For evidence of what’s wrong with the Obama administration’s approach to fiscal policy, you don’t have to look much further than the two-minute mark in this CNBC-TV interview with Sen. Ted Kaufman (D., Del.). Kaufman makes the point that rich people (those earning more than $250,000 per year) shouldn’t get a tax break, because their marginal propensity to consume is too low. The only economic activity that appears to matter in this mindset is how much people spend. It’s as if wealthy people stuff their money in a mattress where it’s just sitting around not doing anything. Kaufman appears completely unaware that the money becomes investment capital, which is crucial to getting the supply side of the economy moving again.
— Samuel R. Staley is Robert W. Galvin fellow and director of Urban & Land Use Policy at the Reason Foundation.