"When George W. Bush was elected president in 2000, a major element of his platform was a cut in income taxes. Bush and his advisers used both supply-side and Keynesian rhetoric to make the case for their policy. (Full disclosure: The author of this textbook was one of Bush’s economic advisers from 2003 to 2005.) During the campaign, when the economy was doing fine, they argued that lower marginal tax rates would improve work incentives. But when the economy started to slow, and unemployment started to rise, the argument shifted to emphasize that the tax cut would stimulate spending and help the economy recover from the recession. Congress passed major tax cuts in 2001 and 2003. After the second tax cut, the weak recovery from the 2001 recession
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A recent study of fiscal policy since 1970 in countries that are members of the Organization for Economic Cooperation and Development (OECD) examined which kinds of fiscal stimulus have historically been most successful at promoting growth in economic activity. It found that successful fiscal stimulus relies almost entirely on cuts in business and income taxes, whereas failed fiscal stimulus relies primarily on increases in government spending.
The tone is too hopeful when it is pronounced on bush administration economy and the idea of Tax cut seems great. But when we consider the fact that Mr. Mankiw himself one of the Economic Adviser of president that time and an advocate from the republican side, we are doubtful whether such presentation of information are really unbiased whether these statistics collected by such organizations which supported a particular view are indeed trustworthy. Another fact remain, if data are really unbiased, is there is a chance that one may refute them from pure uneasiness and preceding notion of …show more content…
It was low in a number of smaller countries—for example, the Netherlands or Denmark, where the unemployment rate was under 4%. Yet these countries are very different from the United States and provide generous social insurance to workers. This suggests that the problem may lay not so much with the degree of protection but with the way it is implemented. The challenge, these economists argue, is to understand what the Netherlands or Denmark has done right. Resolving these questions is one of the major tasks facing European macroeconomists and policy makers
A recent study of fiscal policy since 1970 in countries that are members of the Organization for Economic Cooperation and Development (OECD) examined which kinds of fiscal stimulus have historically been most successful at promoting growth in economic activity. It found that successful fiscal stimulus relies almost entirely on cuts in business and income taxes, whereas failed fiscal stimulus relies primarily on increases in government spending.
The tone is too hopeful when it is pronounced on bush administration economy and the idea of Tax cut seems great. But when we consider the fact that Mr. Mankiw himself one of the Economic Adviser of president that time and an advocate from the republican side, we are doubtful whether such presentation of information are really unbiased whether these statistics collected by such organizations which supported a particular view are indeed trustworthy. Another fact remain, if data are really unbiased, is there is a chance that one may refute them from pure uneasiness and preceding notion of …show more content…
It was low in a number of smaller countries—for example, the Netherlands or Denmark, where the unemployment rate was under 4%. Yet these countries are very different from the United States and provide generous social insurance to workers. This suggests that the problem may lay not so much with the degree of protection but with the way it is implemented. The challenge, these economists argue, is to understand what the Netherlands or Denmark has done right. Resolving these questions is one of the major tasks facing European macroeconomists and policy makers