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69 Comments
- Winkleman, on 04/09/2009, -11/+33i think this should've been titled "How Cheney & Rumsfeld ***** up America, prior to George W."
- GodAImighty, on 04/09/2009, -13/+31The back of a dirty napkin is the only place supply-side economics belongs
- costumemaker, on 04/10/2009, -3/+15only because he cant remember where he put his keys so he is looking for them desperately.
//***** reagan and the way he destroyed the middle class and sent this country into a spiral that it hasnt recovered from since. He was a cancer on this country. Disrespecful of the dead? who cares, He was more disrespectful of the living. - m0nkeybl1tz, on 04/09/2009, -6/+16It sounds like it was a sensible idea: that at some point, increasing taxes would decrease income. However, the idea that lowering taxes will increase income sounds like an abuse of the idea.
- ModernScholar, on 04/10/2009, -5/+15the idea of the laffer curve is a fact; what is not a known fact is where the peak of that occurs. Liberal economists may say even 90% tax rates, conservative economists might say 15-20%. The truth though is really somewhere in between.
- asskey, on 04/10/2009, -3/+12That would be clever, if knowing what a natural log does made someone clever.
It doesn't. - seltaeb4, on 04/10/2009, -7/+16The reason it's called the "Laffer Curve" is not because it was named after Arthur Laffer, but because the the Republicans have been laughing their asses off for the past 30 years at anyone netting less than $1 million net a year who fell for it.
They told you that if they were allowed to cut taxes on multi-millionaires and billionaires, the economic growth would make every Joe Sixpack a millionaire too. The Republicans have used Adam Smith's "Invisible Hand" to flip you off for decades. Are you guys millionaires yet? - yeeaauuh, on 04/09/2009, -4/+13If you listen closely, you can hear Reagan clawing at the top of his coffin...
- costumemaker, on 04/10/2009, -6/+14of course its a napkin. They probably got it from the bar where drunk off their asses when they came up with such a stupid idea.
Note to digg economists: demand creates jobs and innovation, corporations don't. Anyone brainwashed to believe that supply side economics benefits them is just a pawn to the people who are making money and getting powerful off of you. - lordmike, on 04/10/2009, -3/+11It should have been written on a piece of toilet paper for all the good it's done us...
- Kibitz, on 04/10/2009, -4/+9Actual pump priming comes from government spending. Like it or not, the spending binge that the Reagan administration went on allowed us to compete with Japanese technology, gave us fifth generation computers, etc.
Laffer Curve, on the other hand, is ideological cover for giving a tax break to your wealthy friends, and has always been followed by decreased government revenue. - juniorb, on 04/10/2009, -0/+4The front is the side that says "Orlando's Gentleman's Club" on it.
- juniorb, on 04/10/2009, -1/+5Yes. Supply-Side Economics.
- isny, on 04/10/2009, -0/+3Zombie!!
- palmer, on 04/10/2009, -2/+5Is there anything more tired than the "sketch on a napkin" story?
- dmanmax99, on 04/10/2009, -8/+11The idea wasn't worth the paper it was written on.
- Arlo003, on 04/10/2009, -0/+3There are certainly stupid interpretations of the Laugher Curve, different ideas of where the sweet spot is. But the Laugher Curve itself isn't a stupid idea.
- C0ntraRadical, on 04/10/2009, -0/+2"Your teachings are making the poor poorer. What do you have to say to that Supply Side Jesus?"
"But average income is increasing and social mobility within Rome is higher than ever!"
Hilarious. - C0ntraRadical, on 04/10/2009, -0/+2That's unfairly dismissive. You can say that the political use of the concept has been a bad joke but the idea itself makes perfect sense. The question (like another Digger pointed out above) is the shape of the curve.
- C0ntraRadical, on 04/10/2009, -0/+2"...unlike when the wealthy invest their money (they are smart - how do you think they got to be wealthy in the first place - see The Bell Curve)..."
Ooh, the Manifest Destiny/Divine Right theory of wealth. They are truly the chosen ones.
Unfortunately you've mixed up supply-side economics with its exact opposite.
By your own standards I'm going to take that to mean you're not wealthy. - costumemaker, on 04/10/2009, -5/+7If you make 50 k a year and you pay 15 k in taxes lets say. Your take home is 35k. your boss knows that you will work for 35k. If your taxes are lowered, your salary will decrease gradually over time. If they were eliminated, you would be out of your mind to think your boss would pay you 50 when he knows you will work for 35.
