February 12, 2009

Unchartered Territory


Anonymous said...

Instead of throwing money into the economy in the form of this “stimulus package”, what if the government had decided to rid of the income tax for a year? Its overall effect on the national debt would be the same for a period of time, but as a result everyone would have more money to spend, which would make its way back into the economy.

Justin Collum said...

Colin: if many of those people decided to put that money away for a rainy day it would not help the economy at all. Krugman discusses this in one of his op/ed pieces I think.