Mitt Romney's "plan" for closing the budget deficit... hmmm, where have I heard this before? Reduce tax rates by (35%-25%)/35% = 28% and government revenues will grow because of the unleashed something and our deficit will be eliminated.
This is a straight replay of the Supply Side Economics of Arthur Laffer by way of Ronald Reagan.
What happened to government debt during Reagan's 2 terms? Oh yeah, it increased from 32.5% of GDP to 53.1% of GDP. That's a 63% increase relative to GDP (which is the only measurement that matters in terms of the sustainability of the debt. That and interest rates, which we'll get back to later maybe). That's a lot of red ink.
But that's what Romney promised tonight at the first 2012 Presidential debate. The Laffer curve, and the false notion that we are on the right (as oposed to left) side of the curve.
Sheesh, do we really need to revisit Reagonomics?