Please explain supply-side economics to me...

We've been under Keynesianism since the crash

And the economy is much, much better now, so obviously Keynesian economics works.

People require massive amounts of resources, so it's almost impossible to have a decent standard of living without government spending.

If you bash supply side economics, defenders will just come out and say, "Well...yeah...but we've never reeeeeally had "true" supply side economics, so you can't say anything bad about it!"

a reply to: stormson

I think you are correct in your wonderings. Indeed, Reagan's 'trickly down' policy, his policy of 'let's trust the monoplists to do what is right for America" unleashed their greed which had been held somewhat in check by the regulations established in the post depression era by FDR. These monopolists had been waiting in the wings, watching for the best face to feed their brand of capitalism on the country when along came that face that so many had come to trust because he sold them soap. So they backed him for governor and on that foundation, sold him to the whole country.
Reagan was an actor. He played the roll they gave him and presented it as if he was our next door neighbor.
Reagan who was advancing on Alzheimers the whole while and listening to his wife who was heavily influenced by her personal astrologer. Reagan himself held some fantastic ideas about the divinity of the American nation.

Since then , as you rightly see, those monopolists have been let out of their closet and now own and run just about everything. And one of the things that they promote to this day is the myth of Reagan the Hero that still controls much of the defenders of trickle down

a reply to: stormson

sup·ply-side ec·o·nom·ics

n
economics of production: economic policies that promote conditions favoring the producers of goods and services (takes a singular or plural verb)

Encarta ® World English Dictionary © & (P) 1998-2005 Microsoft Corporation. All rights reserved.

In other words anyone that manufactures goods and services, providing stimulus to the economy and creating jobs, takes precedence over the well being of those doing the producing. Corporate Power is paramount. Especially in a country where the actual government is a corporate board of directors with a vested interest in making sure that those products and services maintain status quo and avoid paying taxes that are expected to be paid by the very workers that they employ or enslave.

Supply side economics covers a lot of ground but in the context of how it was used in the 80's it is generally about the affect of marginal tax rates on economic activity. There was also a strong anti union (worker?) element to it as well.
The evidence of the affects on the economy over the period is fairly mixed, as with all economics there is always a "On the other hand".

There is certainly a sound logic to much of the theory however when taken to an extreme or when competing explanations are ignored by politicians and true believers then the practical applications of the theory are lost in translation.
The point of the (possibly misnamed) Laffer curve was never that cutting taxes raises output/revenue but that there is an optimal point at which taxes will raise output/revenue. This is fairly self evidently true but just generally misunderstood.

Politicians like simple economic explanations that can be sold to the public and can be applied to all circumstances. When reality shows a different outcome they will generally blame the theory rather than their own inadequate understanding.

a reply to: introvert

In a freer market, economic downturns are brief. There is one depression that happened in this country no one ever talks about in 1920. It was as deep as the Great Depression, but because the government did nothing about it and let the market correct itself, it took about two years to correct and led to a decade you might have heard about with roughly 1% unemployment - the Roaring '20s. The government dealt with it by getting out of the way rather then through Roosevelt style interventionalism which lead to the 10 years of Depression we all know and love.

a reply to: ketsuko

You missed the point. Unless we are able to branch-off of this planet and spread the economy across the universe in perpetual growth, supply-side economics is bound to have depressions, no matter the size, to correct the market.

As we have seen from our own history, depressions are a time in which those without supply suffer greatly and more wealth is concentrated in the hands of those that already have wealth.

Simply put, supply-side economics cannot sustain itself over long periods of time.

Supply side economics is really quite simple: the rich get richer and the poor get poorer, but if the rich can only get rich enough then the 'average' wealth level increases. So what's good for the rich works for everyone, in theory.

originally posted by: introvert
a reply to: ketsuko

You missed the point. Unless we are able to branch-off of this planet and spread the economy across the universe in perpetual growth, supply-side economics is bound to have depressions, no matter the size, to correct the market.

As we have seen from our own history, depressions are a time in which those without supply suffer greatly and more wealth is concentrated in the hands of those that already have wealth.

Simply put, supply-side economics cannot sustain itself over long periods of time.

In a free market the readjustments are immediate and quick. Various single companies can go out of business but never a large percentage of the economy all at once. Large economy wide business failures are the fault of national, i.e. economy wide, policies.

