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That’s not quite what “supply-side economics” means. From Wikipedia[1] > Supply-side economics is a macroeconomic theory that postulates economic growth can be

That’s not quite what “supply-side economics” means. From Wikipedia[1] > Supply-side economics is a macroeconomic theory that postulates economic growth can be most effectively fostered by lowering taxes, decreasing regulation, and allowing free trade. According to supply-side economics, consumers will benefit from greater supplies of goods and services at lower prices, and employment will increase. Cf. Demand-side economics[2]: > Demand-side economics is a term used to describe the position that economic growth and full employment are most effectively created by high demand for products and services. According to demand-side economics, output is determined by effective demand. High consumer spending leads to business expansion, resulting in greater employment opportunities. Higher levels of employment create a multiplier effect that further stimulates aggregate demand, leading to greater economic growth. > Proponents of demand-side economics argue that tax breaks for the wealthy produce little, if any, economic benefit because most of the additional money is not spent on goods or services but is reinvested in an economy with low demand (which makes speculative bubbles likely). Instead, they argue increased governmental spending will help to grow the economy by spurring additional employment opportunities. They cite the lessons of the Great Depression of the 1930s as evidence that increased governmental spending spurs growth. [1]https://en.m.wikipedia.org/wiki/Supply-side_economics https://en.m.wikipedia.org/wiki/Supply-side_economics [2]https://en.m.wikipedia.org/wiki/Demand-side_economics https://en.m.wikipedia.org/wiki/Demand-side_economics

imtringued 6y ago
Supply side economics works if everyone is poor and there isn't enough stuff for everyone, the assumption is that the supply side can never be saturated and there is always excess demand (think of a hedonic treadmill). It works fine in developing countries with a young population. As soon as you have a developed nation with an aging population where everyone is scrambling to save for their own retirement, you get the exact opposite problem. People are deferring spending, which means deferring incomes, which means deferring jobs which means unemployment. There is lots of money available to invest into businesses, in fact, people are investing too much, interest rates fall through the floor. Low interest rates allow unproductive companies to stay alive and when the long term debt cycle ends they all die at once. That's not good for your retirement. When you expect to retire in 10 years, you want your savings to actually be able to buy things, by making sure there are people in the future willing to work for your money. That's why you invest your savings, to make sure companies exist that sell stuff to you in the future, but how are those companies supposed to survive the 10 years until you retire, if you never buy anything?
mindslight 6y ago
One has to love these fake dichotomies where both "sides" suck. Where's the school of thought advocating for demand commensurate with what people can actually use, and that aims to require only as much labor as required to fulfill that? Probably not getting any phone calls from the economic schemers in Washington.

imtringued 6y ago

Supply side economics works if everyone is poor and there isn't enough stuff for everyone, the assumption is that the supply side can never be saturated and there is always excess demand (think of a hedonic treadmill). It works fine in developing countries with a young population. As soon as you have a developed nation with an aging population where everyone is scrambling to save for their own retirement, you get the exact opposite problem. People are deferring spending, which means deferring incomes, which means deferring jobs which means unemployment. There is lots of money available to invest into businesses, in fact, people are investing too much, interest rates fall through the floor. Low interest rates allow unproductive companies to stay alive and when the long term debt cycle ends they all die at once. That's not good for your retirement. When you expect to retire in 10 years, you want your savings to actually be able to buy things, by making sure there are people in the future willing to work for your money. That's why you invest your savings, to make sure companies exist that sell stuff to you in the future, but how are those companies supposed to survive the 10 years until you retire, if you never buy anything?

mindslight 6y ago

One has to love these fake dichotomies where both "sides" suck. Where's the school of thought advocating for demand commensurate with what people can actually use, and that aims to require only as much labor as required to fulfill that? Probably not getting any phone calls from the economic schemers in Washington.