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Commentary
When new British Prime Minister Liz Truss suggested lowering the United Kingdom's highest tax rate from 45 percent to 40 percent, along with a 1 percent reduction in the income tax rate for all taxpayers, the bond markets and the central bankers around the world went stark raving mad.
The academic pinheads at the International Monetary Fund trashed the tax cut as irresponsible. The bond vigilantes started selling Britain's bonds. And the Bank of England, which had also savaged the tax cut idea, stepped in to buy bonds to stop the bleeding.
The tragedy here is that Truss had the right idea. In an economic calamity as Britain has suffered for the past three years, cutting tax rates to increase investment and production in England is a way to reduce inflation and stave off a recession. It was the same "supply-side" strategy that President Ronald Reagan and Prime Minister Margaret Thatcher used in the early 1980s to end the stagflation and economic malaise from the 1970s. The "supply-side economics" worked and helped launch a multidecade economic revival in both countries....