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The thing I don't like about this is that it treats trickle-down economics as if it's something that needs to be debunked. Trickle-down economics has never been

The thing I don't like about this is that it treats trickle-down economics as if it's something that needs to be debunked. Trickle-down economics has never been a real economic policy, and never been seriously advocated by federal policy-makers. It is an entirely pejorative term created by detractors of supply-side economics. The policies of supply-side economics, however, are much more defensible, but it seems people would much rather pick on the strawman.

smallmancontrov 2mo ago
You're right, it's not one lie, it's a pack of lies, trotted out every time congress needs to justify another capital gains tax cut or rationalize why the next tax hike needs to target work not wealth.
- ghurtado 2mo ago
  It's much more than a set of lies, it's an entire cultural phenomenon 100% USA made. Unlike many of our worst ideas, I'm actually surprised this one didn't become more popular around the world.
  - smallmancontrov 2mo ago
    I've been reading about the US progressive era of 100 years ago and I am seeing from Robber Barons many of the same arguments that I heard growing up from my Reagan-worshipping parents. It's both frustrating and encouraging to know that we soundly defeated these at one point before the pendulum swung back. They didn't invent a new pack of lies, they just put the old one in the microwave and gave it 30 seconds. I suspect that were I to learn about the industrial revolution I would find that the US Robber Barons didn't invent their talking points either and that they simply took British Industrialist talking points and, err, gave them 3 minutes on the stove.
    - roughly 2mo ago
      Worth a read: https://www.hachettebookgroup.com/titles/brian-merchant/blood-in-the-machine/9780316487740/ https://www.hachettebookgroup.com/titles/brian-merchant/bloo...
  - econ 2mo ago
    That's quite funny. I recall several people not even responding but just silently staring at the proponent. Other bad ideas (like privatization) were adopted by repeating opposing talking points.
- twoodfin 2mo ago
  When is the last time either of those things (capital gains rate cuts, tax hikes on the lower 90% of income earners) happened? I think it’s been decades by now.
  - vlovich123 2mo ago
    When did the previous tax cuts get rolled back vs getting extended in perpetuity?
  - smallmancontrov 2mo ago
    OBBB Opportunity Zones? Bonus depreciation? If you are unfamiliar with these or their applications to tax avoidance, you are outing yourself as a wagie running defense for your economic betters.
    - twoodfin 2mo ago
      Sorry, which of those are capital gains rate cuts or tax hikes on workers?
      - smallmancontrov 2mo ago
        Those are both capital tax cuts. The hikes on labor come later, when the debt needs to be paid and Democrats are once again tricked into being fiscally responsible.
  - biophysboy 2mo ago
    TCJA made changes to corporate capital gains, no? As for tax hikes <90%, this hasn’t occurred in income; the opposite has occurred. You could make the case that it hasn’t been worth it for the poorest brackets though, given other coincident policy changes
shadow_it 2mo ago
this is correct. i suspect many simply do not know this because the straw-man is so pervasive.
ghurtado 2mo ago
> as if it's something that needs to be debunked. When half the country has believed something for close to a half a century, across multiple generations, you bet your ass it needs to be debunked. The fallacy of the "precious job creators" is as American as "pulling yourself up by your bootstraps" The fact that you and I were not dumb enough to fall for it doesn't really help anyone in the grand scheme of things. There's still an insane amount of work left in educating the public, and we may even be regressing at this point.
- loeg 2mo ago
  No one believes in trickle-down economics. As GP said, it's a pejorative straw man invented by its opponents.
  - smallmancontrov 2mo ago
    So you're saying that when the Fox News talking head drags out the Laffer Curve to smuggle into the conversation the assumption that the next round of tax cuts for billionaires will unleash enormous economic growth that net-benefits everyone, he doesn't believe what he's saying? You know what, you might just be right.
  - jibal 2mo ago
    [flagged]
    - manlymuppet 2mo ago
      Can I extend an olive branch anyways? I really believe in good faith, civil conversation, and I'd love the opportunity to make amends here. You've said you won't respond further, but seeing your passion, I think it would be great if we could have a civil conversation. I genuinely believe that trickle-down and supply-side economics are meaningfully different things, and I think there would be much to gain from hearing your perspective in more detail. My thesis boils down to the fact that supply-side economics (say for example, something like small business tax credits) often gets conflated with trickle-down economics undeservedly. Trickle-down policy--take money from the poor and give it to the rich indiscriminately--is an objectively horrible idea, but I would say also that nobody is seriously arguing for that sort of thing. (Also, I'm have no idea what "GP" stands for.)