If you look at tax cuts to salary ratios over time, you see that as taxes are cut, gradually salaries decrease. As they go up, salaries increase because of this. It doesn't happen over night like I said, but it does happen. - C0ntraRadical, on 04/10/2009, -0/+2This is kind of how a lot of economics work.
Here's a joke about it:
A physicist, a chemist, and an economist are shipwrecked on a desert island. Starving, they find a case of canned pork and beans on the beach, but they have no can opener. So, they hold a symposium on how to open the cans. The physicist goes first:
"I've devised a physical solution. We find a pointed rock and propel it at the lid of the can at, say, 25 meters per second --"
The chemist breaks in:
"No, I have a chemical solution: we heat the molecules of the contents to over 100 degrees Centigrade until the pressure builds to --"
The economist, condescension dripping from his voice, interrupts:
"Gentlemen, gentlemen, I have a much more elegant solution. Assume we have a can opener..." - Dumbledorito, on 04/10/2009, -2/+4Behold the Gospel of Supply-Side Jesus:
http://www.youtube.com/watch?v=X8xU-gKK17A - whahaa, on 04/10/2009, -4/+6***** supply-side economics!
/boo hiss - inactive, on 04/10/2009, -0/+2Although I agree with the fundamental concept of the curve, to say no one would work with a 100% tax rate is stupid, at least some people will provide at least some work in such a situation, the assumption is the 100% tax will be used to provide for the society, this is the textbook classification of Communism..
They also have the terrible flaw to say that because at some level of tax a reduction will increase revenue that at this point in time, any reduction will increase revenue's.. - Kibitz, on 04/10/2009, -7/+9Laffer Curve: one way to get your ass laughed out of economics graduate school.
- DiscoLando, on 04/10/2009, -5/+7As opposed to the wonderful policies that proceeded it? Those fantastic Keynesian doctrines that brought us the wonders of stagflation?
Of course, I say that as one who is not a supply-sider... don't get me wrong. - mikedeezy33, on 04/10/2009, -0/+2They need a reasonable model to back this up, with ACTUAL numbers and statistics. Without that it is nothing but an idea.
- LordRedSnake, on 04/10/2009, -0/+1Except that had nothing to do with tax cuts or supply side economics and had everything to do with Fed monetary policy.
- inactive, on 04/11/2009, -0/+1Yes, but if one happened to be taxing past the maximum revenue point of the curve, it stands to reason anyone in that situation would do to gain for everybody by decreasing the tax rate, the government has more money, along with all the taxpayers. A good example of humans working to incentives.
I wish they would structure much more of society with this knowledge. For example in a lot of countries, the difference between relying on welfare when one can, to taking on a part time job in that persons given situation, can often be very little to negative from reductions in their welfare payments. If we set this up to ensure people would benefit by doing this work, then the participation rate would suddenly skip a beat... - frankdozier, on 08/10/2009, -0/+1@mbraynard Yeah, I'm middle class. I'm soooo ***** wealthy that I can't afford a new alternator for my car. I won't even get into my medical bills for my daughter's cancer AFTER insurance. You don't know what the ***** you're talking about. Go ***** yourself.
- DavidYeah, on 04/10/2009, -0/+1I see what you did there.
- iamacyborg, on 04/11/2009, -0/+1I don't think the "laffer curve" quite sums up supply side economics, and saying Art Laffer invented the concept is a ***** joke. The idea that production is what drives an economy and not consumption is perfectly valid.
Giving tax cuts to businesses is not a bad thing. Bush's problem was that he did those tax cuts while at the same time blowing the roof off of government spending, conducting illegal wars, doubling the size of the department of education, etc. etc.
In reality its pretty much impossible to prove or disprove an economic theory because the economy is an uncontrolled environment, not a laboratory. There are always many factors at play. Good economic theory makes rational sense, and follows from a logical chain of reasoning. - kingmanic, on 04/10/2009, -0/+1Well.... it sort of worked. The real estate speculation bubble briefly made almost every home owner millionaires.
- Farenyth, on 04/10/2009, -0/+1The concept that government revenue has nodes at either end, relative to the rate of taxation and influential to man's desire or incentive to work, is nothing new; if you wish to ascribe Laffer (especially while discrediting it) with its origins, go ahead, but it's a fairly naive outlook upon the past.
- Laminarcissus, on 04/10/2009, -1/+2Starts with a napkin, ends with a douche bag.
- Kibitz, on 04/11/2009, -0/+1If you think the Broken Window Fallacy somehow discredits Keynesian stimulus, you haven't bothered to think these issues all the way through.
