Should the government cut spending or raise taxes to deal with its long-term fiscal imbalance? As President Obama’s deficit commission rolls out its final report in the coming weeks, this issue will most likely divide the political right and left. But, in many ways, the question is the wrong one. The distinction between spending and taxation is often murky and sometimes meaningless. Read Mankiw's opinion article in The New York Times here.
Why is it that economists find it necessary to so often start their reasoning with "imagine that ...". I feel they always try to draw you into their alternate reality, going on to prove their points, at least virtually.
ReplyDeleteGood point. I think economics' purpose is to understand individuals and society as much as possible through a scientific approach. The only problem is that individuals, and thereby society, do not respond to stimuli as objects or even animals would, which makes it very hard for economists to test their theories. Moreover, humans being so complex, it is very hard to predict their behaviour. That is why economists have no choice but to simplify reality through hypotheses.
ReplyDelete