Tuesday 27 April '10 show notes

• Chris Hayes, Washington, DC Editor of The Nation Magazine.
• Senator Sherrod Brown (D-OH) (Chair, Subcommittee on Economic Policy).
• Steven Hill, Director, Political Reform Program - New America Foundation; author of "Europe's Promise: Why the European Way is the Best Hope in an Insecure Age".
• Karen Nussbaum, Executive Director of Working America.
• R. Emmett Tyrell, founder & editor in chief of The American Spectator, about his new book "After the Hangover: The Conservatives’ Road to Recovery".

• What the hell is going on on Wall Street?
• What is the current state of the financial reform legislation in the senate?
• What does Europe know that we don't know about how to make an economy that works?
• Labor Segment: Calling out Wall Street to bail out Main Street...and the I am "Not Your ATM" campaign?
• Will conservatives ever recover their rationality or electoral majorities?

• All 'Bout The Money, Meja.
• Change, Bart Crow.
• Let Me Be Myself, 3 Doors Down.
• Thnks Fr Th Mmrs, Fall Out Boy.
• Walk Away, Kelly Clarkson.
• I Just Wanna Live, Good Charlotte.
• Crawling in the Dark, Hoobastank.
• Grand Canyon, Dmitriy Lukyanov (you need to search for it) (with additional sounds by Jacob).
• Democracy, Leonard Cohen.

"The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little."

Second Inaugural Address of Franklin D. Roosevelt, 20 January 1937.

For nearly three decades, many conservatives and libertarians have argued that reducing federal tax rates, in addition to increasing long-term economic growth, would reduce the growth of federal spending by “starving the beast.” This position has been endorsed, among others, by Nobel laureates Milton Friedman and Gary Becker in Wall Street Journal columns in 2003. There are two problems with this position.

First, this position is not consistent with the evidence, at least beginning in 1981. In a professional paper published in 2002, I presented evidence that the relative level of federal spending over the period 1981 through 2000 was coincident with the relative level of the federal tax burden in the opposite direction; in other words, there was a strong negative relation between the relative level of federal spending and tax revenues. Controlling for the unemployment rate, federal spending increased by about one-half percent of GDP for each one percentage point decline in the relative level of federal tax revenues. Although not included in the sample for this test, the first three years of the current Bush administration were wholly consistent with this relation.