Demand-side fallacies from General Wesley Clark

Rachel Lucas points to an interview with Gen. Wesley Clark by Tim Russert this past weekend on Meet the Press. During the interview, Clark said, "I thought this country was founded on a principle of progressive taxation," which Rachel points out, contrary to being a founding American principle, is in fact one of the main tenets of the Communist Manifesto.

In addition, Clark reveals his belief in the demand-led model of the economy when asked about tax cuts.

Well, first of all, they were not efficient in terms of stimulating the kind of demand we need to move the economy back into a recovery mode, a strong recovery and a recovery that provides jobs. There are more effective ways of using the resources.

The conviction that the economy only 'churns' if there is some kind of 'stimulus' to drive it runs rampant. It is the belief that the actors in the economy need to be led to act by a carrot on a stick, or perhaps a more fitting analogy would be a whip to the back. On the contrary, actors have individual ends of their own, and pursue them to reach a more subjectively pleasing state of affairs using means which are scarce in the environment. The economy 'churns' when individuals are left free of coercion to pursue these ends. In pursuit of these ends, individuals accrue savings, which are vital for capital accumulation and increased production. No outside impetus is needed to drive the individual actors that make up the economy. The individual is his own impetus.

Public spending, rather than being a stimulus, coercively takes resources out of the actors' possession and hampers the economy. Tax cuts are beneficial, not because they 'stimulate' the economy like a carrot on a stick, but because they allow individuals to pursue their own ends through free exchange, savings, capital accumulation, and increased production.

Of course, my thoughts are predisposed toward the prosperity of the individual and civil society, but it seems Gen. Clark is speaking for the benefit of something else entirely.

Well, you know, I think that what candidate Clark, if there is such a candidate, would be for is he would be for doing the right thing for government.

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What kind of a dumbass

What kind of a dumbass believes that "this country [is] founded on a principle of progressive taxation"?

What a striking indictment of Gen. Clark's economic illiteracy and of the US educational system (assuming he went to public school, otherwise the private institution that failed to teach him).

Yeah, this one pretty much

Yeah, this one pretty much boggles the mind. I don't buy the whole "tax revolt" theory of the Revolution, but come on...this is just shocking.