Today Washington Monthly has another clueless post on economics which misrepresents the Reagan record on deficits and tax cuts. First, they post this graphic.
If someone believed this nonsense, the solution to unemployment would be obvious. Raise taxes ! Keep raising them until everybody has a job ! Of course, to believe it , you would have to be a left winger who doesn’t know anything about the economy.
There is one fact ignored by Benen and Krugman (who knows better). When the Reagan tax cuts passed, the “root canal” Republicans like Bob Dole included a provision that the tax cuts would not take effect until 1982. That guaranteed what we see. Anyone with a bit of sense would postpone economic activity until 1982 when the tax cuts would have taken effect.
Conservatives believe Obama’s stimulus didn’t work, and as proof, they point to the unemployment numbers 11 months after the policy became law. But if that’s the appropriate measure, wouldn’t Republicans also have to believe that Reagan’s 1981 tax-cut plan also failed, since unemployment went even higher the year after it passed?
They might if they believed Benen and ignored the fact that the tax cuts were postponed until the next year when passed.
On the contrary, the Obama tax increases will take effect in 11 months and will be a disaster, unlike young Mr Benen’s delusion.
But when the huge tax-increase agenda arrives a year from now, the economy will begin to decline, and will be some 3% to 4% smaller than it otherwise would have been. The artificially high growth in 2010 followed by artificially low growth in 2011 would “represent a larger collapse than occurred in 2008 and early 2009,” Mr. Laffer writes.
Hang on, rough water ahead.
EXCELLENT, Doc!
Heck… even *I* had forgotten that Congress delayed President Reagan’s tax cuts!
Good catch.
BILL
P.S. – And you’re no doubt correct… Krugman knows better.
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