Laffer: Obama's 'Train Wreck'
Arthur Laffer gives an interview to Donald Lambro at HUMAN EVENTS.
The supply side economist that conservatives highly respect gives a grim prediction for the future under Obama and the democrats.
The famed economist, whose supply-side, tax-cutting policies enacted by President Reagan in 1981 put the economy on a record-breaking, 25-year economic trajectory of growth and prosperity, is telling Americans not to be lulled by sporadic signs of growth this year, because the economy is headed for a sharper decline next year when tax rates are expected to jump sharply, sending the economy into a new tailspin.
“It will make the decline in U.S. output from 2010 to 2011 worse than the decline in output in 2008 and 2009 which will catastrophic,” Laffer said in an interview with HUMAN EVENTS.
(...)
“Obama is a fine, very impressive person. He really is. Unfortunately, everything that he is doing in economics is exactly wrong. He is a crappy president,” Laffer said.
“Whenever a country is in the throes of spending too much and raising taxes, it’s a fiscal catastrophe in the making and this is what is happening now,” he said.
Laffer says 2010 will seem like the recovery is in swing, but it'll be a mirage.
“In anticipation of known tax increases the economy will shift income and output from 2011 -- the higher tax year -- into 2010 -- the lower tax year. As a result of this income shift, 2010 will look a lot better than it should, and 2011 will be a train wreck,” he predicts.
“GDP growth in 2010 will be some 3 to 4 percent higher than it otherwise should be, thus green shoots,” he said. “The transfer of income from 2011 into 2010 will not only make 2010 [economic growth] higher than it otherwise would be, it will also make 2011 [economic growth] 3 and 4 percent lower than it otherwise should be because people have shifted income out of 2011 into 2010.”
“The effect of the shift in income on GDP growth in 2010, however, is going to be fairly substantial, but when the U.S. economy comes to 2011, the train’s going to come off the tracks.”
But the tax picture also will grow darker this year as the country heads into the midterm elections, Laffer said. “In 2010 the U.S. will have a payroll tax rate increase, an estate tax increase and income tax increases. There’s also a tax increase coming in 2010 on carried interest. This rate will rise from its current level of 15 percent to 35 percent, and then it will rise again in 2011.”
As always read it all cause it's Arthur Laffer, and you don't wanna miss his wisdom.
Dig that bunker deep, fill it with guns food and gold, then keep your head down, it's gonna be ugly.
Resurface in time for that 2012 electoral tsunami. The only upside to this national pain will be the repudiation of leftist/Marxist/progressive/liberal policies for a generation, much the same way Jimmah Carter did in his day.
Set as favorite
Bookmark
Email this
Trackback(0)
TrackBack URI for this entryComments (41)
Subscribe to this comment's feed
written by Odin , February 04, 2010
"As always read it all cause it's Arthur Laffer, and you don't wanna miss his wisdom."
Reminds me of the conservative I was talking to the other day who asked if I'd heard of Jason Lewis, and when I said he was a moron, claimed Lewis was a constitutional scholar. Amazing what some people will believe in their alternate realities.
The phrase "Laffer's wisdom" belongs with oxymorons like "Osama's humanitarianism" and "Tonya Hardings' sportsmanship."
written by Kermit , February 04, 2010
Fred, don't join in with Onan's really obtuse observations. He does you no service, quite the opposite. His world view is skewed, and I'm being very generous in that statement.
written by Barthélemy Barbancourt , February 05, 2010
...explain the 25 year economic boom that occured when Reagan took his advice.
Specifically, explain what part of the famous Laffer curve is wrong. At 0% tax rate the government gets nothing, at 100% tax rate the people have no incentive to work. There is a sweet spot where tax receipts are maximized yet the people stay motivated to produce. I can't see how anyone can disgree with this.
Also, Jason Lewis has a nationally syndicated radio show so I doubt that he has an 85 IQ. Liberals need to stop pretending that people that disagree with them are stupid. Intelligent people can, and often do, disagree on complex issues.
Here's an example: what, if anything, should be done about Iran's nuclear program? Can you see how intelligent people might have different views of a complex problem?
written by Al Gore , February 06, 2010
"explain the 25 year economic boom that occured when Reagan took his advice. "
Coupled with record deficits. And the 25 year boom really wasn't really a boom everywhere. Real wages have stayed the same or declined over the past decade.
