No Passing on the Laffer Curve....stay in your own lane

I'm of the opinion that no one can offer an idea or  suggestion on anything unless they are old enough to remember the last time someone tried it and it failed. I'm not kidding.  While driving around the other day I heard one of the talk radio folks fondly remember supply side economics, the trickle down theory and of course the Laffer Curve.  It didn't seem to matter that the host and the "panel" were about 12 years old when these came into the Reagan quiver of dysfunctional arrows but that is a different argument.  Right now we have a Congressman Ryan who seems to have been dipping in the dry well of discounted ideas. Let's talk about what he has in mind for a minute.

 

Congressman, now Speaker, Ryan is what is known as a supply-sider. That makeshift term, boiled down, means don't tax and don't regulate business and in doing so capitalism will take over in full bloom and do its magic.  When businesses prosper as a result of supply side theory, government revenues will shoot up - essentially stating that the revenue pool will fill up by way of all the business activity and then you can cut taxes even further with the theoretical result of even more revenue.  At this point you should be fondly remembering the Laffer Curve.  This tax revenues:government revenue can also be described as a function of jobs and prosperity - indirectly of course - as the theory goes that the more business activity there is the greater supply of goods and services that will be in the marketplace and it follows that "the more people will earn" and "the more people will spend" and "the more tax revenue will occur" without resorting to raising taxes - just expanding the pie pan that holds the ever expanding pie. Got it?

For those of use who remember the times, Mr. Reagan - the actor turned president - bought into this supply side/Laffer Curve in a big way and our modern politicians have, in fondly remembering a sliver of Reaganomics (or as Mr. Bush called it: Voodoo Economics).   Sarah Palin  jumped on this wagon and apparently drove into Mr. Ryan's driveway, parked it, and told him to get with the program.  Being obedient, Mr. Ryan then climbed on board and began cracking his whip while the Palin contingent, NOW REPLACED BY NEARLY THE ENTIRE GOP PRESIDENTIAL FIELD, settles comfortably in for the ride.

But just some instructions we older folks have tucked in the Wagon's glove compartment that Mr. Ryan might want to read before he heads to the beltway.  And for those of you who are swallowing this tonic for what you think ails you.....

• The Laffer Curve is a theoretical exercise and not real world. In practice it doesn't work and has never worked.
• Supply side tax cuts don't created business activity. Demand creates activity.
• Deregulation brought us the brink of catastrophe just it did in the S&L crises under Mr. Reagan/Bush.
• Cutting taxes does NOT increase overall revenue - it only expands the tax base but it doesn't do a thing else.
• Medicare is and entitlement as we are entitled to the benefit for paying into it for our whole lives.
• Cutting the tax brackets to a max of 15% corporate and individual will do nothing except make it easier for the rich and the corporations.  Is it lost on Ryan that if corporations all paid a flat 20% there would be no need for individual income taxes whatsoever. Warren Buffet pays taxes at a lower rate than his secretary does.

Clear?