diob 2mo ago
I mean, when I googled supply-side economics it said it was another name for trickle-down economics. I'm interested in how you'd say they differ, honestly, not trying to be argumentative. I found at least found one analysis (by a left leaning think tank, so take it for what you will) https://www.americanprogress.org/article/the-failure-of-supply-side-economics/ https://www.americanprogress.org/article/the-failure-of-supp... that seems to show that supply-side economics hasn't panned out. It seems obvious that there is an optimal tax rate, too much or too little is bad. But I'd definitely say right now we are far far on the too little side of things.
- manlymuppet 2mo ago
  I don't know where you're looking, but if you go to the first result for trick-down economics, the Wikipedia page, within the first few lines it mentions how the term is used, and how it was created by detractors of supply-side economics. It's never been a real policy. "the term 'trickle-down economics' was popularized by Democrats in the US to derogate Reaganomics" If you similarly look up supply-side economics, at the top of the Wikipedia page it says "not to be confused with trickle-down economics" I'll happily take you on your word that you're not trying be argumentative. It's certainly not your fault that this strawman has been so widely spread that people think it's a real policy idea now. It is confusing to me too. As for whether supply-side economics actually works, to say it "hasn't panned out" I think, is really oversimplifying. Has capitalism (efficient markets but also environmental decay) worked? Has socialism (universal healthcare but also the military) worked? It depends on who your asking and in what regard. In some ways yes and in other ways no. The category is too broad. Also, just as important as how much we tax is where we tax. Carbon tax (very good) vs stamp duty tax (very bad). Competent policy often allows you to have your cake (supporting government services) and eat it too (not sacrificing growth).
  - odo1242 2mo ago
    What is the difference between how trickle-down economics is portrayed vs. the actual ideas of supply-side economics? You have to specify how / in what way it's a strawman
  - 2mo ago
dasil003 2mo ago
When you are rich, it allows a lot more time and funding to come up with arguments supporting policies that will make you even more rich.
- econ 2mo ago
  The sad part is that, with the same formula, they could generate good ideas that also make them more rich.
  - smallmancontrov 2mo ago
    Yeah, but that's hard. Taking lunch money from the poors is much easier.
diabeetusman 2mo ago
So do %s/trickle-down/supply-side/g , then, if it's the term that's bothering you. Doesn't "debunking" trickle-down economics then, by extension, debunk supply-side economics? I'm not clear on the meaningful difference
- manlymuppet 2mo ago
  I don't know regex, but to be clear: trickle-down economics and supply-side economics are very different things. I don't blame you for conflating them since they are intentionally very confusing. One is a policy and the other is basically the name of a common criticism for that policy. For example, the Cartesian circle does not refer to any of the many mathematical advancements Rene Descartes discovered. Instead, it's the name of a common criticism for an argument he made. You can think of it like that.
  - liveoneggs 2mo ago
    You just said trick-down wasn't a real thing so how can you say it's different from supply-side?
    - manlymuppet 2mo ago
      By "not real" I mean it's not a real policy. They are different in that one is a policy and the other is not.
      - liveoneggs 2mo ago
        how about this - Trickle Down is the implementation of Supply Side theory
        manlymuppet 2mo ago
        Yeah I think that's also very inaccurate. Supply-side theory is not about indiscriminately taking money from the poor and giving it to the rich.
alistairSH 2mo ago
You'd think so but not even a decade ago Kansas tried it again and it failed and the GOP continues to cut taxes for the wealthy and people keep electing them. Most of the nation (and world) never took any economics. This stuff is all magic or religion or whatever to them. Ronnie Raygun is as good as a saint to much of the US.
- thegagne 2mo ago
  Non-typical Kansas voter here. I reviewed candidates and any mention of “cut taxes” is a hard no from me. I have kids, and I want to make sure their schools are fully funded. The only tax cuts I would support would be on essentials like food and clothing. I also don’t like targeted new taxes, like taxing sports gambling and recreational drugs, because it unnecessarily entrenches those in our society. Even worse is when they earmark it, like using casino money to fund schools.
