Four Fiscal Phonies

By Paul Krugman, The New York Times

29 February 12

here were some technical problems with my earlier post on GOP deficit phoniness, although not in any way that changes the message. So, here's an update. I use the intermediate-cost estimate from CRFB (pdf) for the four Republican plans, and for consistency, I use CRFB's own estimate (pdf) for Obama. And here's what we get:

So it remains true that all of the proposals, except maybe Ron Paul's (which contains huge and probably impossible spending cuts) would lead to higher deficits than Obama, based on a common assessment.

I see, however, that some commenters are declaring that it's all OK because of the voodoo "dynamic" effects of tax cuts for the wealthy. I guess my question is, what on earth would make anyone believe in that old nonsense at this point?

I mean, we've had two fairly clear-cut tests in recent decades: the Clinton tax hike, which all the usual suspects said would produce disaster, and the Bush cuts, which would supposedly produce a wonderful boom. How did those turn out?

Also, the Romers have some careful new research looking at older data - the drastic tax swings of the interwar years - and find only small effects.

So let me rephrase my question: what conceivable evidence would convince people that supply-side magic doesn't work?

And meanwhile, the whole deficit hawkery of the right continues to be revealed as a fraud.