02
Feb
09

Tax cuts vs. spending

I loved the exchange between Sen. Hutchinson and Sen. Kerry yesterday on Meet the Press. Kerry can be a blowhard but I still like him and I really like it when he hits one. David Gregory wanted to stipulate that no one could know which would work best to stimulate the economy – tax cuts or spending. He not only didn’t let it pass, he made of point by not conceding the point. The transcript is below. We are in uncharted waters, the economy is horrible, but this is not simply tabula rasa. We do have a history of what has worked before and what hasn’t. I thank him for pointing that out.

One thing I want to point out is the falseness of implication that Sen. Hutchinson makes that tax cuts got the market going after 9/11. It makes it sound as if the tax cuts in deed came after 9/11 and were in direct response to the event. The tax cuts were about the first things the Bush administration pulled out of the bag when they came to Washington. The first tax cuts were signed into law in June 2001 – before 9/11.

SEN. HUTCHISON:  Well, yes.  But I hope that the jobs would be created in the private sector so that they would continue in the economy.  We’re talking about a quick fix that does make people start investing again, and, and tax cuts.  If you talk about 2001 after 9/11, it was the tax cuts that stimulated the economy and started the stock market to go in the right direction, and then capital spending and then the economy was going in the right direction. So I think tax cuts cannot be forgotten as stimulus.  But when you’re talking about the spending…

MR. GREGORY:  But let’s just stipulate one thing, that, that, that there is a big ideological and philosophical divide about whether you need an infusion of government spending or tax cuts, which moves the fastest.  Nobody’s got a monopoly on the truth here in terms of what will actually work.  Would you concede that?

SEN. HUTCHISON:  Yes, absolutely, because it is uncharted waters.

MR. GREGORY:  All right.  But let me, Senator…

SEN. KERRY:  Actually, I would not concede that.  We’ve had eight years of a, of, of, of this experiment of massive tax cuts without investing in America’s future, and the result is we have gone from fourth in broadband to 17th in the world.  The fact is our transportation system is neglected, you can’t move products from here to there as effectively as other places.  We waste countless hours of American productivity on roads that are clogged with traffic because we don’t invest in mass transit.  I think the experiment in the last eight years, that’s what this election was about.  We just had an election.  The American people overwhelmingly voted for change.

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