Remember the Reagan advisor who said supply-side economics is a fraud?

[ThatPoetGuy]

Reagan had an economic advisor who said supply-side economics and tax cuts are a fraud. He was the first person I ever heard say "starve the beast." But I can't remember his name. Can anyone help me out here?

[still_one]

1. David Stockman

[enough]

2. David Stockman (nt)

[PassingFair]

10. Didn't he come up with the phrase...

Voodoo Economics?

[Strelnikov_]

12. Bush The Elder Coined The Phrase "Voodoo Economics"

. . .during the 1980 Republican primary season as a response to fellow candidate Reagan's economic proposals (supply side, etc.)

[didntvote4shrub]

3. David Stockman?

Didn't he recant after awhile? Or was it Arthur Laffer himself?

[HereSince1628]

4. Reagonomics was based on a "nonfunction"

The Laffer Curve was something like a hyperbola, but laying on its side. Of course the problem with decision making from this mathematical posture is that the solution for the dependent variable is not unique for any independent variable.

But if you have a 50-50 chance of getting it right, that seems pretty good for the academically challenged folks at 1600 Pennsylvania Ave.

[leftyandproud]

5. The Laffer curve does make sense

How can you debunk it? Seriously? People will not work at 100% taxation = zero revenue

but people will work their asses off if they are taxed at 0%

but again, $0 revenue

There is obviously an equilibrium point somewhere on the scale.

[papau]

9. Incentive makes sense - Laffer curve does not - it was/is random dots

through which you could draw just about any curve

and most would be better fits than the Laffer curve.

It is the extraction of income to provide benefits than make for a happy populace that actually produces more.

There is a study out this week by the IMF, the World Bank, or the UN or a combination of these that shows that per-capita economic well being is directly related to the success of the government to extract taxes in that country. Successful countries tax their folks - and provide the benefits those folks want - and indeed the more successful you are at the tax extraction, the more successful the country.

Of course 100% taxation decreases incentive - but under Bush that is close to where we are now.

The game is disposable income for non-necessary items. And Under Bush - indeed under Reagan - the "tax cuts" resulted in less disposable income for non-necessary items as "entitlements" became home budget items, and all home budget items increased in cost - except you did pay a bit less in taxes (a lot less if you were rich).

The bit less in taxes is always overwhelmed by the increase in cost of necessities - except when you go very, very far out as to what you want the government to provide. The GOP try to scare folks into a decision to cut back on government well before that point can even be seen in the distance.

Meanwhile they do not mind making the middle class unhappy as they provide welfare to the Rich's corporations - especially those that sell use once and never re-use items - like bombs and other Pentagon Items.

[HereSince1628]

13. Well, as it is a geometric statement it appears to be very logical

but as it was offered it didn't make unique predictions.

For any given amount of revenue generated you might be taxing either too much or not enough.

Your assumption that people's work ethos are related to taxation is a major assumption in this model...

Consider, for example, several possible complications...
Currently many people would work at ANY tax rate if they could only find a job.

On the otherhand, while I was a college professor, my personal commitment in time and dollars into my activities left me immune to the effects of taxation, promised raises, or even reimbursement for out of pocket expenses. Money was the least of my problems...time and access to information were my limiting factors.

Like so many things in life, human productivity in the workplace is a consequence of multivariate relationships. To reduce that complexity to any univariate axis is to leave _much_ of the variability unaccounted for and subsumed within confounding correlations.

Optimization problems are inherently interesting and Laffer suggested that taxation's influence on productivity was a problem of optimization, but as he developed it (BTW on a paper napkin) it had substantial problems. Unfortunately Reagan bit on the idea, hook line and sinker.

[HereSince1628]

14. The current problem is "trickle _out_ economics"

Treating the American economy as though it is isolated led to many terrible decisions in the early to mid 1990's.

Trickle down, rather than benefiting American workers, has bypassed them. As a consequence the investor class has sucked all but the absolute minimum flow of revenue needed to maintain workers in the undeveloped world in substandard housing, with substandard food, with substandard healthcare, with substandard environmental protections and substandard provisions for retirement (but hey these folks ain't gonna live long enough to worry about much of this).

[bobbieinok]

6. Stockman helped R devise his economic plan.....he said it was a lie

in a long article in Harper's or Atlantic a year or so after he left the WH

[salin]

7. Yep - wonder what he is doing these days?

[calimary]

8. Yes, and he then wrote a book about it, after he'd bailed from the

Reagan group. He talked about the "magic asterisk" and a nice lady they befriended in Reagan's economic advisory circles - "Rosey Scenario." The "magic asterisk" was a device they used while jimmying up their calculations about how their supply-side crap was going to save the day. Whenever they couldn't get the numbers to add up (which was ALWAYS), they'd insert a "magic asterisk" like a "player to be named later" - that would magicaly and mysteriously come up somehow, from who knew where, and make all their figuring come out correctly.

"Rosey Scenario" was like the "magic asterisk" - the best-case scenario in which all these wonderful "magic asterisks" would suddenly materialize to make all their figuring come out correctly.

One was smoke. The other was mirrors. And THAT'S how they built Reaganomics.

I interviewed Arthur Laffer once. He was a professor at USC, so he was a local boy. He used to love saying "a rising tide raises all boats." It was SO simplistic. I kept wondering how this guy got a degree.

[indepat]

11. Their almost every major policy and initiative are frauds, everything

they stand for is fraudulent on its face.