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The Kansas Economic Miracle



As most of you know, Kansas was provided an excellent test case for supply-side economics. The answer is that upper-class tax cuts have utterly failed to deliver the promised economic growth and caused state revenues to crater, threatening valuable state services. Brad DeLong provides an exhaustive collection of links, concluding:

Let me, for one, say that I am surprised that the economic results of Laffer-Moore grifter tax cuts in Brownbackistan have been so bad. I expected them to be bad. But I expected big tax cuts to steal at least some of the tax base from neighboring Missouri: south of the Missouri River the Kansas-Missouri border is State Line Road, and the state border bisects the two million person Kansas City metroplex. But no: worse than I would have imagined likely, even for Brownback, even for Laffer and Moore.

Moving money from the state budget where it is spent in-state into the pockets of the rich whose marginal propensity to spend in-state is low has consequences. Add in the effects of not expanding Medicaid and the tax cuts, and $1 billion/year of government-funded spending that would be happening were Kansas part of Colorado is not happening. If the in-state multiplier is two, then the simple Keynesian model all by itself accounts for the post-2012 divergence between Brownbackistan and the U.S. average–you don’t need any resort to “uncertainty” generated by the Brownback trainwreck.

And it’s not as if Kansans haven’t noticed what a catastrophe this is — Brownback is enormously unpopular. Which, of course, is why Republicans want elections in which 1)as few people as possible vote and 2)the wealthy minority that actually benefits from policies that are disastrous for everyone else can spend huge amounts of money in election campaigns. It seems worth noting as well that Paul Ryan is fully committed to Brownbacknomics, which might be worth keeping in mind the next time someone tells you that being indifferent about the results of the next federal election is a self-affirming consumer choice and refusing to support Hillary Clinton will really stick it to BIG NEOLIBERAL.

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