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<ul class="summary-list"><li>Polls show that around half of Americans think the US economy is in a poor state.</li><li>They're right to be miserable, said Art Laffer, a former top economic advisor to President Reagan.</li></ul>Americans are right to be feeling so down about the economy, according to Art Laffer.The former economic advisor to President Ronald Reagan said Saturday that he can understand why people's views on the jobs market, inflation, and growth remain negative, despite a strong 2023 where <a href="https://www.businessinsider.com/inflation-consumer-price-index-november-economic-outlook-fed-interest-rate-2023-12">price pressures cooled</a> and the US managed to <a href="https://www.businessinsider.com/dream-economic-scenario-inflation-job-market-unemployment-growth-federal-reserve-2023-11">dodge a long-expected recession</a>."Let me just give you where the huge disconnect comes here," he told <a href="https://www.youtube.com/watch?v=oDByMkUEmy8" target="_blank" rel="noopener">Fox Business</a>. "People care about jobs, not unemployment rates, and so when you look at total jobs, it's way down.""The second thing that's really important is people worry about prices, not inflation … even though the inflation rate is down quite substantially, the prices are not down at all, and it's prices that are killing people, so they obviously are upset.""The last thing is GDP growth this last quarter was almost 5%, which is a very nice number, except GDP is what's really low. It's not kept track with what happened after Trump left office," Laffer added.The unemployment rate held steady at below 4% last year, while inflation has slowed from four-decade highs, in part because of the Federal Reserve's aggressive interest-rate hikes.Meanwhile, the US economy grew at its fastest pace in two years over the third quarter, with GDP up by a <a href="https://www.businessinsider.com/gdp-recession-outlook-economy-gross-domestic-product-third-quarter-2023-10">stronger-than-expected 4.9%</a>.The White House has repeatedly championed "Bidenomics" as a way of creating jobs, pulling down inflation, and boosting growth – but Americans still feel miserable about the economy, according to surveys.50% of respondents to a November <a href="https://news.gallup.com/poll/1609/consumer-views-economy.aspx" target="_blank" rel="noopener">Gallup poll</a> said they felt the economy was in a "poor" state, while just 2% said it was in excellent health.Gas and food prices are still elevated even if they're no longer rising at such a rapid pace, while around 60% of workers say their wages haven't kept pace with inflation over the past 12 months, according to a survey by <a href="https://www.bankrate.com/personal-finance/pay-raise-survey/" target="_blank" rel="noopener">Bankrate</a>.As well as serving as a member of Reagan's Economic Policy Board, Laffer is known for his work on the Laffer curve, which illustrates the relationship between taxation rates and a government's tax income.

Americans are right to feel miserable about the economy, Reagan economist Art Laffer says

<ul class="summary-list"><li>Former Trump advisor <keyword id="1746382" type="PERSON" weightage="60" keywordseo="Larry-Kudlow">Larry Kudlow</keyword> attacked <keyword id="99719" type="PERSON" weightage="60" keywordseo="Joe-Biden">Joe Biden</keyword>'s plans to tax wealthy Americans more. </li><li>Kudlow said that cutting taxes on the rich would raise government tax revenues. </li><li>The economic theory, known as the <keyword id="431485" type="PERSON" weightage="60" keywordseo="Laffer-Curve">Laffer curve</keyword>, has long been criticized.</li></ul>Larry Kudlow, an economic advisor to former President Donald Trump, said that the way to increase the amount of tax wealthy people pay is to cut their taxes.In a <a href="https://video.foxnews.com/v/6240831683001#sp=show-clips">Monday-night interview</a> with Fox News' "The Ingraham Angle," Kudlow addressed reports that President Joe Biden was considering the <a href="https://www.businessinsider.com/biden-plans-major-federal-tax-increase-almost-3-decades-report-2021-3">first major federal tax increase in 30 years</a> to pay for expensive bills to help secure the country's economic recovery after the COVID-19 pandemic.In the interview, Kudlow contrasted Biden's tax plans with the <a href="https://markets.businessinsider.com/news/stocks/7-charts-showing-trump-tax-cuts-not-economic-rocket-fuel-2019-12-1028780773">2017 Trump-administration tax cuts</a>, which Biden's administration is now seeking to undo.Kudlow, who served as the director of the National Economic Council under Trump, said that the Trump administration's cuts had primarily benefited people earning "the middle income and the lower-middle income.""This business about getting them to pay their fair share - the way to get upper-income people to pay more in taxes is to lower their tax rate. Not only will they have investment incentives, they will also have no tax avoidance," Kudlow said."They never tell you that, but the evidence is very clear," he added.There has long been debate between Republicans and Democrats over whether raising taxes boosts or damages the economy.Kudlow was apparently drawing on the research of his mentor Art Laffer, whose theories have long been a major influence on Republicans.Laffer advised the Trump administration on its tax cuts, and Trump in 2017 <a href="https://www.businessinsider.com/reagan-economist-arthur-laffer-tax-cuts-stimulate-coronavirus-trump-economy-2020-4">awarded him the Presidential Medal of Freedom</a>, the highest award that can be bestowed on an American civilian.<a href="https://www.businessinsider.com/reagan-economist-arthur-laffer-tax-cuts-stimulate-coronavirus-trump-economy-2020-4"></a>Under Laffer's so-called supply-side-economics theories, reducing taxes boosts the economy, leading to higher tax revenues overall. It's a hypothesis known as the Laffer curve.Democrats have long criticized the theory, saying that the boosts in tax revenues pledged by Laffer and his followers have repeatedly <a href="https://www.businessinsider.com/china-supply-side-economics-2016-1">failed to materialize</a>, damaging government finances and exacerbating inequality.Under Biden's tax plan, corporations would see their taxes increased alongside households earning more than $400,000 a year. The plan would also increase capital-gains tax.

