A few days ago, The Krug put his crayons to paper and wrote what appears to be an op-ed, this one attacking supply-side economics and advocating Krugmanomics.
But now it looks as if voodoo is making a comeback. At the state level, Republican governors — and Gov. Sam Brownback of Kansas, in particular — have been going all in on tax cuts despite troubled budgets, with confident assertions that growth will solve all problems. It’s not happening, and in Kansas a rebellion by moderates may deliver the state to Democrats. But the true believers show no sign of wavering.
Meanwhile, in Congress Paul Ryan, the chairman of the House Budget Committee, is dropping broad hints that after the election he and his colleagues will do what the Bushies never did, try to push the budget office into adopting “dynamic scoring,” that is, assuming a big economic payoff from tax cuts.
Tim Worstall then wrote this response to The Krug at Forbes.com:
It does rather boggle the mind that a Nobel Laureate economist is against the idea that we should try to estimate the changes in peoples’ activities in response to changes in incentives. Maybe we’re not very good at it, maybe we won’t get the perfectly correct answer. But the core of the whole economics project is that people respond to incentives. So shouldn’t we try to work out how before we change public policy?