What you forget about the budget numbers today is everythings in. Both wars, the war on terror. Bush excluded those numbers so his deficit predictions were pretty much bullshit. And of course, in your eagerness to rewrite history, the bailout was created in 2008, before Obama was sworn in.
How much more destruction to the economy do you need to prove that the tax cuts were a huge failure. Oregon voters got it right when they passed an amendment for higher taxes for those making over $250,000/year. The wealthy can pay more and they will continue to earn and invest.
As I have said repeatedly, demographics will change the political landscape. Hispanics and boomers are going to change this country in ways never imagined.
written by Kermit , February 06, 2010
the bailout was created in 2008, before Obama was sworn in
By a Democrat Congress.
written by Barthélemy Barbancourt , February 06, 2010
We agree on that. The baby boom will bankrupt our nation through their own selfishness. They are the most selfish generation ever and the damage that they did to our country is almost unimaginable.
Look at illegitimacy, literacy, poverty, etc. Almost every thing has gotten worse under the governance of baby boomers. Their liberalism has gutted our country. They inherited a super-power and will leave the next generation penniless.
written by Kermit , February 06, 2010
Pennieless? How about six digits in debt? Barry has all but guaranteed that outcome. He isn't a Manchurian candidtate. He's the Cloward/Piven candidate.
written by Nobody , February 07, 2010
Boomers are going to have to suck it up. Some of us don't need SS or medicare. FDR and LBJ knew that these programs would go under when they started them. I call for "means testing" to start.
written by Odin , February 07, 2010
"the bailout was created in 2008, before Obama was sworn in
By a Democrat Congress."
No. TARP was mostly a Bush WH creation that got bipartisan support from the Congress. A couple of excerpts from a CSM article on lessons learned from the bailout, supported by quotes from "On the Brink," by Bush's Treasury Secretary Henry Paulson:
..............
1. Prepare for what you can barely imagine. As storm clouds gathered in the spring of 2008, Paulson and his staff at Treasury prepared what they called a "break the glass" plan, named after the fire axes kept under glass cases for emergencies. The plan included elements of what would later take shape in the Troubled Asset Relief Program, as the crisis emerged in full force that fall. TARP has been unpopular from the get-go, but it helped to prevent a much deeper economic collapse.
Paulson hoped he wouldn't have to use it. He writes that in April, just after the collapse of the investment bank Bear Stearns, Congress was not "anywhere near ready to consider granting us such powers."
Paulson also shares his view on the nation's financial health when he arrived in office in 2006, after being chief executive at Goldman Sachs. He warned George W. Bush that "we were due for [a] disruption." Although he outlined risks including the unregulated derivatives market, "I misread the cause, and the scale, of the coming disaster. Notably absent from my presentation was any mention of problems in housing or mortgages."
http://www.csmonitor.com/USA/2010/0204/Paulson-s-On-the-Brink-Seven-revelations-about-US-financial-crisis
..............................
Paulson is quoted in the article saying he was "comforted by the knowledge that our president-elect fully understood the threat our economy still faced."
If it comes down to a choice between believing the know-nothings who assert that we weren't on the brink of economic collapse and TARP was unnecessary, or believing the insiders and knowledgeable economists who say we were and TARP averted disaster, I'll go with the latter every time.
written by Kermit , February 07, 2010
Bush was wrong. Goldman Sachs made out like bandits, and the current White House has tripled the error that the federal government created in the first place. When this house of cards collapses, it will be on the head of Barack Obama and the criminal syndicate he supports.
I bet Paulson has one sweet golden parachute though.
written by Odin , February 07, 2010
"Also, Jason Lewis has a nationally syndicated radio show so I doubt that he has an 85 IQ."
Here's Lewis in the Strib, advocating abolishing the estate tax - "Clinton's consternation over letting folks keep what they've earned over a lifetime betrays the cavalier attitude Democrats take toward property."
When someone makes a statement that stupid after what is presumed to be careful consideration (the quote is from an essay Lewis wrote), it's reasonable to consider him or her a moron.
