6 Responses to “good read”

1. 1 Kent
   6/29/2005 at 10:13 am

   Would someone pass me the sack of whatever this guy’s smoking…I’d love a little of that feel-good feeling myself.
   Does anyone remember Dubbya mentioning the Laffer curve when he was selling these glorious tax cuts? Seems to me it went something like “We got this here pile of surplus, and it’s your money so we’re giving it back to you. And while we’re doing it, we’re gonna pay down $2 trillion of the national debt.” How’d that all turn out? The Laffer curve is one of those after-the-original-explanation-didn’t-work-out kinda things…like introducing democracy to Iraq, when there was no WMD threat to the U.S.
   Notice all the favorable comparisons to 2004? No comparisons to ‘98 or ‘99 or any of those other Clinton years? Wonder why. Maybe the projections are correct, and 2005 will not be as bad as 2004. Maybe prostate cancer is not as bad as lung cancer.
   Notice that the Laffer curve doesn’t have any numbers on it? No indication that the optimal tax rate is 39.6% or 28% or 15% or any of the other rates mentioned in the article. Maybe Laffer doesn’t know what it should be (in which case, maybe he could let us know when he finds out). Notice too that the Laffer curve is symmetrical - which is absurd in the first place - but that implies that a rate 1% lower than the optimal rate is just as bad as 1% higher. Maybe we should raise the rate, and see if we get more money that way, and we can help Arthur tease out what that optimal rate should be.
   How about all this extra money that’s flowing in? Doesn’t seem to be helping the budget deficit - wonder where it’s going.
   And all the extra money the states are realizing? Doesn’t seem to be happening in my state. During the ’90’s, so much money really was pouring in, that even NJ politicians were having a hard time figuring out how to piss it away.
   And all that job growth? Seems like there were only two months in the past 36 when job growth even matched the increase in the working-age population.
   And all this corporate investment? Isn’t happening - corporations have become the great savers that our nation needs to try to balance the current account deficit. U.S. companies are sitting on bigger piles of cash than ever before; and when they use it, it’s only for job-eliminating mergers and acquisitions or expansion overseas.
   Sorry to intrude on the reverie of the WSJ and the Bushies. But I’m sure they’d thank me for waiting until the celebrations died down after the commander-in-chief’s extoling last night of the continuing success of the occupation in Iraq.

2. 2 jim
   6/29/2005 at 10:23 am

   What kent said.

   No, seriously, though. Thanks Kent.

   Something about the notion of driving federal tax law from the back of a napkin seemed strange to me and it is exactly the absence of any quantatative data on the curve that I wasn’t getting. That and the fact that if there is all this money flowing back into the economy due to the tax cuts, where is it? The RI Leg just passed the budget on monday night and there’s certainly no huge influx of funding for schools, cities, etc from the feds in that budget, so where’d it all go?

3. 3 chris
   6/29/2005 at 10:44 am

   you would be amazed to discover how many brilliant ideas are drawn up on a bar napkin.
   i think the first options contract was drawn up at a bar as a bet between two gents. if da vinci was a bar rat, i’m pretty sure he would have used nakins as his sketch pad.

4. 4 chris
   6/29/2005 at 11:01 am

   http://www.victoriacapitalus.com/researchpapers/Origins%20of%20Supply-side%20Economics.pdf

5. 5 jim
   6/29/2005 at 11:31 am

   I’m not opposed to the back of the napkin approach. I’d just tend to expect that there would be a more rigorous process to take tax theory from brainstorming on the back of a napkin to implementaiton :-)

6. 6 chris
   7/11/2005 at 2:18 pm

   http://www.freerepublic.com/focus/f-news/1440544/posts

   read this too.
   let me know what you think