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Comparing Obamanomics with Reaganomics, Looking at Evidence from the States

Roger168 Wrote: Apr 22, 2012 4:13 PM
Milton Friedman, a Nobel Prize winner in economics, was President Reagan's Chief Economic Advisor. His economic theory, adopted by Reagan, was "supply side" economics. The theory went something like this. Reduce taxes AND GOVERNMENT SPENDING. The increased disposable income will increase consumer consumption and investment, thereby increasing job growth and growth in taxable income. The extra revenue generated by the increased tax basis more than compensates for the loss of revenue caused by reduced tax rates. It would have worked if the government cut spending. Instead, they spent everything they took in and more. Interest rates soared. The FED raised interest rates to rein in inflation.

I’ve done a couple of posts comparing Reaganomics and Obamanomics, mostly based on data from the Minneapolis Federal Reserve on employment and economic output.

I even did a TV interview on the subject, which generated some comments on my taste in clothing, and also cited a Richard Rahn column that got Paul Krugman and Ezra Klein upset.

Some of the best evidence about high tax rates vs. low tax rates comes from inside...

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