Arthur Laffer, the Reagan-era guru of trickle-down economics, was unchastened by the deficit explosion back then, which effectively disproved his theory that cutting taxes on the rich would increase government tax revenue. According to a recent Washington Post writeup, Laffer continues to be unchastened now, even as Britain reels from a leadership shuffle caused by the catastrophic application of his very theories.
Hand it to Laffer: Seldom does someone who is so often proven wrong have the gumption to maintain he’s right — yet most congressional Republicans still buy into his theory. Einstein allegedly said that doing the same thing repeatedly and expecting different results is the definition of insanity. Which is what seems certain to reign in the House when the GOP takes over next year.
Today’s stubborn Republican mythology that treats tax cuts as a magical economic elixir is largely traceable to Laffer’s theory, which arose in the late 1970s. His famous “Laffer curve” presumes to prove that tax cuts for the rich will spur economic investment, causing such strong economic growth that the government’s tax revenue would actually rise instead of falling. Even 1980 Republican presidential candidate George H.W. Bush derided the notion as “voodoo economics.” That is, until he became vice president to Ronald Reagan, who embraced it.
