To Arthur Laffer, taxing the working people and giving the money to the unemployed is like flunking the “A” students while giving “F” students scholarships.

On Monday afternoon, Laffer –– inventor of the economic model called the Laffer Curve and supply-side economics –– spoke to a crowd at Penn State U. as part of Truth Week 2011, a series of lectures on the economy.

Laffer greeted the crowd cheerfully, urging people to come toward the stage and to keep the mood light and informal. About half of the HUB Auditorium was full when Laffer began his speech, focusing on economic concepts.

His discussion touched on a range of topics, and Laffer even dipped into his past to discuss his relationship with former Vice President Dick Cheney and former Secretary of Defense Donald Rumsfeld, where he first explained the Laffer Curve.

The Laffer Curve refers to the theoretical relationship between government tax rates and individual taxable incomes. It states that taxable income will change if the rate of taxation changes.

Laffer used several hypothetical situations to illustrate economic concepts at work.

“If a guy receives a $600 check, he will buy more goods and services than he otherwise would have bought if he didn’t receive the check,” Laffer said, referencing a stimulus package.

The laws of economics, Laffer said, applies to a two-person world just the same as in a 300 million-person world. The 300 million-person world is just more complicated, he said.

In order to better understand how the economy works, Laffer asked students to imagine the economy is based on apple production: If the price of apples rises, the apple grower will be wealthier, he said. This means apple consumers will be less wealthy and have to spend more on apples, and this is how price and income offset each other in today’s economy, he said.

Laughter erupted during his discussion as he explained economics under different presidential terms.

“Barack Obama is an amazing person and was always at the top of his class. You got to be really good,” Laffer said. “The only problem is he’s always wrong.”

After speaking for about an hour, he stopped to take questions from the audience.

Josh Crawford, chairman of the Penn State College Republicans, said Laffer’s visit was a success.

“I thought the event went well,” Crawford said. “[Laffer’s] strengths were research ability and history.”

One student at the event, Malik Elarbi, said was mostly concerned about the rising costs of tuition and whether his friends had the same opportunities as him.

“In general, the cost of education, college universities the price has just skyrocketed,” Elarbi said.