Former Trump economic advisor Larry Kudlow says the way to get rich people to pay more tax is to lower their taxes

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><a href="http://www.youtube.com/watch?v=ZHtKI6oIsik">Vanderbilt Owen/Youtube</a></div></div></div>Arthur Laffer is a legend in Washington, having been the leading voice on President Ronald Reagan's hawkish Economic Policy Advisory Board. 
His "Laffer Curve," which argued that there are diminishing returns after a certain point of taxation, was taken as gospel.
 If his views are not quite as frequent a presence in public debate, it's largely because Laffer's pet issues, regulation and taxes, took a back seat during the George W. Bush and Barack Obama administrations. 
But Laffer himself still occasionally makes appearances on the public scene.
And in June of 2009, <a href="http://online.wsj.com/news/articles/SB124458888993599879">he penned an op-ed</a> warning excessive quantitative easing would inevitably lead to higher inflation and interest rates.
...we haven't ever seen anything like this in the U.S. To date what's happened is potentially far more inflationary than were the monetary policies of the 1970s, when the prime interest rate peaked at 21.5% and inflation peaked in the low double digits ...Gold prices went from $35 per ounce to $850 per ounce, and the dollar collapsed on the foreign exchanges. It wasn't a pretty picture.
Obviously, nothing like that happened.
In an interview with Business Insider from his office in Tennessee, Laffer admitted that he was wrong. The old maxim that dictates increasing the availability of cash through lower interest rates will lead to higher prices, he said, may need to be reexamined. 
"Usually when you find the model this far off, you've probably got something wrong with the model, not that the world has changed," he said. "Inflation does not appear to be monetary base driven," he said. 
He's not totally comfortable with what the Fed is doing, however. "Ask me whether inflation represents longer term problem, I think there's a potential there for excess reserves to create problems."
Laffer remains critical of both the bank bailouts and QE, arguing both have held back jobs creation and the housing market. Left to its own devices, the economy always finds ways to recover, he said.
"If you look at [the] 2001-2002 [financial crisis], we barely had a decline in GDP, it corrected itself fairly quickly. The only other time we had intervention was in the 1930s. I think we have Great Recession, and the reason we had a Great Depression, was because of intervention, not in spite of it."
He now predicts Republicans will take over the Senate in 2014 - <a href="http://www.politico.com/story/2013/10/arthur-laffer-is-back-as-gop-tax-man-98299.html">and in fact has consulted on recent campaigns.</a> Anger over Obamacare, he said, will push them to victory. He drew a parallel between Jimmy Carter's response to the 1970s energy crisis, which did nothing to alleviate demand for gasoline and President Obama's approach to expanding insurance.
"You can't give away healthcare and not expect the system to over use it," he said.

Arthur Laffer: I Was Wrong About The Fed And Inflation

<ul class="summary-list"><li>Robert Shiller is a Nobel Prize-winning economist, a professor at Yale University, and the author of "<a href="https://www.amazon.com/Narrative-Economics-Stories-Economic-Events/dp/0691182299">Narrative Economics: How Stories Go Viral and Drive Major Economic Events.</a>"</li><li>Shiller explains how compelling stories can impact actual economic outcomes. </li><li>Shiller says the mysterious story of Satoshi Nakamoto was what really drove the price and popularity of bitcoin. </li><li>He also says the Laffer curve became an important part of tax policy because of the powerful story, not because of an actual basis in economics. </li><li>Shiller says this is the one place where he will gladly praise President Trump. According to Shiller, Trump is great at reading audiences, experimenting with narratives, and he is never boring. </li><li>The Nobel Prize winner explains that these stories matter just as much as or more than the truth. And that these narrative disruptions make it very difficult to make long-term economic predictions. </li></ul>Robert Shiller sat down with Business Insider during the World Economic Forum in Davos, Switzerland to discuss his most recent book and how it applies to the current economic landscape. Following is a transcript of the video. Silverstein: So, your new book "<a href="https://www.amazon.com/Narrative-Economics-Stories-Economic-Events/dp/0691182299">Narrative Economics</a>" is a topic that you've been interested in for a very long time. Can you explain to me what narrative economics is?Shiller: A lot of people think about narratives these days, it's a new trend. But they tend not to be economists or financial analysts. Maybe they think about it, but they don't research it. I think that major economic events, successes and failures alike, are typically driven by stories that went viral. And we don't have a deep understanding of events until we understand, we start studying the narratives.Silverstein: And can you give me examples of something recent that happened because of a narrative, a strong narrative?Shiller: Yeah. OK, the, the Great Recession. We named it the Great Recession in honor of another narrative, which is the Great Depression. Now you would think that people would be forgetting about the Great Depression. That was 1929 and well into the '30s. Like 10 years of economic slowdown. But it's a long time ago. You think people are forgetting about it. But they're not. And in fact, in the early 2000s, references to that exploded. I count, I count these things, how often they come back in the news media.So, and then we named it the Great Recession. It's obviously a reference to the Great Depression. And so people became scared and they stopped spending. They didn't stop spending, but they cut back. You know they think, should we go on a cruise this year? Well, maybe not. You know, I feel a little unsettled. It's going to