10 June, 2015

If High Taxes In The '50s And '60s Produced Good Growth, Then Let's Have High Taxes Again

If High Taxes In The '50s And '60s Produced Good Growth, Then Let's Have High Taxes Again: That is, the post-war growth happened despite those taxes and unions, not because of them. And if you start your economic analysis in 1929, or 1930, you’ll see that the period 1930 to 1970 was not in fact remarkable. It’s just that if we start at 1945 we’re looking at the effects on GDP of 40 years of technological advance being exploited in 20 years. This is not something that’s going to happen again by increasing taxes nor favoring unions.

At which point we can go back to economic normality. Freer markets, a lower burden of government, increases the growth rate.

It’s a bit like those arguments over the pause in climate change. If you’re allowed to pick your start and end points in measuring a cyclical occurrence then you can prove pretty much anything you like. Counting economic growth from the moment we stopped blowing stuff up is going to make that period look good whatever the policies.