Supply Side and Libertarians Are Wrong and Not Supported by the Data
10 March 2018 | Pago Pago, American Samoa
Kimball J Corson
The economy of the US, especially in regard to income and wealth inequality in the interwar years was substantially different than our present economy currently. Inequality was not a problem. The middle class was not yet gutted. The super rich did not think they had enough to hoard most of their additional income in secondary markets. That was yet to come, but that situation has arrived now. And the economy behaves differently now. Inventories and production are held back so as not to exceed aggregate demand. Tax cuts and hikes no longer impact GDP, but now primarily affect inequality.
More generally, the cut taxes mantra of libertarianism for growth is a false claim simply designed to starve government of revenue to obtain the further mantric goal of smaller government which in fact decreases rather than increases personal and economic freedom. So they are wrong again, both coming and going.The biggest and first order effect of a cut in government spending and taxes is a direct reduction in GDP in like amount. It is foolish to think it can be made up by secondary effects. Yet that is exactly what republicans claim. Cut taxes and spending and tax revenues will actually rise. It is crazy, false and bad policy. Bigger and better government and more goverment spending are the remedy for Libertarian austerity measures designed to cripple government and for the consequences of austerity. The question is whether to increase or decease the circular flow of money in the economy and therefore incomes.
Yet the dominant economic outlook in America government is for austerity imposed by lower taxes, smaller government and no interference in the economy -- the libertarian mantra. We cannot get so much wrong and do well as a nation or for our people. Stupidity and ignorance are prevailing, with Trump leading the way. His tariffs are another mess entirely. This man is a strike out king and should be impeachable on economic grounds.