For convenience, I have long divided the vast field of economic theory into three schools. First is the Austrian school, which requires balanced budgets every year. Second is the Keynesian school, which advocates deficit spending during weak economic conditions but surplus spending during strong economic times. (History shows elected politicians use strong economic times to expand entitlements instead of repaying debt.) Third is the supply-side school, which argues a tax cut for "job creators" is always a good idea.
For the last few years, supply-side believers in Congress have complained about the Austrian school believers in the Congressional Budget Office (CBO). They complained that CBO used "static scoring" which doesn't make the assumption that tax cuts kick-start the economy. "Dynamic scoring" does make that assumption, and the supply-side believers insisted on that. They were successful in getting Keith Hall appointed head of the CBO. He was an economic adviser to President George W. Bush and was involved in the Bush tax cuts.
Last week, he dropped this bomb on supply-side believers: "No, the evidence is that tax cuts do not pay for themselves. And, our models that we're using, on macroeconomic effects, show that."
Screaming betrayal -- instead of actually studying the economic model -- the true believers are now calling for Mr. Hall to resign.
OK, I will not snicker, I will not snicker, I will not snicker, I will not . . .
For the last few years, supply-side believers in Congress have complained about the Austrian school believers in the Congressional Budget Office (CBO). They complained that CBO used "static scoring" which doesn't make the assumption that tax cuts kick-start the economy. "Dynamic scoring" does make that assumption, and the supply-side believers insisted on that. They were successful in getting Keith Hall appointed head of the CBO. He was an economic adviser to President George W. Bush and was involved in the Bush tax cuts.
Last week, he dropped this bomb on supply-side believers: "No, the evidence is that tax cuts do not pay for themselves. And, our models that we're using, on macroeconomic effects, show that."
Screaming betrayal -- instead of actually studying the economic model -- the true believers are now calling for Mr. Hall to resign.
OK, I will not snicker, I will not snicker, I will not snicker, I will not . . .
