Posted on 03/14/2010 9:06:14 AM PDT by WOBBLY BOB
The printed money is just another form of debt that the government borrowed.
It's because the Laffer curve is drawn upside down with respect to economic "energy". The peak is actually the lowest-energy state for the economy - tax revenue system. Reduce marginal rate from that point, and the tax revenue decreases, increasing the "energy state" of the government. Increase the marginal rate from that point, and it increases the "energy state" of the economy, which naturally works to decrease costs, reducing tax revenue.
Just an engineer's take.
Looks to me like it’s extremely difficult for the gov’t to stay at the max revenue point. OTOH, its makes it pretty clear which direction the gov’t should go if its not at the peak.
Would you care to comment on your blog about this video? I think you’ll find it quite interesting
http://www.freedomandprosperity.org/videos/laffercurve1-3/laffercurve1-3.shtml
Exactly. From 2004-2007, tax revenue increases were greater than any 4 year period under Clinton. This was despite the Clinton tax increases and booming economy.
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