Plain Sense Economics

If we can peel away the political posturing, there is an important argument in the issue of how best to generate a recovery in our country’s economy. Put simply, the question is whether producers (employers) are the answer and we should do everything we can to encourage them, or whether we should do something to [...]

Congress has been deadlocked on the issue of restoring or changing the tax cuts passed in 2001 and 2003. Those original cuts had a sunset provision – the cuts end on December 31, 2010. If Congress does nothing, income tax rates, including capital gains and estate taxes, return to their 2000 levels.  Democrats want to [...]

Arthur Laffer is credited with the eponymous theory that a decrease in tax rates can lead to an increase in tax revenues. Even if the original theory may have been scribbled on a napkin, it still holds sway with the supply side contingent. The simplified explanation is that by reducing tax rates, income earning individuals [...]

At about the 6th or 7th week of my Principles of Macroeconomics class we have a kind of broad (though not deep) understanding of how the economy works, how we measure it, and some of the things government does to influence it. We’ve learned about fiscal policy and monetary policy; we have a rough idea [...]

In Principles of Macroeconomics we compare the dueling strategies of John Maynard Keynes and supply side advocates. Keynesian strategies rely on government spending to stimulate demand during recessions. Supply siders argue that we should reduce tax rates, and let income earners (individual and corporate) keep more of what they earn, thereby increasing their incentive to [...]