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But the retirement should be gradual right? When the economy slopes back down I was under the impression that Keyne's theory would suggest deficit spending agai
by nkassis 15y ago
But the retirement should be gradual right? When the economy slopes back down I was under the impression that Keyne's theory would suggest deficit spending again. Hence you'll always be yoyoing but never fully paying. You're right that his full theory has never been tested. I haven't seen many politicians really advocate increase taxes during booms.
- nl 15y agoTax (rate) increases during booms aren't required. The idea is that the increased economic activity leads to additional tax revenue, which leads to surplus budgets. It is often possible to reduce tax rates during a boom and still keep a budget in surplus (eg, Australia managed that between 2005 & 2008)