The crazy economic theory that spending has no consequences. Sometimes ideas that seem obviously silly catch on and cause serious destruction. In the late 2000s Australian economist Bill Mitchell coined the term “Modern Monetary Theory,” or MMT, to describe what one might call Keynesianism on steroids. John Maynard Keynes (1883-1946) argued ...

This is part of a series ‘Economists Exchange’, featuring conversations between top FT commentators and leading economists The economist on the mis-steps of the Fed over interest rates and the markets. Few economists have a curve named after themselves. One of the exceptions, Arthur Laffer, is best known for the moment in 1974 when he drew a ...

State public-assistance programs should be there to provide support in times of need but designed to emphasize the importance of self-sufficiency. An exciting new law in the Show-Me State is promoting a pathway to self-sufficiency. Government-welfare programs are meant to be a safety net and not trap families in dependency. Missouri is ...

The latest Census Bureau report on income and poverty could hardly have been grimmer. The US "supplemental poverty rate" (a new measure that takes into account government benefits and expenses related to working) rose over the course of a year. The child-poverty rate doubled. Almost every group – old people, young people, males, females ...

Business taxes are an anchor around the neck of the Garden State’s once-prosperous economy. How do you turn one of the most prosperous places in the world into an economic and fiscal basket case? Look at New Jersey over the past several decades. As recently as the early 1970s, New Jersey was an economic powerhouse with rising incomes, ...

If you can never escape, why would you want to live there in the first place? Lawmakers in California, Illinois, New York and Washington state have proposed new taxes on wealth, and higher income taxes for the rich are on the table in Connecticut, Maryland and Massachusetts. Residents of these seven blue states are already among ...

Lawrence Summers was right about the danger of excessive spending. But now he wants high unemployment. Mr. Summers, who served as Bill Clinton’s Treasury secretary, rocked the Democratic establishment last year by predicting that his party’s excessive spending would cause inflation. He was right. But he’s wrong now. On June 20 he told ...

The debacle of the 1970s reveals how disastrous surging prices can be for the economy and markets. The recent report showing negative economic growth for the first quarter of the year is a painful reminder of the damage that inflation can do. The current 8.5% inflation rate is the highest in 40 years. But few policy makers or Federal ...

Forty years after the 1981 tax cuts, America needs to relearn the lessons of the supply-side revolution. Friday marks the 40th anniversary of Ronald Reagan’s first tax cuts—arguably the most consequential and controversial economic policy paradigm shift of the past half-century. The Reagan supply-side revolution went global. An analysis by ...

The 5,000-page, $900 billion fiscal "stimulus" legislation passed by Congress on Monday is not a jobs bill, and it will do far more short- and long-term damage to the U.S. economy than good. Why is it that "bipartisanship" in Washington these days means that Republicans and Democrats agree to spend and borrow? Fiscal conservatives in ...

An insurance product could have saved billions of dollars in pandemic-related foreclosures. The pandemic-related economic shutdown has created a crisis for many low- and moderate-income homeowners who are out of work. The loss of a job can take a terrible personal toll on a family. But unemployment is also the primary cause of foreclosure, ...

By requiring hospitals to post real prices and insurers to disclose reimbursement rates, Congress can help patients and stimulate the economy. When Art Laffer's son returned home from Barcelona in March with COVID-19 symptoms, he went to a Nashville hospital to get tested. He never saw a doctor. He never got a coronavirus test. He saw four ...

Paying employers and employees through the payroll-tax system is a faster, more efficient way to keep them together for the long haul. As we're already quickly learning, there are several implementation challenges in delivering seriously needed trillions of CARES Act relief in a timely manner to Americans amid the COVID-19 economic ...

Every worker in America would get a substantial pay raise for the remainder of the year, while employer payroll costs fall. The best economic idea we’ve heard in response to the coronavirus crisis is a payroll-tax suspension. President Trump restated his support for it at a recent press briefing, and for good reason: It would reward work ...

Democrats want to repeat the 2009 strategy of paying Americans not to work. President Trump is negotiating with Congress over a massive stimulus plan to combat the severe economic and financial fallout from the coronavirus. One idea that seems to be catching on is a check of up to $1,200 to be mailed to every American, while Democrats in ...

“This is the flip side (of) tax the rich, tax the rich, tax the rich. The rich leave, and now what do you do?” — Andrew M. Cuomo, N.Y. governor (2/4/19) . After the Trump tax cut went into effect one year ago. we predicted that the Trump tax reform would supercharge the national economy but could cause big financial problems for the ...

On Saturday President Trump shrewdly flipped the table on House Speaker Nancy Pelosi in the government shutdown standoff. Mr. Trump has now proposed a grand bargain on immigration: Legalization of some 1 million so-called “Dreamers” — the foreigners who were brought into the United States illegally by their parents — and an immediate end to ...

