Professor Kelly on Economics

Full disclosure; I am not a trained economist nor a veterinarian, but I do think I learned enough in college to spot BS when I see or hear it.  I offer the following examples for your consideration.
(Warning:  I could be wrong (but I don't think so).

I keep hearing these bogus economic theories, espoused by the left and of course everyone on MSNBC, that for every $1 spent on unemployment benefits, another $2 is generated in economic activity.  Same for food stamps, says Nancy Pelosi and the U. S. Department of Agriculture.  They tell us that for every $1 spent on food stamps, another $1.84 is put back into the economy.  Last summer, one of Jennifer Granholm's DHS bureaucrats tried peddling the magical multiplier effect of food stamps here in Saginaw.  Well if that were all true, then why not put us all on unemployment and food stamps and watch our GDP explode to new and dizzying heights of prosperity!

The other morning I heard Donny Deutsch say that Barack Obama had "never run anything in his life", prior to being elected president.  Donny is a big supporter of the Bamster.  He was explaining why the president's negotiating skills might look weak to the uninitiated.  Another honest moment emerged minutes later when Democrat Governor Ed Rendell of Pennsylvania, while defending the Obama/Republican tax deal as a defense against the possibility of a double dip recession, said quite frankly, "because he country is going to hell in a hand basket."  Just a hunch, but Gov. Rendell's invitation to the White House Christmas, er Holiday Party, may get lost in the mail.

Here's another from Ed Rendell during the same segment.  He said that Bill Clinton raised taxes on the highest 2% of income earners in the '90's and as a result, we had the "best period of economic growth in our lives."  Once again, Democrats see the sanctioned confiscation of someone else's earnings (taxes) as "growing" our economy.  Yes Virginia, when taxes go up they expand the governments' pockets, but for the private sector, and certainly for the individual who's paying those taxes, there is a net decrease.  They had it, now someone else does.  No new dollars have been added, so where's the "growth?"

Along those same lines, how can the extension of the "Bush tax cuts", our current rate of taxation by the way, which have been in place for several years now, add to the deficit?  When they were first implemented, they were indeed a tax cut.  The government raised x and then after the taxes were lowered, the government would presumably make less of x, right?  (*See below) Seems simple enough.  Okay, how then, if everything else stays the same, can we they say that by extending our current rate of taxation, we will increase our deficit by another trillion dollars?  We weren't expecting the money in the first place!  Why are we counting something that's not there?  How can you raise an additional, and fictitious, percentage of money on an already fixed percentage?  If I make $50,000 in salary, even though I'd really like to make $100,000, have I created a deficit for myself?  Of course not.  Only if I spend money like I was making $100,000.  And that my friends is the problem.      

* However, supply-siders will tell us that in reality, smaller tax rates increase the supply of money to the government because lower marginal rates leads to job growth which leads to more taxes being generated and subsequently paid to the government.  At least that's the theory.  The real problem is that promised reductions in government spending never follow the reductions in the tax rates.  But I am getting way beyond safe territory here and what I wanted to try and explain.