Today in order to capitalize upon the fact that the fourth quarter economy sank (even though it was because of the downward pressure due to the threat of sequestration forced upon Congress by the Tea Party), they wheeled out Arthur
Laughter Laffer to make a dire predictions….
He is on their short list of who-to-call-when-we(FOX News)-NEED-a-dire-prediction…..
Because….. He is well known for making “dire predictions”..
“Economist Arthur Laffer told his clients on July 26, 1982, that (Ronald Reagan’s) Tax Equity and Fiscal Responsibility Act, which raised taxes by about one percent of GDP, “will stifle economic recovery,” “retard economic growth,” and undercut “the economy’s ability to enter into a period of expansion.” On August 20, 1982, he told his clients that TEFRA, Tax Equity and Fiscal Responsibility Act, “will tend to lengthen and deepen the recession.”
Instead, ….. No one could have been more wrong…
“Looking at real gross domestic product, it grew 4.5 percent in 1983 and 7.2 percent in 1984 – an exceptionally strong performance. The stock market had one of its best years ever in 1983 – both the Dow Jones Industrial Average and the S&P 500 Index rose 35 percent. There was no increase in the rate of inflation, which was exactly the same in 1983 and 1984 as it was in 1982. The unemployment rate fell from 10.6 percent in December 1982 to 8.1 percent by December 1983 and 7.1 percent in December 1984.”
On August 20, 1993, Laffer told his clients, “Clinton’s tax bill will do about as much damage to the U.S. economy as could feasibly be done in the current political environment.” He said that interest rates would rise and the stock market would fall.
Once again, it would be hard to find a forecast that was more completely wrong….
“The unemployment rate fell from 7.1 percent in January 1993 to 5.4 percent by December 1994. Real GDP growth rose from 2.9 percent in 1993 to 4.1 percent in 1994. Stock prices rose and interest rates fell. More importantly, the 1993 tax increase and accompanying spending controls, which were opposed by every Republican in Congress, laid the foundation for the phenomenal growth of the late 1990s that actually produced budget surpluses before Republican tax cuts in the 2000s dissipated them.”
And now! Today,… well, there he goes again….
“You have the whole output of the economy shrinking. Not just expanding more slowly, it`s absolutely shrinking,” (lol, see by how little, below)… Laffer told Fox News’ Eric Bolling…
“That’s catastrophic,” the former adviser to President Ronald Reagan added. (Did anyone else catch the stupendous irony of that? Oh, Wow. You can’t make stuff like that up).
“You can explain some of that by sequestration, and defense spending was down lot and all that. But you still have a rotten economy. And it’s still too bad. We know how to fix it, by the way, a low rate flat tax, spending restraint, sound money, free trade.” (See George Bush’s Economic Record.) Laffer was responding to reports Wednesday that the U.S. economy contracted 0.1 percent in the last quarter of 2012…
Yes. Laffer was responding to reports Wednesday that the U.S. economy contracted 0.1 percent in the last quarter of 2012. Quote: “You have the whole output of the economy shrinking. Not just expanding more slowly, it`s absolutely shrinking,”
Recalling his years as one of Reagan’s top economic advisers, Laffer said Reagan actually cut the highest tax rates (From 70%-50%; they are 35% now) He said “we made a mistake” by phasing in the cuts, which he said caused the 1981-82 recession. But he said the economy took off in 1983* when the cuts (and 1%GDP tax increase) went into full effect. *
“This place just went like a rocket ship,” he said. “I think we had 7.5 percent growth in 1983 and 5.5 growth in 1984, just this boom that lasted for years and years.”* (*lol)
(Conversational excerpts provided by Newsmax)