Via Matthew Yglesias, here's Larry Kudlow's latest hand-waving defense of supply-side economics:
Tax revenues have been surging from personal incomes, capital gains, and dividends. Now, the Congressional Budget Office would try to argue that these revenues are lower than would have been the case if taxes had not been cut. But who’s to say? Economic growth would’ve been slower and hence revenues without tax cuts might have been lower. All we know is what we know—namely, revenues have been steadily rising in the aftermath of lower tax rates.
"[W]ho's to say?" As Yglesias writes, "Who, indeed, other than, perhaps, the staff economists at the Congressional Budget Office who are trained to make such calculations." Don't forget about all the current and former Bush administration economists and budget experts who admit that tax cuts don't increase revenue! (Ed Lazear and Greg Mankiw, among many others)
I was struck, however, that Kudlow seemed to grasp the relevant counterfactual -- the level of federal revenue we would have observed over the same time period had a tax cut not been enacted. Usually, he just touts increased revenue levels over time and (falsely) assumes that those increases prove his point (see this random example from Google, for instance).
It's hard to know if the problem is intellectual dishonesty or fundamental ignorance. As Kudlow himself might put it, who's to say?
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