Hmm...this term is a bit complicatable, and must be twisty in explanation....but I will try my best. With, even though, with total supply of commodities, and increase in productivity, money scarcity is the first form of exchange to fix it's roots, as in the respect with economic proforma. Tariffs, and revenues relieved not, but so as in simple terms; but with "redundancy" still in effect.. (if you like the term in this context...mediocretic state), to back up the efficiency in gross profit. Inflation?...bad news. Next month, in february, I will resume my studies in economics, and macro-enterprise, together with my incomplete IR paper, if this could boost debate here to help redifine it's meaning. Somehow, let this make my capitalists' stomachs protrude like capital "D" letter, to grope, if this sounds funny to laugh about.

an excellent economic ideas, it works and is very effective. however i do believe that the interests of the common people should be protected. a compromise should be made between supply side policies and the interests of the work force.

Supply-side economics started as a reaction to the 'stagflation' (low growth and high inflation) of the 70s. One clever idea was that the high taxes of the 70s discouraged work and productive investment, while encouraging tax-evasion and specualtive investments...which drove inflation ever higher. By cutting taxes, growth would increase...so tax cuts could, paradoxically, increase tax revenue. In the odd circumstances of the late 70s (when double-digit inflation was pushing middle-class people into high-income tax brackets, and creating more and more tax dodges) this theory had some merit. It has no merit in today's circumstances, when the goverment is running mammoth deficits and the wealthy are paying lower taxes than ever. In practice, supply-side economics was already dead by the mid-1980s; while the Regan tax cuts led to a slight increase in revenue (as predicted by the more rational supply-siders) they did not lead to any kind of bonanza that charlatans like Arthur Laffer predicted; most importantly, they did not pay for Regan's massive increases in defense spending. Only massive Japanese purchases of T-bonds kept the ship of state afloat in the 80s, as massive Chinese purchases has kept Supply Side II solvent under Bush. Eventually, the US dollar's international value will drop to the level of green toilet paper, our dollars will come marching home, and the good old days of stagflation will be with us again. By this time, SSE is likely to be completely discredited-outside of certain asylums and think tanks.

Very bad system. Makes the rich richer and the poor poorer.

Another con to rationalize additional parisitism by the rich.

i am for a national sales tax, or at least a flat income tax. The tax code should not be used for ecomonic stimulus or retardation. That is what the federal reserve system does through interest rates. Collect taxes necessary to run the govt and end it there.

Reagan should've been ashamed of himself for coming up with this voodoo doodoo. I remember all too well the job losses, the downsizings, and the newly homeless either dealt with their situation OR they committed suicide.

Here's the thing, while the trickle-down concept has some merit in the abstract, and I would agree the extremely high tax rates on the wealthy would be a drag on the economy, the truth is that giving tax breaks to the poor and the middle class is a better stimulant to the economy. Poor and middle class consumers SPEND the extra money in their pockets, bettering the lives of their families, creating jobs mass-producing the items in question, AND making the owners of said companies wealthier. This is how the underlying economy operates anyway, the masses buy products and services produced by the wealthy. For the most part people don't become billionaires producing products for the wealthy, they become that way by selling a whole lot of things to the middle class and the poor. Everybody wins in this scenario. The Bush Administrations' targeting of tax cuts primarily at the upper income brackets has resulted in a stagnant economy with little economic benefit to the largest portions of the population. The current situation with the rich having a field day while the rest of the population struggles is borne out by the sales figures in the retail sector. High-end retailers such as Neiman Marcus and Nordstrom are flourising with increased sales and profits while the likes of Walmart and Costco and other retailers who cater to the middle class and the poor are feeling the pinch, not to mention the societal and governmental costs involved with a sinking middle and lower class, such as crime, unemployment, health issues, erosion of local tax base, etc.

It works. Many of the morons bashing it here obviously have no understanding of the concept.

not so much a bad idea as simply not really a worthy goal in and of itself.

oh yeah trickle down economics really work for me and family all i remember that for all my mother's hard work none of reagan's policies worked (triggered huge deflicts created a criminal class and huge homeless populations around the country)and killed unions in this country made me a socialist for life.

