Bryan Caplan and Arnold Kling

Supply-side Economics

A Category Archive (25 entries)

Prescott on Tax Cuts

Supply-side Economics
Arnold Kling
In this essay, I explain 2004 economics Nobel Laureate Edward Prescott's views that the Bush tax cuts were too small. Prescott re-casts the trade-off as between "market time" and "non-market time." In addition to TV and Bon-Bons, you spend some... MORE

Economic Policy Analysis

Growth: Causal Factors
Arnold Kling
Whoever is writing the lead editorials for the Washington Post (I suspect Sebastian Mallaby) on economic policy issues in this year's election is providing pieces that are highly educational. Today's editorial is called The Growth Mystery. we don't know how... MORE

Reagan's Economics in Context

Supply-side Economics
Arnold Kling
I decided to put my thoughts into a longer essay. When Ronald Reagan defeated Carter's re-election bid, "incomes policies" were a proven failure. Notwithstanding Milton Friedman's comments quoted above, by 1980 it took a lot less courage to stand by... MORE

Ronald Reagan's Economics

Supply-side Economics
Arnold Kling
Jane Galt writes, High inflation was the result of a dozen years of bad fiscal and monetary policy under two Republicans -- Nixon and Ford -- and two Democrats -- Johnson and Carter -- that was brought under control only... MORE

Welfare State Free Lunch?

Fiscal Policy
Arnold Kling
In his New York Times column last week, Jeffrey Madrick referred to the work of Peter Lindert on the ability of countries to grow in spite of welfare state distortions. Lindert's argument can be found in Why the Welfare State... MORE

The Budget Menu

Fiscal Policy
Arnold Kling
In the essay I referred to in my previous post, I also write A President who has only added to future entitlement obligations ought to be judged as having acted to increase taxes. To call this Administration a tax cutter... MORE

Trade Deficit, Saving, and Tax Policy

International Macroeconomics: Exchange Rates, International Debt, etc.
Arnold Kling
I argue that our trade deficit is really a savings deficit. Increasing exports relative to imports is not a matter of beating up on China to live up to its commitments in the World Trade Organization. It is not a... MORE

Over-worked or Over-taxed?

Supply-side Economics
Arnold Kling
Americans work more than Europeans. Do we work too much, or does Europe tax work too much? Edward Prescott argues the latter. Americans on a per person aged 15-64 basis work in the market sector 50 percent more than do... MORE

Economic Arguments

Regulation and Subsidies
Arnold Kling
A few days ago, controversial radio personality Rush Limbaugh created a controversy. As a commentator on a football pre-game show, he said (1) The Philadelphia Eagles' quarterback was overrated by others in the media. (2) The reason that the quarterback... MORE

Friedman Interview

Economics of Education
Arnold Kling
John Hawkins' interview of Milton Friedman touches on many subjects. Friedman is not terribly worried about Social Security. we're a very strong country, lots of able people, lots of active entrepreneurs, and so the Social Security system will be a... MORE

The Budget Debate

Social Security
Arnold Kling
The Congressional Budget Office provides an analysis of the long-term Budget outlook. The projections also assume for analytical purposes that aggregate federal revenues will level out at 19 percent of GDP in 2020, reflecting the higher end of the range... MORE

Politics vs. Economics, II

Supply-side Economics
Arnold Kling
(Note: this continues the discussion from Politics vs. Economics.) Another topic on which politics and economics can be separated is "supply-side tax cuts." The meaning of this phrase has changed somewhat over the years. During the Reagan era, a supply-side... MORE

Politics vs. Economics

Growth: Causal Factors
Arnold Kling
On one of the comment threads, a reader asked me if I disagreed with the economics of Lawrence Kudlow. "Honestly, I never thought he had any to disagree with," was how I began my reply. Let me revise and extend... MORE

Libertarian Manifesto

Growth: Consequences
Arnold Kling
Irving Kristol recently wrote a neoconservative manifesto. It is hopeful, not lugubrious; forward-looking, not nostalgic; and its general tone is cheerful, not grim or dyspeptic. Its 20th-century heroes tend to be TR, FDR, and Ronald Reagan. Such Republican and conservative... MORE

Wesbury on Tax Cuts

Supply-side Economics
Arnold Kling
Brian Wesbury makes a supply-side case for tax cuts. One point he makes that I agree with is that when we think of the government "crowding out" the private sector, we should focus on spending rather than taxes: Spending must... MORE

Liquidity Trap or Statism Trap?

Supply-side Economics
Arnold Kling
In this essay, I take issue with Paul Krugman's claim that the liquidity trap is relevant to Japan and the United States. Krugman has learned the wrong lessons. He thinks that the bank bailouts are a good thing, that Japan's... MORE

Government Overgrowth, II

Supply-side Economics
Arnold Kling
Was the stock market boom good for New York? Not according to Megan McArdle, otherwise known as 'Jane Galt'. in an era of prosperity, city spending grew an astonishing $5.6 billion, or 25% - right up to the capacity of... MORE

Temporary Dividend Tax Cut?

Fiscal Policy
Arnold Kling
Jacob Levy criticizes the Senate's proposed temporary tax cut on dividends. The arguments in favor of repealing the dividend tax have to do with removing distortions from the capital markets and from the incentives faced by corporations, and with improving... MORE

Government Overgrowth

Supply-side Economics
Arnold Kling
One fascinating phenomenon is that when government grows so large and its interest groups so powerful, it threatens to crowd out the private sector. This is a concern in Israel, where a new economic plan that tries to limit government... MORE

Social Security Tax Cut?

Fiscal Policy
Arnold Kling
A proposal from former Labor Secretary Robert Reich: The best and the fastest way to get more money into the pockets of people who are likely to spend it quickly is to cut the taxes of average working people. Most... MORE

Spend Less on Education?

Productivity, Baumol's cost disease
Arnold Kling
Sometimes, an economist argues against conventional wisdom, as in this essay, where I question the view that the government needs to increase its spending on education. If we combine the limited extent to which education is a public good with... MORE

The Budget Debate, VIII

Supply-side Economics
Arnold Kling
Be careful what you wish for. Some supply-siders have asked for "dynamic scoring" of tax cuts, to take into account supply-side effects. The Congressional Budget Office has done this analysis. CBO's analysis suggests the proposals, on net, would probably increase... MORE

Supply-side Dissatisfaction, II

Supply-side Economics
Arnold Kling
N. Gregory Mankiw, incoming chairman of the President's Council of Economic Advisers, continues to take flak from supply-siders. In this essay, I discuss the latest attack, from The Wall Street Journal's Susan Lee (subscription required). Her objection to Mankiw is... MORE

Supply-side Dissatisfaction

Supply-side Economics
Arnold Kling
Some folks are reportedly bitter about the appointment of Greg Mankiw to succeed Glenn Hubbard as Chairman of the Council of Economic Advisers. N. Gregory Mankiw, whom Mr. Bush nominated on Wednesday to lead his Council of Economic Advisers, wrote... MORE

The Case for Tax Cuts

Supply-side Economics
Arnold Kling
For an antidote to the interventionist Atlantic Monthly, see this open letter signed by a number of conservative economists. As a rule, government cannot create wealth or expand the economy. Only the private sector can do that. Government can, however,... MORE

Return to top