We join the story of Kansas in January 2011, when former U.S. Sen. Sam Brownback takes office as Kansas’ 46th governor along with a Republican-controlled House (92 Republicans and 33 Democrats) and Senate (32 and 8) to have his back.
The Kansas economy, while far from being a catastrophe, had been underperforming for a long time. The ...

Stimulation of growth through a corporate tax-rate cut. Everyone's blaming the oil price collapse and China's sliding economy, for the rout of the stock market these first two weeks of 2016. That's part of the story, but there may also be a policy explanation for the bearish sell-off.Call it the Bernie Sanders effect. In the ...

As we've cheerfully noted on these pages, the good news on the presidential campaign trail is that almost all Republicans are now for serious pro-growth tax reform and simplification. Every candidate wants lower rates (some a one-rate flat tax), fewer loopholes and carve-outs, and a reduced role for an abusive IRS.What a contrast with ...

During the Reagan years, "federal income taxes" as a percentage of GDP went from 9.1% in 1981 to 8% in 1989. And to James Pethokoukis of the American Enterprise Institute and others, this means the "Reagan tax cuts didn't pay for themselves."But wait. Income tax revenues from the top 1% of income earners rose like mad as a share of GDP. In ...

Taxes Vs. Prosperity: The Real Wedge Issue'Government is not the solution to our problem; government is the problem," may well be President Reagan's most oft-repeated quote. And the reason it's so frequently quoted is because it's so damn true. And no example fits this quote better than the government actions taken before and during the ...

We recently launched the Committee to Unleash American Prosperity with the goal of persuading the presidential hopefuls in both parties to focus on the paramount challenge facing our country: slow growth and stagnant incomes.
Faster growth isn't just needed to raise the living standards of Americans. It also would make America stronger abroad ...

To this day, policymakers with a deep-seated fondness for government spending and taxes promote their economic policies in the name of John Maynard Keynes, despite being deeply at odds with Keynes' capital ideas. Obamanomics was no different.
The higher taxes, heavy regulation, aimless government spending and huge ideological pet ...

At a Washington, D.C., dinner some 40 years ago that has taken on a life of its own, the late Jude Wanniski, Don Rumsfeld, Dick Cheney and I discussed the topic du jour: President Ford's proposed 5% tax surcharge, which was the centerpiece of the dead-on-arrival Whip Inflation Now (i.e. ...

The last several months have seen a wave of American companies merging with foreign companies, a process known as "inverting." In effect, inversion is the corporate equivalent of a renunciation of American citizenship. By some estimates, about $250 billion of these deals have been consummated since the start of the year, and another $100 ...

We desperately need a new bipartisan tax bill to reform corporate taxes.

Within the past 60 years or so, corporate income taxes have declined dramatically as a share of U.S. GDP. In the early 1950s, U.S. corporate tax revenues averaged 5.3 percent of GDP. Over the most recent five years, U.S. corporate profits tax revenues averaged only 1.4 ...

Lawmakers need to come to grips with our subpar economic performance and enact reforms to jumpstart growth. Real annual economic growth between 1960 and 1999 was 3.5%. Since 2000, it has been 2.2%. As a result, we are 15% poorer than we would have been if growth had remained steady. That means more poverty and budget problems in state capitals ...

States can cut their income-tax rates if Web vendors collect the sales taxes that are legally due. Reinvigorating the economy should be priority No. 1 for federal and state leaders. After enjoying an average growth rate above 3.5% per year between 1960 and 1999, Americans have had to make do with less than one-half that pace since ...

Blue states with high taxes are struggling to compete for businesses and workers. You can tell a lot about prosperity in America by observing the places people are moving to and where they are packing up and moving from. New Census Bureau data on metropolitan areas indicate that the South and the Sunbelt regions continue to grow, while ...

In country after country, increased government spending acted more like a depressant than a stimulant..

Policy makers in Washington and other capitals around the world are debating whether to implement another round of stimulus spending to combat high unemployment and sputtering growth rates. But before they leap, they should take a good hard look at how that worked the first ...

There's no way around the facts. Under Presidents Bush and Obama, government exploded as a share of the economy..

President Obama shocked us the other day when he said, "Since I've been president, federal spending has risen at the lowest pace in nearly 60 years." Having heard him champion the "multiplier effects" of deficit-financed stimulus spending, we saw him as an enthusiastic ...

A new sales tax could be raised in the future—but so can any other tax. And the low marginal rates would jump-start the economy..

It used to be that the sole purpose of the tax code was to raise the necessary funds to run government. But in today's world the tax mandate has many more facets. These include income redistribution, encouraging favored industries, and discouraging unfavorable behavior. ...