Originally Posted by Parallax
On a per capita basis the $288 billion tax cut actually amounts to $1000 per person. But the tax cut was made up of many small, temporary tax credits. I think the numbers should have been much bigger, Obama should have drastically simplified the tax code and left room for more fiscal expansion ...
But how is this related to the fact that the US government did NOT spend more $1000 billion dollars like Mangu-Ward says??
I'm not sure where $1000 comes from but I'll take your word for it and I'm not sure what this means: how is this related to the fact that the US government did NOT spend more $1000 billion dollars like Mangu-Ward says
Here's what you said: The goal [of fiscal policy] is to shift the total debt burden from households to the federal government. When households have repaired their balance sheets the aggregate demand will return to a normal level and we will see falling unemployment, for example cutting payroll tax by 2% does not create jobs directly but it helps people to pay down their mortgages and student loans and credit card debts slightly faster.
So here you seem to be saying that $1000 or $500 in a tax cut will do all kinds of wonderful things for a familiy's budget. You imagine that these people will dutifully apply their $50 per month to the principal on their credit cards or their student loans. I think that's a wise thing to do and I would encourage anyone to reduce their debt but it seems that the amount is very small and certainly won't substantially repair household balance sheets.