Nick Gillespie of Reason.tv sits down with James Pethokoukis of the American Enterprise Institute to talk about the current state of the economy and why economic growth is so sluggish in this 6 minute clip (no commercials or adverts!).
What is the biggest threat to the economy? There seems to be a real lack of vitality in this economy.
The #1 thing the government can do is to create a tax system that is pro-growth. Right now, we have a tax system that penalizes capital investment which is very important for creating new innovation, new products and new companies of the future.
Temporary tax cuts don't work because people know they're temporary. Their long-term spending and investment behavior will not be influenced
(ed. note: lending a hand to why this seemingly endless battle over the payroll tax cut is so much bunk.)
Why didn't the stimulus package work? Pethokoukis reiterates the point we have made from the get-go: the statist dream of the Keynesian priming pump to the economy got derailed by the statist dream of a comprehensive system of regulatory choke points.