PRESTOPUNDIT

Economics. "George W. Bush has become a master at one-sided economics. He pushed his tax cuts through Congress with the one-sided argument that reduced federal tax payments leave American taxpayers with more money to spend. When Americans spend their tax savings, more American goods will be produced. Hence, more American jobs will be created.

Bush never mentions the flip side of the tax reduction: the resulting hundreds of billions of dollars in annual budget deficits will force the federal government to borrow funds that cannot then be borrowed by American investors - and hence cannot be spent by American firms and the people they employ. The decline in demand for goods caused by the deficits can offset the rise in demand for goods brought about by the tax cuts. The net effect? Any job-creation effects of the fiscal policy will be largely, if not totally, neutralized .. ". -- Economist Richard McKenzie in today's OC Register.