Okay, one more time

By Megan McArdle

Brendan Nyhan, of whom I am generally very fond, is attacking me on supply side economics. In his post, he does a brilliant job of proving that politicians make ludicrous claims for their policies. Stand by for the blistering expose of the shameless way that men pursue young, attractive women, and the follow-up report titled "Sometimes, when the people you have slept with say they are going to call, they don't mean it".

Once again, before I go any further, I think people should spend all the time they want refuting those claims. What I don't think is that supply-side economics is dominating Republican policy, which is what Chait, and now Matt, and for all I know everyone to the left of Lincoln Chafee, are now claiming. To release a book subtitled "How Washington Got Hoodwinked and Hijacked by Crackpot Economics" you need a little more than "sometimes, in the course of selling their policies, politicians make ludicrous claims based on discredited economic notions", because that is not exactly a unipartisan vice. To subtitle your book that way, you need the most extreme form of supply-sidism to be the driving force behind Republican tax policy. And it just isn't.

Supply-side claims are made in the course of selling tax cuts, but they are not the dominant reason that politicians pursue tax cuts. Nor are they the dominant means by which those tax cuts are sold to the public; Brendan or anyone else can find plenty of other arguments for tax cuts from all the politicians they cite as rabid supply-siders. Supply-side economists do not dominate Republican advisors--the only one I am aware of is Steve Forbes for Giuliani, which is another excellent reason not to vote for the man. And the supply side arguments which are generally made to me by the various Republican think-tank people I talk to are vastly more plausible arguments about increasing the size of the economy and keeping spending down, not implausible ones about tax cuts paying for themselves. That's why I said that Chait's claims were "overblown", not "wrong".

The people I would call "strong" supply-siders (the ones who claim that tax cuts raise revenue) are fun to refute, because they are so easy to refute, because they make such extravagant claims. But inflating the strong supply-siders into the driving force behind Republican tax policies is overblown, and it seems like a way to avoid engaging the more substantive arguments in favor of tax cuts. And to all the liberal commenters who are preparing to say "there aren't any substantive arguments in favor of tax cuts" . . . thanks for making my point for me.

This article available online at:

http://www.theatlantic.com/business/archive/2007/09/okay-one-more-time/1870/