Remember the Laffer curve? The cornerstone of supply-side economics, it was a visual representation of the idea that tax revenue could in many cases be increased by lowering corporate tax rates. That was the idea behind Bush's $136 billion corporate tax cut in 2004 and, more recntly, he's pushed for another big cut. How's that working out for ya? The Wall Street Journal sums it up (subscription required): "With turmoil rocking financial markets and housing woes slowing the economy, corporate tax revenues are falling and leaving big holes in the federal budget."Corporate income tax revenue for the first seven months of the fiscal year plummeted 14.7% while government outlays increased 7.3%. The budget deficit increased a stunning 88%.
What's the solution to this mess? That's right: send people a check for a few hundred bucks, hoping that they'll go buy a plasma television or a diamond-encrusted vibrator.
Does any of this make sense to anyone?
Comfort Zone Investing: The unmighty dollar
Five winners of a weak dollar
For a quick-read on the U.S. economy, check the price of gasoline