cost a lot of money. If people cut back on their consumption enough that we have a recession. And these stories impact the economy in a way that otherwise wouldn't necessarily be happening. Yeah. A lot of economists seem to think, want to think, that it must be something about technology, or productivity, or maybe what the central bank did. But I think it's, it's more generated in people's minds.Silverstein: And what's so strong about the bitcoin story?Shiller: Oh yeah, I use that as Chapter 1 of my book. It's an example of how good stories create economic events. And in the case where - I think it's clearly traceable to the story. Now I'm not going to even comment on whether bitcoin is a good idea or not. It doesn't matter. I'm just looking at the story.The story was that a man named Satoshi Nakamoto had an invention which he promulgated on the internet around 2008. And, it's the greatest, most wonderful invention in a long, long time. It ties into stories about anarchism. Anarchists don't like government. Well, bitcoin didn't ask anybody's permission. They didn't go to any regulator to start their bitcoin. And it's not even tied to a country. It's international. We're all cosmopolitans now. It just seems like a good story.And then they put a little mystery into it. Satoshi Nakamoto has never been spotted by anyone who tells us about these things. How could it be? He's one of the most famous people in the world now. And yet no one has met him. So maybe he doesn't exist. Maybe there is a committee, maybe it's a conspiracy. Who knows? But somebody wrote a nice paper that was, it just has an excitement. I can see people transform. When I bring it up in my class, my students react, they wake up when I bring up bitcoin.Silverstein: How do you separate out the story from what's real? And how much can the story affect what becomes real?Shiller: It isn't a single story, every telling of the story is a little different. There's a core idea in the story. And, how do you tell whether it's a real story or not? That takes work. And in the case of bitcoin, it's kind of difficult to think through it. It's not - it's impressive. It's not easy. But you can work at it. The problem is, if you reach a decision about bitcoin one way or the other, it'll never get out, because it can't compete with the narrative quality of the original story.Silverstein: Can you tell me about the Laffer curve, something that I think a lot of people take to be fact, but you say that a lot of the strength from it comes from this very simple story?Shiller: Yes, so I'll tell you a story. In 1974, an economist named Art Laffer was having dinner at the Two Continents restaurant, a nice restaurant in Washington DC. And he was having it with Donald Rumsfeld, who was the secretary of defense for the United States - really big shot guy - and Dick Cheney, who would soon become vice president of the United States. So a bunch of the - and also <a href="http://www.polyconomics.com/memos/mm-050614.htm">Jude Wanniski</a>, who is a writer for the Wall Street Journal who wrote the story up.<a class="zoomin" href="https://static-ssl.businessinsider.com/image/5e2dc86862fa81792b5e99a4-960/ap090123016454.jpg"></a>AP PhotoDr. Arthur Laffer, Economist and professor at University of Southern California, with "Laffer Curve" on blackboard, Feb. 23, 1981.And in that story, Art Laffer draws a diagram on a napkin, called the Laffer curve, which illustrates, I won't get into the details, but supposedly illustrates dramatically how taxes can hurt incentives and destroy the economy. And that even if you, if you actually cut taxes, you may collect more taxes even though you cut, because people will be so much more affluent, they'll be working and producing. Nice story. It went viral. But not in 1974. It wasn't until in 1978, when Jude Wanniski wrote a book, a best-selling book called "<a href="https://www.amazon.com/gp/product/0895263440/ref=dbs_a_def_rwt_bibl_vppi_i0">The Way the World Works</a>," and he tells this story about the dinner. And afterwards, people want to know the whole story. They ask about the napkin. The napkin is a visual image that enhances the story.And there it is. It's now many years later - the Laffer curve went through a typical epidemic. It expanded right after 1978. And everyone was talking about the Laffer curve. Same time as Rubik's cube came out. That was another, another such fad. Laffer curve and Rubik's cube were both around that time. They both faded somewhat. But they're both still here. And Laffer is coming back. It has an internal dynamic like that of a disease. I'm not calling it a disease.Silverstein: How much does narratives impact how the Fed communicates or how the president communicates? How much does that impact the economy?Shiller: The people who take positions like Fed or Treasury Secretary become intuitive narrative economists even though they weren't taught any of that in grad school, because it's so obvious that the narrative matters.<a href="http://pictures.reuters.com/C.aspx?VP3=SearchResult&amp;ALID=2C04082SGDRY3&amp;PBC=:2C04082SGDRY3">Reuters/Alessia Pierdomenico</a>Customers queue to enter a branch of Northern Rock in Kingston, Surrey, southern England.So for example, when the Northern Rock bank failed in the UK in 2008, the Chancellor of the Exchequer and the head of the Bank of England reacted immediately because they didn't want, it looked like it was a story about a bank run. This bank was failing and depositors were worried that they wouldn't get all of their money out. There was deposit insurance, but it was only up to a small amount. And people who had their life savings, planning for retirement, panicked, they thought, maybe I'll lose all of it. And so they rushed to the bank, and of course it's a self-fulfilling prophecy. The bank can't pay out all this money at once.They immediately rescued the Northern Rock bank and paid off all the depositors. So, the reason they did that is they didn't want the narrative to get started. They knew that in the past it was rumor and stories that people went to many different banks and asked for their money right