Insane economics

* To keep or not to keep Bush's tax cuts for the rich. Arthur Laffer (Tennessean, 2010, Sept 22, Opinion) says keep them, because the rich invest in businesses which create jobs. If his theory were correct, we would have a better economy today than we had before Bush's tax cuts. We don't. The very rich put their money in hedge funds that sequester money from the financial markets without helping underlying businesses--like a cancer. * Back around 1980, Laffer's theory was cited as justifying Reagan's tax cuts for the rich. We don't know whether those tax cuts stimulated economic activity, since they were accompanied by increased military spending, reduced interest rates, deregulation, policies promoting international trade and policies promoting investment in stocks and bonds--and the economy soon faltered with all these policies ongoing. Nevertheless, all Republican spokespersons quote Laffer's theory as self evident axiom (eg Richard J Grant, Tennessean, Sept 12, Opinion). * If Laffer's theory actually underlay Reagan's tax policies, then his legacy is about 12 trillion of our 13 trillion national debt, which is heading us toward default and/or hyperinflation. * There are some policy initiatives that would restore balance and wider sharing of prosperity in our society, but they aren't being discussed at high levels.