Supply-side myths

Odd, that twice in the last week I'd come across posts/articles that so clearly fit with my semester-ending "Myths of Public Policy" lecture.   Might as well go with a theme.  Earlier this week, Matt Yglesias had a post highlighting that someone over at National Review (!!) actually rebutted the supply-side economics myths.  I'm not going to rebut supply side economics here (read the link), suffice it to say that under the vast majority of economic circumstances, cutting marginal tax rates decreases, rather than increases government revenue.  I think Yglesias has an important take-home point though– it's not just these myths, its how pervasive they are among seemingly educated Republicans:

At any rate, Williamson deserves credit for his piece. But the piece
downplays the extent to which the myths he debunks are utterly central
to conservative politics. He argues, for example, that there’s a real
sense in which the Reagan tax cuts “didn’t happen” since there were no
spending reductions. There’s something to be said for that point of
view, but it makes utterly nonsense of the mainstream conservative story
about the past 30 years’ worth of US domestic policy. Maybe Williamson
is downplaying the bite of his argument on a “you catch more flies with
honey” but realistically I think it’s just a sign that intelligent
conservatives have little intention of doing battle with the charlatans
who dominate their movement.

I'll never forget the experience several years ago when a Richard Burr (Republican Senator from NC) staffer called me back in response to a letter I had written to their office about the budget (huge props to them for that).  The conversation devolved into a discussion about supply-side economics, though, and this staffer was as convinced that cutting tax rates raises revenue (despite all evidence to the contrary) as he was convinced the sky is blue.  It was scary.  And sadly representative. 

 

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