Estimates of the so-called “fiscal multipliers” – the eventual effect on gross domestic product of a given tax cut or increase in government spending – showed that infrastructure investment would add between 0.5 per cent and 1.8 per cent to output per 1 per cent of GDP spent by government.Oh yea, also:
Tax cuts of equivalent size would add 0.3 per cent to 0.6 per cent, it said.
The debate has divided politicians in leading economies, with Republicans in the US Congress saying tax cuts would be a more effective boost to the economy than infrastructure investment favoured by the Democrats.
“Tax cuts are an indirect form of stimulus, so you don’t know what the recipient of the tax cut will do with them,” said a senior IMF official. “The infrastructure investment would be a more direct form.”
The fund repeated its call for governments to be more aggressive in restructuring troubled financial systems and said temporary nationalisation might be justified in some cases.Bah, socialists.
In a sane world none of this would even be worth pointing out. Still, its useful to keep harping on about this since one party has a Crayola lodged in its brain.
I wonder if Canada would be interested in a trade. Their Conservatives for our Republicans. Oh yea, and Alex Rodriguez.