Large numbers of Americans seem abysmally ignorant about economics, or simply choose to ignore economic realities because they conflict with personal ideology. In my opinion, this is one of the most valuable studies to benefit both individuals and society at large. Apparently, it’s not taught much anymore.
Two semesters of economics was required for my undergraduate degree in forestry back in ’59—relatively ancient history in today’s “Don’t-know-much-about…” society. Frankly, often sitting in class and trying to understand the textbooks, I didn’t get this “dismal science.” I passed these courses, but couldn’t connect them to my academic interests at the time; too bad. But I must have learned something. In subsequent years I’ve realized how vitally this knowledge influences our decisions—both in the micro (personal) and macro (societal) senses.
Fortunately, we have some great contemporary economists, including our North Carolina Bruce Caldwell, Virginian Walter Williams and Thomas Sowell in California (and some classic writings from the late Drs. F. A. Hayek and Milton Friedman) from whom we can learn.
Jim Tynen, editor of the Civitas Institute’s Capitol Connection newspaper, reports in the February issue that recently a nationally renowned economist came to North Carolina.(link) Dr. Arthur Laffer spoke to a Tarheel audience in Raleigh and praised the State legislator’s plan to reduce or eliminate the state income tax (and, I hope, the corporate tax).
Dr. Laffer came not with any “party or ideology” agenda, but rather to present his economic findings relative to the fiscal political mess imposed on this State and others over decades. “And it’s the economic facts, not just theory,” he said.
Laffer reminds us that the “U. S. economy boomed after tax cuts” during the presidential administrations of J. F. Kennedy and Ronald Reagan—nonpartisan reality. Further, he compared no-income tax states with those having high progressive taxes over the past 50 years. Data show that “the no-tax states way outperform the high-tax states—period.”
Of course, statists rarely acknowledge the reason for this: taxes influence our behavior—low taxes give positive incentives for investment, job creation and higher personal income; high taxes lead to negative reactions. High tax states such as Michigan, California and New York lose jobs and poverty increases.
It’s bad for all citizens when the political class and statist supporters ignore economic realities and push for more unproductive spending and taxing that sap the life out of our economies, nationally on a grand scale, and within our states.