Wealth of a Nation
How the Keynesians went off the road at the Laffer Curve.
Apr 5, 2010, Vol. 15, No. 28 • By EMILY ESFAHANI SMITH
But while the nattering nabobs chatter away, history tells another story. Ronald Reagan’s landslide victory over Jimmy Carter elevated supply-siders to the levers of power, and Reagan instituted a 30 percent cut in the marginal income tax rates, echoing the 1977 Kemp-Roth legislative proposal. In 1981 the Reagan tax cuts were enacted, supply-side economics became law, and “the seven fat years” followed. Between 1982 and 2007 the United States experienced the greatest period of stable economic growth in its history.
Which leaves one question: If the supply-side theory discredited Keynesianism and brought prosperity, can it do the same in the present dismal economic climate?
Emily Esfahani Smith is an editorial assistant at The Weekly Standard.