Saturday, April 5, 2014

Wisconsin Congressmen try to put Voodoo Economic Spell on CBO!

Supply-side Economics: 1992 presidential candidate Ross Perot was right to call it voodoo economics. Supply-siders are still convinced cutting taxes (government revenues), increase...government revenues. It’s magic.

We’re seeing this play out in Wisconsin, where “job creating” businesses has gotten everything they wanted from Scott Walker, from major tax cuts to tort reform, all without holding up their side of the bargain…jobs, jobs, jobs. And the GOP has yet to ask them to put up or shut up.

After the Reagan and George W. deficits, with a lot of help from the free market experiment that brought us the Great Recession, the only way to get people to accept supply-side was to make it into an actual law and force the CBO to use it.  
‘DYNAMIC SCORING’ BUDGET DOCTRINE: Voting 224 for and 182 against, the House on Friday passed a GOP bill (HR 1874) requiring the Congressional Budget Office (CBO) to add “dynamic scoring” to its tools for forecasting the impact of proposed legislation on U.S. economic growth. A tenet of supply-side economics, dynamic scoring holds that tax and spending cuts always pay for themselves by stimulating economic activity. But the CBO, reflecting the views of mainstream economists, does not recognize dynamic scoring as empirically valid, and instead uses what is known as “static scoring” to forecast economic impacts. 
Voting yes to make their fantasy economic dream come true were Ryan, Sensenbrenner, Petri, Duffy, and Ribble. Polls show Americans might like to try this magical potion. 

In researching this failed economic BS, I came across another term; the horse and sparrow theory:
The economist John Kenneth Galbraith noted that "trickle-down economics" had been tried before in the United States in the 1890s under the name "horse and sparrow theory." He wrote, "Mr. David Stockman has said that supply-side economics was merely a cover for the trickle-down approach to economic policy—what an older and less elegant generation called the horse-and-sparrow theory: 'If you feed the horse enough oats, some will pass through to the road for the sparrows.'"
Or this...
A 2012 study by the Tax Justice Network indicates that wealth of the super-rich does not trickle down to improve the economy, but tends to be amassed and sheltered in tax havens with a negative effect on the tax bases of the home economy.
And finally:
In 1896, Democratic Presidential candidate William Jennings Bryan made reference to trickle-down theory in his famous "Cross of Gold" speech:
"There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it."


Anonymous said...

Of course people never ever alter their behaviors or lifestyle when they are being taxed more. I know how much I like to just sit here working for the government all the time. That's why I work so hard.

Higher taxes do not necessarily result in higher revenues. A progressive tax on income deincentivizes people to work. The more you make, the more they take.

Since I already know your closed mind will automatically dismiss that comment, good luck with your opinion. Hope that works out well for you.

Democurmudgeon said...

Your argument had been disproved about 50 years ago, when the tax rate was over 90%. Although the average tax came in at around 80% after deductions, this golden age of innovation didn't stop, did it. The tax wasn't a disincentive for inventors, business interests and corporations at all. Correct me if I'm wrong about a time I actually grew up in.

I've said it before, when I grew up, I was told that if I didn't try real hard or decided to quit, there was always somebody behind me just waiting for the chance to take my place. Tell me that isn't true today, genius.