Monday, August 15, 2011

What Am I Missing?

So I was talking over this whole debt crisis with some knowledgeable Republican finance types, and I’m trying to see what I’m missing.

VP: What should the government do to fix the economy?

R: Tax cuts.

VP: But won’t tax cuts expand the deficit?

R: Yes, but those can be offset by massive cuts in spending.

VP: But then why don’t we just raise taxes, and then pay down the deficit that way?

R: Because tax hikes take money out of the economy, and we’re in a recession. If you take money out of the economy now, it deepens the recession!

VP: But wouldn’t cutting services and other government spending take money out of the economy as well?

R: Yes.

VP: So? Doesn’t that deepen the recession?

R: But we’ve got to get the deficit under control.

VP: So then why not raise taxes?

R: Because we’re in a recession.

VP: Argh!