The Failure of the American Democratic Party...

[Simon_Jester]

If tax rebates have a multiplier effect then they'd serve Keynes' purpose well enough, surely?

[Phantasee]

The main reason Social Security is in danger is that while its expenses may only be about 5% of GDP, they're something like a quarter of the federal budget, at a time when the government's income only covers about two thirds of its expenses. If Social Security is preserved inviolate, it becomes a lot harder to find anywhere else to cut the budget and... fuck Grover Norquist with a pineapple.

I don't quite understand your last sentence, although I'm sure it's very amusing.

[SirNitram]

If tax rebates have a multiplier effect then they'd serve Keynes' purpose well enough, surely?

The multiplier effect is an existing idea Keynes codified further. I don't think it would count, myself. But all things have multipliers effecting them; though some might have a multiplier of x1. I'm no where near good enough to run the equations for the tax rebates, and we still are left without an answer to the thrift paradox question.

[aerius]

If tax rebates have a multiplier effect then they'd serve Keynes' purpose well enough, surely?

If the multiplier is greater than 1. But according to the CBO's report on the stimulus package the multiplier effect of tax breaks and rebates was less than 1, so I think the answer is no.

[Simon_Jester]

The main reason Social Security is in danger is that while its expenses may only be about 5% of GDP, they're something like a quarter of the federal budget, at a time when the government's income only covers about two thirds of its expenses. If Social Security is preserved inviolate, it becomes a lot harder to find anywhere else to cut the budget and... fuck Grover Norquist with a pineapple.

I don't quite understand your last sentence, although I'm sure it's very amusing.

Well, if you can't cut the budget and you must close the deficit, you must increase taxes. What is the essential obstacle to increasing taxes in the US? What one individual has most permanently bound his name to creating that obstacle?

Oh, and aerius: 20% of US GDP is damn near three trillion dollars. Government revenue is running well below that. We'd still have a deficit if we were taking in 20% of GDP in taxes, but it'd be a damn sight smaller, and the debt would be a LOT smaller if we'd been doing it consistently.

There are also distributive arguments: how is the health of the overall economy affected by choosing which 20% of GDP we take, from who, and what do we do with it?