Reply #7: There is no hammer. [View All]

[cosmicaug]

kentuck wrote:

Reagan was the first to preach the effects of Dr Feelgood's taxcuts as the cure to everything that ills you. He spent the last six years of his presidency trying to make up for the lost revenues and to somehow relieve the huge deficits that he created. He failed and George Herbert Walker Bush paid for it when he raised taxes to try to alleviate some of the drag from the monstrous deficits.

Now, along comes W and he tries the same trick but twice as much and he runs deficits two times as much as Reagan. They scratch their heads as the "taxcut" economy only creates 38,000 jobs this month. They predicted 200,000. Will they finally realize that taxcuts for the wealthy are simply the worst possible way to try and stimulate an economy and when it leads to huge deficits, it is simply another nail in the coffin of supply siders and modern conservatism?

Read stuff by Krugman mentioning supply siders (such as the old New York Times Magazine article archived at http://www.pkarchive.org/economy/TaxCutCon.html). They can be divided into two camps: the true supply side believers and the Starve-the-Beasters.

The true believers, are dogmatists and nothing can convince them that their position is wrong. Nothing. It is an axiom to them.

The Starve-the-Beasters pursue supply side policies for reasons other than the precepts of supply side economics (tax less and you will always get more revenue). They want to use a broken budget as a tool of persuasion to implement a smaller government which they believe will always be a good thing (that's their dogma). The implication of this is that it does not matter if supply side does not work (indeed,in their view, it will be a good thing is this is the case) and thus no facts are likely to drive a nail in supply side economics with them either.

It is hard to know whether any given supply sider is in one camp or the other (or, if they're sufficiently deluded, in both) since most folk are unlikely to admit that, yes, they do want to bankrupt government (so that, in their view, good things will happen). Naturally, most of them pretend to be true believers.

So the answer is no, Dubya has not hammered the final nails in the supply-side coffin. Nothing ever will.
On Edit: Fixed syntax issue.