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November 8, 2010

Matthewnomics

Is Chris Matthews supporting a supply-side argument?

First he says this:



Chris Matthews: Why don't we lower all taxes down to about one percent, or frankly just one or two percent? Because by your theory, the lower the rate goes, the more revenue flows in. That is insane.

Rep. Steve Scalise (R-PA): Look, I'll challenge you to go look at the numbers: when they cut taxes in '03, you had 48 consecutive months of job growth and the federal government took in more money.



But then a few seconds later, this:



Chris Matthews: Check the Reagan deficits, buddy. I was there, Congressman, he doubled the national debt. Why do you keep denying the facts?

Rep. Steve Scalise (R-PA): The federal government took in more money. It was the spending that created the deficits.

Matthews: Because the economy grows. Obviously it brings in more money.



Timeout! Isn't that the fundamental argument of supply-side economics? When tax cuts are lower, then the economy grows, and thus the government brings in more money.

This needs more exploring.

I still don't fully understand why conservatives who want smaller government push for something (tax cuts) they believe will create larger federal revenues.

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