Dr. Arthur Laffer's "Program for Prosperity" Released Today

June 20, 2012 - PRLog -- “These nine lectures, offered to the public at no cost, represent some of the best thinking of Yorktown University faculty," said the University's president, Dr. Richard Bishirjian.  "We are honored to include former Yorktown University Trustee, Dr. Arthur Laffer, as the first lecturer in this series. His address, titled "A Program for Prosperity" was given at Yorktown University's commencement in June 2011.

Dr. Laffer's  begins his commencement address by observing that the American economy is worse today than it would have been had there been no stimulus policies of the Obama Administration. The reason, he argues, is that government spending does not create jobs.  

Dr. Laffer asks his audience to imagine that the whole world is comprised of two farmers: Farmer 1 and Farmer 2. If farmer 1 gets benefits, who pays for them, he asks? Government spending to stimulate the economy is taxation and as such for every transfer recipient there is a transfer payer. The idea that taking from one person to pay another can grow the economy is just bad economics, he argues.

Only good economics creates jobs. The employer looks at the total cost—all payroll taxes, income taxes, insurance, threats of lawsuits, parking spots for his employees and calculates what economists call “gross wages paid.”  If the gross wages are less than the marginal value to the firm, he will hire the worker.

The difference between what it costs an employer and what a worker receives is called the "tax expenditure wedge."  Stimulus spending doesn’t lower the tax expenditure wedge.  Only reducing that wedge creates economic growth.

There are five critical policies, Dr. Laffer argues, that reduce the tax expenditure wedge and thus contribute to economic growth:

   1) Low marginal tax rates or a 12% flat tax
   2) Spending restraint
   3) Sound money
   4) Government regulations that are not excessive
   5) Free trade

Yorktown University’s free lecture series may be accessed online at http://www.yorktownuniversity.edu/about.cfm

Contact: Wade Shol
wade@yorktownuniversity.edu
Phone: (877) 757-0059