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October 12, 2004
The Nobel Prize and Politics
According to Nobelpreisborse, New York Times columnist Paul Krugman had a decent shot at winning the Nobel Prize this year in economics. This obviously would have been ammunition for the Kerry/Edwards ticket as he has been a harsh critic of Bush's fiscal policies, especially his tax cuts. As it turns out, it looks like the shoe might be on the other foot. Edward Prescott, along with Finn Kydland, was awarded the Nobel Prize yesterday and he had this to say about the Bush tax cuts:
What Bush has done has been not very big, it's pretty small," Prescott told CNBC financial news television.
"Tax rates were not cut enough," he said.
Lower tax rates provided an incentive to work, Prescott said.
The American analyst, who is a professor at Arizona State University and a researcher at the Federal Reserve Bank of Minneapolis, said a large tax cut in 1986 had lowered rates while collecting the same revenue.
But "in the early '90s the economy was depressed by the tax increase in '93 by about four percent, and it's right at that level now," Prescott said.
Posted by Peter Mork at October 12, 2004 8:07 AM
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