A Fact Liberals Deny

[Wake up CALL]

Reagan Was Right

An interesting and objective perspective on supply side economics.

[Clarkmeister]

Yup, that quite nicely sums up all the benefits.

[Cyrus]

Your link to the Supply Side Economics website leads nowhere !

I cannot think of a better demonstration of the value of the concept of Supply Side Economics itself.

Sincere congratulations.

[adios]

Good quips about the link. Just curious about what "Supply Side Economics" means to you all. I read a lot of stuff attributed to supply side economics that I'm not sure should be. Here's a synopsys:

Supply-Side Economics

An excerpt from the link:

Theory: Incentives Matter Theory: Incentives Matter

Two principles from the first course in economics:
– If you tax something, you get less of it.
– If you subsidize something, you get more of it.

What have we as a society been taxing and subsidizing?

We have taxed:
– Income
– Employment and productive effort
– Investment and Saving
– Production of goods and services that the population at large needs and wants, worth more than the cost of production
– (And we’ve increase regulation of these
things.)

Is it any wonder we have gotten less of these?

What have we subsidized?
– Unemployment and leisure
(unemployment compensation, welfare, redistribution)

– Lack of productivity and contribution to society (welfare, etc.)

Is it any surprise that we’ve gotten more of these things?

[Cyrus]

-If you tax something, you get less of it.
-If you subsidize something, you get more of it.

Subsidizing something, more often than not, means allowing into the "market" a "something", a "product", that should not be there in the first place. Classical.

"We have taxed: Income, Employment and productive effort, Investment and Saving, Production of goods and services that the population at large needs and wants worth more than the cost of production"

It's a question of balance, rather than absolutes. (No this isn't about vodka either, Wake up Call.) But is America taxing the above-mentioned endeavors too much? One can only compare, since the alternative is to tax nothing and regulate nothing -- and let the street lights be the object of auctions.

Compared to the rest of the advanced, western-style democratic world, a world that includes Japan, the United States are doing alright. In fact, those that "create jobs" and all the other good things you mentioned are practically subsidized, instead of taxed.

Why aren't there more of them, then?...

[adios]

Cyrus obviously doesn't believe that the two principle he quoted should be included in any economics course let alone the first course in economics.

Two principles from the first course in economics:
– If you tax something, you get less of it.
– If you subsidize something, you get more of it.

[Wake up CALL]

Allow me to try this again Reagan's Great Insight This link should work, however I did appreciate the humor regarding my blank link [img]/images/graemlins/smile.gif[/img]

[Cyrus]

"Cyrus obviously doesn't believe that the two principles should be included in any economics course let alone the first course in economics."

Where did I say or imply that?

I simply commented on the main effect of subsidisation, Tom, a gov't policy that happens to be anathema for the American Right. The economic tenet is that, by subsidizing, we are distorting.

But that shouldn't make subsidies necessarily a bad thing! We know that activity X would disappear for example, were it not for state subsidies, but we need X for the kids, for instance. Or the elderly. (To wit, we subsidize that which would normally could not survive the free market but we, as a society, deem worthy to keep, anyway.)

As in the case of taxes, it's a question of balance rather than absolutes.

And another thing : the words "more of it" might be taken to imply that when taxes are lowered across the board, the national tax revenues will increase overall (since taxes from increased business activity will more than make up the loss from the rate drop). Well, instead of having a 20-post debate about it, let me just point out that this "theory" has proven to be disastrously false when it was actually applied during Reagan's presidency. As was predicted by every serious economist, tax revenues dropped.

--Cyrus

PS : I also give Reading 101 but you seem too advanced for that. [img]/images/graemlins/grin.gif[/img]

PPS : Did you read the guy's rant involving poker ? It's in the same website that Will not CALL provided a link to. Your hero is a funny guy!

[Wake up CALL]

" Well, instead of having a 20-post debate about it, let me just point out that this "theory" has proven to be disastrously false when it was actually applied during Reagan's presidency. As was predicted by every serious economist, tax revenues dropped."

You must have been living in a different country than me if you believe that to be true. Temporarily they dropped but then the economy recovered due to the tax rate decrease and the revenues increased accordingly.

[adios]

A few facts which I've pointed out before on this forum and the stock market forum, tax revenues are dependent on GDP growth, the higher the growth the higher the tax revenues. During the era of disinflation that includes the Reagan, Bush Sr., Clinton, and Dubya; GDP growth on a compounded basis was the highest under Reagan (it's not even close) even with a nasty recession during his administration brought about by then Fed Chairman Paul Volker's campaign to break the "back of inflation" with unprecedented high short term interest rates. What Cyrus states is just not true. I've posted a link to Federal Budget Data quite a few times which shows tax revenues and GDP growth rates.