Paul Ryan is a charlatan and a crank.
This assertion is based on the standard outlined by Republican economist Gregory Mankiw, Chairman of George W. Bush’s Council of Economic Advisers, and author of the world’s best-selling economics textbook.
Ryan’s budget proposal relies on economic forecasting from The Heritage Foundation, rather than the CBO. According to the Heritage numbers that Ryan favors, not only will Ryan’s tax cuts pay for themselves, but the cuts will actually increase tax revenue.
Of course, this is nothing new. The conservative fantasy of revenue-raising tax cuts is one of the cornerstones of supply-side doctrine (derided as “voodoo economics” by George H.W. Bush).
How does supply-side theory play out in the real world? We need look no further than the Reagan years. Mankiw explains:
An example of fad economics occurred in 1980, when a small group of economists advised Presidential candidate, Ronald Reagan, that an across-the-board cut in income tax rates would raise tax revenue… After Reagan’s election, Congress passed the cut in tax rates that Reagan advocated, but the tax cut did not cause tax revenues to rise.
In the first edition of his textbook, Mankiw went so far as to call Reagan’s supply-side advisers “charlatans and cranks.” Mankiw explains why:
I used the phrase “charlatans and cranks” in the first edition of my principles textbook to describe some of the economic advisers to Ronald Reagan, who told him that broad-based income tax cuts would have such large supply-side effects that the tax cuts would raise tax revenue. I did not find such a claim credible, based on the available evidence. I never have, and I still don’t.
Just like Reagan’s advisors, Ryan is trying to convince the American people that his tax cuts will raise tax revenues. Therefore, based on the Mankiw standard, Paul Ryan is both a charlatan and crank.
On a related note…
Greg Mankiw happens to run one of the most popular economics blogs. Given his strong views on the fallacy of self-financing tax cuts, one would expect Mankiw to be highly critical of Ryan’s budget.
So what has Mankiw written about Ryan’s proposal? Absolutely nothing. I wonder why?