"Voodoo" vs "Zombie" Economics

Voodoo to Zombie Economics

Liz, with her ability to attach just the right word phrase to describe something has just attached the right phrase to describe the US economic system currently pervasive today. We were discussing the Laffer curve, the basis of Reagan's economic policies, often called "Trickle Down Economics" and by its opponents "Voodoo Economics "

The Laffer curve, named after economist Arthur Laffer, was an approach to collecting taxes that optimized the revenues collected by the government. Typically, you only hear about tax RATES and why the government needs to raise them because they are spending more than than they collect. Laffer posited that what the government needed to do was concentrate on revenues rather than rates. Taking two known points on a graph, it is known that if the tax rate is 0%, the revenue will be $0. The other known point is a tax rate of 100%. At that point the revenue will be $0 because people and companies are not willing to invest or work for $0.

For all of the positive points on the Laffer curve, there would be positive revenue. As one increased the tax rate, the revenue would increase, TO A POINT! At that point, named the Laffer Point, and increase in the tax rate would actually cause revenues to decrease. What increased the revenues during the Reagan years was that the rates were moved from the left of the Laffer point, closest to the 100% rate, to the right, closest to the 0% tax rate.

“During Reagan's presidency, tax rates certainly fell sharply: the top personal income tax rate went from 70 percent in 1980 down to 28 percent in 1988. However, during those same years, tax receipts went up — from $599 billion in fiscal year 1981 to $991 billion in FY 1989 (in historical dollars), an annualized growth rate of 6.5 percent.” (http://fee.org/the_freeman/detail/the-laffer-curve-will-tax-cuts-pay-for...)

Detractors of these policies, rightly, pointed out that reduction of tax rates would not necessarily increase revenue. However, they either did not understand the Laffer principle or chose to ignore it. Rather than correctly report and educate citizens about the policies they derided them by calling them either “Voodoo Economics”, “Trickle Down Economics”, “Tax Breaks for the Rich”

As we have seen in the recent past, the government has kept the individual tax rates pretty much the same. Now, when the government needs more money in order to grow, they tax through agencies, like OSHA, or the FAA, and now Obama-care.

Of late, we have seen the growth of “Zombie Economics” espoused by the Zombie party, which by its very nature is rather disorganized. However, its members can easily be identified by their characteristics:

  • They consume living humans' property, oft using humans' natural generosity, or government elected officials that want to protect their existence in order to get elected.
  • They are unproductive, and contribute nothing to the economy,
  • They support self serving policies like “sharing the wealth”,
  • Their names often can be found on tombstones near their voting places,
  • Their theme-song appears to be “We shall over-run”,
  • They protest the very system that allows them to protest. (Like capitalism, that funds their lives and freedoms)
  • They can be seen, usually at night, walking the Zombie walk, through streets and highways, demonstrating their Zombie intelligence quotient. Some, recently un-dead can be seen taking live persons property for their own use,
  • They chill easily, and often set fires to their surroundings to get warm,
  • They leave, in their wake, droppings – often including paper products, and physiological wastes,
  • Since they are a protected minority, they reject legitimate authority, and regularly accuse police of “profiling”.

Because of the threat of the increasing population of zombies, the CDC has issues a booklet “Preparedness 101: Zombie Apocalypse” and the Adam Chodorov of Sandra Day O'Conner College of Law has studied the legal implications of zombies under US Federal and state tax codes.

Since there is no known defense to the Zombie Apocalypse, this article is to make its readers aware of the situation and encourage them to ask their congressmen what they plan to do about the situation.