View Full Version : Vodoo economics and Supply side theory

08-03-2010, 06:01 AM
Boy, I sure get a kick out of the Republicans talking out of both sides of their mouths when it comes to the deficit. All of a sudden they have found religion when it comes to balancing the budget but what they do is laughable and demonstrably false. One one hand they say that everything from now on needs to be paid for if we are going to improve it. Okay great I have no problem with that but two seconds later they make the exceptions for the expiration of Bush tax cuts. It is not even a matter of debate if tax cuts have increased the deficit,they have but we continue as a society to accept these idiotic conclusions that tax cuts solve all problems.
If tax cuts were so great and would help stimulate job growth why not let the rates go to zero? And the other thing is who doesn't like tax cuts? It is like asking "Do you like sex". When I hear a politician promising to cut taxes this is what he really is saying " I want to get reelected and I will promise you anything to to make sure that happens , even it means running this country into financial ruin".
Spending is other side of the equation and both sides Democrats and Republicans spend like drunk sailors. Time to make these guys accountable and ,for us as citizens,to understand that there are tough choices ahead that must be faced.
Here is a link that should help explain what's happening. Lots of charts and graphs for those so inclined


08-03-2010, 06:12 AM
an article....

http://online.wsj.com/article/SB10001424052748703977004575393882112674598.html#p rintMode

08-03-2010, 07:29 AM
Laffer, author of the WSJ piece, is anything but an objective commentator. He is one of the popularizers of voodoo economics. His theory, summarized in the Laffer curve, is that there is some tax rate, x, at which revenues will be maximized. He argues this logically enough by saying that, obviously, if the tax rate is either 0% or 100%, tax revenues will be zero. Obviously, the "optimal" tax rate is somewhere in between. He hypothesized that whatever might be the optimal rate, it was lower than the rate at that time (mid-1980's). He had no basis by that assumption then, and has no basis now. His graph of total revenues vs taxes shows nothing as it stands since it does not consider the positive and negative effects of economic changes from other causes, but implicitly assumes that all changes are attributable to tax changes. If that were true, the fact that his curve stops in 2006 is ominous. Since 2006, tax rates have declined dramatically as the balance of the Bush cuts took effect and the economy collapsed. However, as is noted in the graph he did show, the revenue curve began falling even while the economy was still growing. This suggests, that wherever the optimal tax rate might be, we appear to be below now.

08-03-2010, 07:49 AM
[QUOTE=cotts135;654358] If tax cuts were so great and would help stimulate job growth why not let the rates go to zero?

Let me dig out my old republican thinking cap and put it on. (jeez, that thing is small)

If taxes are bad, and tax cuts are good, why even stop with a zero rate, as you suggested? Why not go into negative tax rates.....the government giving people handouts and money? Hmmmm....we could call it things like social security, foodstamps, welfare, WIC....wow, I never realized how much these entitlments HELPED THE ECONOMY!!

We should all thank our shelter/welfare recipients for stimulating the economy and contributing to economic growth....in the truest republican sense!

Thanks for enlightening me Cotts!! :D:D

Terry Britton
08-03-2010, 09:40 AM
It is simple, just cut spending on entitlement programs!!! Secure the borders!! Use the military to take the war on drugs to the cartels, and sieze the lands for USA profits. Declare regions won in war as USA territories, and start mining and drilling the new USA territories of Iraq and Afganistan. If labor is needed for the USA territories, the illegal aleins found in our borders are willing to work.

We should be able to pay off China from the gains in Iraq and Afganistan.