away.Silverstein: And what about Trump? Is he good at this? Has he been able to -Shiller: This is one place where I can be lavish in my praise of Donald Trump. He is very good at narratives. He's very good at judging audiences. He experiments. This is a way, the way you launch narratives. You never know whether it will go well. He listens to the audience. He creates a whole story. The story of him at his rally, which is spread by word of mouth. It's a visceral thing. Most of these people had never gone to a presidential speech before. And if they did it would've been boring. He'd be talking about statistics on the national deficit or something like that. Trump is not boring, really not boring. And it started a word of mouth thing that was huge.Silverstein: And how much has this increase, or is it the same, with social media? Is the impact of narratives bigger or faster, or can we just see it more?Shiller: Well, the impact of narratives is bigger with social media. But I have to say, I think the mistake people make is more often underestimating how important narratives were long ago. So we have the Latin word rumor, that has the same meaning as it does today. What is a rumor? It's a contagious narrative, right? Which is not fact-checked by anyone, it's just out there. So they knew about this thousands of years ago, and it was a factor thousands of years ago. But yes, it is bigger today. We're living in a world with expanded information technology and ability to communicate. And to communicate with like-minded people. To find each other. Maybe they had computer dating and maybe that helped people find their spouse. But it's much bigger now. They're not just, it's finding someone who has the same political views as you that you can talk with.Silverstein: And you talk about how difficult it is to predict economic performance in the long term. Is that because of how much narratives play a part?Shiller: It's hard to predict whether a new movie which hasn't been shown yet will be a success. Notoriously hard. The director might have had successful movies in the past, he has famous actors and actresses, but nothing seemed to click this time. It's when you put the movie in front of the audience and you start to listen to the word of mouth.Silverstein: And how does that relate to, like, GDP estimates two years out?Shiller: So when you talk about, oh, yeah, they're not very good at forecasting GDP two years out because the disturbances are, I think, narrative-based. And they don't generally systematically study them. And unfortunately, it does require some human judgment at this time anyway, to understand the importance of narratives.Silverstein: Is there one big narrative that is happening right now that you think we should be paying attention to or that's dislocating something?Shiller: Well, a narrative that comes to mind is the artificial intelligence revolution. And we have many stories of neat things. Like your smart speaker, I guess like Amazon Echo that you have. It's kind of, it does seem like the the new world. Something really fundamental has changed. But I don't think it has scared us yet profoundly because we don't have high unemployment. So people think, well, but the economy is strong so, not worry about it now. But I think if we do have another recession, that narrative could come roaring back and become again an obstacle to recovery.

Nobel Prize-winning economist Robert Shiller explains how compelling stories are what really shape our economy - from bitcoin to Trump's presidency

<ul class="summary-list"><li>Even the midst of a global pandemic when millions of Americans are losing their jobs every week, the GOP is writing rescue bills to reflect their view that government should only help the "deserving."</li><li>Who deserves help? Business. Who does not? Working people, poor people, other institutions.</li><li>Right now Washington is fighting over whether or not a bill sending financial help to small businesses should also send help to hospitals and state governments fighting coronavirus on the front lines. Democrats want more aid for more people. Republicans want to limit it.</li><li>This shouldn't be an argument. States give money to the unemployed and hospitals need this money badly. Republicans need to put their crusade aside and focus on helping us out of this crisis.</li><li>This is an opinion column. The thoughts expressed are those of the author.</li><li><a href="https://www.businessinsider.com/?hprecirc-bullet">Visit Business Insider's homepage for more stories</a>.</li></ul>If America is going to get through the coronavirus with its society and economy intact, Republicans are going to have to give up on their crusade to keep government small and budgets austere.As a country we have more to lose if we under-spend during this crisis than we do if we overspend. If we under-spend, the deluge of missed rent, mortgage, auto, and credit card payments will stack up and do lasting damage to our economy and people's livelihoods. It's why we need more money for more people faster.But the GOP is still designing legislation with its ideological goal of limiting the role of government to the support of enterprise squarely in mind. This week they've proposed adding another <a href="https://www.washingtonpost.com/us-policy/2020/04/09/senate-coronavirus-small-business/?utm_campaign=wp_main&amp;utm_medium=social&amp;utm_source=twitter">$250 billion to the Paycheck Protection Program</a>, a loan program for small businesses. This is great, the problem is they don't think anyone else should get emergency funds right now.Democrats want to tack billions in funding to hospitals <a href="https://www.businessinsider.com/coronavirus-state-local-government-federal-trump-congress-bailout-2020-4">and state governments</a> - in other words, to the people on the frontlines of this crisis - onto the GOP bill. But Republicans don't want to do that. They want money to go to business owners and only to business owners.Senate Majority Leader Mitch McConnell said the rest of the country - yes, including the hospitals - simply isn't in as desperate a need. How anyone could say that in the midst of this particular crisis is baffling, unless you understand that the GOP inherently thinks some people are worthy of government aid (corporations, business owners) and some people are not (workers, poor people).