Being an accountant, I am always thinking not in terms of spending per se, but in terms of “on what?” and “how effectively?” Tax cuts (foregoing needed revenue) are just another form of government spending. Many people believe as an article of faith that people spend money more efficiently than does goverment, and that the market best “decides” the best use of the money spent. Therefore, tax cuts are at their face the best option for driving an economy. To me, however, not being a member of that church, we should have learned with the failure of the markets in 1929, the failure of deregulated markets with the S&L crash of the early 90’s, and the failure of deregulated markets that has led to our current crisis, unquestioning faith in “free” markets alone is misplaced.

When people are wedded to this belief, they will not listen to my concern about “on what?” (for example, they will not listen to me when I ask whether we simply spending the money but whether we are also directing the spending toward a goal that will reap dividends and greater national wealth in the future). Here I believe that Brian has the stronger argument, simply because the government–not just private enterprise–can make good investments (TVA and NASA come to mind immediately). More important, private enterprise is not known to make such investments on the scale that government can. Furthermore, government investments (as opposed to near-exclusive reliance on private “spending”) can result in greater capital turnover in both the public and private economic spheres. The immediate spending on jobs, purchases, etc., generates jobs and new consumption, but–as the investments come into fruition–they subsequently generate more jobs and wealth.

Similarly, the faithul will not listen to me when I ask, “how effectively?” Nevertheless, cost-benefit computations, which are drilled into accountants and econommists, are necessary. If we are going to spend n dollars on tax cuts, what is the cost/benefit ratio? Now if we perform a similar computation on investment in alternative energy, not failing to include what is effectively the tax we now pay to foreign nations for their oil. Which results in the greater yield? Again, I agree with Brian.

For people to whom labels like “conservative” and “liberal” are important (they are meaningless to a practical person like me), I will add only that it is making the best use of our resources that sounds “conservative.” What our government has done under so-called “conservatives” has been anything but conservative!