income effect
apparently someone's been reading my blog. i've posted on this topic before. if i cut your wages you will work more hours to make up the difference. which clearly does not benefit you. but it does benefit the economy. ie you have incentive to do more economically valuable things. if i got the lingo correct. cutting your wages is good for the economy. at least this is the line of reasoning taken by someone trying to sell me on romney's tax plan. romney's suggested tax plan raises taxes on the middle class. you taking a pay cut and you eating a tax hike both reduce your effective wages. which apparently is good for the economy. romney also suggests preserving the tax cuts for the rich. which puts the so called job creators in the opposite boat. they have incentive to do fewer economically valuable things. specifically, by gop logic, they'll create fewer jobs. which is bad for the economy. a wash? more/less. course the difference is, you work more and rich folks work less. well, to be fair, the growing ranks of the unemployed work less too. i seriously don't know how anyone can think this is a good plan.