1) I have to give a lot of credit to Silver for this statement:
yes, tax increases have deleterious effects on productivity, which means that you’re giving back some number of pennies on the dollar — and tax cuts have beneficial ones, thereby making the opposite true. But, given that current levels of taxation are low-ish by modern standards, and that Ryan’s budget would make them lower, we are nowhere near the point on the Laffer Curve where tax cuts would have a net positive effect on government revenues. (In the long run, at least: tax cuts are more beneficial during a recession when a multiplier may be in play.)
It’s heartening to see a non-Republican acknowledging the irrefutable logic of the Laffer Curve. Sure, Silver thinks current tax rates are too low to have much effect on the curve (I’d point to the total tax burden, including local, state, property, sales, income, dividend, capital gains, and FICA, and politely disagree), but at least we’re moving into an argument driven by empirical data vs. name-calling about “voodoo” or “trickle-down” economics.
Republican tax-cutters are prone to pretend there is no dip at all, and that revenues will rebound almost instantly such that hardly anyone will notice. That’s hogwash, but then so also are their opponents’ claims that GDP would have grown at the same rate under higher marginal tax rates.
Ryan is too optimistic; Krugman is denying reality. I think Silver strikes the right balance by saying that the tax cuts may very well spur economic growth but won’t fully and immediately replace lost revenues.
What you need to realize is that the CBO is the servant of members of Congress, which means that if a Congressman asks it to analyze a plan under certain assumptions, it will do just that — no matter how unrealistic the assumptions may be. CBO will tell you what’s going on, but it will do so deadpan, doing nothing in terms of emphasis or placement to highlight the funny business.
Nice of Krugman to enlighten us! I’m with McArdle though: Where was Krugman during the Obamacare debate? And where is Krugman calling out the Obama administration for fluffing up the success of the stimulus based on equally dubious CBO conclusions based on the same kind of assumptions and circular logic as Krugman decries above? As Jonah Goldberg says, “I save or create 500 push-ups every morning”).
Bottom line: I’m not impressed by Ryan’s math skills, but it’s been incredibly illuminating to see his critics pillory him using the exact same arguments opponents of Obamacare and the stimulus have been using. We can thus safely conclude that Ryan’s critics / Obama’s defenders were either being disingenuous in their attacks on Ryan, or in their defense of Obama’s stimulus and healthcare reform plan, or both.
Joe Mama
McArdle has more of the goods on Krugman, who desperately attacks Ryan as an “unscrupulous flimflammer” in his latest round of asshattery. Krugman too often refuses to argue in good faith, which is why he is a hack who cannot be taken at face value. More here.
Paul Ryan’s Roadmap to Nowhere: http://bit.ly/bipA7W
A few thoughts.
1) I have to give a lot of credit to Silver for this statement:
It’s heartening to see a non-Republican acknowledging the irrefutable logic of the Laffer Curve. Sure, Silver thinks current tax rates are too low to have much effect on the curve (I’d point to the total tax burden, including local, state, property, sales, income, dividend, capital gains, and FICA, and politely disagree), but at least we’re moving into an argument driven by empirical data vs. name-calling about “voodoo” or “trickle-down” economics.
2) As for Ryan’s predictions about revenue, as I said elsewhere:
Ryan is too optimistic; Krugman is denying reality. I think Silver strikes the right balance by saying that the tax cuts may very well spur economic growth but won’t fully and immediately replace lost revenues.
3) I love this Krugman quote:
Nice of Krugman to enlighten us! I’m with McArdle though: Where was Krugman during the Obamacare debate? And where is Krugman calling out the Obama administration for fluffing up the success of the stimulus based on equally dubious CBO conclusions based on the same kind of assumptions and circular logic as Krugman decries above? As Jonah Goldberg says, “I save or create 500 push-ups every morning”).
Bottom line: I’m not impressed by Ryan’s math skills, but it’s been incredibly illuminating to see his critics pillory him using the exact same arguments opponents of Obamacare and the stimulus have been using. We can thus safely conclude that Ryan’s critics / Obama’s defenders were either being disingenuous in their attacks on Ryan, or in their defense of Obama’s stimulus and healthcare reform plan, or both.
McArdle has more of the goods on Krugman, who desperately attacks Ryan as an “unscrupulous flimflammer” in his latest round of asshattery. Krugman too often refuses to argue in good faith, which is why he is a hack who cannot be taken at face value. More here.