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From: jrrt@hogpd.UUCP (R.MITCHELL)
Newsgroups: net.politics
Subject: The WSJ on Reaganomics
Message-ID: <421@hogpd.UUCP>
Date: Thu, 8-Nov-84 09:41:36 EST
Article-I.D.: hogpd.421
Posted: Thu Nov  8 09:41:36 1984
Date-Received: Sat, 10-Nov-84 07:32:28 EST
Lines: 53

In view of the recent allegation that Reaganomics is now considered
a joke by anyone in the know, I offer the following excerpt from a
11/6/84 WALL STREET JOURNAL editorial.  Draw your own conclusions --
I make no claims either way so flames at me will be ignored.
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		ALL SUPPLY-SIDERS NOW
   From an educational standpoint, it's too bad the Reagan recovery
foreclosed any real economic debate in this campaign.  For the intellectual
joust would have revealed a truly remarkable shift in thinking since Arthur
Laffer first drew his curve on a restaurant napkin to illustrate that at 
some point higher tax rates actually collect less revenue.
   ...In the backwaters of the Charles River, to be sure, you can find
those who dismiss the Reagan recovery as a "Keynesian" response to 
deficits, as if it would have worked as well to have boosted spending 
instead of cutting taxes.  Yet according to the OECD, deficits and
government spending in Europe have been running even higher than in the
U.S.  The recovery did not take place there; it took place here,
following the first net tax cuts in 1983.
   A careful reader can find supply-side economics, and even the Laffer
Curve, spreading through the popular press.  "With tax rates reduced, the
supply-siders say, the rich will move away from tax shelters and channel 
more money into conventional investments," writes Time magazine.  It notes 
that, following the reduction in the top marginal rate to 50% from 70%,
"the percentage of income tax collected from taxpayers earning $50,000
or more rose from 32.9% to 35.4%.  At the same time, the share paid
by those making $20,000 or less fell from 17.1% to 15.5%."  Time concluded
that, true to supply-side claims, "the share of taxes paid by the richest
Americans is on the rise."
   "Ever since George Bush labeled Ronald Reagan's proposals for massive
tax cuts 'voodoo economics,' Reaganomics has been widely classified as
...a lunatic fringe" writes Newsweek.  "Now, economists of many stripes
are factoring in a new variable: the key supply-side tenet that a steadily
growing economy coupled with spending restraint may be able to erase much 
of the budget deficit without tax increases.  In short, the supply-siders 
may be right."  It adds that "the strongest argument supply-siders have
is the economy's performance.  Defying conventional wisdom, it has achieved
sustained expansion" without renewed inflation.  And "budget deficits have
come down."
   ...the [post-election] debate will not be over whether there is a Laffer
Curve, but over its precise shape.  Even while many of the debaters 
continue to ridicule Arthur Laffer, they will be arguing over which tax 
rate will maximize revenues.  A look over the shoulder at Mr. Mondale will 
show how far the idea has come, how widely the reality of supply-side
incentives is now accepted.  Politically, it is Republicans and Democrats
who have learned this lesson who are likely to do well in today's returns.
And intellectually, it will be the same people who set the economic agenda 
for the future.
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Excerpted without permission.  The usual disclaimers apply.

Rob Mitchell  {allegra,ihnp4}!hogpd!jrrt

Money's not my life, just my living.  - Gay Johnson