Holiday gifts for the American consumer
Have you read about the recent boost in U.S. consumer spending? Of course you have and you know it is attributed -- at least in part -- to a steep drop in energy prices, particularly a drop in gasoline prices.
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This development is described by some in the financial press as a tax cut because the benefit accrues to the consumer in much the same way a tax cut does. That is, by paying less at the pump, we automatically keep more of what we earn. I wonder how Keynesians who routinely advocate for enormous government spending to stimulate demand are reacting. Putting money directly in the hands of taxpayers can also spur consumption.