The Norman Transcript

Letters

Discussion

February 28, 2013

Economic history must be examined

The Norman Transcript

NORMAN — Editor, The Transcript:

I marvel at the continued mantra for raising taxes to raise revenue for the national government.

Like too many religious zealots, people like Mr. Milbank seem to believe that if one continues to recite a given explanation, it will become true. Or perhaps, and more likely, he believes that it is true in spite of the economy’s history.

Like so many economic theorists, he believes that economic laws were invented by economists who devise rules that the populace should conform to. This is hubris at the worst level.

The economic rules that work have not been invented by an imaginary god of economics but are only mathematical descriptions of how the populace in general thinks and acts. This is the way that the sciences work. The theories and mathematics that work are just descriptions of what nature is really doing.

The price/demand curve was not a rule made by some economist to tell how the populace should react to the variations in the economy. It is just a description of how the preponderance of the population acts in reaction to the flux in the economy.

The Laffer curve is another example of this fact. Despite the attempt to convince people that it is “voodoo economics,” there is statistical data that proves that it is a good description of what actually happens.

In fact, the shape of the Laffer curve can be derived from human nature alone without recourse to economics. To get the actual numbers, economic history must be examined.

If the tax rate is on the wrong side of the peak, an increase in taxes will cause a decrease in revenue from the earners who are taxed. There are examples in the data from the history of the economics that bears out this concept.

One has only to examine the history of the economy, without any erroneous assumptions,  to see that raising taxes almost always causes a recession and just exasperates the recovery from a depression.

Demand-side economics sounds great when human nature is excluded from its assumptions. But the low inertia comes into play when human nature is added, causing the system to become unstable. Economic history bears this out.

Unstable systems oscillate. Sometimes this is desirable, but not in an economy.

John Baugher

Norman

For local news and more, subscribe to The Norman Transcript Smart Edition, or our print edition.

Text Only | Photo Reprints
Letters
  • You’ve got to have faith

    Editor, The Transcript: My name is Alice Graham. I live in Leesville, SC and I’m a songwriter/musician. I wrote this song the following morning as I drove to work. I asked the question, “What is it that Moore needs the most today?” and the ...

    May 25, 2013

  • Johnson analyzed issue well

    Editor, The Transcript: I would like to thank Jim Johnson for his thoughtful, thorough and sensible analysis of the gun situation in our country.  He has made a meaningful contribution to what one hopes will become a civilized ...

    May 24, 2013

  • Diana Frost letter correction

    Letter correction: A letter to the editor from Diana Frost, originally published in March 2012, was inadvertently published again in Sunday’s paper. The Transcript apologizes for the error....

    May 23, 2013

  • Teachers should be proud

    Editor, The Transcript: He walked by the camera in his red OU T-shirt, splattered with dirt, hair disheveled, and cuts on his face. He told the reporter about helping rescue people from the rubble of the tornado. He spoke of his experience ...

    May 23, 2013

  • Roman Catholic Church too busy to respond with hate

    Editor, The Transcript: Diana Frost’s letter of May 19 concerning the Roman Catholic Church was so unreasonable that it almost defies response. Still, one of her many accusations must be addressed....

    May 22, 2013

  • Pesky employees at it again

    Editor, The Transcript: I just read the letter to the editor complaining that the Republican Party has apparently cornered the market on gall with their investigation of the Ben Ghazi incident. If gall indicates a search for the truth, ...

    May 21, 2013

  • Republican Party has unmitigated gall

    Editor, The Transcript: When it comes to unmitigated gall, the Republican Party has no equal. Take the current Benghazi hearings, for example. This is nothing but a political charade aimed at the 2014 election and Hillary Clinton’s ...

    May 19, 2013

  • John Tullius’ cartoon is wrong about education

    Editor, The Transcript: John Tullius’ last Saturday cartoon has jumped up and stepped right on my toes, along with, I suspect, the toes of teachers and school personnel all over town: “Growing up — we learned good morals, values and ...

    May 19, 2013

  • What hope for our humanity’s predicament?

    Editor, The Transcript: Well, what is it, this “predicament” of ours, our humanity’s? What’s behind or underneath this predicament, this predication, this saying before or is it a “before saying?” Ah, that might be getting closer to what ...

    May 19, 2013

  • Tax cuts help wealthy and harm schools

    Perhaps it’s old news by now, but I hope the controversy will live on....

    May 18, 2013