“Passing these tax cuts will worsen the long-term budget outlook, adding to the nation’s projected chronic deficits. This fiscal deterioration will reduce the capacity of the government to finance Social Security and Medicare benefits as well as investments in schools, health, infrastructure, and basic research. Moreover, the proposed tax cuts will generate further inequalities in after-tax income.
To be effective, a stimulus plan should rely on immediate but temporary spending and tax measures to expand demand, and it should also rely on immediate but temporary incentives for investment. Such a stimulus plan would spur growth and jobs in the short term without exacerbating the long-term budget outlook.”
But the Heritage Foundation trotted out a couple of economists who said, “So’s your face.”
Here is the guy who gets everything wrong, Dick Morris, on the topic as late as 2010:
How should Republican candidates handle the tax issue? By arming themselves with one basic fact: tax cuts–not increases–generate additional revenue.
By squelching economic activity & reducing consumer buying power, higher taxes hurt the economy, dry up commerce, and reduce tax revenues. Tax cuts do just the opposite: By adding to buying power, they add revenue. This isn’t just theory. It’s what has happened every time. (snip)
So remember that mantra: Lower taxes produce higher revenue. It’s one of the most powerful messages we have.