Ep. 112 Don’t Get Excited About Tax Cuts, Says Krugman; Results Will Be Pitiful

11 November 2017     |     Tom Woods     |     5

Krugman says Republicans are expecting too much from the corporate income tax rate cut they’re proposing. Is he right?

Krugman Blog Post

Leprechaun Economics and Neo-Lafferism” (November 8, 2017)

Articles Mentioned

Sequester of Fools,” by Paul Krugman
Funny Facts Friday,” by David Stockman

Episode Mentioned

TWS Ep. 1035 How Ludwig von Mises Fixed Economics (But Ingrates Won’t Thank Him) (Bob Murphy)

Course Mentioned

History of Economic Thought, Part II: 20th Century Economics,” by Bob Murphy
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  • Phrederick

    I’d pay to see Mr Krugman refer to Irish law as “Leprechaun Economics” in a Dublin pub.

    • http://www.realultimatepower.com/ Chucky Arla

      I would buy the video as well.

  • The NAPster

    I realize that the GOP is selling its tax plan as good for (some) Americans, but it’s an odd complaint from Krugman to point out that increased returns may flow to foreign investors. Why should we care where returns on assets flow? In a situation in which those who buy and sell assets, and those who make use of the assets, are all able to do so voluntarily, the relevant parties will arrange ownership, income and use to try to best to satisfy consumer preferences.

    If it’s a problem for Americans that foreigners are deriving income from assets located here, shouldn’t it be a problem for New Yorkers that Alabamans are deriving income from assets located in New York State? Or that an out-of-house landlord derives income from his in-house tenant?

    No, what’s key is asset use to maximized consumer preferences, not asset ownership or income flows.

    • Tyler Folger

      I think his point is to emphasize that this will be bad even on the administration’s own terms. Trump ran, partly on a protectionist platform. And so he presumably would chafe at gains from American policies going to foreigners.

      • The NAPster

        That’s what I originally assumed. But if you read the blog post, Krugman says “But let me make a different point: GDP is actually the wrong measure. If you’re going to be pulling in foreign capital, you’re going to be paying more investment income to foreigners; so gross national income — income accruing to domestic residents — is going to go up by less. And surely that’s the measure we care about.”