Nothing you accuse the Supply side of doing was done by the free market. All economic problems are based in politics, which puts power mongering ahead of everything else.

a reply to: DAVID64

Since the govt gives big business so many tax breaks, that really doesn't make sense. Why not just lower the corporate tax to a competitive level, close all those loopholes and tax dodges and bring them back to the U.S. Make it profitable to have the "Made in the U.S.A." on the label. I don't see this happening for one good reason : Americans won't work 12 hour shifts for $2 a day.

You're right. There's more to this equation: "Favored Trading Status" -- and it's the biggest part of the equation which is always left out of the equation!!!

It used to be that nations which did not maintain a basic standard of labor could not trade with the USA. Countries that did not pay a decent wage to their labor, or maintain safe working conditions, etc., could not sell their products to the USA. This served both a humanitarian and economic purpose... no sweaat shops with small children working 16 hour days, for example, and it ensured that USA manufacturers paying a fair wage and bennies were not forced to compete with manufacturers paying pennies to workers.

Once Clinton gave China most favored trading status, soon followed by NAFTA, that level playing field went to hell.

originally posted by: Semicollegiate

originally posted by: introvert
a reply to: ketsuko

You missed the point. Unless we are able to branch-off of this planet and spread the economy across the universe in perpetual growth, supply-side economics is bound to have depressions, no matter the size, to correct the market.

As we have seen from our own history, depressions are a time in which those without supply suffer greatly and more wealth is concentrated in the hands of those that already have wealth.

Simply put, supply-side economics cannot sustain itself over long periods of time.

In a free market the readjustments are immediate and quick. Various single companies can go out of business but never a large percentage of the economy all at once. Large economy wide business failures are the fault of national, i.e. economy wide, policies.

Nothing you accuse the Supply side of doing was done by the free market. All economic problems are based in politics, which puts power mongering ahead of everything else.

History tends to show the exact opposite, when we have active economic polices then peaks and falls of economic cycle are smoothed out.

Prolonged economic downturns are generally accompanied by government inaction.

originally posted by: ketsuko
a reply to: introvert

In a freer market, economic downturns are brief. There is one depression that happened in this country no one ever talks about in 1920. It was as deep as the Great Depression, but because the government did nothing about it and let the market correct itself, it took about two years to correct and led to a decade you might have heard about with roughly 1% unemployment - the Roaring '20s. The government dealt with it by getting out of the way rather then through Roosevelt style interventionalism which lead to the 10 years of Depression we all know and love.

Only the the early 20's depression was a fairly long compared to post 45 recessions (when we had more active polices) and had no where near the affect on output as the great depression.

Also prevalent view seems to be that the 20's depression was ended by cutting interest rates (active policy).

originally posted by: ketsuko
a reply to: introvert

In a freer market, economic downturns are brief. There is one depression that happened in this country no one ever talks about in 1920. It was as deep as the Great Depression, but because the government did nothing about it and let the market correct itself, it took about two years to correct and led to a decade you might have heard about with roughly 1% unemployment - the Roaring '20s. The government dealt with it by getting out of the way rather then through Roosevelt style interventionalism which lead to the 10 years of Depression we all know and love.

So we need s freer market?

Seems to me that since 1980 the market has gotten more and more free, yet the effects are worse and worse. Why is that?

The unemployment rate in 1920 was 5.2 and in 1928 was 4.2. This was also called the guilded age when inequality was rampant. Employee abuse was off the charts with 12 hour days, no lunch breaks, and 2 10 min potty breaks 6 days a week.

Again, supply side seems great for the few at the top, but not so much for the majority of the people.

To understand how well Supply Side economics works...Look at the countries that enjoy the highest standard of living.

They are mostly socialists....with the US at #7



www.countryranker.com...

and don't give me that tired old argument that you can't compare the US with smaller countries...that's BS

originally posted by: olaru12
To understand how well Supply Side economics works...Look at the countries that enjoy the highest standard of living.

They are mostly socialists....with the US at #7



www.countryranker.com...

and don't give me that tired old argument that you can't compare the US with smaller countries...that's BS

It is not BS. the US has an exponentially larger, more diverse population, unchecked immigration, has to play global police, is the source of most innovation, etc. those countries are significantly smaller (Sweden has a population similar to NYC). The fact of the matter is that those countries are able to have their little socialist utopias because the US exists. They don't have to spend much on military. They leech off the innovations of our free markets, particularly with healthcare.

The ironic thing is that many of those countries are starting to crack, particularly with their immigration of Muslims.