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Laffers

Ross Douthat:

Most Republicans would have been happy posing as deficit-reducers while arguing for deficit-financed tax cuts. But Ryan, despite his own supply-side sympathies, deliberately drew up a plan for deficit reduction that would work with our current tax code, and doesnít require any rosy fantasies about how tax cuts will spur unprecedented growth. [Emphasis supplied.]

Wait, what?

Ryanís assumptions provide the key to understanding his political thinking. He predicts that his plan would bring in more revenue from increased economic activity even while cutting the top tax rate and corporate rate from 35 percent to 25 percent, adopting the supply-side theories that he has subscribed to since he was at Miami University of Ohio. [Emphasis supplied.]

It's the old cut taxes on the rich + ? = Prosperity gnome plan. Get this:

If Rep. Paul Ryanís newly unveiled 2012 budget is signed into law, this is what Ryanís economic forecasters say will happen: The unemployment rate will plunge by 2.5 percentage points. The still-sinking housing market will roar back in a brand new boom. The federal government will collect $100 billion more in income tax revenues than it otherwise would have. And thatís just in the first year. By 2015, the forecasters say, unemployment will fall to 4 percent. By 2021, it will be a nearly unprecedented 2.8 percent.

Sounds like a "rosy fantasy" to me. Ross Douthat is both a fool and a knave.

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  • Display: Sort:
    I keep (5.00 / 4) (#1)
    by Ga6thDem on Wed Aug 15, 2012 at 01:17:28 PM EST
    asking my conservative friends if this is true then why hasn't it worked yet? You should see the pretzels people twist themselves into trying to justify this stuff.

    Reagan rate cuts (none / 0) (#30)
    by Abdul Abulbul Amir on Thu Aug 16, 2012 at 10:18:21 AM EST
    .

    Reagan cut the top personal income tax rate from 70% to 28% and tax revenue increased every year of his administration.  

    .

    Parent

    Baloney (5.00 / 2) (#31)
    by Yman on Thu Aug 16, 2012 at 11:24:58 AM EST
    OTOH - Reagan also raised taxes 11 times after cutting them - in 1982, 1984, 1985, 1986 and 1987.  Not to mention the fact that he drastically increased federal spending and tripled the national debt.

    BTW -

    tax revenue increased every year of his administration

    Wow - sounds impressive.  Unless, of course, you realize that in raw terms revenues almost always increase - except in the case of deep recession - as a function of both population growth and inflation.  Take a look at the past 40 years.  Not to mention the fact that - even in raw terms - revenue fell in 1983.  So revenues did not increase during every year of the Reagan administration.

    When you adjust for inflation and population growth, revenue increased much less during Reagan's term (19%) than it did during the 8 years preceding Reagan (24%).  We won't even talk about the 41% growth under Clinton that occurred after he raised the top marginal rate.

    Parent

    Thanks (5.00 / 1) (#34)
    by Ga6thDem on Thu Aug 16, 2012 at 02:45:56 PM EST
    for proving my point that conservatives live in a fantasy world.

    Parent
    All I have to say is (5.00 / 4) (#2)
    by Zorba on Wed Aug 15, 2012 at 01:24:03 PM EST
    I doubt it, Douthat.

    And I was thinking, (5.00 / 4) (#3)
    by Anne on Wed Aug 15, 2012 at 01:28:38 PM EST
    "I doubt that, a$$hat."

    Maybe the answer is that we just need for everyone to smoke what he's smoking; it seems to be some pretty powerful stuff.

    Parent

    Yes, his name (none / 0) (#4)
    by Zorba on Wed Aug 15, 2012 at 01:54:48 PM EST
    does lead to all kinds of appropriate word-play.
    Indeed, I'll have what he's having.   ;-)

    Parent
    Wizards and magic will save us (5.00 / 5) (#5)
    by Dadler on Wed Aug 15, 2012 at 02:24:43 PM EST
    This is what the Ryan plan REALLY is.  Abracadabra your money is gone.  Suckers.

    As (5.00 / 2) (#6)
    by lentinel on Wed Aug 15, 2012 at 03:22:30 PM EST
    illusory as Ryan's proposals are, the reason that people might take them seriously is that we are in big big trouble. High unemployment. A vanishing safety net. People not being able to pay off their mortgages.

    And this has been going on during most if not all of Obama's first term.