watwut 2mo ago
I have literally seen it being defended, in all seriousness, after the economy crash. When the financial institutions were bailed out. Maybe not the name, but the literal idea that the money given to them will flow down. There were even graphics gping with it. Again, in all seriousness. So yes, it needs to be debunked.
- anonymars 2mo ago
  I think a large part of the issue, ignoring the self-interest one (certainly those of money will argue that their taxes should be less) is that both the supply and demand side can interfere with the proper functioning of the economy My quick take is that during the 2008-ish great financial crisis, those in power were children of the 1970s supply-side shocks (demand>supply resulting in shortages and inflation), and used precisely the wrong tool to handle the demand-side shock of the GFC: interest rates were zero-to-negative, indicating a surplus of investable cash and no place to put it to work, and policymakers responded by...cutting everything on their side to the bone as well (austerity). At a high level: the economy was literally trying to pay the government to spend money on productive investment, but this once-in-a-lifetime opportunity was largely squandered
vlovich123 2mo ago
Can you describe the defensible policies of supply-side economics? That's as vague a term as trickle-down economics to me. Supply-side economics is based on a flawed premise of looking at only the Laffer curve and saying if taxes are too high the economy suffers, therefore we must make the tax rate arbitrarily low. In reality though there are more nuances to making the tax rate arbitrarily low (e.g. high inflation and cost of living for starters).
- manlymuppet 2mo ago
  Sure. I think supply-side economics deserves more nuance than simply thinking we need to make the tax rate arbitrarily low. The Laffer curve isn't the only thing you should look at, since where you tax can be just as important as how much you tax. Take corporate taxes for example. If one were to advocate to get rid of corporate taxes, you might think that person unabashedly biased. What kind of person would want to give breaks to the richest people (corporations) when everyday people are the most in need of those kind of cuts, right? But the reality is that when you tax corporations, that is one of the most economically damaging taxes you can do. How about then, rather than taxing corporations, you tax the benefactors of those corporations directly? When you tax Walmart, sure you tax the C-suite, but you also make it so that Walmart can hire less people, and invest less in the economy. Rather than taxing the corporation, what if you just taxed the C-suite directly? Tax the Walton family, or the highest earning employees directly, and you get to have your cake and it too since you get similar amounts of tax revenue without damaging the economy nearly as much. You'll see this often in the social democracies of Scandinavia, like Sweden or Denmark. These are countries with strong welfare states, and yet, the corporate tax rates are often lower than the U.S., even if you look at the most red states. This is supply side economics at work, and an example of how supply-side economics can be easily misrepresented.
  - orwin 2mo ago
    You can't do that, because the Walton family and others are really, really good at avoiding getting taxed. Even small business owners like my uncles do whatever they can to avoid any sort of taxes. I never paid VAT on sport equipments or DIY equipment, which are what they sold, but we also managed for my whole school life to avoid paying VAT on school supplies, and it's probably the same for my 22 cousins. Tax avoidance is a really good hobby for those people.
brightball 2mo ago
I always like to approach this conversation with a question: Should business that actually do create jobs in practice get bigger tax breaks? For example, if I by some miracle create a 1 man company that makes $100 million / year profit and somebody else creates a company that makes $100 million / year profit but has 2,000 employees...should the two companies be taxed differently? Walmart employees 1.6 million people in the US. 68% are full time. Average salaries range from $18.25 / hr (field associate) to $27 / hr (supply chain). Median $30,520 across all US employees. 156,000 employees are estimated to be enrolled in Medicaid (9.4%). Amazon employees 1.1 million. $23 / hour average for field / fulfillment. Median $53,211 across all US employees. 123,000 employees are estimated to be enrolled in Medicaid (11.7%). Both offer pretty extensive career development, training and tuition assistance programs. Profit per employee: - Walmart $10,800 / employee (1.6 million employees) - Amazon $50,000 / employee (1.1 million employees) By comparison: - AppLovin $3.7 million / employee (898 employees) - NVIDIA $2.86 million / employee (42,000 employees) So what if we actually had a tax strategy that literally was aimed at "job creators" rather than "capital gains"? What would that look like?
- twoodfin 2mo ago
