Nancy Pelosi Argues for Tax Cuts*

*She just doesn't know it.


How much do you know about economics, Ms. Speaker?

"Economists tell us that unemployment insurance returns $2 to the economy for every $1 spent."

-Nancy Pelosi

Critics have said that this illustrates economic illiteracy (or innumeracy) on the part of the current Speaker. But, I'm here to tell you that one does not become Speaker of the House of Representatives by being a "pretty face". (Nancy certainly didn't!)

So, for the moment, let's say that the Speaker has her facts straight: Every dollar spent on unemployment insurance returns two dollars to the economy. Would not the reverse be true as well:
For every dollar taken from someone in taxes, two dollars is removed from the economy?

At best, that would be a wash. Factor in that the government is so inefficient in nearly everything it does, the overhead to get that dollar where it is going may siphon off 70 to 80% in bloated government overhead, and you've got a losing proposition.

Believe your own hype, Ms. Speaker. Stimulate the economy by two dollars for every one you cut in taxes. Better yet, take two tax cuts and call me in the morning.