Friday, March 11, 2011

Common Mistakes Economists Make, As Seen By Marginal Revolutions

Left Wing

2. Evaluating government spending on a program-by-program basis, rather than viewing the budget as a series of integrated accounts.  Cross check with the phrase "Social Security," or for use to take many discretionary spending cuts off the table.

6. Overestimating the efficacy of fiscal policy, underestimating the power of monetary policy, and sometimes ignoring or neglecting how the two interact ("the monetary authority moves last").

Right Wing

3. Lower taxes don't spur economic development as much as it is often claimed, at least not below the "fifty percent or less of gdp" range.

8. The story of steady and significant economic progress for most Americans is accepted too readily.

Read the rest for yourselves and discuss Smile with tongue out

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