Radio talk show host Hugh Hewitt on Fox News comments about the failure of Obamanomics.
In the second half of the video below Hewitt emphasizes the failure of the Congressional Budget Office (CBO) to estimate the dynamic impact of tax cuts. The CBO takes a tax cut and increases the deficit by the amount of taxes cut. What it fails to do is account for the positive impact of the additional money in the economy which leads to investments, jobs and economic growth. All this increases taxes collected by the government which over time can more than make up for the initial drop in tax collections.
If Congress doesn’t act, in about 130 days the biggest tax increase in American history will occur when the Bush tax cuts expire. Again, the CBO and Democrats look at the additional taxes brought in without taking into account changes in behavior by businesses and individuals which could easily take us into a second recession or worse.
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