Review by Choice Review
Laffer (known for the Laffer curve), Moore, and Tanous, leading advocates of supply-side economics, argue that the prosperity experienced in the US and other economies since the early 1980s is threatened by a return of government regulation, protectionism, unsound monetary policy, and especially, higher tax rates. While they present lots of data to support these claims, there are two serious problems with their use of that evidence. First, they often confuse correlation with causality. For example, they point to the Kennedy-Johnson tax cuts to show how lower tax rates result in higher tax revenues. This fails to take into account that it was not just tax cuts, but also increased spending on the wars in Vietnam and on poverty that caused rapid growth in output and inflation, both of which contributed to higher tax revenues as people were pushed into higher tax brackets. Second, they are very casual in their use of history to support their arguments, as illustrated by the claim that inflation during the 1970s was caused by Nixon's decision to go off the gold standard in 1971, which ignores how the inflation rate tripled from 1964 to 1971. And it was Arthur Okun, not Robert Okun, who invented the misery index (p. 82). Summing Up: Not recommended. D. W. Ring SUNY-College at Oneonta
Copyright American Library Association, used with permission.
Review by Choice Review