As for the supposed Laffer-induced 25 year economic boom, how do you explain U.S. economic growth in the decades after WWII when the top tax rates and capital gains tax rates were much higher? How does supply-side economics reconcile the fact that the Clinton administration and the Congress raised taxes on the wealthy in 1994 and revenue increased? Even David Stockman, Reagan's first Treasury Secretary and an initial believer in Laffer's "wisdom," didn't attribute the "economic boom" to Reaganomics.
When Reagan sleazed his way into the presidency, the U.S. was the world's top creditor nation. When he left we were the top debtor nation. Most U.S. households were supported by one income-earner when Reagan took office; when he left most households needed two income-earners to support their standard of living. Before Reagan's presidency, the national debt reflected some semblance of fiscal sanity. Reagan put us on the path to financial ruin. ("Reagan proved deficits don't matter." - Dick Cheney)
Clinton and the Democratic Congress tried to restore fiscal sanity, but then W took office, pushed through tax cuts for the rich (with the help of a Republican Congress), instituted his infamous "nobody could've foreseen" style of governance and here we are.
written by Kermit , February 07, 2010
When someone makes a statement that stupid
I have to wonder why Bart continues to let statements this stupid go unchallenged.
written by Barthélemy Barbancourt , February 07, 2010
I no issue with this statement "Clinton's consternation over letting folks keep what they've earned over a lifetime betrays the cavalier attitude Democrats take toward property."
If you think that there isn't a huge intellectual discussion about what is private property and the government's right to take all, some or any of it, you really are being obtuse.
I assume Jason Lewis was talking about the Death Tax. If your partisanship makes it impossible for you to admit that some well read people see the personal property issue different than you do, it is you who needs to check your IQ. You may have a strong opinion of one side of the issue, but to dismiss everyone else that has an opinion different from yours as stupid is petulant and childish at best and lowers the value of your opinions.
Now quit calling ideas that you disagree with stupid, it makes you look, for lack of a better word, stupid.
written by Barthélemy Barbancourt , February 07, 2010
"how do you explain U.S. economic growth in the decades after WWII when the top tax rates and capital gains tax rates were much higher?"
Well, let's see. The information age has made capital more mobile, smoke-stack industries have left the USA and set up shop in other parts of the world and our global competitors today are really competitive. The Japanese make more than cheap radios, the Koreans have one of the leanest car companies and India is taking over highly paid IT work that didn't even exist in 1950.
Plus the cost of Federal, state and local government was lower in 1950 and regulations were often non-existent. My dad build a large garage in the 1970's on land that had not zoning at all. Try that today.
Trying to compare the US in the 50's to the the US in 2010 is silly.
written by Kermit , February 07, 2010
I will be most interested in reading a well-reasoned, thoughtful reply.
written by Odin , February 07, 2010
"I assume Jason Lewis was talking about the Death Tax."
A tax by any other name is still a tax. At the risk of validating your Sally Field complex ("You refute me! You really refute me!"), I suggest you read his quote again and consider how much of their hard-earned wealth folks will be able to keep when they die if Lewis succeeds in abolishing the estate/death tax.
"Trying to compare the US in the 50's to the the US in 2010 is silly."
But comparing different periods of U.S. economic growth isn't. If it was lack of regulations and lack of competition that were primarily responsible for the decades of economic growth after WWII when tax rates and capital gains tax rates were much higher, why does supply-side economics focus primarily on the supposed effects of tax rates? Clinton and the Democratic Congress didn't deregulate much and competition was probably at least as cutthroat as it was during Reagan's presidency, but revenues increased when they increased taxes on the wealthy anyway. How do you explain that?
written by Al Gore , February 07, 2010
"They are the most selfish generation ever and the damage that they did to our country is almost unimaginable. " Boomers havent hit Medicare age yet. The idiots in the town hall meetings complaining about government control of healthcare while they actively participate in Medicare aren't boomers. Many of them will get far more out of the program than they ever put in.
Bill Clinton was probably the first boomer president. At the end of his administration, we had a budget surplus. Obama is barely a boomer. You really have to look at the Reagan administration as the beginning of our downward slide. Deficits exploded, the wealth gap got bigger and we started to see the exiting of manufacturing in this country.
And you can thank boomers for the PC, the technology boom, a good deal of the advances in medicine and science and an economy that until recently, was the most powerful in the world.
