Southern Bread

Watching this is downright embarrassing. I always considered Art Laffer to be a pretty smart dude with his development of the “Laffer Curve” and all that. I know the Laffer Curve has some issues, but the principle itself was sound. When you raise taxes enough, at some point tax revenue will actually begin to fall when people begin to look for every imaginable way to avoid the taxes. That includes businesses laying folks off, taking jobs with lower pay, etc. And reducing taxes in a certain window can actually increase revenue when just the opposite happens. This all seems kind of instinctive even if the actual Laffer Curve itself turns out not to be a curve or something.

But he gets totally schooled here by Peter Schiff. This is from back in 2006. Man, Laffer owes Schiff a major apology. I especially love the statement by Art that we have “great monetary policy” in this country. If his definition of great monetary policy is to keep interest rates artificially at zero when they should probably be 10 points higher, and print money like a drunken sailor then yes, we have great monetary policy: