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Home Publications Blogs Beat the Press Tax Increases and Spending Cuts in Italy Will Slow Growth, Not Speed It Up

Tax Increases and Spending Cuts in Italy Will Slow Growth, Not Speed It Up

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Wednesday, 21 September 2011 05:08

In an article discussing debt problems of euro zone countries the NYT told readers that a statement issued by the Italian government yesterday:

"said the government was preparing steps to lift growth and recently passed measures to control public finances through tax increases and spending cuts."

It would have been appropriate to remind readers that spending cuts and tax increases slow growth by pulling money out of the economy. It is likely that whatever steps the Italian government might prepare to boost growth will be more than offset by the impact of its austerity package.

Comments (1)Add Comment
I'm not so sure how ....
written by John Puma, September 22, 2011 3:37
saying, simply: "tax increases slow growth by pulling money out of the economy ... " is going to convince anyone that taxes need to be raised on the rich.

Perhaps something like "tax increases on those without disposable income"?

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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