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Debate #1... GO!

#1 Oct 05 2012 at 5:52 PM Rating: Default
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Smasharoo wrote:

End result is a lot of additional tax revenue without having to raise tax rates.


Minor caveat: This has never occurred in the history of time and is mathematically and economically unsound.


When applied as an absolute, yes. But then all economic calculations break down when used at the wrong time. I'm assuming you also realize how wrong statements like "a dollar of food stamps creates a buck 80 in economic growth". Same deal.

However, in the situation we're in right now, the approach is absolutely sound. Let me repeat what I said earlier. Our revenues dropped several hundred billion dollars between 2007 and 2011. Yet, during that time, we did not change our tax rates. The loss of revenue occurred because of decreased economic activity and lower employment. At the federal level, lower profits means less taxes and fewer workers means less taxes. If you can reverse that, then the revenue will come back. That's not voodoo economics at all. It's quite consistent and documented economic behavior. It's what happens every time you have a recession and then the economy bounces back.

The problem is that we didn't bounce back. Now we can disagree over why that happened, or what the correct solution is, but if Romney is correct that his policies will allow that bounce we've been waiting for to finally happen, then he's absolutely right that this will allow for deficit reduction without having to raise taxes. If you want to argue that his policies wont create that bounce, that's fine. But simply declaring that if we can get that increased economic activity and employment it wont help our deficit issues at all is simply 100% wrong.

I was asked how Romney thought he could do this. I've answered the question. Now, if you want to argue that there's some magical math that says that if we shift 10 million people from the unemployment roles (which consumes tax revenue) to employment (where they'll be paying taxes), that this will not help our deficit, then by all means, argue away. But I don't think you can do more than just wave your hands and insist that it wont work. That's not a good enough response though.
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