Krugman offers faulty argument
Paul Krugman’s argument in “America goes dark,” (Aug. 10) is based on faulty economics. He states, in support of the Obama administration’s plan to extend the Bush tax cuts for all but the top income bracket, that “when we save a school teacher’s job, that unambiguously aids employment; when we give millionaires more money instead, there’s a good chance that most of that money will sit idle.”
This argument ignores the fact that the top earners do not bury their money in the back yard. Any “extra” money they have will be put into a bank, where it will be available for lending. Or, it will be invested directly in stocks and other productive ventures. Clearly, raising taxes on the top bracket will hurt production and employment.
More sinister is Mr. Krugman’s assertion that extending a tax break would be the equivalent of giving money to millionaires. It would be more accurate to say that such a tax break would allow them to keep more of their own money. Every dollar government has is a dollar that must be taken from productive citizens. Government does not have its own money; it merely expropriates it from those who have earned it.
JAY UNDERWOOD