Friday, December 9, 2016

Dirk Ehnts — A comment on the trickle-down economics of Arthur Laffer, 2017 Trump edition

Laffer’s trickle-down economics did not do well empirically. Whether a cut in taxes stimulates the economy is a different question, and also any changes in tax rates might be overcompensated by changes in government spending taking place simultaneously. This, I believe, was part of the bait-and-switch under Ronald Reagan (tax cuts for the rich, but huge increase in government spending on defence) and will be part of the Trump policy, too. Nothing new here.
econoblog 101
A comment on the trickle-down economics of Arthur Laffer, 2017 Trump edition
Dirk Ehnts | Lecturer at Bard College Berlin

3 comments:

Andrew Anderson said...

... but huge increase in government spending on defence) Tom Hickey

Financed with welfare proportional to wealth, positive interest paying sovereign debt.

Matthew Franko said...

This guy also misses the external sector....

GLH said...

People forget that although Reagan gave the rich huge tax cuts he increased the taxes on the rest of us sixteen times in order to pay for the huge deficit he created.