The pressing case to cut both taxes and spending

By James Kwak

The former defence secretary’s economic cure to cut both taxes and government spending is examined by Tim Harford

(Video courtesy of Huffington Post.) As David Callahan writes on Huffington Post (emphasis added):

If you've already received your first paycheck of the year, then you've probably noticed that it was a teeny bit smaller than expected. That's because when the temporary cut in payroll taxes expired at the end of last year, policymakers decided to let them stay that way as a part of the fiscal cliff tax deal, also known as "American Taxpayer Relief Act of 2012."

Here is a post on Facebook a couple days ago that is worth a read in entirety. I will post the entire article along with a few thoughts. We Are Already Over the Fiscal Cliff by Ron Paul

The recovery has fizzled out in California with revenues $1.5 billion below overly-optimistic estimates.California tax collections since the start of the fiscal year have fallen $1.5 billion behind projections, raising concern that the most-populous U.S. state will face automatic spending cuts.

I attended the National Tax Association’s spring symposium today, and heard a fascinating presentation by Raj Chetty, a “wunderkind” economics professor from Harvard, on using “behavioral economics” (sometimes now referred to as “cognitive economics”) to better understand the