Republicans Don't Get Economics

Robert Robb of the Arizona Republic has a column in today's paper that suggests that our Governor isn't following the right course in dealing with the surprising (surprising to whom, I've written about this coming since before the last election) reduction in tax revenues. Not that I'm disagreeing with Robb, but the bone-head tax-cuts-are-the-answer crowd have all chimed in to say in the comments section that secret to our survival are more tax cuts. This blinder mentality is what's harming Arizona and more people need to point out how stupid that notion actually is.

A poster called CooperG responded to another named JackD who said he knew what he was talking about because he (JackD) "ha(s) the mathematical background necessary to grasp the necessary concepts." I couldn't have said it better myself.

There's a joke that goes like this: what do you call someone who graduates at the bottom of his medical school class? You call him "Doctor." I would argue your understanding of the Laffer Curve has more to do with things you've learned from propaganda than reading the good Doctor Laffer's paper and understanding it.

While I won't waste my time on explaining it to you (you really don't understand it), suffice it to say that you need to pay attention to the assumptions Laffer makes. Like there is a point where tax rates reach an optimal point when increases in productivity produce equal increases in tax revenues. What you don't understand is it is a C-U-R-V-E, meaning reductions or increases in taxes will have the negative effect of either causing reductions in revenues or reductions in productivity. You Tax-Cuts-R-Us folks think you can cut taxes forever and get the same result. Hmmm, that sounds a bit like that old chesnut of doing the same thing over and over and expecting different results.

As for the other posters, if tax cuts are so good at increasing revenues at the state level (Laffer focused on the national economy), then how come the expected increases haven't appeared? When will it start showing up? Why are revenues down? With apologies to Ronald Reagan and Clara Peller, "Where's the beef?"

I'd bet money that every one of the people who posted messages on that web page that support tax cuts are retirement age and either live on investment income or pensions. But CooperG is correct, the Laffer Curve is a "curve" and not a flat line. Unfortunately for us, a flat line is what we'll get if we continue to listen to these legsilators who think cutting taxes is the only answer to revenue problems.

The unfortunate thing is that the nitwits in the legislature are already redirecting attention away from their failed strategies for increasing revenues at a time when we need them, to blaming it on ballot-required spending measures. How any of these so-called "friends of the taxpayer" can say that cutting revenues when we have no choice but to spend money on these things by cutting spending on things we need that are NOT ballot-required is plainly and simply reckless and irresponsible.