"Reaganomics would fix any economy that’s in the doldrums,” Laffer said. “It’s not a magic sauce, it’s common sense.Laffer also said that the S&P downgrade was deserved. We spend and borrow too much and if the other rating agencies don't follow suit they won't be doing their jobs.
“You’ve got to get rid of all federal taxes in the extreme and replace them with a low-rate flat tax on business net sales, and on personal unadjusted gross income. That’s number one.
“Number two, you have to have spending restraint. Government spending causes unemployment, it does not cure unemployment.
“Number three, you need sound money. Ben Bernanke is running the least sound monetary policy I’ve ever heard of," Laffer said.
“Number four you need regulations, but you don’t need those regulations to go beyond the purpose at hand and create collateral damage. The regulatory policies are really way off here.
“And lastly you need free trade," Laffer said. "Foreigners produce some things better than we do and we produce some things better than foreigners. It would be foolish in the extreme if we didn’t sell them those things we produce better than they do in exchange for those things they produce better than we do.”
People don't work in order to pay taxes, Laffer added, they work for what they get after taxes. When we pay people not to work and tax them when they do work we shouldn't be surprised when we find that a lot of people choose not to work.
Goolsbee is no longer in the administration, but I doubt that this is advice Mr. Obama would heed in any event. He seems determined to take the country toward a socialist economy with less market freedom, more onerous government control, higher taxes, and more entitlements. That path has never been shown to lead to prosperity, Laffer's has.