Fareed Zakaria dumps some truth onto the Republican lie that tax cuts and spending cuts will stimulate economic growth.
The Republican prescription is to cut taxes and slash government spending — then things will bounce back. Now, I would like to see lower rates in the context of tax simplification and reform, but what is the evidence that tax cuts are the best path to revive the U.S. economy? Taxes — federal and state combined — as a percentage of GDP are at their lowest level since 1950. The U.S. is among the lowest taxed of the big industrial economies. So the case that America is grinding to a halt because of high taxation is not based on facts but is simply a theoretical assertion. The rich countries that are in the best shape right now, with strong growth and low unemployment, are ones like Germany and Denmark, neither one characterized by low taxes.
And what happens in the next recession? More tax cuts? And after that? Etc, etc, etc. Sounds like a recipe for not just drowning government in the bathtub, but the entire American economy with it. Fact: every time we've tried Reaganomics (tax cuts, spending cuts, deregulation, etc) it's been closely followed by a deep recession The 1980s gave way to the early 1990 recession, the 2000s gave way to the Great Recession. How could this newly proposed round of Reaganomics possibly be any different?