How many times can we be fooled? Evidence suggests many times. Sometimes we want to be fooled — a lady told me once she would vote for Richard Nixon because he said he would lower her taxes, even though she didn’t for a minute believe he would.
Here are some more examples:
Cut Spending — Those who would cut government spending, Tom Reed is one, believe that when the government taxes and spends less, private business will spend more to make up the difference. Business will spend more only when demand for goods and services requires it. Thus this belief is unreasonable.
The Laffer Curve suggests that there is an optimum average tax rate that maximizes revenue. Even though taxes in the United States are low compared with other developed countries, proponents seized on this idea to argue that cutting taxes (especially for the rich) would increase revenue. It didn’t work — tax rates were cut, but revenue failed to increase. Oh, well.
Small Government — Advocates of small government believe that government can do little if any good, so the less it does the better. I don’t know of any persuasive argument that small government would protect the environment, provide for public health and safety, or promote justice for all.
Supply Side Economics — Advocates of supply side economics believe that efficient free markets are the key to economic prosperity, that regulations and taxes restrict business growth. Seizing on this idea, politicians cut taxes, rescinded regulations, and promoted international trade agreements. This hasn’t proven effective, but the idea has legs — right-leaning politicians, including Tom Reed, still thunder against taxes and regulations.
Trickle Down — Trickle down assumes that when the rich prosper the poor will benefit as well. Low taxes for the rich in the United States have increased economic inequality while poverty has increased
Other mistaken ideas include “Americans aren’t going hungry,” “climate change hoax,” “default can’t happen” (and wouldn’t be bad if it did), “just say no,” “guns make us safe,” “national debt must be repaid by our children,” and “unemployed will find work if benefits are cut.” It isn’t hard to think of more.
© William Hungerford – February 2014