The dismal failure of supply-side economics on vivid display

This man has a used cocktail napkin that he'd like to sell you: Arthur Laffer testifies in 2012 to the Kansas Legislature about the economic marvels that his plan was going to produce. (AP)

This man has a used cocktail napkin that he’d like to sell you: Arthur Laffer testifies in 2012 to the Kansas Legislature about the economic marvels that his plan was going to produce. (AP)

Three years ago, in Kansas:

“Gov. Sam Brownback and his celebrity tax policy consultant, Arthur Laffer, said Tuesday that the income tax cuts Kansas lawmakers approved earlier this year will drive growth and make Kansas more competitive with surrounding states.”

Today in Kansas:

Kansas lawmakers will need to find a combination of about $400 million in tax increases or spending cuts for next year, according to the state’s budget director, in the face of revised revenue estimates….

The Kansas economy is growing at a slower rate than the national average, said Raney Gilliland, director of the state’s Legislative Research Department. Personal income is also growing at a slower rate in Kansas than in other states, he said.

—————————

This week’s major revenue revision is just the latest of a string of recurring budget crises in Kansas, forcing cutbacks in education, transportation and other basic services that have been so deep that even conservative Republicans are acknowledging they cannot be sustained. The increased growth and increased revenue promised by Laffer, the guru of supply-side economics, simply hasn’t materialized.

In fact, the situation has become so dire that some Republicans, including Brownback, are finally, publicly acknowledging that they may have to — GULP!! — raise taxes to avoid complete disaster.

But it’s important to point out that after causing the problem by passing major tax cuts that largely benefited the wealthy, Kansas legislators are eye-balling increases in the sales tax, gasoline tax and alcohol and cigarette taxes, all of which will increase the tax burden on working-class and middle-class Kansans while largely exempting the rich. It’s really quite amazing.

And why does this matter outside Kansas? It matters because Laffer, the Heritage Foundation, ALEC and other nationally known conservatives, including Senate Majority Leader Mitch McConnell, had all cited Kansas as an important test case of conservative economic theory. If the experiment had produced the results that they promised, they would be celebrating it as validation of their theory. So its abysmal failure should be prominently noted as well.

As Brownback wrote in the forward to an ALEC-sponsored publication co-authored by Laffer in 2011:

“To those who doubt their research, I encourage you to watch Kansas during the next few years as we work to reset the state’s course on taxes and let our citizens once again be the engine of economic growth.”

Most of all, it matters because most if not all of the 2016 GOP presidential field — Jeb Bush, Ted Cruz, Scott Walker, Rick Perry, Rand Paul and others — have met with Laffer seeking his guidance and endorsement for their own national economic plans. The plans released to date follow the flim-flam Laffer model almost down the line, with large tax cuts for the rich that are supposed to “jump start” an economy that is already wallowing in excessive capital formation.

It does not work. Time and again, it has been demonstrated that it does not work. But practical experience is apparently useless in challenging what has become theological doctrine.

Reader Comments 0

694 comments
George McDuffee
George McDuffee

The shame is not in running the experiment.  The shame is in running the same experiment several time, and refusing to accept the results.  The supply side economic model has been imposed several times on a domestic state [Kansas] and nations [Chile and Argentina] with unequivocal results.  IT DOES NOT WORK.  It should also be noted that these experiments in socioeconomic policy have extremely high financial [lost economic progress] and human [deaths, chronic disease, retarded development, and social alienation ] costs.



St Simons he-ne-ha
St Simons he-ne-ha

Well, that was a drubbing, a complete destruction.

The brave Sir Robins ran away, ran away.

From the abysmal failure that is trickle-down.

It's not even fun kicking them around anymore.


We will leave them behind now, with their 4th century religion,

and their 19th century failed economic scam.

Forward.


JamVet
JamVet

Defense spending is a Constitutional requirement of the Federal Government. Taking care of the poor is not. 

STOP LYING, YOU FILTHY LIAR!

I use to believe that you actually had the capacity for intellect.

But your endless empty headed gibberish, leads me to no other conclusion than that your brain is severely atrophied from non-use, to the point where you simply cannot help but write like a babbling idiot anymore...

honested
honested

@td1234 @JamVet 

Where does the Constitution suggest ANY hint at the largest military in the history of the Universe dedicated to the protection of offshore commercial interests and an defensive umbrella for our 'allies'?

td1234
td1234

Correction: Not 90% but 75% of all means tested programs (great society) goes to single parents, which the breakup of the family caused. 


"The federal government operates over 70 means-tested welfare programs that provide cash, food, housing, medical care, and targeted social services to poor and low-income persons.[10] In fiscal year 2010, federal and state governments spent over $400 billion on means-tested welfare for low-income families with children. Roughly three-quarters of this welfare assistance, or $300 billion, went to single-parent families. Most non-marital births are currently paid for by the taxpayers through the Medicaid system, and a wide variety of welfare assistance will continue to be given to the mother and child for nearly two decades after the child is born."


http://www.heritage.org/research/reports/2010/09/marriage-america-s-greatest-weapon-against-child-poverty

Tuna Meowt
Tuna Meowt

@td1234 "Correction: Not 90% but 75% of all means tested programs (great society) goes to single parents"


Correction noted and appreciated.



"which the breakup of the family caused."


Substantive evidence, please.


Paul42
Paul42

@td1234

So... do you have any solutions other than outlawing divorce for reasons other than adultery and making out-of-heterosexual-marriage sex a crime?

td1234
td1234

@Paul42 @td1234 Government can only help the issue on the margins like making divorce, when children are involved, have to have cause or stop the incentives for having children out of wedlock. 


