Friday, November 18, 2011

Both Sides of His Mouth

A prime example from the Wall Street Journal's James Taranto:

Two Former Enron Advisers in One!

• "There's obviously a relationship between tax rates and revenue. That relationship is not, however, one-for-one. In general, doubling the excise tax rate on a good or service won't double the amount of revenue collected, because the tax increase will reduce the quantity of the good or service transacted. And the relationship between the level of the tax and the amount of revenue collected may not even be positive: in some cases raising the tax rate actually reduces the amount of revenue the government collects."--from "Economics," by former Enron adviser Paul Krugman and Robin Wells (Mrs. Krugman), second edition, 2009

• "In Democrat-world, up is up and down is down. Raising taxes increases revenue. . . . But in Republican-world, down is up. The way to increase revenue is to cut taxes on corporations and the wealthy."--Krugman, New York Times, Nov. 18, 2011

Clearly, President Barack Obama and his supporters believe the second Paul Krugman, and not the first. But it was the first that won the economics prizes.

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