    In short, people are desperate.

    And they might perceive any alternative, any "rosy fantasy" as being better that what we now have.

    As indeed people were during the last part (5.00 / 2) (#10)
    by ruffian on Wed Aug 15, 2012 at 03:50:23 PM EST
    of Bush's term. Obama runs the risk of being hoisted on his own hope and change petard, even if in this case the change means going back to what what did not work 30 years ago.

    Parent
    You have to wonder when (none / 0) (#19)
    by gyrfalcon on Wed Aug 15, 2012 at 10:53:11 PM EST
    politicians, whether it's Paul Ryan Mitt Romney or Barack Obama, will figure out that over-promising stuff just gets everybody royally PO'd and themselves in real trouble down the road.

    Parent
    IIRC Romney promised a (none / 0) (#25)
    by observed on Thu Aug 16, 2012 at 12:24:14 AM EST
    big bump from choosing his VP.

    Parent
    It could be done.. (5.00 / 1) (#7)
    by NYShooter on Wed Aug 15, 2012 at 03:25:01 PM EST
    1. Current: A millionaire "earns" 2 million dollars, and pays $1000 in tax.
    Under Ryan's plan: He "earns" 6 million dollars, and pays $1010 in tax.=More Tax revenue
    Score one for Ryan!

    2. Unemployment: A victorious Romney/Ryan could easily take office with both Houses, "R." Nothing in the way of eliminating minimum wage laws, or, to be generous, reducing them to 1$/Hr. With those additional 4 million dollars our above millionaire will be "earning," think how many more maids, pool sweepers, landscapers, etc. they'll need (and afford) at $1?Hr. Unemployment solved!
    Score two for Ryan!

    Point/Set/Match


    Ahhh but.... (none / 0) (#28)
    by heidelja on Thu Aug 16, 2012 at 07:35:36 AM EST
    ...look at the possible tax revenue lost that could be reducing the debt! That's what Republicans say their concern is! The debt. A min wage at $8/hr one pays $2500 in taxes, maybe, and at $1 maybe $300! That's like 8 workers required to pay the taxes of one!

    Parent
    Why is reducing the debt so important? (5.00 / 1) (#33)
    by Anne on Thu Aug 16, 2012 at 02:27:41 PM EST
    Answer: it isn't.

    Likewise, the deficit.

    If Paul Ryan were as devoted to debt and deficit reduction as he claims to be, he'd not have voted for every single big-ticket spending bill, would he?

    Or are we supposed to believe that some things are debt-creating worthy and some not?  Drones galore at hundreds of millions?  No problem.  Food and nutrition programs for poor women and children?  Oh, those lazy bastards, no!

    Some day, maybe someone can explain to me this fetish/obsession conservatives have with spending, but only as to programs or initiatives that help people.  If it's for war, or some corporate lobbyist or big-bucks contributor wants it, no problem.

    The Paul Ryan-type plans don't boost the economy; they do, however, so squeeze the the old, the poor and the marginally middle class as to seem bent on eradicating them.  All I would say to that, other than to note how morally reprehensible that attitude is, is, once they eradicate those at the very bottom, they will have to come for those at the next level.  When these brainiacs realize the elite will soon be coming for them, they will see the light, but it will be too late.

    Maybe conservatives can't be saved from themselves, but that doesn't mean the rest of us have to willingly participate in their effort to sacrifice us.


    Parent

    I love it when (none / 0) (#36)
    by NYShooter on Thu Aug 16, 2012 at 06:19:20 PM EST
    you ask "why" the Conservatives do this, or that.

    Like Alice used to say to Ralph, "Honey, you slay me."

    Parent

    Ahhh, but (none / 0) (#32)
    by NYShooter on Thu Aug 16, 2012 at 12:49:34 PM EST
    As your italics indicate, what "they" say is definitely not what they "mean." Starting with Reagan's pulling the plug on fiscal responsibility through Bush, the lesser's, unfunded (and unfounded) wars, TARPs, Prescription Drug benefits, and bank bailouts, it seems they've rewritten the definition of Hypocrisy.


    Parent
    mercenary self-intersest (5.00 / 5) (#8)
    by jondee on Wed Aug 15, 2012 at 03:30:19 PM EST
    inspired theology masquerading as "sound economic thinking"..

