It was a more sophisticated rendering of the idea of "a magic money tree", the dismissive phrase employed years later by former British prime minister Theresa May.
Never mind the rich — why do middle-class and poor people consistently fail to challenge the seductive appeal of the Laffer curve or the hallucinatory quality of voodoo economics? It may revolve around the way the idea of paying taxes is framed. Lakoff argued that politicians opposed to voodoo economics should work to rectify the way taxes are described. Rather than a burden, taxes should be categorised as an investment; in education, health, roads, the power grid, law enforcement, libraries, training for scientists, teachers, doctors.
Indeed, one of the most powerful illustrations of the fallacy of voodoo economics is the American state of Kansas. The experience of this Midwestern state should serve as a lesson. It's time we broke the spell of voodoo economics The idea of lowering taxes while creating a better society has deep roots in western politics, but its appeal is illusory.
Rashmee Roshan Lall. The rich don't generally use their personal wealth for the public good or to create jobs. More from Roshan Lall. The US should explore new frontiers, not revisit old space-race triumphs. In the new Afghanistan, the future of women must be protected. We may use the provided email to contact you if we have additional questions. See our privacy statement. Skip to main content. Voodoo Economics. Usage conditions apply.
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Visit the IIIF page to learn more. View manifest View in Mirador. Description A poster used at a Solidarity Day protest on September 18, The definition of Voodoo economics is, "an economic policy perceived as being unrealistic and ill-advised, in particular a policy of maintaining or increasing levels of public spending while reducing taxation.
To get things going, we need something to increase demand. Conservative economists tend to say — have the Fed reduce interest rates so people and businesses will borrow and spend more. Liberal economists tend to say have the government cut taxes for the poor, because they will spend, or have the government borrow and spend more to help business get started again.
The right answer, is that in a regular recession, monetary policy works and is much easier to use so that is best. Both conservative monetarist — like Milton Friedman and liberal Keynesian economists say that the government needs to stimulate demand in a recession.
It claims that if the government cuts their tax rate, the rich will make so much more money that they will pay more taxes not less. So this was tried under Reagan.
Big tax cuts for the rich. So you make no money and pay no taxes. At a lower tax rate people do work and pay taxes. Is that going to make you work so much harder that you more than double your income. If you could, you already would have. So no, you will just happily take home triple what you did before, and maybe even work less.
For them, supply-side says if you cut their tax rate, they will pay less tax. It sounded soooooo good. Supply-side economics is dishonest. So the plan was to cut tax rates for the rich in half, which they did. To get this through they had to cut taxes for the middle class some too, but they counted on inflation pushing the middle class back into higher tax brackets.
But cutting the top bracket had a permanent effect because there is no higher bracket to get pushed into. So not only was cutting taxes to raise money crazy, it was just a deception to cut taxes for the richest and then use the deficits to force cuts in services for the middle class and the poor.
The Republicans have almost all gone over to the supply side now, and many, like Reagan, have been brainwashed into believing it. This will be the largest debt reduction ever achieved by any nation at any time. There are a lot of lies in circulation.
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