I’m Beginning To Think That Arthur Laffer And Stephen Moore Are Not Credible Economists
By The basic outlines will be familiar to most of you, but John Judis does an excellent job of describing the Koch-induced meltdown in Kansas, filling in a lot of interesting details. (Sam Brownback is obsessed with John Brown, which cannot be a good thing on any level.) The bottom line:
After he had ousted the moderate Republicans, Brownback was able to push an ideologically pure agenda with almost no real opposition. He obtained the power to nominate judges. He reduced tax cuts on the wealthy even more: The rate for the top bracket fell from 6.45 percent to 3.9 percent, and Brownback promised to eventually reduce it to zero when revenues from other sources made up for any potential losses. The economic benefits, he boasted, would be immense. In Denver in October 2012, Brownback predicted “more job creation, more tax revenues, and . . . a much more solid public-sector funding.” The Kansas Policy Institute, for instance, predicted that his tax cuts would generate a $323 million windfall in revenue.
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By June of 2014, the results of Brownback’s economic reforms began to come in, and they weren’t pretty. During the first fiscal year that his plan was in operation, which ended in June, the tax cuts had produced a staggering loss in revenue—$687.9 million, or 10.84 percent. According to the nonpartisan Kansas Legislative Research Department, the state risks running deficits through fiscal year 2019. Moody’s downgraded the state’s credit rating from AA1 to AA2; Standard & Poor’s followed suit, which will increase the state’s borrowing costs and further enlarge its deficit.
Brownback had also promised that his tax cuts would vault Kansas ahead of its higher-taxed neighbors in job growth, but that, too, failed to happen. In Kansas, jobs increased by 1.1 percent over the last year, compared with 3.3 percent in neighboring Colorado and 1.5 percent in Missouri. From November to May, Kansas had actually lost jobs, and the labor participation rate was lower than when Brownback took office. The cuts did not necessarily slow job growth, but they clearly did not accelerate it. And the effects of Brownback’s education cuts were also glaring—larger class sizes, rising fees for kindergarten, the elimination of arts programs, and laid-off janitors and librarians.
In fairness, those laid-off janitors and librarians were parasites, not workers. Supply-side works!