I am getting just a wee bit tired of jawboners from both sides of the political aisle distorting the truth. Truth is something that you cannot pundit your way past. So, permit me to illuminate 3 popular myths.
TAXES ARE AT AN ALL TIME LOW
These folks gleefully full point out that currently, only 15-16% of GDP is going to taxes (which is true; the exact % depends on whose numbers you believe). These pundits then go on to say that further cutting taxes are unnecessary, witness the % they claim. This is simply not true. See, if millions of previously employed people lose their jobs, they are no longer paying federal/state/local taxes, but instead, are drawing wealth transfer payments from gov’t. It is no secret that this situation decreases the % take of GDP from taxes, regardless of the tax rates.
CUTTING TAXES WILL INCREASE JOBS
The theory here is that cutting taxes will put more $$$ into the pockets of consumers, they buy more stuff, and therefore create more jobs. Nonsense. Cutting taxes will make working people a tad richer, but it will not create more jobs. It never has: W tried this with those free checks, but no jobs were created then, and none will be created now. Do not get me wrong: I think lower taxes are a good reward for hard working Americans, but it will not create more jobs. Sorry about that.
MORE GDP = MORE JOBS
This may have been true 5 decades ago when I was born, but not today. See, a company like US Steel can create more product using fewer employees. How? Automation, computers, industrial robots, and so forth. So, if we dramatically increase GDP somehow, this has nothing to do with more jobs.
WHAT IS YOUR SOLUTION, SMARTY PANTS?
I do not have one. If I did, I would be a very rich and very famous economist somewhere.
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