And its not just boomers. look at the rise of various ethnic groups like hispanics. Their values are far different than yours and their growth will change the political climate in years to come.
Face it Bart -- obese, cigar smoking, white guys who still wear mullets are a dying breed.
Editted by Site Owner: I left the insult up but changed the name. Al Has many issues with rules.
written by Barthélemy Barbancourt , February 07, 2010
I have no idea what you are talking about for the tax rate. If you are not familiar with the concept of Family as self or the idea that people control their wealth after death,I suggest you look into it. We have wills and many people who have died exercise control over their money and family love after they are gone. I seem to remember a long discussion as while back about this. A will is a contract and it is valid after the death of the signer. It is not the only contract the lives past the death of the signers.
You can disagree with this interpretation of the law, but that's how it works today. Some people have set up vehicles to execute their desires long after they are gone, these are often called foundations. You know all of this yet you pretend it doesn't exist as you have issues with estate taxes, as well as other taxes.
Why can I transfer all of my wealth to the Lovely Mrs. Eberly and not my kids? You can parse this all you want, but most American what their kids taken care of after they are gone.
If you think that estates are wrong, I guess you hate life insurance too? Good luck selling that to the wives of America.
As for tax rates, I don't know where they kicked in adjusted for inflation. I suspect that the top rates were like the AMT. The AMT was supposed to only hit an handful of Americans. I'm guessing that the 90% tax rate also only hit a very small minority and the vast majority of Americans had an over-all lower tax burden than today.
Either way, there is no way to tax our way our of Obama's deficits and everyone knows it. The Democratic party is losing due to spending (Yeah, Bush spent too much too) I can't wait to see all the Democrats get kicked out of office in November due to Obama's insanity. $1.6 Trillion deficit this year alone. The Republicans don't even need to discuss anything else.
written by Barthélemy Barbancourt , February 07, 2010
I just a matter of who has the most toys. So far, I'm not losing.
I am afraid that you are correct about people like me being a dying breed. Obama and people like you are killing businesses, large and small. This is one of the most anti-business administrations ever. There are better places to do business and Americans won't be leaders for long with policies like these.
Liberalism has always hated independent people. Any Obama success will come at a cost to freedom and independence. Jim, Shark and Kermit's kids are inheriting a bankrupt nation with too many road blocks to their success. I'd suggest that they learn Chinese and move to Hong Kong.
written by Odin , February 07, 2010
"If you are not familiar with the concept of Family as self. . . "
Actually I'm not. I'm familiar with couples referring to their "better half," but I've never heard of anyone referring to descendants as "my better quarter" or "my better eighth" or anything similar. If you consider your family to be self, suppose you said, "Speaking only for myself, I don't like cherries." Would that mean you're speaking for your entire family and none of them like cherries? If someone in your family has a headache, does that mean the entire family (self) has one? If a husband beats up his wife and kids, is that self-abuse? Does the judge tell him, "You're only hurting yourself"?
". . . or the idea that people control their wealth after death,I suggest you look into it."
I have and it's nonsense. People don't control wealth after they die because people no longer exist after they die. The word you seem to be overlooking in Lewis's idiocy is "keep," as in "letting folks keep what they've earned over a lifetime."
"A will is a contract. . ."
No, and your continuing to say it is doesn't make it so. I doubt you could find even a first-year law student who would agree that a will is a contract. A contract is an agreement between parties and has no relevance to the argument Lewis embarrassed himself making. The estate tax doesn't prevent inheritors from keeping "what they've earned over a lifetime."
"The Democratic party is losing due to spending (Yeah, Bush spent too much too.)"
Not just W, but also Reagan and Bush, Sr., all of whom presided over record deficits. Most of Obama's spending up to now has been from continuing W's policies - TARP, the two wars, etc. At some point the majority will begin blaming Obama for the sad state of the economy, but the last poll I saw suggests that hasn't happened yet.
written by Barthélemy Barbancourt , February 07, 2010
Americans work hard so that their kids will have a better life. They reject the idea that if they die their kids won't get the fruits of their labor. You can rail all you want about how the end of your life is the end of your legal rights (if so, why is sex with the dead illegal?) but your bucking centuries of tradition and culture. In fact, Civil Unions will make this a moot point as people will just join with people civilly to avoid taxes.