<h2>The haves and the deserve-nots</h2>The GOP rarely practices the sober economics it preaches (<a href="https://www.businessinsider.com/national-debt-deficit-trump-how-it-compares-obama-bush-clinton-2019-11">Donald Trump blew open the federal deficit</a> during the strong economy of the past few years, for example) and when it does practice it, the effort largely fails (See: <a href="https://www.businessinsider.com/kansas-experiment-with-tax-cutting-failed-on-its-own-terms-2017-6">Kansas under Governor Sam Brownback</a>). But to some Republicans this loose verbal commitment to fiscal austerity is a proud tradition. Even if it's sincere, though, there's no place for it during a pandemic - not when 6.6 million people are filing for unemployment <a href="https://www.businessinsider.com/us-weekly-jobless-claims-unemployment-filings-labor-market-coronavirus-recession-2020-4">in a single week.</a>It is absurd to only replenish the funds of one program when it's so clear that money is needed everywhere, and that we need to use all the mechanisms at our disposal to distribute funds.That means helping the states. This week New York Governor Andrew Cuomo announced that he would be adding another $600 per week to <a href="https://www.businessinsider.com/new-york-unemployment-office-calls-2020-3">unemployment benefits until July 31</a>. In a press conference, he wryly added that the federal government said it would pay him back - some of that now-famous Cuomo humor. His lack of confidence was palpable.It's hard to blame him. Based on the way the conversation about how to rescue the economy is going on the GOP-side, it's clear that the fiscal hawks are getting tired of spending money on Americans who (to them) may or may not deserve it.Recall that in the first coronavirus aid bill Republicans drafted last month they were ready to give the <a href="https://www.businessinsider.com/obama-calls-out-lack-of-robust-system-of-testing-coronavirus-2020-4?r=US&amp;IR=T&amp;nr_email_referer=1&amp;utm_source=Sailthru&amp;utm_medium=email&amp;utm_content=Opening_bell&amp;utm_campaign=Post%2520Blast%2520moneygame:%252010%2520things%2520you%2520need%2520to%2520know%2520before%2520the%2520opening%2520bell&amp;utm_term=10%2520THINGS%2520BEFORE%2520THE%2520OPENING%2520BELL%2520-%2520ENGAGED%252C%2520ACTIVE%252C%2520PASSIVE%252C%2520DISENGAGED">poorest Americans only $600 in aid money</a> to ride this out, compared to the $1,200 that people who had higher incomes were set to receive. Their reasoning was that poor Americans don't pay income tax, so they should suffer more during a global calamity. Ultimately they relented to Democratic pressure and upped the checks to lower-income people to that $1,200.Now the White House is throwing around the idea of creating a <a href="https://www.washingtonpost.com/politics/trump-preparing-to-unveil-second-coronavirus-task-force-officials-say/2020/04/08/e0808922-7a05-11ea-b6ff-597f170df8f8_story.html?utm_campaign=wp_main&amp;utm_medium=social&amp;utm_source=twitter">task force to deal with the economic impact</a> of coronavirus, and so the right-wing think tank hacks and Washington swamp-things are coming out of the woodwork with their opinions.Take, for example, Arthur Laffer, the guy who drew the "Laffer curve" which is supposed to show that if the government cuts taxes, instead of growing deficits the economy will grow so quickly that the government will end up taking in more revenue. This theory has never worked. Laffer is just another man who sold Americans the idea that they could get something for nothing. On Wednesday Laffer told <a href="https://www.reuters.com/article/us-health-coronavirus-usa-laffer/cut-salaries-taxes-to-reopen-u-s-economy-says-laffer-conservative-fave-idUSKCN21Q3AT">Reuters</a> the way to fix the coronavirus economy is to cut taxes for businesses, while raising them for non-profits and other institutions. This is a horrible way to do things in a crisis when non-profits provide a safety net for some Americans.Even after quarantine the economy will still need help. Until we have a vaccine, commerce will be slower. People's habits will be different. They'll be too afraid to go out and spend money they way they did before. Sporting events, concerts, anything with large crowds will still be a no-no.So a task force for the economy is a good idea, but ultimately it's all about execution. And the Trump administration's execution has been objectively abysmal throughout this crisis.Remember when Pence announced we would soon all be able to drive up to a Walmart and get tested for coronavirus a few weeks ago? Well, it seems like the administration just gave up on that whole thing. The federal government will <a href="https://www.npr.org/sections/coronavirus-live-updates/2020/04/08/829955099/federal-support-for-coronavirus-testing-sites-end-as-peak-nears?utm_source=twitter.com&amp;utm_medium=social&amp;utm_campaign=atc&amp;utm_term=nprnews&amp;utm_content=20200408">end funding for the program on Friday </a>and turn it over to states to fend for themselves.This is not how experts say you get to a place where experts say you can open the economy. We need testing to make people feel safe, it's the only we'll get people to behave in any normal way. As a country, we can't afford to skimp on any part of this.It is not in the GOP's ideological interest to just spray money around to people regardless of how they "contribute" to the economy. But it's going to have to let go of that. It's putting the economy in even more danger.And as long as Republicans continue to write ideologically driven relief bills, we will continue to have these asinine arguments about whether or not we need to take care of all of the American people in a disaster. It makes you wonder when Republicans think it's appropriate to take care of Americans at all.This is an opinion column. The thoughts expressed are those of the author(s).