Supply side economics is unfairly characterized as trickle-down economics. Economists from this school of thought generally focus in on producers, not consumers of goods. The central tenet of fiscal suply side policy is that lower taxes achieves higher levels of production, growth and employment while maintaining the same or even an expanded tax base. Tax cuts do help out economic growth; the past 40 years since the Kennedy Adminstration has seen the advancement of these ideas in the public arena with the result that the economy since then has grown more rapidly than at any other time in US history. Monetary supply siders insist that the dollar must keep to a fixed standard to give stability to the national economy. It should be pegged to gold since this is a good indicator of how healthy the economy is at any given time. As opposed to most Keynesians, supply siders believe that the amount of money in any given system is not a good target to base future economic growth. Rather than flooding the market with dollars to alleviate inflation, what should be done is tighten monetary policy along with tax cuts to grow the economy. The goal is to control inflation while preventing economic stagnation. In order to maintain currency stability, you have to target gold prices because this promotes stability. Higher gold prices indicates excess liquidity, so that would mean that the government would have to sell more securities to take in the extra dollars. Falling gold prices indicate that more dollars need to be printed to satisfy demand for the currency. Europe will probably end up doing this; the result might be that the OPEC nations (Oil producting nations) will probably switch to the Euro, causing economic problems at here in the US. The fed needs to pay more attention to gold prices. During the late-1990's the Fed paid more attention to inflation and less to falling gold prices, which had reached an all time low of 253 dollars per ounce in 1999. The result was massive deflation in the commodities market. If we had paid more attention to this deflation in the late-1990's, the economy, specifically equity markets, would be in a much stronger position today. The critical theme is that we need to adopt a fixed value for the dollar so we can because a reliable lender in the international community. In the aggregate, a floating dollar has caused more instability in international financial markets than is really necessary or warranted. Supply-side isn't about soaking the rich like it's Keynesian detractors claim, it's about promoting a stable monetary policy. It will only strengthen the US's position throughout the world if we're seen as more reliable.

Supply-Side Economics (as I understand it) is basically the philosophy of lower marginal tax rates so as to provide incentives for labor based wealth creation (ie earned income) as well as incentives to keep capital invested within the taxing jurisdiction by increasing after-tax returns on investment. While the incentive to work may seem marginal at best when applied on the individual level, when the concept is applied on a macro scale (ie thousands and millions of individuals), the effect can be quite substantial. As for encouraging capital investment, this is more intuitive as capital can relatively easily move to and from different taxing jurisdictions (eg county to country or state to state). The overall effect can easily be an actual increase in tax revenues even though tax rates fall since the tax base increase more than offsets the lower tax rate. The magical sweet spot where tax revenues are maximized will differ between taxing jurisdictions due to many factors including how heterogenous and risk tolerate the taxed society is.

None of you have studied this in school, have you? Perhaps you all dropped out before Econ 101???

Any economic system which recognizes the rights of producers and consumers, and includes tax cuts, is a good thing.

Right wing, it was also tried by Napolian (according to a docci I've seen on him) and some one who lived under Musolini told me he used it too (and it worked). I am against it for other reasons such as pensioners cannot be supported.

Supply side works FOR THE RICH AND POWERFUL. They got all the laws passed. Now look at where the factories are moving too. Who are losing their jobs. Look at the most recent eco indicators for the U.S. not pretty and getting worse. I say tarrif all those U.S. made products that are made in foreign countries and then shipped back to the U.S. Hit em hard and see what the so called U.S. big business interest say. Hit them in the pocket book where they will here you.

An Economic system that understands the nature of economic man rather than the nature and avarice of political man. Excessive money taken out the productive economy for Government use is destructive of the general economy. Supply side Economics was the iron rule of the American Republic for most of its history. It was only the exaltation of envy by the democratic party that enshrined the odious tax system upon this Republic.

The human species has a tendency to apply principles of one system to others without thinking that the analogy is not logical or applicable. For instance, "Opposites attract" is proven in regard to magnetic poles, but it is also used in reference to emotional attraction, when in reality, most people prefer someone with similar qualities that they can relate to. This in mind, consider when Reagan first used the term "trickle-down economics" as if money obeyed the laws of gravity. People bought it without thinking, and now we have to show for it giant corporations going bankrupt. Thousands of the grunts are suddenly jobless and in debt, while the CEO's open their golden parachutes and manage to live high despite the suffering they've rained down. Eat the rich!