    This stuff is actually based on the pre-Christian idea that if the emperor-king thrives, the realm thrives..

    Or as was said in L'il Abner, what's good for General Bullmoose, is good for the U.S.A..

    Which may have been partially true back when the investor class was "creating jobs" in U.S, and not in China, Vietnam, and Mexico.

    Well, it's a nice fantasy, (5.00 / 1) (#9)
    by Zorba on Wed Aug 15, 2012 at 03:33:33 PM EST
    I suppose, for some people.  ;-)
    But it's still a fantasy.

    Parent
    more poverty and desperation (5.00 / 1) (#11)
    by jondee on Wed Aug 15, 2012 at 04:04:41 PM EST
    = increased job creation in the firearms, security systems, and corrections industry.

    And more oppurtunies for God to vent his righteous wrath on the wicked "sons of Ham", and chastize them for not being entreprenuerial enough.

    Praise the Lord.

    You read Douthat. (5.00 / 1) (#12)
    by KeysDan on Wed Aug 15, 2012 at 04:34:08 PM EST
    Why do that?   I know, Tom Friedman is on vacation.  Actually, for recent NYT articles try MoDo ("When Cruel is Cute") where she gives a political anthropologic assessment of Ryan, which is entertaining-- not that Douthat's isn't, if you like screwball comedy.

    Well, I could say that (5.00 / 1) (#13)
    by Zorba on Wed Aug 15, 2012 at 05:15:45 PM EST
    we need to keep an eye on what the "other side" is saying.  Forewarned is forearmed.  ;-)

    Parent
    Fox World (none / 0) (#20)
    by gyrfalcon on Wed Aug 15, 2012 at 10:57:29 PM EST
    I really do think everybody should spend a week or so immersed in Fox News and even more Fox Biz, painful as it is, in order to get a real grip on just how big and how strong that right-wing bubble they live in is.

    Lou Dobbs today, for instance, was genuinely seriously taken aback when a right-wing but somewhat reality-based fund manager type did not agree that the economy would almost immediately begin to grow once Romney is president.

    Parent

    if "supply-side" economics actually (5.00 / 2) (#17)
    by cpinva on Wed Aug 15, 2012 at 10:22:27 PM EST
    worked, the logical thing to do would be to give rich people and corporations a zero marginal tax rate, and just watch the economy and tax revenues explode. it doesn't, and they won't, ever.

    i beg to differ with you on one aspect of your characterization of mr. douthat: he isn't a fool, he simply assumes everyone else is. someone is paying him to write that nonsense, so really, how much of a fool can he be?

    Then a knave, perhaps... (5.00 / 1) (#22)
    by unitron on Wed Aug 15, 2012 at 11:00:41 PM EST
    ...if he knows better and writes it anyway.

    Parent
    Paul Ryan (5.00 / 1) (#23)
    by cal1942 on Wed Aug 15, 2012 at 11:59:24 PM EST
    hasn't advanced intellectually beyond his teen years.  His budget is the budget of an adolescent.  It's all fantasy and doesn't even come close to adding up.  Russ Douthat is a moron lacking any depth whatsoever. A perfect marriage.

    The New York Times, better than most, but it ain't what it used to be.

    Big Tent was recently unashamedly... (1.00 / 2) (#24)
    by Gandydancer on Wed Aug 15, 2012 at 11:59:39 PM EST
    ...comfortable with having misleadingly characterized as "privatization" a Bush proposal that actually only allowed taxpayers to divert 2.5% of FICA taxes to private retirement plans, so I don't suppose he will be embarassed if I point out that nothing in the first blockquote (by Douhat) refers to the results of Heritage's modelling as described by the third blockquote. But it's clear that anything he writes needs to be examined with the suspicion due any other three card monte dealer.  

    Here's how this works: (5.00 / 4) (#29)
    by Anne on Thu Aug 16, 2012 at 09:10:11 AM EST
    BTD bgins his post with a quote from Douthat, in which Ross says that Ryan's budget plan works without requiring rosy fantasies about how tax cuts will spur growth.

    He - BTD - then provides two excerpts from two sources - with links - that show Ryan doing just that: in the first, it's about what Ryan himself projects, and in the second, it's about what Ryan's economic forecasters predict.  

    If both of those examples are not all rosy and pie-in-the-sky then you and I have a different idea of what that means.