If America is going to survive the coronavirus, the GOP is going to have to give up on a 40 year crusade

<div class="KonaFilter image-container display-table"><div><div class="image on-image"></div></div></div><ul class="summary-list"><li>In an interview with 60 Minutes on Sunday, Democratic Congresswoman Alexandria Ocasio-Cortez discussed some so-called radical economic ideas.</li><li>Turns out, they're not so radical. But her opposition will still find them incredibly threatening.</li><li>That's because she's changing a discussion about economics that has gone uncontested for about 40 years, and that in turn could change the way we think about what we really value in the country for the next 40 years.</li></ul>On Sunday <a href="https://www.cbs.com/shows/60_minutes/video/SRMCs3QSphj4GK_HrJ6AgSLcWtH5BTEg/alexandria-ocasio-cortez-president-el-sisi-an-unlikely-inventor/">60 Minutes aired an interview</a> with New York Representative Alexandria Ocasio-Cortez where she discussed her views on our political climate, her rise to Congress, and her policy ideas.Then something that hasn't happened in a few years happened. We actually started talking about those ideas - ideas that have little to do with President Donald Trump.If the fact that her ideas were given any space at all space isn't shocking enough for you, you should check out the ideas themselves. They are a departure from the last 40 years of the way we think of how national budgets and American taxation should work. And they are desperately needed at the moment.Ocasio-Cortez discussed two ideas, specifically, that would make your generic, center-right "fiscal responsibility" issue voter's hair stand on end.<ul><li>A 70% tax rate on incomes above $10 million.</li><li>The application of modern monetary theory (MMT) on our budget. According to this theory deficits are okay as long as money is being spent productively (on say, healthcare or infrastructure). The only real danger with running deficits is out of control inflation, which the Federal Reserve can control by raising rates.</li></ul>Obviously this flies in the face of everything your dad told you about being a prudent American. The rich aren't supposed to be "punished" for their success with taxation, and the government is supposed to give money back to people instead of "wasting it." As for deficits, well those will turn America into Weimar Germany, or so it goes.Ocasio-Cortez is here to tell you all of that we tried that line of thinking and the result was massive inequality and a hampered government. It was just a useful idea that turned into a fever induced by special interest groups bent on minimizing money spent on social programs lowering taxes for the rich. They found their foothold in the Reagan administration, and they've been dominating American economic thought ever since - so much so that the popular imagination almost forgot that these are just theories and started accepting them as mathematical fact.But they're not.&#xa0;Quickly, a word from economist John Maynard Keynes: "The ideas of economists and political philosophers, both when they are right and when they are wrong are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist."<h1>Strong and wrong</h1>In Spanish there is a saying: "The dog that barks loudest, eats."And so it often is in <keyword id="6358883" type="UNKNOWN" weightage="60" keywordseo="politics">politics</keyword>. Since the 1970s the loudest voices in economics have come from the right, from followers of economist Milton Friedman who believed that selfishness was the natural state of humanity. You see why he would want a small federal budget and low taxes.A bunch of Friedman's disciples made their way into the Reagan administration, and there they started to craft pop culture economics as we know it today. For example, economist Arthur Laffer went in there and pitched what we know today as the Laffer Curve. It contends that lower tax rates can actually lead to higher tax revenue - something that certainly didn't happen when taxes were lowered last year as 2017 tax receipts <a href="https://www.reuters.com/article/us-canada-usa-treasury-idUSKBN1902TQ">came in lower than expected.</a>But you can still see Laffer on CNN waxing philosophical about economics. He was an advisor to the Trump administration and to former Kansas Governor Sam Brownback, who enacted the massive tax cuts that eventually<a href="https://www.bloomberg.com/opinion/articles/2018-10-19/trump-models-u-s-economy-on-kansas-that-s-a-mistake?utm_campaign=socialflow-organic&amp;cmpid%253D=socialflow-twitter-view&amp;utm_content=view&amp;utm_medium=social&amp;utm_source=twitter"> laid waste to the state's economy.</a>Deficit hawks on the right bark loud, too, even though they've almost never practiced what they preach. President Ronald Reagan used deficit spending to fund Star Wars and end the Cold War. The economy slowed after, George Bush Sr. raised taxes. And then we were fine. Former House Speaker Paul Ryan - a supposed deficit hawk and budget wunderkind -&#xa0; exploded the deficit by passing 2017's tax cut. And nothing happened. President George W. Bush exploded the budget after finding it in good shape - and all was well.In fact, the major economic problems of Bush's time in office came from the private sector - from the irrational exuberance that led to the tech bubble, and a mortgage crisis that ballooned into a full on global financial meltdown. In the latter instance, the government helped nudge us into the crisis, melding a desire to encourage homeownership with an ideological bent toward deregulation.Read more: <a href="https://www.businessinsider.com/budget-deal-proves-baby-boomers-are-selfish-2018-2">Now do you finally believe baby boomers are the most selfish generation?