The Laffer Cliff

Our old friend Arthur Laffer is back, this time he's put the cards on the table ahead of time.  His plan?  Another $3.6 trillion stimulus.  How to accomplish this?  Eliminate all federal taxes for the next 18 months.

Any government program that would reduce unemployment has to make working more attractive for both employer and employee. Since late 2007 the federal government has spent somewhere around $3.6 trillion to stimulate the economy. That is a lot of money.
 
My suggestion would have been to take all $3.6 trillion and declare a federal tax holiday for 18 months. No income tax, no corporate profits tax, no capital gains tax, no estate tax, no payroll tax (FICA) either employee or employer, no Medicare or Medicaid taxes, no federal excise taxes, no tariffs, no federal taxes at all, which would have reduced federal revenues by $2.4 trillion annually. Can you imagine where employment would be today? How does a 2.5% unemployment rate sound?

That's fiscal responsibility right there.  Sure, people will immediately hire more workers and buy all kinds of useless crap instead of drastically slashing wages in order to give the same employees the same take-home pay under the new tax scheme and pocketing the difference on both ends or anything, while employees see nothing from this, they could see a one-time boost from income taxes, but that of course will be banked and not spent, or used to pay off debt.

In other words, what we'd have here is a $3 trillion or so plus transfer of wealth to the richest Americans and business owners, while the poorest Americans get...nothing.  Oh, and $3.6 trillion more in national debt, which of course will be paid for, right?

I wonder what the Tea Party fiscal faithful would make of Laffer's plan.  Because that's what Republicans want to do.  They give even less of a damn about balancing the budget than Democrats do.