The history of popular economic thought really started in 1776 with the seminal work of Adam Smith, entitled The Wealth of Nations. It was the genesis of the classical or Austrian school of economics, popularized by Ludwig von Mises. During the Great Depression, another school of economic thought was popularized by John Maynard Keynes, and it was understandably called Keynesian economics, although it is sometimes called Demand-side today. Ronald Reagan brought the third school of economic thought to the country, called Supply-side economics.
As a college student during the 1960's, I was taught Keynesian economics almost exclusively. During a lunch with Arthur Laffer, the godfather of Supply-side economics, in 1978, I became fascinated and studied various experiments in Supply-side economics. However, as some experiments failed so badly, I have gravitated back to the Austrian school, which means deficits really matter a great deal.
With that in mind, I have studied the President's new budget proposal and am glad it is "dead-on-arrival." It is pure Supply-side, meaning the deficit does explode if the economy doesn't explode. It is dependent on explosive growth in GDP. That ain't going to happen!
Our $20 TRILLION debt is going to jump, with this proposal. Trump is right to curb entitlement growth, but he is doing it in the most heartless fashion, such as cutting health care for the poor. The two biggest budget gluttons are Social Security and Medicare, which are untouched by this budget proposal, because recipients of those huge programs vote in huge numbers. As a beneficiary of both, I would recommend they both be cut. At the very least, eliminate the cost-of-living increases and limit spending on high-income recipients like myself.
Am I happy about a tax cut for me? Of course! I moan and curse every quarter when I write that check to the IRS. But, writing that check is good for the country. Supply-side disciples believe I will take my tax savings and create new jobs. No, that ain't going to happen either. I will save the money, which creates no jobs, and hurts the country. To suggest that all tax cuts increase revenue growth, then what happened to the Bush tax cuts? Have you looked at what happened in Kansas? Yet, the Administration wants us to believe GDP will grow, reducing the deficit. This is called "dynamic scoring," which I describe as economic ignorance.
The Kennedy tax cut and the Reagan tax cut were successful in increasing GDP growth. A tax cut today would not! DOA is a good thing.
As a college student during the 1960's, I was taught Keynesian economics almost exclusively. During a lunch with Arthur Laffer, the godfather of Supply-side economics, in 1978, I became fascinated and studied various experiments in Supply-side economics. However, as some experiments failed so badly, I have gravitated back to the Austrian school, which means deficits really matter a great deal.
With that in mind, I have studied the President's new budget proposal and am glad it is "dead-on-arrival." It is pure Supply-side, meaning the deficit does explode if the economy doesn't explode. It is dependent on explosive growth in GDP. That ain't going to happen!
Our $20 TRILLION debt is going to jump, with this proposal. Trump is right to curb entitlement growth, but he is doing it in the most heartless fashion, such as cutting health care for the poor. The two biggest budget gluttons are Social Security and Medicare, which are untouched by this budget proposal, because recipients of those huge programs vote in huge numbers. As a beneficiary of both, I would recommend they both be cut. At the very least, eliminate the cost-of-living increases and limit spending on high-income recipients like myself.
Am I happy about a tax cut for me? Of course! I moan and curse every quarter when I write that check to the IRS. But, writing that check is good for the country. Supply-side disciples believe I will take my tax savings and create new jobs. No, that ain't going to happen either. I will save the money, which creates no jobs, and hurts the country. To suggest that all tax cuts increase revenue growth, then what happened to the Bush tax cuts? Have you looked at what happened in Kansas? Yet, the Administration wants us to believe GDP will grow, reducing the deficit. This is called "dynamic scoring," which I describe as economic ignorance.
The Kennedy tax cut and the Reagan tax cut were successful in increasing GDP growth. A tax cut today would not! DOA is a good thing.
