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Politics : Formerly About Advanced Micro Devices
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To: RetiredNow who wrote (531300)11/21/2009 12:15:29 PM
From: i-node  Read Replies (3) of 1574772
 
Very good point. I've argued the same myself in the past. The Laffer assumes as its objective that we want to maximize gov't revenues. I'd say that our real objective is make gov't as small as possible, while still ensuring it is as effective as possible.

Sorry, but this statement reflects a blatant misunderstanding of the Laffer Curve.

The objective need not be maximizing revenue. But maximizing revenue HAPPENS to occur on the Laffer Curve at about the same time you maximize economic growth. Which IS a good thing.

It is economic serendipity. When you cut taxes, you get economic growth. When you get economic growth, tax total gross earnings increase such that even with reduced tax rates, you collect more money.

The objective need not be collecting more money; it is a by-product of economic growth. Just like after Clinton/Gingrich cut taxes in the late 90s.

The fact is that we're going to need a combination of tax increases and cuts in spending to get back to ZERO deficits.

There you go again. If you increase taxes, what happens to economic growth? You kill it. Look what happened when Clinton increased taxes in 93. We were on a trajectory that should have seen strong growth, and it killed it, overnight. Look what happened with Bush 41 violated his "no new taxes" pledge. THE NEXT MONTH THE ECONOMY COLLAPSED (I remember it like it was yesterday). The very next month.

We all want fiscal discipline. I can assure you I'm first in line to want to see deficits reduced and to see us paying down the debt. This guy is not taking us there.
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