Krugman: Carter, Reagan, Revenue

[ProSense]

Carter, Reagan, Revenue

One common reaction of conservatives, when you point out that the experience of the last 20 years offers zero support for the idea that tax cuts pay for themselves, is to start shouting “Jimmy Carter! Reagan! Supply side roolz!”

So I thought it might be worth presenting a bit of evidence from an earlier 20-year stretch. Here’s real federal revenue, in 2005 dollars, from 1970 to 1990. I’ve plotted the log, because it’s easier to look at trends:



A couple of points. First, the Carter years, contrary to legend, were not a period of economic stagnation and falling revenue because high tax rates were strangling the economy; there was a nasty recession starting in 1979, largely thanks to an oil shock, but overall growth was respectable and revenue growth reasonably high.

Second, the revenue track under Reagan looks a lot like the track under Bush: a drop in revenues, then a resumption of growth, but no return to the previous trend.

This is exactly what you would expect to see if supply-side economics were just plain wrong: revenues are permanently reduced relative to what they would otherwise have been.

[izquierdista]

1. So tell me again...

Why are Geithner and Summers inside the limo advising Obama, while Krugman is on the hood, banging on the windshield and yelling "you're going the wrong way"?

[Jim Lane]

3. What do you mean, "again"?

I haven't heard that explained even once.

[Name removed]

2. Deleted message

Message removed by moderator. Click here to review the message board rules.

[mikekohr]

4. It's Not Just Decreased Revenue! Republicans also INCREASE spending at the same time

WHY DO REPUBLICAN ECONOMIC PRINCIPLES ALWAYS EXPAND THE NATIONAL DEBT?
-The answer is simple mathematics. Reduced revenue + increased spending ='s increased debt-


?


(click link below to view enlarged graph, scroll down to 3rd graphic)
http://cedarcomm.com/~stevelm1/usdebt.htm

The two biggest promises of "Trickle Down Economics" are it's greatest failings. Proponents of "Trickle Down Economics” claim that tax cuts, skewed to the rich, will create jobs and increase tax revenues. The graph above disproves the latter claim. Job creation plummets under "Trickle Down Economics (see http://bureaucountydems.blogspot.com/p/job-growth.html )and nine of the last ten recessions have occurred under Republican leadership (see http://bureaucountydems.blogspot.com/p/history-of-recessions.html ).

Two things are certain to grow when a Republican is in the White House, unemployment and the National Debt.


By contrast, "Bubble Up" economnic priciples practiced by Democratic Administrations put people to work, rev up the economy, and balance the Nation's ledger books. Every time. No exceptions

[hulka38]

5. Thanks for this ProSense.