To take just on example: why do you think you're able to communicate with me through a computer, on the internet? Magic? Did Bill Gates tap his magic wand, and then computers and the internet wooshed into existence? No, these technologies were nurtured and developed for decades in the state sector through government spending, and then handed over to private corporations when they became commercially viable. Welcome to reality. - Richandler, on 04/10/2009, -1/+2The part that this video forgets to mention is that when you lower taxes, the people who the government works for, get more money and that is what counts. It think the idea that higher revenue is mostly associated with money moving quicker through the economy rather than the slow process that the government constantly goes through. Thus the government gets more money at first until it stagnates in their government checkbook and then is re-released back into the economy or simply destroyed though horrible spending ideas.
- frankdozier, on 08/10/2009, -1/+2You're right, those wealthy people are so smart. So smart, in fact, that they got to be wealthy off the backs of the middle class. Actually, they're so smart that they were able to screw everyone else over for as long as they wanted, nearly undetected. You know what? Those guys are SO smart that they laughed out loud at the idea of supply-side economics, and said: "OK, I'll take the money and run," just as the conservative government wanted them to.
Pretty smart, huh? - C0ntraRadical, on 04/10/2009, -0/+1But see how spending can help neutralize a recession?
The trick is to make sure you're not increasing spending when you don't need to. Then you're just crowding out private resource allocation instead of idle resources. - C0ntraRadical, on 04/10/2009, -0/+1But you're only talking about the top marginal rate without any mention of the bracketing.
The tax structure across different income levels is also important in maximizing revenue.
The Laffer curve also doesn't even attempt to address fairness which is a whole 'nother can of worms. - C0ntraRadical, on 04/10/2009, -1/+2"Guess math/logic isn't your strong suit."
This coming from the guy who wants to privatize all the roads?
I'm going to disagree with you both and say that increased public spending as pump-priming is only truly effective when the pump actually needs priming (i.e. recession.)
Otherwise you're likely shifting from efficient distributor of resources (private market) to one that's less so (government.)
But! ... don't take that to mean I think the more money left in the private market the better.
There has to be a base level of taxation to support long-term drivers/facilitators of economic growth like education, healthcare, societal institutions, and even defense.
This are things that the private market is not very good at allocating resources to, even though they provide a greater net return for the economy than private spending would have otherwise. - frankdozier, on 08/10/2009, -0/+1@mbraynard Stop talking....you're embarrassing yourself.
- C0ntraRadical, on 04/10/2009, -0/+1"...and had everything to do with Fed monetary policy."
Among about a dozen other factors as well. - C0ntraRadical, on 04/10/2009, -1/+2It's pretty disingenuous to place the blame for the 1970's stagflation solely on Keynesian economic policy.
It's more accurate to say the stagflation was actually caused by commodity supply shocks and, then only later, exacerbated by the failure of Keynesian economic policy to control this supply-push inflation instead of focusing on boosting demand.
So really Keynesian theory extended stagflation, not caused it. - kingmanic, on 04/10/2009, -0/+1The feds low low rate was partly responsible. Massive speculation and a semi-insane market optimism was a major part too. Both drove banks to require less and less for a loan because very few things promised as much return/security in the same volume as mortgages. The fact that the government was both looking the other way for 20 years, encouraged loans to marginal (and eventually out right unsuitable) candidates and tried to pull all stops on super heated bubble also didn't help. Supply side economics did not directly driving this but was part of the same "market" philosophy and actually did drive the problem more as it made it more favorable to invest.
- gradient01, on 04/13/2009, -0/+1I don't think the purpose of tax policy is to maximize the amount of money reaped from the people of this country, and to frame the debate in those terms is lunacy. Taxation is a necessary evil and taxes should be as low as we can possibly make them irrespective of whether our government is deprived of the fruits of its citizens labor.
- C0ntraRadical, on 04/10/2009, -0/+1Meh. He articulated the idea and popularized it. That's good enough for a byline.
- iamacyborg, on 04/11/2009, -0/+1Communism is not a 100% tax rate, it's a 100% graded tax rate (as opposed to the United State's partially graded taxed rate). In other words, a very productive person gets taxed much more than a very unproductive person (maybe they even pay a negative tax) such that everyone makes the same (piss ass) money.
What you say is right though, that if you're to the left of the "peak" of the curve than any reduction is going to reduce your tax revenue. Is our goal really to maximize government revenue? The "peak" is the peak of government revenue, not the peak of economic health and general well being. That peak is much further left.
The peak of the Laffer curve could be summarized as "just the right amount of oppression". - Ttech2, on 04/10/2009, -0/+1Great....
Tax Cuts are what causes problems. -
Show 51 - 71 of 71 discussions
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