(no subject)

[theweaselking]

To the surprise of every advocate of cutting the GST, the 1% GST cut has not increased spending, enhanced the economy, or paid for itself.

Note, for the record, that "every advocate of cutting the GST" included no competent economists, where "competent", here, is defined as "does not take pet theories as more reliable than real facts".

Comments

[torrain.livejournal.com]

...I missed that it was supposed to do any of those things.

This may contribute to my lack of surprise.

[pope-guilty.livejournal.com]

My understanding of economics is that you can't get hired unless you're incompetent.

[kookiemaster.livejournal.com]

It's kind of silly to expect consumers to quickly modify their spending in any significant way because of a 1% tax cut. I mean really, are you going to suddenly rush to the store to get a new tv because omg the tax is 1% less ... and moreso because it's expected to be a permanent decrease?

When they announced that the GST would be created, then it had a temporary impact on durable goods purchases, but again, temporary and counterbalanced by a sharp decrease.

The impact on consumers's disposable income is probably negligible and other factors such as economic growth and interest rates have a far more important impact on spending. You can cut the GST all you want, with the US economy as it is, you're not going to create an economic boom.

It's just electoral candy really.