Arnold Kling  

The Case for Profits

Harding's Stimulus Plan... Recommended Reading...

I make the case at Forbes online. I first found out about it when Cato posted a copy of the essay on their web site. I wonder how many people actually will click on the "opinions" section of Forbes on line and then read my essay there. I'm guessing not many. Nice picture, though.

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CATEGORIES: Fiscal Policy

COMMENTS (3 to date)

If you cut the payroll tax (roughly) in half, where does the Social Security System get the money to pay benefits?

scott clark writes:

"The bottom line is the bottom line."

Good stuff.

El Presidente writes:

Help me out here. You write:

The economy is in trouble today because of, pardon the pun, false profits.

So, why on Earth would we try to "take these lies and make them true"? If we were reporting fanciful or unsustainable profits, how would we go about re-inflating that bubble, and why?

I agree with your basic analysis about profitability needing to drive the bus, but profit expectations and current contracts have a lot to do with how we reach that point. If profit expectations were unreasonable and they were embodied in contracts (of all kinds, including mortgages) then the remedy is either inflation (preferably through redistribution) or economic collapse, not tax cuts to employers. Or am I missing something?

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