defend the indefensible: supply-side economics

curious if there are any legit justifications for this

i dunno what the justifications really are, but if you decide to be the guy making them and you're good at it, you'll never miss a meal.

i like think of larry kudlow as a phil hartman character carrying on after death, so it's comforting in a way

that's all i got.

what i've got:

the problem isn't the theory but the policies that the theory generates. it's logically to assume that things like taxes provide a de-incentivizing force for the things they tax. that's the logic behind a vice tax and even tariffs -- you can promote the behavior you want and de-incentivize the behavior you don't want by giving financial rewards or punishments. the better question is to what extent various taxes work and don't work. if for instance cutting taxes will increase the rate of production but that production won't equal the amount lost by cutting taxes (or won't equal the amount you could've produced through other techniques that tax money could have funded) then it's a net failure and as i understood it that's the dispute between supply-siders and non supply-siders. it's silly to say that raising taxes has no effect on production (you basically have to ignore behaviorism to believe that) but reasonable to say that those taxes could be better used for other things. i guess a true defense of supply-side economics would try to argue that the benefit in production from cutting taxes is equal to or more than other possible techniques.

good for warren b
Christiane Amanpour: "They say you have to keep those tax cuts, even on the very wealthy, because that is what energizes business and capitalism."
Warren Buffett: "The rich are always going to say that, you know, just give us more money and we'll go out and spend more and then it will all trickle down to the rest of you. But that has not worked the last 10 years, and I hope the American public is catching on."
http://abcnews.go.com/ThisWeek/warren-buffett-read-lips-raise-taxes/story?id=12199889

Supply side economics is very Thomist in spirit. It takes a chaotic reality, adds magical thinking, then builds a systematic new reality out of the fusion of the two. Of course, the new reality does not match real reality, but it has a certain fascination for people prone to magical thinking.

jacob hacker (yale) and paul pierson (berkeley), authors of winner-take-all-politics, reflecting on buffett's contention

http://www.huffingtonpost.com/jacob-s-hacker-and-paul-pierson/warren-buffett-vs-the-bro_b_787036.html

If budgets are flush cut (high-end) taxes because the people deserve their money back. If budgets are in deficit, cut (high-end) taxes because it generates new revenues. Peace? Cut taxes. War? As Tom DeLay once said, "nothing is more important in the face of a war than cutting taxes." For the GOP, it's always tax-cut time, and the group that always needs the tax cuts the most are those at the very top.

i guess a true defense of supply-side economics would try to argue that the benefit in production from cutting taxes is equal to or more than other possible techniques.

sometimes cutting the tax rate (i.e. "cutting taxes") can cause the tax revenue to go up (i.e. the government makes more money from taxes). If the tax rate gets "too high" corporations and the wealthy will essentially choose to go home with the football, and hide their money, but sometimes lowering the tax rate can bring them back into the field and potentially brings in more revenue than if taxes were higher.

iirc

It's the Laffer Curve, and it's massively flawed.

http://en.wikipedia.org/wiki/Laffer_curve#Research.2C_Quantification_and_Empirical_Data

According to the Congressional Budget Office in 2005, studying the probable effects of a 10% tax rediction: "In the paper's most generous estimated growth scenario, only 28% of the projected lower tax revenue would be recouped over a 10-year period after a 10% across-the-board reduction in all individual income tax rates. The paper points out that these projected shortfalls in revenue would have to be made up by federal borrowing: the paper estimates that the federal government would pay an extra $200 billion in interest over the decade covered by his analysis."

Sound familiar?

Poor people just spend their money on booze and drugs.

As Tom DeLay once said, "nothing is more important in the face of a war than cutting taxes."

Yet another example of why DeLay always seemed eminently punchable to me. You think we need to be at war, great, pay for it.

Corporate profits last quarter were highest than they've ever been. So open up your mouths yall, let's all taste that sweet trickle-down!

http://www.nytimes.com/2010/11/24/business/economy/24econ.html?_r=1&partner=rss&emc=rss

this is quite different than the "austerity economics" plaguing the world right now ... although a lot of today's austerians were yesterday's supply siders.

in other words, the proponents of these theories aren't interested in "good policy" or "good economics" per se ... they're more interested in assfucking the poor and unfortunate, and need some sort of fig leaf to cover up that ugly fact.

It's the Laffer Curve, and it's massively flawed

Yeah, but in the spirit of defending the indefensible, let me just say that the curve itself is totally legit, it's just that Laffer was wrong about where we were on the curve.

he's all, we're gonna go down this rollercoaster of lost revenue wheeeee
and we're all kind of suspended in an upward slope waiting for the rollercoaster to get going like fuuuuuck laffer worst hypeman

in other words, the proponents of these theories aren't interested in "good policy" or "good economics" per se ... they're more interested in assfucking the poor and unfortunate, and need some sort of fig leaf to cover up that ugly fact.

But this is what critics would have said about supply-side economics too, right? I'm sure austerity proponents have arguments for why austerity is good economic policy, just as supply-siders did.