Avoiding the simplistic, re: tax cuts and spending

[Selatius]

11. You understand Keynes' teachings to a degree that is refreshing here.

You are correct. It's not that Keynes said that tax cuts are worthless.

It's that he said if the goal of the tax cuts is to stimulate the economy, then it is probably the least efficient way to do so but that it is stimulative to a point. He wasn't against tax cuts per se. He was against tax cuts if there were far better tools at one's disposal in the toolbox. A far more efficient way to focus and aim that amount of cash in a direction that will be the most beneficial to an economy (a far better return on one's investment, one could say) would be something along the lines of, for instance, a jobs program or maybe a public works program.

In fact, a jobs program is probably the best way to stimulate the economy, barring total military mobilization to fight World War Two all over again. It's preferred precisely because it pumps money directly into the pockets of workers, who are also consumers. Any Econ 101 student would quickly learn that the primary driver of any major economy today is aggregate demand for products and services, and the best way to stimulate aggregate demand is to put more money into the pockets of people who are looking to buy products and services.

This is one reason why some criticized the stimulus package as being too much tilted towards inefficient tax cuts and not enough towards public works and a bona fide jobs program.