He used the percentage of spending/debt to GNP coming out of World War Two where it was over 30% at the end of the war and dropped by 2/3rds in the 3 years after and the economy grew. Well duh. The east coast got hit by a snowstorm yesterday and the stock market went up...so we need a storm every day for stocks to rise?
It is the simple view of history that I find most irritating. 2006 with its run away Bush spending, off budget wars, etc., is not to be confused with stimulus spending now or in the two years that Mr. Obama has been in disaster management mode and that is the point. A family, hypothetical, has a fixed mortgage - an old one and also spends $100 a day on home decorations and does this even though it eats up all available extra money. The home burns down and they have no insurance. Now the family spends all their money plus that $100 a day on putting a roof over their heads and feeding the family because it is just more expensive to live in temporary housing than in their old 30 year fixed mortgage home. Please tell me how the circumstances of their spending is the same? How is $100 spent on stuff the same as $100 spent on food?
Times change. Yesterday isn't today, wish that it was. And it is that simply simon view of the good old days that makes Mr. Laffer such a laugher.