Tuesday, September 22, 2009


Today'$  Laffer
"other than that, Mrs. Lincoln, how did you like the play?"

Art Laffer's excellent column in today's WSJ  (Taxes, Depression, and Our Current Troubles ) set me in motion.  Excellent because Laffer has an ability to distill weighty economic theory down to a simple, easily digestible syrup.  While recognizing that I hardly qualify to sneer at anybody's intelligence quotient, there are two areas where I most certainly do.  Anybody promoting the notion of man caused climate change, or anybody claiming that Reagan's adherence to Laffer Curve principles was a disaster,  is too freaking stupid
  to be taken seriously on any matter.  These three short videos are guaranteed to confer upon the viewer a better understanding of tax policy than possessed by any elected Democrat in the nation .  Period.  Even watching  the first 3 minutes of  L1  may suffice.  Watch, and enjoy hilarity like this from L3:
Here's a real-world example. Back in 1989, I worked for Senator Bob Packwood of Oregon. As the ranking Republican on the Finance Committee, he sent a letter to the JCT, asking how much tax revenue would be raised if the government confiscated every penny of income about $200,000. What did the JCT say? On your screen, you can see Senator Packwood's November 14 floor statement in the Congressional Record.

As the Senator explained, the JCT estimated that this 100 percent tax rate would collect $104 billion in 1989, rising to $299 billion in 1993. And when Senator Packwood asked the bureaucrats whether this was realistic, they gave him the same revenue estimate, but included a footnote stating "that these estimated taxes do not account for any behavioral response." This is sort of like the fiscal equivalent of "other than that, Mrs. Lincoln, how did you like the play?" (Laffer 3)
 Laffer 1 - 8 minutes
Laffer 2 - 7 minutes Laffer 3 - 7 minutes


pdwalker said...

Great videos.

Anonymous said...

This reminded me...

When I was in high school, a long time ago, I signed up for Economics. For the first 6 months or so I was interested and did well but came to realize that the Keynesian stuff (didn't know that at the time) we were being taught was 100% pure BS. I'd ask questions and got a "well if we assume" you'll get this result. Of course the assumption was just as you post indicated--that people are morons and will do the same thing regardless of circumstances. I gave up on the subject, my grades dropped, and the teacher was pissed because I'd been one of his best students. I'm pretty sure I told him that the theories he taught sucked as well.

Now I realize, more fully, how much BS we were being fed. I've also come to the conclusion that no-one can predict, with certainty, exactly what will happen when. However one can say, generally, what will result as a consequence of policies.

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