Listen: From A Napkin To A White House Medal The Path Of A Controversial Economic Idea
"Economists art Laffer is set to receive the medal of freedom today from President Trump laugher helped popularize the notion that tax cuts can pay for themselves through faster economic growth, Ronald Reagan's former budget director David Stockman calls laugher, quote, the greatest fake economists to ever come down the pike and quote, NPR's, Scott Horsely reports aren't Lavers journey to the nation's highest civilian honour began forty five years ago with around of drinks in Washington. Cocktail lounge laugher, a young economist time was trying to persuade president Ford's deputy chief of staff, the guy named Dick Cheney that lowering taxes could actually boost government revenue art was trying to explain to janey how to laugh or curve works. Grace Marie Turner. A reporter who was there says Cheney wasn't getting it right away. So laugh a resorted to a visual aid, how he sketched out this Laffer curve on a paper cocktail napkin at the hotel Washington just across the street. From the White House. The Ford administration never embraced laugher philosophy, but Ronald Reagan did taxes story and Bruce, Bartlett says the namesake curve that laugher sketched that day provided intellectual cover for Reagan's nineteen Eighty-one tax cut, basically, it was a way to have your cake and eat it too. Bartlett, who later worked in the Reagan White House says in those days, Republicans pushing tax cuts still had to pay lip service to fiscal responsibility. So if you wanted to have a tax cut either had to pay for it by raising other taxes, cutting spending, or come up with some gimmick elect laugh recurs to simply assert, that it wouldn't lose revenues, despite laugh assurances the Reagan tax cuts did lose revenue. And while the economy, eventually boomed deficits soared Reagan was ultimately forced to reverse about half the cuts today. Most serious Republican economists dismissed the idea that tax cuts pay for themselves through faster. Economic growth, but sociologist Elizabeth pot. Berman of SUNY. Albany says the Laffer curve has none. The less stuck around, once you take those kinds of ideas and put them poorly into the political sphere, they sort of take on a life of their own in two thousand twelve the state of Kansas paid laugher, seventy five thousand dollars to help then governor Sam Brownback craft his own tax cut, laboratory NPR's planet, money, cutting taxes would do great things for the Kansas Konami more employment. More put more production. You're more jobs created in Kansas. They'll be more payroll taxes. It didn't work out that way, anti McKay who was head of the Kansas center for economic growth says despite Lavers promises state revenues plunged by six hundred million dollars and job growth lagged, his voice was nowhere to be heard when we were undergoing nine consecutive rounds of budget cuts credit downgrades, there wasn't any part of the state budget that wasn't being used to prop up his failed tax, experiment state. Lawmakers eventually reverse the tax cuts laugher insisted they just needed more time to work. He continues to chant. In tax cuts at the federal level a month after president trumps election laugher told morning edition corporate taxes should be cut dramatically dropping that tax rate to fifteen percent would have a huge impact on the US economy, and would have very little impact, if any on tax revenues from corporations from businesses congress did slash corporate taxes, although not as far as laugher wanted, and despite a strong economy corporate tax revenues dropped last year by twenty six percent no matter how many times laugher is projections of proven wrong. White House economic adviser, Larry cudlow is unfazed. I know some people agree. And some people may not agree with his views. But, but I'm electric guy a replica of the cocktail napkin. We're laugher. I sketch that curve. Is now on display at this Massoni museum of American history. The grace Marie Turner says that cloth museum-piece is not the original this wasn't a kind of stablishment. It would have had a cloth napkin. And I don't think anybody knows what. Happened to that. Napkin, probably got picked up and carried off when the your glasses were sent back to the bar of fitting in for the Laffer curve as an economic forecasting tool. But when it comes to political marketing the curve, and its creator live on Scott Horsely, NPR news, Washington."