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Veronique de Rugy | Which Hurts More, Tax Increases or Spending Cuts?





In the debate over the fiscal cliff, and beyond the politics, the president and Congress should be asking the following question: Between the choices of tax increases and spending cuts, which measures will hurt the economy the most?

Over at EconLog, George Mason University’s Garett Jones provides the answer: Tax increases. He looks at an IMF paper, often used by anti-spending cuts advocates to say that spending cuts hurt the economy, to show that actually fiscal adjustment based mostly on tax increases will hurt the economy the most. Here is Jones:

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