> > "Government policy should not favor some industries at the expense of > others, but that is exactly what cash for clunkers does. The program helps > consumers who can take advantage, and it increases profit and employment in > the auto industry. But funding for the program comes from all other > taxpayers, so it harms the consumers and industries not supported by the > program. > > "Thus cash for clunkers creates winners and losers based on political > considerations, not economic values. Whether or not government spending is a > good way to stimulate the economy, the specific kind embodied in this > program is misguided because it distorts the economy's allocation of > resources across consumers and industries. > > "Any spending stimulus, of course, tends to favor some sectors over others, > which is one reason stimulus is better accomplished via reductions in tax > rates, not increased spending. Tax cuts improve the incentives to work, save > and invest, thereby making the economy more productive going forward. > Reductions in tax rates are neutral across sectors and therefore let private > valuations of costs and benefits -- not political connections -- determine > winners and losers." > > Wow... That made so much sense, it's making my brain hurt. Thanks for the post, Wade.
--Jason /* PLUG: http://plug.org, #utah on irc.freenode.net Unsubscribe: http://plug.org/mailman/options/plug Don't fear the penguin. */
