Supply-Side Economics

[whell]

Originally Posted by finnbow

Once again, the fundamental truism holds true - the longer-winded your response, the more incorrect you are. Supply-side economics is about nothing other than providing a rational to cut taxes regardless of prevailing economic conditions. Budget surplus? Cut taxes (Dubya). Budget deficit? Cut taxes (Reagan, Trump).

Thanks for proving my point. Supply-side theory is not political, as stated above. You can make it political if you wanna....and apparently you wanna.

[Rajoo]

Originally Posted by whell

There is no such thing as "Trickle Down Economics". That is a term that was first uttered by David Stockman and then co-opted by Reagan's political detractors to criticize Reagan's application of supply-side theory.

Here's the thing:

You should have simply claimed this was a scam started by Grandpa Reagan.

The IMF Confirms That 'Trickle-Down' Economics Is, Indeed, a Joke
Like, an actual joke.


"Trickle-down" economics began as a joke. Seriously.

If there’s one person most often associated with the origins of of trickle-down economics, it’s President Ronald Reagan. Few people know, however, that the phrase was actually coined by American humorist Will Rogers, who mocked President Herbert Hoover’s Depression-era recovery efforts, saying that "money was all appropriated for the top in the hopes it would trickle down to the needy."

Rogers’ joke became economic dogma within two generations, thanks in large part to Reagan. At the center of Reagan’s economic doctrine was the idea that economic gains primarily benefiting the wealthy—investors, businesses, entrepreneurs, and the like—will "trickle-down" to poorer members of society, creating new opportunities for the economically disadvantaged to attain a better standard of living. Prosperity for the rich leads to prosperity for all, the logic goes, so let’s hurry up with those tax cuts already. The legacy of Reaganomics continues to shape modern debates over macroeconomic policy in the United States, from the Bush tax cuts of the mid-2000s to the deficit hawks waging war over the federal budget in Congress.

Now, nearly 80 years later, Rogers’ quip is getting the punchline it deserves: A devastating new report from the International Monetary Fund has declared the idea of "trickle-down" economics to be as much a joke as he'd imagined.
Increasing the income share to the bottom 20 percent of citizens by a mere one percent results in a 0.38 percentage point jump in GDP growth.

The IMF report, authored by five economists, presents a scathing rejection of the trickle-down approach, arguing that the monetary philosophy has been used as a justification for growing income inequality over the past several decades. "Income distribution matters for growth," they write. "Specifically, if the income share of the top 20 percent increases, then GDP growth actually declined over the medium term, suggesting that the benefits do not trickle down."

https://psmag.com/economics/trickle-...-indeed-a-joke

What Is Trickle-Down Economics?

Trickle-down economics refers to any policy in which wealthy people and corporations receive tax cuts, stimulus, or deregulation in an effort to boost growth for the entire economy.

Also known as supply-side economics, trickle-down economics got its colloquial name from early twentieth-century humorist Will Rogers. Advocates believe it unfetters the free market to produce prosperity, while critics think of it as a cynical ploy to line the pockets of the rich while making empty promises to lower-income earners.

https://www.masterclass.com/articles...kW67ZhKc002swK

And since I am an equal opportunity guy.

There is No Such Thing as Trickle-Down Economics
The point is not to transfer wealth up and down but rather to create universal opportunity.

Critics of liberalism and the market economy have made a long-standing habit of inventing terms we would never use to describe ourselves. The most common of these is “neo-liberal” or “neo-liberalism,” which appears to mean whatever the critics wish it to mean to describe ideas they don’t like. To the extent the terms have clear definitions, they certainly don’t align with the actual views of defenders of markets and liberal society.

Trickle Down

Economists have never used that term to describe their views.

Another related term is “trickle-down economics.” People who argue for tax cuts, less government spending, and more freedom for people to produce and trade what they think is valuable are often accused of supporting something called “trickle-down economics.” It’s hard to pin down exactly what that term means, but it seems to be something like the following: “those free market folks believe that if you give tax cuts or subsidies to rich people, the wealth they acquire will (somehow) ‘trickle down’ to the poor.”

The problem with this term is that, as far as I know, no economist has ever used that term to describe their own views. Critics of the market should take up the challenge of finding an economist who argues something like “giving things to group A is a good idea because they will then trickle down to group B.” I submit they will fail in finding one because such a person does not exist. Plus, as Thomas Sowell has pointed out, the whole argument is silly: why not just give whatever the things are to group B directly and eliminate the middleman?

There’s no economic argument that claims that policies that themselves only benefit the wealthy directly will somehow “trickle down” to the poor. Transferring wealth to the rich, or even tax cuts that only apply to them, are not policies that are going to benefit the poor, or certainly not in any notable way. Defenders of markets are certainly not going to support direct transfers or subsidies to the rich in any case. That’s precisely the sort of crony capitalism that true liberals reject.

https://fee.org/articles/there-is-no...own-economics/

So in the end, Supply side economics is giving tax cuts to the rich and hope it trickles down to the poor. And if its anything like the Bush2 recovery plan, money simply vanishes. At least in the Canadian system, one has to actually provide employment to get the incentives, here in the US its simply a scam to buy private jest and vacation homes. Disclaimer: I had to pay off our second home with a 25 yr mortgage.

[whell]

Originally Posted by Rajoo

So in the end, Supply side economics is giving tax cuts to the rich and hope it trickles down to the poor.

