A Picture Is Worth A 1,000 Words by Economist Ludwig von Mises

My friends ONTHEBORDERLINE are madly in love with the late economist Ludwig von Mises, the darling of neoCON economics. A major reason is because, as far as OTBL'ers are concerned, no tax is a good tax. The "Reagan Revolution" and the current "Bush Revolution" are based on the same cut taxes for the rich scenario. You be the judge of where we are going...

Unemployment Rate by Year and President:



The Federal Deficit by Year and President:



So you can wade through the dense quotes of the dead Austrian economists who have virtually disappeared from even the footnotes of today's economic textbooks. Or you can look at the above graph and figure out the direction we are headed.

The Reagan and Bush "revolutions" are based on a cocktail napkins drawing by living economist Art Laffer. Laffer's theory is very simple (and that's why it's so appealing to the neoCONs). Below is a picture of the Laffer Curve:

The Laffer Curve:



The curve shows the relationship between tax rates and tax revenue. Theoretically, tax revenues increase up to a maximum at some critical tax rate. After that rate is reached, raising tax rates further will theoretically lower tax revenues. This theory has never worked out in reality, but it is a simple explanation to use to get people to back tax cuts for the wealthy.

In practice that Laffer Curve works more like the example below:



The Laffer Curve might be found as a footnote in today's economics textbooks, but it is disappearing fast. It's not disappearing because of all those "liberals" inhabiting the halls of our universities. It's disappearing because it doesn't work, it hasn't worked and there is no empirical data to back it up.