Props to Professor Brian Domitrovic for taking certifiable maniac Jonathan Chait to task for his sloppy, stupid writing.
Jonathan Chait of New Republic fame is the cliché’s most recent enunciator. He wrote the above line last month in a takedown of Republican fiscal policy, in the organ Democracy: A Journal of Ideas. Chait joins a list of distinguished observers – such as MIT/IMF/Peterson Institute majordomo Simon Johnson – who have recently repeated the bald and false assertion: George H.W. Bush called supply-side economics voodoo economics.
Let’s go back 31 years and sift the evidence. The underlying reference is to the 1980 Republican primary campaign, when Bush was trying to make time against a surging and ultimately victorious Ronald Reagan. In April 1980, and in press releases in prior months, Bush did indeed, no doubt about it, say that his opponent espoused “voodoo economic policy.” But – and this is the big but – Bush did not associate Reagan’s economic plan with “supply-side economics.” Rather, Bush called himself “the supply-sider in this race.”
Paul Ryan: If you tax something more, you get less of it. If you tax something less, you get more of it. We don’t want to tax jobs more. We want them to be taxed less so we can get more of them.
– – – – –
Ryan’s budget predicts less government spending and less taxation will drastically shrink unemployment, rejuvenate the housing market and generate billions in extra government revenue. That forecast comes from the conservative Heritage Foundation, which adheres to Ronald Reagan’s supply side economics: Get the government out of the way and the economy will flourish.
Brian Domitrovic at Forbes.com:
The problem with composing a straight history of supply-side economics is that inevitably, you’ve got to make it an epic. It’s one whale of a success story – a decade of stagflation vanquished once and for all – with drama, personality, savvy, and intellectual heft in tow. If you’re a scholar settled high in our tut-tutting and left-leaning establishment, brace yourself if you decide to write that book.
Dan Mitchell writes A Laffer Curve Tutorial which features three great, short videos. Enjoy!
By Larry Kudlow
The new Tea Party GOP must maintain a message of economic growth.
Alan Reynolds is in today’s Investor’s Business Daily:
Personally, I’d prefer individual tax rates of 15%, 20%, 25% and 30% with a low flat rate on dividends, capital gains and estates and a 25% rate on corporate profits. But even such a modest move in the right direction would be ruled out if current law could somehow be made permanent.
By partially co-opting the banal Republican talking point about “making the Bush tax cuts permanent” Obama is really trying to cram through his own tax policy proposals from the moribund 2011 budget. He is belatedly pushing the same proposals from the same budget that Obama and a Democrat-controlled Congress have totally ignored since February.
– – – – –
After the dividend tax rate came down, average dividends among the top 1% surged to $52,814 in 2004 and $83,072 by 2007. Reported dividends of the top 1% in 2007 were twice as large as the previous peak in 2000. That can’t be coincidence.
Since 15% of $83,072 is larger than 38.6% of $30,673, even that drastically reduced tax rate on dividends did not significantly reduce average revenues collected from the top 1.4 million taxpayers. But the lower dividend tax clearly did result in high-income taxpayers holding more dividend-paying stocks than ever before in taxable accounts.