Angry Republicans are blaming Democrats for holding up a $1 trillion stimulus package meant to provide relief to Americans and businesses amid the coronavirus crisis, but the man whose economic theory became a cornerstone of Ronald Reagan’s revolution hopes the plan will die.
Art Laffer, in an interview Monday with Fox News, called the bill a “helicopter money proposal” of handouts that has a bad track record historically.
“It never works, it just causes the problem to get worse and worse,” said Laffer, known for his “Laffer curve.”
“You don’t tax people who work and pay people who don’t work and expect more work,” he said.
Laffer noted he’s “been on all of these crises on the inside, from Nixon in 71-72 … through Jerry Ford, up to the present.”
He proposes, instead, cutting the payroll tax for the next seven to eight months “to make sure that it’s more attractive for people to work and more attractive for companies to hire.”
And he suggests guaranteeing or granting liquidity loans to businesses to help them stay afloat.
“Just the payroll tax cut and liquidity lending,” he said.
“That’s all you need, and stand back: This economy will do really well.”
Laffer believes the rebate checks to individual taxpayers “will have an impact, but it will be negative,” curbing the incentive to work and to hire.
“What we really need now is jobs. Everyone is suffering terribly from this coronavirus impact,” he said.
Laffer scored the payroll tax cut at $750 billion.
“That will bring the economy back as fast as it can come back,” he told Fox News. “This is not an economic problem. It’s a coronavirus problem that had a big impact on the economy, and this would bring it back.”
Laffer said the aim is to “make sure we bring people back to work as quickly as possible, and to do that you make work and hiring as attractive as possible.”
His proposal would have a broad-based impact, he said, because every family has a worker in it.
Laffer took a shot at Congress.
“Whenever politicians make decisions, whether they are panicked or drunk, the consquences are rarely attractive,” he said.
An adviser for President Trump during the 2016 election, Laffer said Trump “is the single best president we’ve had in my lifetime.”