It’s a big statement to say, as Arthur Laffer did this Monday in a Wall Street Journal op-ed, that “The economy will collapse in 2011.” And it’s also easy to understand why many are trying to find out how the famed supply-sider is arguing his case. There's nothing like a mouth-gaping claim to get your page views to skyrocket.
In simple terms, here’s Laffer’s reasoning: President Obama is raising taxes, or more precisely, President Bush’s tax cuts expire on Jan. 1. The wealthy will naturally shift their production and income out of next year into this year, which will, in turn, mean that next year, there will be no growth or spending.
Forbes puts Laffer on the list of “Wall Street’s Big Bears:” -- "the pessimists, worrywarts and naysayers of today's turbulent markets. The guys who appear on CNBC peddling gloom and worry.”
Here's the CNBC appearance: