This is pretty funny, though incredibly geeky:
Daniel Kuehn, of course, is shocked that Papola et al. keep kicking this poor strawman.
Meanwhile, for my IER job I am looking at this New Yorker piece pushing for a carbon tax. I came across this passage:
As we all know, the official Republican term for the rich is “job creators.” The official Republican formula for creating jobs, therefore, is to hand the rich an ever-larger share of the nation’s disposable income.
Trouble is, the rich can do any number of things with the extra money. They can save it. They can speculate with it in the stock market. They can use it to book a larger suite at the Cipriani for a Venice weekend. And yes, some of them might spend or invest some of it in a way that creates a job for someone. But there is no guarantee that that someone will be American, as opposed to, say, Chinese.
However, if the extra cash goes to regular people, a little at a time in each paycheck, they are highly likely to spend it—spend it right away and right here, in the United States.
When it comes to tax cuts, especially in a period of high unemployment, flagging demand, and big corporate profits, when investors are sitting on piles of cash, payroll tax cuts are much, much more stimulative than high-end income tax cuts. The only thing more stimulative, of course, is “new federal spending”—because when the government spends money the money gets spent.
Yes yes, this is all consistent with a single-minded focus on investment. But notice when the writer explicitly mentioned it, he said “might spend or invest some of it.” That’s part of what “my side” is talking about–the very term spending is generally taken to mean consumption spending.