From Dan Crawford:
"The point of the post is that while one AEI economist [Viard] is willing to state the obvious about tax cuts [that since Reagan at least they have reduced revenue], and though he may state that no economist disputes the obvious, his more prominent colleagues at the AEI do dispute what the data so obviously shows. I went further, and noted that Viard had to know that his own institute is a big part of the problem. Pethokoukis' [his more prominent colleague] next sentence: "Supply-side economics is simply a school of economic thought that believes a) incentives matter, b) high tax rates are bad for growth, and b) inflation is fundamentally a monetary phenomenon."
I'll ignore the grammatical error toward the end of the sentence - there are enough substantive issues in the post - and merely point out: "incentives matter" is not something that defines supply-side economics any more than having two arms and two legs is a defining property of people of Swedish extraction.
I have yet to meet an economist of any stripe who doesn't believe incentives matter, just as I cannot think of any country whose citizens don't typically come equipped with four limbs. Its just that typically different schools of thought think incentives matter in different ways."
The rest of the post goes on to discuss incentives in Marx and Keynes, and how ridiculous this claim about supply side economics is. The thing is, "supply side economics" isn't really even an economic theory. It was a disposition of policymakers and some economists close to policy makers originating in the 70s and 80s that had some tangential relation to some of the discussions going on among economists at the time.
How Are These Times Different?
2 hours ago