Decreasing spending and cutting taxes is great from my point of view. That shrinks the government as a whole. That's not a stimulus though. According to what is now conventional wisdom (Keynes, more or less), you don't balance the budget during slow years. The whole idea is to cut taxes or INCREASE government spending to avoid and recover from recessions.
For better or worse, deficit spending ala Keynesian economics is how governments like the US, Japan, Canada, and France have all stimulated their economy during slow years ever since the depression.
I don't think is the best tax plan possible but I think it's ok enough. For all the disagreements between economists on this plan - and there are two large camps signing off on their own pro or con documents with a handful of nobel prize winners on each side - nearly everyone agrees that cutting taxes and/or increasing spending is how one stimulates the economy. The only real disagreement is what sort of distribution of income will result from particular tax cuts and how fast the economy will respond to particular deficit spending stimuli.
Nearly every economist is some sort of Keynesian (some neo-Keynesian) today. Cutr taxes and increase government spending to stimulate the economy.
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05-23-2003
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