Link: Bruce Bartlett: Reagonomics is dead.

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Bruce Bartlett on supply-side economics and Reaganomics - Oct. 19, 2009

Read and discuss amongst yourselves. There will be a pop quiz at 11:30.

(Money Magazine) -- Bruce Bartlett was a lieutenant in the Reagan revolution. As an aide to congressman Jack Kemp, he helped write the legislation underpinning Ronald Reagan's 1981 tax cut and then worked in the Reagan and the George H.W. Bush administrations.
Bartlett still thinks low marginal tax rates fired up the '80s economy, but he laments that conservatives misunderstand Reagan's legacy, thinking of tax cuts as a cure for every ill.


His book criticizing George W. Bush got him fired from a conservative think tank in 2005. His latest, "The New American Economy," should stir up more controversy. For a start, he argues that conservatives can learn from John Maynard Keynes, the economist who argued for big government spending in times of crisis.

[Bamaro]

Thats why they called it Voodoo

[NYBamaFan]

In the end, you have to decide what role the government should play in the economy. Ideally, it would play no role - but that has not been considered a possibility since the Great Depression...

[TommyMac]

Well, with the Dems, you'll never have to worry about a tax cut.

[Bodhisattva]

	Quote:	Bamaro
	Thats why they called it Voodoo

Who's they? That term was coined by Bush Sr. in his primary battle with Reagan. It's a political criticism, not an economic one. Voodoo is a catchy term, I grant you, and it plays well with those who don't understand economics.

[Bodhisattva]

Supply side economics argues that tax cuts foster individual wealth and, by extension, national wealth. Lower taxes means more money in your pocket and more incentive to earn that next dollar. More money in your pocket = more disposable income = more spending on the extras = more goods and services sold = higher employment and corporate profitability = positive domino effect that generates tremendous economic benefits.

Does anyone disagree with the benefits of tax cuts?

Now, here's the bonus. Greater economic growth = more money in government coffers. 25% of something is better than 50% of nothing. So, lower taxes = higher government revenue.

Notice, it's higher government revenue, not lower deficits. Congress can still, and usually does, decide to spend more money and create large deficits in spite of the extra revenue. Those deficits are not the fault of tax cuts, but of spending increases.

Let's say the government brings in $100, but spends $110 - a deficit of $10.

Supply side economics is implemented and the result is goverment revenues of $125. But, the government spends $150, producing a deficit of $25.

Who's fault is the higher deficits? I'm going to have to go out on a limb and say it's the fault of an irresponsible Congress and their unconsitutional spending.

With that said, I'm not a supply sider. It's a incomplete economic plan, IMO, because it allows for greater government spending (up to a point). I believe spending should only done on items justified under the Constitution.

Me = low taxes and low government spending

Supply siders = low taxes and relatively high spending

Lefties = high taxes and high spending

[NYBamaFan]

	Quote:	Bodhisattva
	...Does anyone disagree with the benefits of tax cuts?...

Tax cuts only help when expenses are cut accordingly...

[Bamaro]

	Quote:	Bodhisattva
	Does anyone disagree with the benefits of tax cuts?

The Laffler curve MUST be considered.

[RammerJammer14]

	Quote:	NYBamaFan
	Tax cuts only help when expenses are cut accordingly...

That is pretty much what he said. Although I believe they will help (without cutting spending) to a point.

	Quote:	Bamaro
	The Laffler curve MUST be considered.

I knew you would reply to this thread. Yes, the Laffer curve must be considered, but do you really think we are below the optimal point of the curve? Besides, I have been told by some posters on this board that the Laffer Curve is a myth anyways, so its a moot point...

[dayhiker]

	Quote:	Bamaro
	The Laffler curve MUST be considered.

Save Ferris.