    And, as for the privatization thing, we were all aware, as was BTD, that the Bush plan would not and did not take SS completely private - no one was under any illusions that that's what he was claiming.  What we all - or most of us - know is that whether it's a 2.5% piece or a .0001% slice, allowing the contributions to bypass the public system is the very definition of "privatizing," is it not?

    And while you may be clinging to the notion that Bush's plan was not the first step in a much larger privatization plan, the rest of us are not, and well understand that the plan was the proverbial foot in the door toward the day when workers would eventually be able to privately invest all of their SS contribution.

    Sheesh.

    Parent

    It just popped into (none / 0) (#14)
    by Ga6thDem on Wed Aug 15, 2012 at 05:23:29 PM EST
    my head that laffers is really laughers and the jokes on uh. Hahaha.

    Earth calling Mars (none / 0) (#15)
    by koshembos on Wed Aug 15, 2012 at 05:30:16 PM EST
    While most us need to find logical justification for action we take and ideas we support, the media seems to live in a world devoid of oxygen, the earth is flat like a conference table and smarts are confined to office politics.

    Douthat supports a plan that my 3 year old grandson will laugh at. But that is our media today. They take a plan to rob everyone except the rich as a way to paradise. Mental treatment is a must.

    Douthat is best known (none / 0) (#16)
    by Repack Rider on Wed Aug 15, 2012 at 09:30:27 PM EST
    ..for his immortal essay on his adventure with a girl he described as "a chunky Reese Witherspoon."

    Gross man! (none / 0) (#18)
    by Militarytracy on Wed Aug 15, 2012 at 10:29:33 PM EST
    And as always I'll bet once again (none / 0) (#26)
    by Militarytracy on Thu Aug 16, 2012 at 12:43:46 AM EST
    I know exactly what removes feelings of being masticated, a nice spanking.

    Parent
    Another great headline (none / 0) (#21)
    by gyrfalcon on Wed Aug 15, 2012 at 10:58:59 PM EST
    "Laffers" indeed.  Economist humor!

    And what were the underpinnings... (none / 0) (#27)
    by heidelja on Thu Aug 16, 2012 at 04:13:00 AM EST
    ...of the last housing boom? It was Chinese prosperity which fueled a boom in building construction. Some for the 2008 Olympics even! The Chinese boom caused a worldwide increase in the price of concrete causing new home prices in the US to skyrocket causing an uplift in existing home values.

    What caused the Chinese boom in the first place? Imports to the US! Of course, all the while deficit spending over the last 32 years (20 by Republicans) have given Americans the sense they could afford it.

    What part of "this is what Ryan's economic (none / 0) (#37)
    by Anne on Sat Aug 18, 2012 at 10:42:51 AM EST
    forecasters say" would lead you to conclude that Heritage is putting spin on something Ryan and/or his economic team didn't, haven't and aren't saying?

    Ryan requested the Heritage analysis:

    The assumptions come from an economic model developed at Ryan's request by analysts at the Heritage Foundation, who analyzed the budget's provisions and projected their economic impacts over the next decade using a macroeconomic model developed by the consulting firm IHS Global Insight. Heritage compared the economy under the Ryan plan with an alternate scenario developed by the nonpartisan Congressional Budget Office.

    Heritage provided it. And stands by it - and, wait - is that Ryan I hear disavowing that analysis?  Uh, no.

    We aren't going to agree on the so-called merits of the Republican/conservative economic plans, probably ever, and BTD will be among those plans' most vocal critics.  You can nitpick his posts all you want and talk about intellectual honesty, but that just distracts from - as it's meant to - the economic dishonesty of Ryan's plan, which simply follows in a long line of dishonest Republican economic plans that didn't work.

    I should tell you at this point that I'm not a fan of the Obama approach, either, which in my opinion is altogether too Republican to have much chance of working, as we've already seem these last three-plus years.  And I expect him to double-down on the more conservative aspects if he is re-elected.  That will have predictable, and bad, results.

    What we need is a real Democratic plan, from real Democrats; sadly, that ain't happening anytime soon.

    the comment you are replying to (none / 0) (#38)
    by Jeralyn on Mon Aug 20, 2012 at 07:18:27 PM EST
    was deleted for insulting BTD.

    Gandy Dancer has been put in time out.

    Parent