Like Errol and Ruby I see the value of this economic ideology. Unlike some posters I was not born in the 1980’s - I lived through them as a tax-paying adult - an experience I would easily consider more valuable than any second hand information I might have received. Also, like Ruby, I think many people often let their irrational hatred of politicians influence their opinions. The fact is that during the 1980’s things did begin to improve overall economically. And guess what – YES - the wealthy DO spend their money – it’s called investing. Smart investments that include building companies is one way they become or stay wealthy. With the obvious financial growth that has occurred over the past 20 years it is patently ridiculous to believe otherwise. The fact that those with the means do indeed invest in the growth of business obviously creates JOBS and JOBS are what give the middle and lower tax brackets a place to go to EARN money. Now, it may not be as relaxing to get up and do the 8-5 thing 5 days a week as is to walk to your mailbox and pull out a check but it does give you a chance to earn something more than money - one of the bonuses of accepting responsibility for yourself is self-esteem. I’m by no means wealthy but I do resent my tax dollars going to programs which continue to enable many (NO, not all) able bodied people to collect rather than earn their livings. I would be much more supportive if the social programs were more focused on helping people who find themselves in a temporary bind to be independent. On the other hand, why should people who are skilled at making a living be punished for being to be successful? After all, whether you love, hate or are just plain jealsous the fact remains that they WORKED for it – if they want to extend a helping hand (and many have and do) that’s wonderful, commendable, and humane. But we should all remember - the wealthy do not owe what they have simply because they have it and someone else does not.

It doesn't matter that I just hated Reagan in general. The simple fact is that "supply-side economics" doesn't work. On paper, it sounds like a decent idea - the wealthy get their taxes lowered, so they spend more, putting it back in the economy, and everybody gets richer. But there's a problem: the wealthy don't spend that extra money. They save it, so that we get big piles of money not doing anything to help the economy, which means you're faced with a trade-off. Either the economy stagnates (and the poor and middle class certainly aren't benefitting) or we have inflation, because more money is needed. Republicans, who generally like this system, will do anything to keep down inflation (which isn't good either) so that doesn't leave great options. And since the economy wasn't boosted, the government doesn't get back the revenue that it would have had from taxing the rich, so we have to cut spending from social programs or go into massive deficit (both Reaganomic tenets) or both. In simpler terms for those who are less intelligent: the system is a fiasco, a farce, and a failure. Take care, everyone!

This is really just major tax cuts for the rich to benefit the rich while even the upper middle class and below get a negligible amount of tax relief. While in office, Reagan gave so much more wealth to the top 1% of society when he left office than when he began. The number went from 22% in 1975 to 42% in 1992, which is thanks in most part to supply-side economics.

Supply-side economics works. It's as simple as this. If people have more money to spend and invest, they spend and invest more and that helps the economy. More jobs are created and existing employers are able to raise wages. People have more money to spend when they pay less taxes. It helps everybody! I'm not rich by any means, but I know I can benefit from supply-side economics because it's logical, and because I saw the failing economy of the 70s improve after Reagan took over in the 80s. I can't help but think that people who disagree with supply-side economics just hate Reagan or conservatives in general so they resort to the old cliches - "It's robbing from the poor and giving to the rich" etc.

With Robert Mundell receiving the Nobel Prize in economics last year, perhaps supply-side theory will finally receive more respect in the academy. Every supply-side tax cut (i.e., lower marginal rates across the board) has been effective in actually RAISING gov't revenue, by stimulating higher economic growth. It was as true under JFK as it was under Reagan. But as much as I adore Ronald Reagan, I have to say that I believe he failed in underscoring the most important aspect to why supply-side tax cuts work... Reagan always posed it as a question of "incentive", because it had been personally true for him as a Hollywood actor in the 40s and 50s. "Why bother making another picture if I'm facing a 90% tax rate?" That's absolutely true when we're talking about a dramatic change (as when Reagan lowered marginal rates on the highest bracket from 70% to 28%). But it's less convincing that people "work harder" at 33% than 38% tax rates. Still, you can achieve very strong benefits from that reduction (i.e., what Bush is proposing now). Why? Because rich people use money more productively than government. When private citizens keep more of their money, they're apt to save and invest. The rich especially can afford speculative ventures, so that risky start-ups like Apple Computer circa 1981 get seed money. Of course, these types of companies are the ones that keep our economy so dynamic and innovative. If that money went into gov't hands, it would be shuffled among bureaucrats, given to "interest groups" that can deliver votes, or otherwise used in a manner that doesn't respect the market (i.e., what people find useful). Because Republican advocates of supply-side economics have failed to make that point, Democrats can still demagogue any tax cut by saying "the rich don't need more money!" The proper response would be, "Who cares if they need it? They'll use it a lot more productively than pandering politicians with $2 trillion in their pockets." I hope someone starts to make it soon, and loudly.