I guess I'm the over-educated one as I recently had a class on the ideas of clan, blood and family. The idea that your offspring are an extension of yourself has been around for centuries. The idea that a child is a completely separate identity is still not fully accepted in some societies today. I don't think you need to look too hard for statements about people living on through their kids.
written by Kermit , February 07, 2010
Onan is most likely unfamiliar with the concept of "posterity" too. No surprise there.
written by Odin , February 07, 2010
"You can rail all you want about how the end of your life is the end of your legal rights . . ."
I'm laughing at the idea that you have rights when you no longer exist, which is inane. Who or what has the right(s)?
"(if so, why is sex with the dead illegal?)"
Tradition and health concerns. If corpses are people, why is necrophilia a misdemeanor instead of felony rape?
"but your bucking centuries of tradition and culture."
No. Locke's natural law philosophy is based on property rights for the living, not dead things, the latter having no need for property rights. Use your over-education and tell us why Locke says his god endows us with personal property rights, beginning with property rights in our bodies.
written by Barthélemy Barbancourt , February 07, 2010
You know fully well that most people believe that their wishes expressed in their wills should be honored after they are dead. They don't care one wit about Locke or any other pointy headed view of the existence or existentialism.
Politicians know this too. You could rant all day about your rights being extinguished when you die and you'll never get one politician to agree with you. People want the right to dispose of their property and money as they see fit when they pass away. This is a fundamental private property issue. If the government were to say that you have absolutely no ability to direct assets when you pass away, I would guess that that government would be short lived at best.
I suggest you start getting out more and talking to real people. I can see why you like Obama, neither of you has a clue about how the American public thinks.
By your view, the minute my single neighbor dies I should be able to move into his house and take everything he had. Are advocating a society of anarchy or do you just want the government to take everything my neighbor had? Either way, you are violating basic rules of private property and advocating for a society that bears little resemblance to any country I want to live in.
written by Kermit , February 07, 2010
Centuries? How about thousands of years? Onan has embraced a relatively new concept that endows government over posterity. Your rights may "end" when you die, but they certainly include the ability to determine what to do with your property at the point of your demise. I suspect you Marxist (deleted) would like to deprive us of that right too, but until that day you can kiss my free, American ass.
written by Odin , February 07, 2010
"The idea that a child is a completely separate identity is still not fully accepted in some societies today."
Which societies are those and why are they relevant to a discussion about American tax policy? In America, children are considered by law to be completely separate identities, although there is some disagreement on whether human conceptuses are separate individuals. Is it now your position that conceptuses are part of the women carrying them and should be treated accordingly by society and the legal system?
written by Nobody , February 07, 2010
Did not we have this talk sometime back? Odin gets to take your stuff when you die. Odin is a thief. I give up.
written by Odin , February 07, 2010
"Odin gets to take your stuff when you die."
Your understanding of Locke's natural rights philosophy and its relevance to property rights and estate tax laws leaves a lot to be desired. You should probably just keep quiet and avoid embarrassing yourself further.
"Odin is a thief."
No. The estate tax doesn't take your stuff when you die because it's no longer your stuff. That's the point, one of many apparently beyond your (and Lewis's) understanding. More's the pity.
"I give up."
That would be good.
written by Odin , February 07, 2010
"You know fully well that most people believe that their wishes expressed in their wills should be honored after they are dead. They don't care one wit about Locke . . ."
Perhaps not but most probably care about the Constitution and their natural rights and the laws protecting those rights, even if they don't know or understand the coherent philosophy behind them. The question is whether it's better to pass laws consistent with the philosophy America and the Constitution were founded on, or just pass laws that may or may not conflict with that philosophy. The former seems much wiser to me, considering the philosophy enshrines the rights of individuals and insists government(s) have compelling reason(s) to limit/deny those rights.
Lewis was trying to make a natural rights argument in support of abolishing the estate tax. He failed miserably. All he did was make the claim of his being a constitutional scholar laughable.
"By your view, the minute my single neighbor dies I should be able to move into his house and take everything he had."
No. In most instances the greater society has more of a moral claim (natural right) to the property than his heirs. As a member of the greater society you have a moral claim equal to his heir(s) and the other members of society, not a superior moral claim.