  It would incentivize the wrong things: All else being equal, you want to produce more with less labor and other inputs. It’s a good thing farming needs an order of magnitude fewer farmers than a century ago.
  - magicalist 2mo ago
    > All else being equal, you want to produce more with less labor and other inputs Is that actually true? Maybe I'm being dense right now but that's not completely apparent to me. More abundance per person does seem generally better (albeit there's eventually diminishing marginal utility), but that's not the same thing as society as a whole producing more with less labor. Maybe "all else being equal" is the operative condition here, like assuming that the economy would be able to absorb newly freed labor into new economic activity? You can also optimize some good things out of existence in this manner, and it's still not clear that robots are going to be able to swoop in and save that kind of newly uneconomical activity, at least within my lifetime.
autoexec 2mo ago
The actual paper never uses the phrase trickle-down economics and just covers how tax cuts for the rich don't improve the economy but does increase income inequality
deleted 2mo ago
[deleted]
bluealienpie 2mo ago
So no candidate ran on tax cuts? Explicitly for high income earners?
gamblor956 2mo ago
Trickle down economics is just another name for supply-side economics. They're one and the same. The difference is that the name "supply side economics" focuses on the the beneficiaries while the name "trickle down economics" focuses on the results. Supply side economics owners claimed that benefits would "flow" down from the capital owners. The pejorative name "trickle-down economics" accurately reflects that the quantity of benefits that "flows" down to everyone else from those benefiting from massive tax cuts is a mere trickle of the money that the supply side saved from the tax cuts.
regularization 2mo ago
> Trickle-down economics has never been a real economic policy, and never been seriously advocated by federal policy-makers. It is an entirely pejorative term created by detractors of supply-side economics. https://thehill.com/homenews/house/3522907-gop-lawmaker-byron-donalds-says-trickle-down-economics-does-work/ https://thehill.com/homenews/house/3522907-gop-lawmaker-byro... Well here is one of those federal policy-makers you say doesn't exist, a Republican congressman, advocating four years ago for trickle down economics and advocating for "...letting the free market - and yes, trickle down economics, which does work - actually flourish in the United States"
- smallmancontrov 2mo ago
  If only big players had KPIs like us little folks! r>g is close to a complete debunk of the trickle-down narrative, today and through history, and it's a remarkably sturdy result.
- win311fwg 2mo ago
  That's not serious advocacy as trickle-down economics isn't a policy that can be implemented. The policy associated with trickle-down economics is known as supply-side economics. Trickle-down economics is something created for a comedy bit to express, in a humorous way, why supply-side economics doesn't work. Even if you don't buy into the underlying message of the comedy routine and believe that supply-side economics does work, you still cannot implement that comedy routine as government policy. That... doesn't make any sense. Clearly that guy you refer to was performing his own comedy routine.
  - smallmancontrov 2mo ago
    "Supply-side economics" is a technocratic rebranding of trickle-down economics, adding just enough nuance to force the draw rhetorically while advocating policy that is completely indefensible to anyone who has enough time to properly examine the nuance.
    - win311fwg 2mo ago
vannevar 2mo ago
The article focuses specifically on the economic effects of tax cuts, concluding that they have little overall positive effect on economic or job growth. This is consistent with meta-studies looking at the relevant research. To the extent that "supply-side economics" predicts that tax cuts will stimulate the economy, it's fair to say that it has indeed been debunked.
miyoji 2mo ago
This is ridiculous. "Trickle-down economics" is just another name for "supply-side economics". You can also call it "voodoo economics", as George H.W. Bush did. They're all referring to the exact same failed policies that have been criticized for failing to achieve what they claim to achieve for 130 years.
throw0101a 2mo ago
> The policies of supply-side economics, however, are much more defensible, but it seems people would much rather pick on the strawman. Lowering taxes is one of the policies of supply-side economics: > Supply-side economics is a macroeconomic theory postulating that economic growth can be most effectively fostered by lowering taxes, decreasing regulation, and allowing free trade.[1][2] * https://en.wikipedia.org/wiki/Supply-side_economics https://en.wikipedia.org/wiki/Supply-side_economics Along with decreasing regulation and allowing free trade, so you've just knocked down one of the reasons to think about supply-side stuff seriously.

