Tuesday, October 02, 2007

To Earn More, Ask Your Boss for a Pay Cut!

If you think the title of this post makes no sense, then you’re gonna love “Krugman Ruined a Beautiful Day,” the winner of the maven’s most wonderful letter of the day for October 2, 2007. This letter was written in response to a TD op-ed by Paul Krugman. I don’t remember Krugman’s column, but today’s letter was surely entertaining.

My favorite sentence in today’s letter is “Even students in Econ 101 understand that tax cuts increase the revenue going into the U.S. treasury. This has been proven many times.” Hey, it’s been a long time, but I did take Econ 101 and I never learned this amazing principle. I learned about supply and demand and all that cool stuff that only works in a hypothetical world. But never did my Economics professor have the nerve to suggest to me that lowering taxes increases revenues.

Now, this is becoming crystal clear to me. The more money we want to raise for the United States government, the lower our taxes should be. Over the years my brain has begun to resemble Swiss cheese. However, I still have enough gray matter to extend our letter writer’s theory to its ultimate conclusion. If lower taxes mean higher revenues, then if we eliminate taxes entirely we will maximize the revenues we collect.

How come nobody has thought of this before? Wait, now I remember. Isn’t this what George Herbert Walker Bush called “Voodoo Economics” in 1980? Isn’t this what became known back in those days as Reaganomics? Isn’t this what created huge budget deficits over the past few decades? Aren’t we in mega trillions of dollars of debt because we had presidents who thought you could cut taxes and increase spending at the same time? Despite what our letter writer claims, this inane theory has not been proven; it has been disproved two disastrous times—in 1981 and in 2001—and our great grandchildren will be still be paying off our obscene debt in sixty years.

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