Just getting around to this, been a busy day, but today’s New York Times has one good article and an editorial that misses it by a mile.
First, the good news, this article by Daniel Gross, a guy who actually understands economics. He writes about the recent news — greeted with hysteria in some quarters — that the US share of global GDP has fallen since 2000. Gross takes it all with a yawn, putting it into perspective. The growing wealth of other nations ultimately is good for US manufacturers. We call those newly-wealthy consumers, “customers.” The story also has an accompanying chart which shows the US share of world GDP at 27.7%. By comparison, China’s is a puny 5.4%, while Russia’s is just 2%. It really does put it all in perspective. People often forget we are still the dominant manufacturing power in the world, by a mile. That is part of the reason for these strong GDP numbers.
Given his knowledge of economics, maybe Gross should take up writing the Times editorials. Their lead editorial today continues to fight the old tax battles. They can only ever see one tax solution — raise ’em! — and are blind to any other views. The bottom line is that tax receipts are at an all-time high. This is not, as the Times says, owing to some lingering vestige of repealed tax cuts. It’s owing to the actual tax cuts kicking in. Cut taxes and that will increase spending and investment. And indeed it has. How else would the Times explain the dramatic uptick in federal tax receipts? It sure wasn’t higher taxes that did it. Tax increases will only retard spending and investment. Old liberal habits are just hard to break.
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