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Originally Posted by Coup
By PAUL KRUGMAN
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ah, an article written by a neokeynesian....
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We?re told that we have no choice, that basic government functions ?
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Education etc are not 'basic government functions'.
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services that have been provided for generations ? are no longer affordable.
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That was to be expected... even Keynes himself saw it coming but he simply didn't care.
"
In the long run, we're all dead." -- John Maynard Keynes
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And it?s true that state and local governments, hit hard by the recession, are cash-strapped. But they wouldn?t be quite as cash-strapped if their politicians were willing to consider at least some tax increases.
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...
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But isn?t keeping taxes for the affluent low also a form of stimulus? Not so you?d notice. When we save a schoolteacher?s job, that unambiguously aids employment; when we give millionaires more money instead, there?s a good chance that most of that money will just sit idle.
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Money in a bank/savings account doesn't sit idle. It serves as the basis for loans/investments/credit.
Taxation and government spending only inflates the money supply => lowers the value of money => the poor and lower incomes suffer first.