Demand side economics still has a role to play - even in the US.
When asked about the damage to the Florida economy caused by the hurricanes an economist replied it won't be that bad. The increased demand for building supplies and the labour required to carry out the work will stimulate the economy of Florida and consequently it shouldn't hurt the market too much or damage Bush's chances in the State.
This is classic Keynesian economics. Freidman's model was used by Mrs Thatcher - we ended up with a massive deficit, high unemployment and interest rates in double figures. The rich, however, got considerably richer. The 1980s saw a marked rise in Porsches on the road (doing nothing for the deficit)
Lowering taxes per se is not always a good idea. One has to look at the burden of taxation as a whole and balance this against spending plans. The Bush administration is spending a lot on the military - increasing spending in real terms considerably. Likewise homeland security and Iraq reconstruction will cost tax dollars (a lot of tax dollars).
If running a country was simply a case of cutting taxes the job would have been cracked years ago. I suspect the good professor's comments are somewhat out of context and he his espousing an aspirational economic direction rather than addressing current economic realities facing George Bush.
The leeway for more tax cuts will be limited and anyway could also have the negative result of increasing the deficit of finished goods coming into the country. Tax is a form of fiscal control just as interest rates are - it simply requires the administration of the day to show prudence in how it is spent (or not spent).
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