Krugman: Tim Pawlenty’s Supply-Side Time Warp

[Derechos]

Earlier this week, Ramesh Ponnuru had an excellent column on the Republican Party’s struggle to come up with an economic agenda that doesn’t just feel like “half-remembered bits of Reaganism.” Here’s how it ended:

snip

In recent years, though, Republicans have tried to cut taxes for corporations and high earners without doing anything for the middle class. (Anything direct, that is: The middle class was told it would benefit from higher growth.) It’s not surprising, then, that the Republican advantage on taxes has declined — or that in recent elections, most voters haven’t told pollsters that Republicans are “in touch” with people like them.

… The country’s fiscal straits may make it difficult for Republicans to devise conservative ways of responding to the economic challenges that middle-class Americans now face.But it must be said that they don’t appear to be trying very hard.

snip

Read the whole thing — and then read Tim Pawlenty’s big economic speech this week, which exemplifies the problem Ponnuru is diagnosing. Somewhere, buried in the middle of the address, there’s a line that speaks directly to the middle class: Pawlenty is talking about his plan for a rate-lowering, base-broadening tax reform, and he pitches this as a “one-third cut in the bottom rate … to allow younger — middle — and lower-income families to save and build wealth.” But you’ll search the rest of the speech in vain for anything else that’s addressed so explicitly to middle class concerns. Instead, most of Pawlenty’s agenda is a mix of “half-remembered bits of Reaganism,” transparent gimmicks (a balanced-budget amendment that caps spending at 18 percent of G.D.P.) and straightforward magical thinking, in which cutting taxes on business, investment and high-earners leads to 5 percent growth every year for a decade — something that neither the Reagan nor the Clinton booms came close to achieving — which in turn goes a long way toward closing the budget deficit, happily, before we have to start in on painful cuts.

http://douthat.blogs.nytimes.com/2011/06/09/tim-pawlent...