</a><h1>United States of Amnesia</h1>Politics nerds talk about something called the <a href="https://www.mackinac.org/7504">Overton Window</a>, it's the theory that only a limited number of policy ideas can be discussed at a time. It's a spectrum, and only that which fits within the spectrum can make it into the national conversation.It seems that Ocasio-Cortez is getting her ideas on the spectrum.That is why low tax zealots like Grover Norquist, the infamous president of Americans for Tax Reform, are calling Ocasio-Cortez proposal <a href="https://www.foxnews.com/opinion/grover-norquist-ocasio-cortezs-70-income-tax-rate-is-the-opening-shot-in-a-renewed-war-against-taxpayers">a "war" on tax payers.</a>Never mind that reasonable economists admit that a 70% tax on income over $10 million wouldn't raise much revenue or impact many Americans or hurt the economy at all. <a href="https://www.bloomberg.com/opinion/articles/2019-01-07/u-s-economy-ocasio-cortez-s-70-tax-idea-isn-t-very-radical">As Noah Smith over at Bloomberg writes</a>, economists have theorized that the "optimal top tax rate for incomes higher than $300,000 - a much lower cutoff than the one proposed by Ocasio-Cortez - should be about 73 percent."<a href="https://www.bloomberg.com/opinion/articles/2019-01-07/u-s-economy-ocasio-cortez-s-70-tax-idea-isn-t-very-radical">More from Smith:</a> So Ocasio-Cortez's tax plan isn't radical at all... a dramatic expansion of federal tax revenue would require much more than what Ocasio-Cortez is proposing. It would require an overhaul of the corporate and capital-gains tax systems, higher rates on a much broader range of high earners, and probably&#xa0;<a href="https://www.bloomberg.com/opinion/articles/2016-07-25/a-wealth-tax-looks-like-it-can-make-a-country-richer" target="_blank" rel="noopener">wealth taxes</a>&#xa0;as well. It would require a huge amount of political will and a sustained policy-making effort over a number of years.&#xa0;So why are men like Norquist howling over this proposal? Because they know what Ocasio-Cortez is doing - they did it themselves. Slowly inject an idea into the policy discussion and then push, and push, and push until it seems normal, no matter how radical or ridiculous it may seem.I mean, these guys convinced us that if the government collected less tax revenue it would somehow end up with more tax revenue. How illogical is that?Read more: <a href="https://www.businessinsider.com/white-house-budget-millennials-young-people-2017-5">The White House just made one thing abundantly clear to millennials</a>Perhaps Ocasio-Cortez's proposed tax rate wouldn't do much for the government's coffers. But consider what it would do to the American imagination. We live in a country where 63% of citizens think that our economy is stilted unfairly toward the rich and special interest groups, <a href="http://www.pewresearch.org/fact-tank/2018/10/04/partisans-are-divided-over-the-fairness-of-the-u-s-economy-and-why-people-are-rich-or-poor/">according to Pew Research.</a>Part of that is because of what the loudest voices have said our government should and should not spend money on - because what their values are. Previous administrations have used deficit spending to fund wars (Iraq, Afghanistan) and tax cuts. AOC would have us used deficit spending to fund education, healthcare, and her Green New Deal.These are things that we've heard that we can't afford for our entire lives. We've heard that money in the government's hands is "wasted." But how could money that pays for the health and welfare of a country's own people be a "waste"? It's not <a href="https://www.theverge.com/2018/10/29/18027032/foxconn-wisconsin-plant-jobs-deal-subsidy-governor-scott-walker">like it's going anywhere</a>. In an economy run on consumer spending, anything that lets Americans keep more of their paychecks instead of giving it to say, health insurance companies that just buy back their own stock seems like it would juice the economy, not hurt it.As more and more Americans feel the deck is stacked against them, they're going to start listening to these ideas. They know "what" has happened to them - that suddenly taking care of a middle class family is harder and more expensive than it was for their parents - but what Ocasio-Cortez is offering is another reason "why" and another "how" we can fix it. These "whys" and "hows" are terrifying the Republicans who run the right, thus their massive pile-on everything Ocasio-Cortez does.It was easy to tell Americans to keep taxes low when it seemed that anyone who worked hard enough could get ahead.&#xa0;But what if no matter how hard you work, the system is stacked against you? It's looking increasingly clear that not everyone can make it to the top bracket - or even move up brackets.Americans are starting to understand the meaning of privilege - the privilege of being able to support a family or even just a person on minimum wage; the privilege of being able to get an education if you have the brains but not the cash; the privilege of being able to get sick without going broke.And they're starting to understand it because slowly, over the last few decades, those privileges have been taken away from them. Perhaps that, not Ocasio-Cortez, is what has broken our decades-long policy fever. She's just here to suggest another remedy.This is an <keyword id="6356002" type="UNKNOWN" weightage="100" keywordseo="opinion">opinion</keyword> column. The thoughts expressed are those of the author.<div></div> <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/exercise-workout-shape-routine-2016-12">An exercise scientist reveals exactly how long you need to work out to get in great shape</a></h3> <div> </div> </div>

Alexandria Ocasio-Cortez's ideas are not so 'radical,' but they are changing how Americans think about economics

