What I'm not saying is that all government spending is bad. It's not - far, far from it, but there is no free lunch, as a former colleague of mine used to say. There is no public tooth fairy. Father Christmas does not work on the Treasury staff this year. You can never bail someone out of trouble without putting someone else into trouble.

The income effects in an economy always sum to zero.

There are 11 states in the United States that in the last 50 years instituted an income tax. So I looked at each of those 11 states over the last 50 years, and I took their current economic metrics and their metrics for the five years before they put in the progressive income tax... Every single state that introduced a progressive income tax has declined as an overall share of the U.S. economy.

You know, without China there is no Wal-Mart and without Wal-Mart there is no middle class and lower class prosperity in the United States.

The zero-income-tax-rate states have far faster growth in tax revenues than did the states with highest income tax rate over this period.

There are lots of other things that affect state growth besides state taxes. However, the reason I look at taxes is because these are policy variables that can be changed by state governments in order to get better results than they otherwise had.

It has always amazed me how tax cuts don't work until they take effect. Mr. Obama's experience with deferred tax rate increases will be the reverse. The economy will collapse in 2011.