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If New York Times Were U.S. Treasury Secretary… January 22, 2009

Posted by Daniel Downs in economy, media, monetary policy, news, politics, taxes, The New York Times.
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Don Feder wrote an interesting critique of the New York Times’ understanding of economics. According to Feder, the Times knows only one economic formula, which is tax cuts, bad; spending, good.

Feder continues, “[t]he Times thinks it’s not only possible, but desirable, to try to spend our way out of a recession caused by over-spending, deficits and misplaced priorities.”

If you have read other posts, you will understand why I agree with Feder’s statement: “If economic illiteracy were a disease, The New York Times would be terminal.”

Feder’s ire was raised while reading an editorial urging Obama to spend $800 billion more and trash his promise to cut taxes to those making under $200,000 a year. New York Times prescribes further remedy of our economic woes. The Times also wants Obama to keep shoveling more money to the states to replace outdated and crumbling infrastructure.

Feder rightly observes that “no matter how much the states get for highway repairs (from the gas tax, general revenue, tolls and federal aid), the infrastructure is still crumbling and outdated.”

The question tax payers and gasoline consumers should be asking is why that is. The national average tax on gasoline is 47 cents per gallon. That means the amount of gas taxes collected by federal, state and local governments to maintain our roadways is a meager $66.5 billion a year. And the federal government returns to the states 90.5% of its portion of the national gas tax, which is 18.4 percent.

Feder observed the New York Times’ chant against tax cuts for the rich. It is believed (the key word) that tax cuts for the low and middle-income will somehow magically create more spending. Even though the Times would have Obama forget cutting tax altogether, it is believed spending will save our save our economy.

According to Feder, the New York Times also believes giving the rich tax cuts would result in savings not spending. Yet, Feder surmises:

“How does The Times think the rich will save — by shoving their tax refunds into a piggy-bank? Their tax savings will be invested in stocks, bonds and mutual funds, which will lead to more capital investment and more job creation — far more than simple spending on consumer goods.”

“Investment, which leads to job creation, which in turns leads to long-term consumer spending, is essential to a recovery. It’s amazing that the editorial board of America’s self-styled newspaper of record can’t grasp basic economic principles.”

Source: Boycott The New York Times, January 12, 2009 and U.S Dept. of Transportation, Federal Highway Administration, Motor Fuel & Highway Trust Fund.

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