In that same speech, Obama railed against tax cuts for wealthy Americans: "Now here's the thing -- we've tried this before. We tried this trickle-down fairy dust before. And guess what -- it didn’t work then, it won’t work now. It’s not a plan to create jobs. It’s not a plan to lower the deficit. It’s not a plan to move our economy forward."
But history does not bear out Obama's claims, says economist Art Laffer, an advocate of the top-down theory: "It really did work," Laffer told Fox News on Thursday. And it worked under both Republicans and Democrats:
"It worked under Harding and Coolidge, we had the roaring twenties...then you had, of course, Kennedy, with his supply side or trickle down economics -- beautiful -- it was called the Kennedy go-go sixties. Laffer also mentioned boom times under Reagan's and Clinton's supply-side economics.
And there it ended, he said: "And now you've had Bush and Obama with the same type of bad economics, and the results are pretty terrible."
Laffer noted that the bottom half of earners don't pay any taxes, while the top one percent pay around 40 percent of tax receipts. There's only "so much more" you can take from the wealthiest Americans. "And if you take it, these people know how to get around it," he added.
"I mean, these are the people who create the jobs, the output, the employment -- so if you tax them into closing down their factories, closing down their operations, you're going to get exactly what Obama has got, which is the highest unemployment."
Laffer noted that lowering the marginal tax rates -- and eliminating deductions, exclusions, exemptions and loopholes -- boosts tax revenue, as does getting people off unemployment and onto the tax rolls.
In 1986, a number of Democrats -- including then Sen. Joe Biden -- voted for such a plan, Laffer said. "These people know. I mean, if you want to tell the truth about Obama -- he knows. He would never run his family budget the way he runs our country's budget...It's just bad economics, it doesn't work. And we've got to get to supply-side, pro-growth where people get rewarded for doing well."
Laffer served on President Reagan's Economic Policy Advisory Board from 1981-1989.