No, it's not. But I won't try to demonstrate otherwise. Sometimes folks just want to believe what they want to believe. I'll leave you with this, from a source with zero agenda other than to provide information:

https://www.encyclopedia.com/finance...ly-side-theory

In addition to tax cuts, supply side theory usually recommends that the government should decrease its regulation of business and provide other incentives for increases in production, such as tax breaks (amounts of money that can be deducted from the taxes owed to the government) for companies that invest in new equipment. Supply siders also often insist on the importance of free trade (the reduction or elimination of restrictions on goods imported from foreign countries) and the free movement of capital (the unhindered ability of money and other resources to move across borders), believing that restrictions on trade or capital movement negatively affect production.

[Pio1980]

Tinkle down tax reduction economics is basically corporate welfare for the wealthy on the backs of actual tax payers who carry the load.
Republicans don't actually care about debt on their watch, but will cut taxes on the backs of those that benefit from them when they can.
That's the cycle, paint Dem's tax-and-spend bandits who rob the makers to feed the takers, never mind the "takers" provide the labor for the "makers".
Oversimplistic, perhaps, but connecting the dots with a straight line makes following the money simple.

[Rajoo]

Here is how supply side works in reality. Meta announces massive layoffs after companies like Twitter & Lyft and their stock price jumps up creating wealth for the investors. So if profits can be increased by reducing the workforce, how would Trickle Down actually ever trickle down? Give tax breaks to Meta so they will rehire these workers?

[Chicks]

Jeremy Hunt: Everyone will have to pay more tax
https://www.bbc.com/news/uk-politics-63614124

Some Conservatives MPs have warned against increasing taxes, with former party leader Iain Duncan Smith telling Sky News it could lead to a "deeper" recession.

Addressing the concerns of his colleagues, Mr Hunt said the previous leadership had tried that approach, "in other words a plan that doesn't show how, in the long run, we can afford it".

"We have tried that, we saw it didn't work."

ROFL. Clearly, Tinkle-down doesn't work.

[Chicks]

3 myths about the Trump tax cuts
https://finance.yahoo.com/news/3-myt...155801290.html

The TCJA paid for itself.
It almost certainly didn’t, which means tax savings for individuals and businesses were mostly financed by additional federal borrowing. But the COVID pandemic muddled this story and gave supply-side tax-cut advocates a bit of cover for claiming the TCJA produced an economic windfall.

MAGA Myths.

[Chicks]

GOP shredded for still pushing discredited Reagan-era economic theory
https://www.rawstory.com/republicans-laffer-curve/

Repukes are going to push this nonsense on rubes like Whell because it still works to get votes from these idiots.

[whell]

Originally Posted by Chicks

GOP shredded for still pushing discredited Reagan-era economic theory
https://www.rawstory.com/republicans-laffer-curve/

Repukes are going to push this nonsense on rubes like Whell because it still works to get votes from these idiots.

Speaking of rubes, hope you had a great Thanksgiving, Chickie.

Thanks for this article as well, because it calls out the one item that the left keeps coming back to:

Arthur Laffer, the Reagan-era guru of trickle-down economics, was unchastened by the deficit explosion back then, which effectively disproved his theory that cutting taxes on the rich would increase government tax revenue.

The Keynesians keep lying about what Supply-Side is. I've stated many times that the theory has nothing to do with government spending, but the Keynesian crowd unfailingly attempts to describe Supply-Side in terms of the deficit, which is a function of spending.

The failure, if you want to call it that, was not in the theory itself. The theory worked, and tax revenue tracked pretty much the same as a percentage of GDP from 1970 - 1990: https://www.usgovernmentrevenue.com/...n_20th_Century

The ideology has a kernel of truth to it in that taxation generally reduces economic activity; however, there has never been any evidence U.S. taxes were high enough to begin with to depress economic activity beyond the returns to government revenue.

It's an irrelevant point because there's never been any agreement - at least in recent history - about the appropriate role, size, and required funding level for the US Gov't. In fact, the left likes to refer to a reduction in a percentage of budget increase for a department of the function of the Federal bureaucracy as a budget cut. So, the author might have a point, but he gets out over his skis and fails when he refers to the deficit.

Here's where the train went off the rails: https://www.usgovernmentspending.com...ecent_Spending

Spending MORE THAN DOUBLED during that period of time, yet tax revenue as a % of GDP remained flat. It was, and still is, the SPENDING that is not sustainable, which has nothing to do with Supply Side theory.

[finnbow]

Originally Posted by whell

The Keynesians keep lying about what Supply-Side is. I've stated many times that the theory has nothing to do with government spending, but the Keynesian crowd unfailingly attempts to describe Supply-Side in terms of the deficit, which is a function of spending.

What you seem to be deliberately avoiding is that Supply-Side theory says that tax revenue goes up with a decrease in the tax rate (at least on the only half of the Laffer curve that Supply-Siders care about) and that, accordingly, spending can remain the same (or even go up) without an adverse impact upon the deficit.

As I've said a time or two before, supply-side economics is best understood as "You can have everything you want, but you have to pay for it with tax cuts." It's sophistry, pure and simple and provides a scheme by which Republicans can provide tax cuts for the rich while avoiding spending cuts that would negatively impact their base. A win-win for cynical dishonesty.