The solution for this problem, as well as for improving education, is going to have to come from society as a whole by society chastising and making it an unacceptable practice.  

td1234
td1234

@LeninTime How? Every belief of a Capitalist would want the family to be intact so that they have more money (capital) to spend. 

Tuna Meowt
Tuna Meowt

@td1234 @Paul42 Fortunately, it's none of society's effing business if a couple's marriage goes sour.


Nick_Danger
Nick_Danger

@td1234 

Thanks, td.  Good info.

Got any suggestions on how to reduce single parent households?

It would also be interesting to see if there are differences between single-parent household created by death of a spouse, and those created otherwise.

LeninTime
LeninTime

@td1234 

Correction: Not 90% but 75% of all means tested programs (great society) goes to single parents, which the breakup of the family caused. 

***
If any single force can be said to have 'caused' the breakup of the traditional nuclear family, it is capitalism.

Visual_Cortex
Visual_Cortex

@Paul42 @td1234

He's on board with forcing all women at gunpoint to carry every pregnancy to term.

I guess that'd put armed guards to work...

LeninTime
LeninTime

53 pickup

Do you have any other interlocutors to your diatribes than 'libs'?

Numbers_R_Us
Numbers_R_Us

I'm just surprised more Republicans have not already moved to Kansas so they too can enjoy the good life that trickle down can bring them.

td1234
td1234

@Numbers_R_Us Why? We are doing just fine in GA and it will only get better when the legislature restructures the income tax code next year. 

fiftythreepercenter
fiftythreepercenter

Hey libs, how long does somebody need to be on welfare/section 8/food stamps, etc before they stop being poor?

Paul42
Paul42

@fiftythreepercenter

"And which one of us still hasn't figured out there were lied to?"


So:  tell us about Benghazi.  Please.  Tell us about Benghazi."

Paul42
Paul42

@fiftythreepercenter

If you don't sit on your keyboard you might be able to use your brain to think up stuff to post.

Paul42
Paul42

@fiftythreepercenter

Read it again.  You brought up the subject of believing stuff when you were lied to.

You ducked putting that to the test down below.

You ducked it again.

Were you lied to by rw media on Benghazi, or not?


Did you believe it and repeat the lies or not?

Are you holding yourself up as an example of what not to do?

JamVet
JamVet

@fiftythreepercenter @Paul42 

What is up with your sophist rhetorical questions?

You really do write at a very stunted level.

And you have that Republican gift of taking extremely complicated, interrelated and complex issues and devolving them into juvenile sound bites and wildly off the mark evasions.

You apparently know nothing of and understand nothing of the underlying information related to poverty.

At a minimum you desperately need some education in logic and reasoning.

Along with years of practicing research. (One of those evil liberal academia thingies...)

Finally start reading.

Crack a book for the first time in decades and read!

Michener, Wells, Sagan, Darwin something/anything.

Open your mind and join the 21st century.


td1234
td1234

@Brosephus They do somewhat but not as much as you are implying: 


"The federal government operates over 70 means-tested welfare programs that provide cash, food, housing, medical care, and targeted social services to poor and low-income persons.[10] In fiscal year 2010, federal and state governments spent over $400 billion on means-tested welfare for low-income families with children. Roughly three-quarters of this welfare assistance, or $300 billion, went to single-parent families. Most non-marital births are currently paid for by the taxpayers through the Medicaid system, and a wide variety of welfare assistance will continue to be given to the mother and child for nearly two decades after the child is born."


http://www.heritage.org/research/reports/2010/09/marriage-america-s-greatest-weapon-against-child-poverty

Paul42
Paul42

@JamVet

Sadly, I'm pretty well convinced that a striking number of people (of a certain ideological persuasion?) are simply not able to make connections between related events, facts or concepts.

It's like their brains are comprised of compartments with each single bit of information going into one compartment and they never, ever take more than one out at a time and see if they are in any way related.

Brosephus
Brosephus

@fiftythreepercenter 

The people who are part of the "poor" change just as those who are in the 1%.  Don't let facts get in the way of your ideological rant.

consumedconsumer
consumedconsumer

@fiftythreepercenter @CommonSenseisntCommon Welfare isn't designed to make you rich, WTF is your point?


Capitalism American-style is designed to have losers. It's built into the system. Why do some here deny this? If that's the system you want, and you want to call yourself a  nation, rather than a collection of 300 + million individuals, then you have to take care of those that will be left behind. 


Tuna Meowt
Tuna Meowt

@fiftythreepercenter @CommonSenseisntCommon "How long will that take?"


You should ask the states themselves.  States administer those programs, and most of them have imposed time limits that apply in most cases -- so long as minor children aren't involved.


I suppose that's how long it takes, right?

LogicalDude
LogicalDude

Happy Earth Day!  



Go ahead and recycle something, or wear your pants an extra day without washing them. (why do we pluralize "pants"?) 

Tuna Meowt
Tuna Meowt

@Tuna Meowt@fiftythreepercenterI'll take it you have nothing then.  Thanks for playing."


Right back at you, Commandante Less-Than-Zero.


The fact that I'm not playing your game doesn't establish that YOU are any good at it your ownself.


Chump.


RaindroidWillBoy
RaindroidWillBoy

Its earth day.  We all need to rejoice in Nixons' establishment of the EPA, our "deal" with China to meet again in 2030, and teh 38% chance last year was the warmest on record..

Paul42
Paul42

@RaindroidWillBoy

We've already heard how Nixon's a RINO who weakened America by letting a communist dictator country grow stronger and turned the government over to hippies with their junk science in order to destroy free enterprise and redistribute wealth to poor countries.

alexander2
alexander2

@RaindroidWillBoy  Don't forget TR and the National Parks, nothing like a national park visit to show you the beauty of this good ol' earth.