As I've already said ad nauseum, your neighbor's natural right (moral claim) to property ends when he does. That should be obvious to you. How can he have a claim to anything when he no longer exists? What has the claim?
written by Barthélemy Barbancourt , February 07, 2010
Our country has a cultural bias towards respecting the wishes of the recently departed. You and twist words all day but the idea that "society" has a greater claim to your property than your blood off-spring is a non-starter in this country.
You think that society, ie a massive all powerful government, should rule over tradition is sad. Why do you trust a government, recently run by GW Bush, to do better than the recently deceased kids?
written by Odin , February 08, 2010
it's a matter of morality. In a country founded on Natural (Moral) Law philosophy, who has the greater moral claim? As I've already said, I believe in most instances the society that created and maintained the conditions for wealth creation has a superior moral claim to that of inheritors whose only moral claim is probably in most instances based on whatever emotional support they provided the deceased while being wealth drainers. Children don't tend to enhance the tangible wealth of their ancestors, which might explain the dearth of Procreate and Grow Rich books, although some low-income members of society seem to believe having children is the way to prosper, or at least survive. In those instances, having children does tend to enhance wealth, at least in the short term, but it's hard to make a natural law argument that those parents and children have moral claims to welfare money.
You're right that society has a cultural bias towards respecting the wishes of the deceased, but it also has a cultural bias towards respecting natural (moral) law. When the two biases conflict I believe the wiser course of action is the more moral course.
written by Kermit , February 08, 2010
It's a matter of morality? Yeah, black is white, up is down, and "society robbing you of your birthright is moral.
God, what a commie you are.
written by Kermit , February 08, 2010
Of course, the natrual extension of this perversion of morality would permit society to decide whether or not an individual was an adequate contributer, and euthanize those deemed a burden. Is there any surprise that Communism has murdered hundreds of millions of people?
written by Odin , February 08, 2010
and try to avoid embarrassing yourself further, since you still don't seem to understand that the natural rights position I'm espousing, (and natural rights philosophy in general) is the antithesis of communism. There is no property "birthright" for adult inheritances in Locke's natural law philosophy, nor should there be.
Actually, it's Republicans/conservatives who tend to take a more utilitarian view of society, usually expressed as "the freedom to fail" (starve), and balk at paying welfare to those they deem "non-contributors."
written by Barthélemy Barbancourt , February 08, 2010
You can dream all day about stealing a man's property on the day he dies, it ain't gonna happen.
If we only have rights to proprty while drawing breath, why do wives get anything? Again, good luck telling women voters that they get nothing when their husband dies. You have already lost the kid's votes.
Isn't it time to admit that this is a silly idea with no chance of ever becoming reality?
written by Odin , February 08, 2010
"You can dream all day about stealing a man's property on the day he dies,. . ."
Continually building strawmen like this does you no credit. In fact it's a laughable tactic that invites ridicule and a practice that if continued will ensure your site becomes (remains?) an echo chamber for dumber-than-average conservative know-nothings.
As I've already made more than abundantly clear, the estate tax steals nobody's property. Your failure to acknowledge that brings to mind the old saying about it being hard to get a man to believe something when his paycheck depends on his not believing it. Watching you constantly resort to the intellectually dishonest phenomenon Rand called "blanking out" is getting old.
To paraphrase Dean Wormer, "Dumb, ignorant and blanking out is no way to go through life, son." I suggest you re-think your stultifying philosophy.
written by Nobody , February 08, 2010
Just he can twist Locke, he mis-quotes Dean Wormer. What a dandy.
written by Nobody , February 08, 2010
A check for you Odin, all the estate tax has done is take people like me (and Bart one day) is to a lawyers office to set up a living trust. Bad law always has a work-around or is ignored. Remember 55 mph? When it came in I lived in Ca, it lasted one day. I think Locke even takes the bad law idea up in the Second Treatise. (it may not be in your Cliffs Notes version )Wait, was it Bastiat? Oh now I remember it was both!
written by Odin , February 10, 2010
the word "paraphrase" means. Nice ejumacation ya got there.
Write comment
You must be logged in to post a comment. Please register if you do not have an account yet.
