Originally Posted by Ligeia
I think, as a general rule, each side is more confident in their economic stance than is warranted. Honestly, if macroeconomics, and classical economics more broadly, were as reliable as each side implies, I think we would see drastically different economies. There would be very little room for dispute and forecasts, predictions, and general economic planning would be a lot more successful.
I think one has to begin by determining what the proper role of governance is. For example, if you believe that is the job of government to provide a framework in which each person has the potential to be successful, then I think you can make a better case of less centralized planning and a more liberal economy (I mean this in the most traditional sense of liberal, ie. freedom and individual autonomy).
However, if you believe that the role of government is to reduce the aggregate suffering, then the limits of the government are greatly reduced as well. Now, it is simply a matter of evidence: if we have good reason to suspect that raising the corporate tax rate will reduce suffering of the most impoverished in the country, then there is no real way that you could argue against it. Claims about individual liberty are somewhat easy to skirt.
I think when you take that latter approach, you see that classical liberal economics don't hold up. One of the freest economies in the world also has a hugely dissatisfied populace. Meanwhile, highly socialist economies in Europe have much higher levels of happiness.
I think it is also important that we do not straw-man each other's positions. For example, I don't think anyone who advocates a more top-down economy would point out the USSR as the test case which we should emulate. At the same time, corporate handouts are not an example of classical liberal economics, either, so I don't think you should hold that against capitalism. From the perspective of thorough-going-capitalists, much of the activity in the US that socialists consider to be a machination of capitalism are actually machinations of top-down, as opposed to bottom-up, economic planning. A thorough-going-capitalist would've wanted those failing companies to bottom out so that their resources can be redistributed among more competent or efficient companies.
I guess my main point is that I think it is not as straight-forward as we pretend it is when we engage in debate with others. I also think we should spend more time identifying what our starting values are and why they differ, instead of debating economic points that are beyond our expertise, such as "What will be the effects of a x% tax cut?"