Arthur Laffer: “Keep the government’s Hands off of Medicare!”

The story (stories) of the old befuddled scared men and women crying out their Representatives, Senators, and President to “Keep the Government’s Hands off my Medicare!” is that tad too easy encapsulation for the advocates of Obama’s Health Care Reform, a sledge hammer that works largely to corrall the emotional out of the more legitimate concerns.  I do not know how to rate it in terms of propaganda versus a matter of clarifying a frame.

But it is one thing for your befuddled octagenarian grandpa to worry about a government take-over of Medicare.  The man I don’t understand with this one is Arthur Laffer, that influential economist who, as that Creation Myth holds, doodled this on a napkin, thus heralding in the reign of Supply Side Economics.


And here is that napkin!

And now he adds these two cents to the current Health Care debate.:  “If you like the post office and the Department of Motor Vehicles and you think they’re run well, just wait till you see Medicare, Medicaid and health care done by the government.”

Huh.  Far be it for me to shake my head in wonderment at a economist, but… Huh.  Can he please scribble a graph of that on a napkin to clarify his position?

The Laffer Curve is, I have to admit, certainly true in extremis.  A zero percent tax rate will bring in no revenue, as would a 100 percent tax rate.  It gotes to figure that various rates of taxation should, therefor, be somewhere in between those two figures.  I suspect that there is no scientific answer to the “law”.

I have always admired Sean Hannity’s extrapulation of the principle.  “Every time you cut taxes, revenue doubles.”  It goes to figure that he should be, therefor, advocating a long series of two cent tax cuts — the $10 Trillion debt would be paid off in no time flat.  Except, I suppose, the “Starve the Beast” theory, which would require the government not to have too much room to grow.

It is worth musing over the (I would say undesirable idea) of a 100 percent top marginal rate.  I know it has been debated and discussed in the halls of various Green Party platform discussions, at least I assume it is as it is the quickest path to a “Maximum Wage” — and I know (from some listening to KBOO) that that socialist idea has been battered around in Green Party politics.  I also remember that the “Maximum Wage” was a great boogey-man for Rush Limbaugh (from my occasional listening back in the 1990s), the end of a slippery slope which would serve as the final sign that the “Great Experiment of America” is “Over”.  There is no real way to know if he believes that, since he never bothered to leave New York City for test case number one in the slippery slope.

But such a thing is a radical enough idea, fundamentally changing our country in ways that I think would justify and explain a chant of “I WANT MY COUNTRY BACK” jumping to starting up a chorus of the “Star Spangled Banner”, and thus the successful shuttering of a Town Hall Meeting.  In the meantime, we’re stuck with too many knots in engaging a plan that would either modestly benefit or modestly hamper the country — I would go with “benefit”.

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