Thursday, May 08, 2003

Dwight Meredith (of the always interesting and often riveting Policy, Law, and Autism blog) wrote an excellent comment on the tax cut in my comments section that I'd like to reproduce here:

Luskin should quit while he is behind. For anyone who has taken the time to read any of PK's non-NYT writing, the liquidy trap argument was obvious. Luskin, of course, can't be bothered to even click through his own link to read the CEA report before relying on it.

Also note that Luskin has not bothered to support his claim of 5.4 million jobs created by the tax cut after he got caught speeding.

Finally, the alleged "big lie" that Luskin keeps harping on is that PK cited the cost/job without citing the cost per job year. Once again, if Luskin would do the work, it would become apparent that the cost per job year does not look like such a deal. Lets take the best case scenario for Luskin based on the CEA report.

The tax cut will create 700,000 jobs that will disappear within 3 years. That is a total of 2.1 million job/years. In addition, the tax cut will create another 700,000 that the CEA report does not specify an end date for. The Krugman liquidity trap argument suggests that those jobs will also disappear relatively soon but assume for the purpose of argument that they last a full ten years. That would result in 7 million job/years for the ten year period. Thus, the maximum number of job/years that could be created is 9.1 million. Call it 10 million job years to get a round number.

The cost of the tax cut is $726 billion over then ten year period. The cost per job year would be $72,600 of tax cuts for each $40,000 of wages.

That can hardly be called a good deal. It is only if Luskin's 5.4 million job fiction (which the CEA report flatly denies and which Luskin has been unwilling to try to defend) is accepted that his argument makes any sense at all. Luskin is not engaged in a debate over economics. He is simply promoting a faith based initiative.
Hah! Nice analogy. I also liked this bit from John Isbell:

"Your Honor, I'm just a simple unfrozen caveman lawyer. Your world frightens and confuses me, with its highfaluting jargonized academic theory."
That's from Phil Hartman, and I still miss him, but it looks like "Unfrozen cavemen lawyer" is alive and well.

(Except for one thing... if I recall the setup correctly, didn't the lawyer actually finish his law education?)

Anyway, thanks to Atrios, Jesse Taylor, Bobby (from the unofficial Paul Krugman website), and Kevin Drum for linking to me.

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