<a href="https://www.youtube.com/watch?v=hhvggoVScLk">Screenshot, YouTube</a>This is Stephen Moore. He likes tax cuts.None of the <a href="http://www.businessinsider.com/trump-plans-to-use-dynamic-scoring-to-justify-budget-2016-11">bad ideas about economic growth</a> we're about to discuss are new. But for the next few days - as Washington starts debating our tax code and budget in earnest - our country is going to be just lousy with them.Despite Donald Trump's promises to balance the budget and spur economic growth with infrastructure spending, he has instead decided to take old, hackneyed Republican economic policy and Trumpify it (which is to say, make it big league). That means a platform of massive tax cuts, deficit spending, and pushing off government investment in public goods off to... whenever.Of course, his surrogates - and some of the originators of these ideas - are out in force, giving their full-throated approval to ideas that have never proven their worth. The following is smattering of all that.<h1>Duh, just grow the economy</h1>We'll start with Trump economic advisor Stephen Moore <a href="https://www.wsj.com/articles/growth-can-solve-the-debt-dilemma-1493160796">in today's Wall Street Journal.</a>Right now the Congressional Budget Office (CBO) is projecting that the economy will growth at about 1.9% over the next 30 years. That's bleak, writes Moore. By his conjecturing, we can pay for Trump's tax cuts, and take care of all our problems, if we can just put 3% GDP growth in our models. From WSJ:"...consider what happens to the CBO's numbers assuming 3% annual growth. By 2040 the economy would expand not to $29.9 trillion, but to $38.3 trillion, according to an analysis by Research Affiliates, a California investment firm. That's an additional output of $8.4 trillion-roughly the entire annual production today of every state west of the Mississippi River."(The country actually reports its first quarter GDP on Friday, and <a href="http://www.businessinsider.com/differences-between-eps-gdp-2017-4">Bloomberg estimates</a> it will come in at 1%.)It sounds great, and considering that Moore is a holdover from the Reagan era, none of this should be surprising. That was a time when the CBO threw out economic models they didn't like and simply built new ones. It was a time when so-called "Voodoo economics" really took hold of the Republican Party.And you can see some of its questionable tenets in the pathway Moore explains will take us to 3%:<ul><li>Improving technology and robotics like self-driving cars.</li><li>Increasing labor force participation despite demographic challenges (i.e. Baby Boomers leaving the workforce).</li><li>And of course, the topic du jour: tax cuts, tax cuts, tax cuts. </li></ul><h1>Doctor, my eyes</h1>Where to start?Moore does not address the jobs that would be lost thanks to self-driving vehicles (it's not just valet parking folks, the<a href="http://www.businessinsider.com/when-self-driving-trucks-will-take-over-2017-1"> trucking industry will be decimated</a> by this), nor does he address the <a href="http://www.businessinsider.com/there-is-a-huge-hole-in-trumps-promise-to-bring-back-us-manufacturing-jobs-2017-3">jobs that have already been lost</a> thanks to technological advancement. He does not touch on the only thing that can mitigate this issue, which is retraining our workforce for a different kind of economy (education, where did that idea go?).Moore does, however, address the fact that an economy that demands an expansion of the labor force requires immigration. Obviously, that's antithetical to Trump policies, so he writes, embarrassingly... "immigration is America's natural demographic safety valve. Letting in more legal immigrants-especially those with skills and special talents-may not happen under President Trump, but it can and should eventually."Where Moore and Trump seem to be on the exact same page, is on these tax cuts. "The Tax Foundation <a href="https://files.taxfoundation.org/legacy/docs/TaxFoundation_FF516.pdf" target="_blank">predicted</a> last year that the House Republican tax reform alone would raise wages by 8%, GDP by 9% and capital investment by 28%. If this is even close to being right, pass the tax cut now and stop obsessing about whether it is paid for within the short-term budget window," he writes.Of course, the Tax Foundation is a think tank that runs exactly on Moore's speed.<h1>Guys, everyone knows this is tired</h1>More and more, economists are rejecting these ideas, especially in an age of massive inequality when the government needs resources to blunt the dramatic impact of economic change (like robots, sir)."Trump's proposal to cut corporate tax rates won't boost growth or create jobs. In fact, it will discourage corporate investment, as corporations and their shareholders earn even higher profits and pocket more of the cash--just like they did last time we tried a big corporate tax cut," said <a href="http://rooseveltinstitute.org/marshall-steinbaum/" target="_blank">Marshall Steinbaum</a>, Senior Economist and Fellow at the Roosevelt Institute. "If Trump wants to encourage investment, he should close loopholes that CEOs exploit to move profits offshore and increase the effective tax rate on corporations, their CEOs, and their shareholders."But of course, that's not what's happening. Treasury Secretary Steve Mnuchin is running around talking about how tax cuts will pay for themselves. He will be helped with that, in part, by dynamic scoring - another Reagan era practice of adding the estimated growth tax cuts will "create" to budget projections.Meanwhile, the originator of all this, economist Arthur Laffer of "Laffer curve" fame, has a feature in the <a href="https://www.nytimes.com/2017/04/25/us/politics/white-house-economic-policy-arthur-laffer.html?smid=tw-share&amp;_r=0">New York Times</a>. Luckily, his ideas are buttressed by appropriate criticism from both sides of the aisle.From NYT:Douglas Holtz-Eakin, a former Congressional Budget Office director who advised Senator <a href="https://www.nytimes.com/topic/person/john-mccain">John McCain</a>'s Republican presidential campaign in 2008, was equally skeptical. "I can imagine cutting the rate to 15 percent," he said. "I can imagine growing a percentage point faster. I can imagine raising $2 trillion in revenue. I can't imagine them being one and the same policy."Laffer on the other hand, says the tax cuts are a "no-brainer."I suppose we agree on that. <h3>NOW WATCH: <a href="http://www.businessinsider.com/why-some-people-turn-red-drink-alcohol-2017-4">The disturbing reason some people turn red when they drink alcohol</a></h3> Please enable Javascript to watch this video

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