2.) I can't let this pass, though. Rudy Giuliani describes himself as a supply sider. The other day he said: "I regard myself as a supply-sider for sure. I mean, watched Ronald Reagan do it and learned it, saw it work. Taxes get reduced, more revenue comes in."
This hollow idea that Reagan's tax reductions increased revenue is often repeated by supply side conservatives. But they must think you're an idiot because they never account for important factors like the following:
* Inflation. If you crow about revenue numbers without accounting for inflation, you are a... deceptive penis. Most supply siders are deceptive penises, and assume you won't notice.
* Population growth. Americans and dirty illegal immigrants have kids. The population grows. Thus, more people pay taxes... which increases revenues.
* After cutting taxes in 1981, Pres. Reagan raised them in 1982 (twice), 1983, 1984, 1985, 1986 and 1987. Reagan said he was "closing loopholes", but that's just another way of saying "tax increase". Tax increases affect revenue totals.
* Without Fed Chairman Paul Volcker's monetary rectitude, there would've been no economic boom in the 1980's. Nothing mattered until 1970's Stagflation was extinguished with high interest rates. That's why a brutal recession immediately followed Reagan's vaunted 1981 Recovery Act, and it's also why the U.S. economy enjoyed robust growth after 1983.
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All in all, the real per capita revenue growth rates were much higher in the 70's (+25%) than during the Reagan years (+18%). During the Clinton boom years, per capita revenue growth totalled (40%).
But it has become conservative boilerplate to say that "Reagan cut taxes and revenues rose" as if that statement signifies cause and effect; as if those are the only two facts worth knowing.
(Speaking of Reagan, I must note that ex-Supply Sider and former Reagan Budget Director, David Stockman, has been charged with "overseeing a sweeping fraud at a troubled auto parts supplier that he led before the company collapsed into bankruptcy." Tsk, tsk.)
Now conservatives are proclaiming the same thing about Bush's supply side policies. "Look at the rise in revenues!", they chirp, while not noting that real per capita revenues were the same in 2006 as they were in 2001. Revenues rose, but only after falling dramatically. (Income Inequality, though, has taken off.)
And sadly, America's Mayor is describing himself as a supply sider who learned the craft by "[watching] Ronald Reagan do it". What's the proper response to such a lame claim? How 'bout this:
Rudy, please stop this "supply side voodoo economics tango and wango dance". It's unbecoming. Borrow some talcum from Malcolm if you need to, and get in the game!
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Update: Here's the latest conservative tax foolishness.
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Labels: Giuliani, Vitty-cent, Voodoo economics
