In the post below, Asha Bangalore of Northern Trust responds to Art Laffer's WSJ op-ed demanding more tax cuts.  The title above, of course, is ours (Asha's far too professional and polite for a title like that).  Asha's title is "Missing Elements" of Mr. Laffer's Incomplete Story.

Mr. Laffer illustrates his arguments about tax cuts and the positive impact on economic growth with the Reagan tax cut experience (see chart 1, replication of chart in Mr. Laffer's article) in today's Wall Street Journal (Arthur Laffer: Tax Hikes and the 2011 Economic Collapse - and he predicts a dire economic situation if the Bush tax cuts are allowed to expire at the close of 2010. 

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Stepping forward from Laffer's utopic economic era, why did the economy post noticeable growth after tax increases were implemented in 1993?  The recession ended in March 1991 and the banking system was beset with issues, which delayed the robust recovery until later.  A revival of bank lending led to the self-sustained growth witnessed despite the tax increases instituted in 1993 by the Clinton administration.  If Laffer's thesis about tax cuts is valid, why did the U.S. economy record the weakest period of economic expansion following the Bush tax cuts of 2001 and 2003?  The evidence from tax cuts is essentially not as strong as Mr. Laffer's leads the reader to believe...

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