smallmancontrov 2mo ago

You're right, it's not one lie, it's a pack of lies, trotted out every time congress needs to justify another capital gains tax cut or rationalize why the next tax hike needs to target work not wealth.

ghurtado 2mo ago
It's much more than a set of lies, it's an entire cultural phenomenon 100% USA made. Unlike many of our worst ideas, I'm actually surprised this one didn't become more popular around the world.
- smallmancontrov 2mo ago
  I've been reading about the US progressive era of 100 years ago and I am seeing from Robber Barons many of the same arguments that I heard growing up from my Reagan-worshipping parents. It's both frustrating and encouraging to know that we soundly defeated these at one point before the pendulum swung back. They didn't invent a new pack of lies, they just put the old one in the microwave and gave it 30 seconds. I suspect that were I to learn about the industrial revolution I would find that the US Robber Barons didn't invent their talking points either and that they simply took British Industrialist talking points and, err, gave them 3 minutes on the stove.
  - roughly 2mo ago
    Worth a read: https://www.hachettebookgroup.com/titles/brian-merchant/blood-in-the-machine/9780316487740/ https://www.hachettebookgroup.com/titles/brian-merchant/bloo...
- econ 2mo ago
  That's quite funny. I recall several people not even responding but just silently staring at the proponent. Other bad ideas (like privatization) were adopted by repeating opposing talking points.
twoodfin 2mo ago
When is the last time either of those things (capital gains rate cuts, tax hikes on the lower 90% of income earners) happened? I think it’s been decades by now.
- vlovich123 2mo ago
  When did the previous tax cuts get rolled back vs getting extended in perpetuity?
- smallmancontrov 2mo ago
  OBBB Opportunity Zones? Bonus depreciation? If you are unfamiliar with these or their applications to tax avoidance, you are outing yourself as a wagie running defense for your economic betters.
  - twoodfin 2mo ago
    Sorry, which of those are capital gains rate cuts or tax hikes on workers?
    - smallmancontrov 2mo ago
      Those are both capital tax cuts. The hikes on labor come later, when the debt needs to be paid and Democrats are once again tricked into being fiscally responsible.
- biophysboy 2mo ago
  TCJA made changes to corporate capital gains, no? As for tax hikes <90%, this hasn’t occurred in income; the opposite has occurred. You could make the case that it hasn’t been worth it for the poorest brackets though, given other coincident policy changes

shadow_it 2mo ago

this is correct. i suspect many simply do not know this because the straw-man is so pervasive.

ghurtado 2mo ago

> as if it's something that needs to be debunked. When half the country has believed something for close to a half a century, across multiple generations, you bet your ass it needs to be debunked. The fallacy of the "precious job creators" is as American as "pulling yourself up by your bootstraps" The fact that you and I were not dumb enough to fall for it doesn't really help anyone in the grand scheme of things. There's still an insane amount of work left in educating the public, and we may even be regressing at this point.

loeg 2mo ago
No one believes in trickle-down economics. As GP said, it's a pejorative straw man invented by its opponents.
- smallmancontrov 2mo ago
  So you're saying that when the Fox News talking head drags out the Laffer Curve to smuggle into the conversation the assumption that the next round of tax cuts for billionaires will unleash enormous economic growth that net-benefits everyone, he doesn't believe what he's saying? You know what, you might just be right.
- jibal 2mo ago
  [flagged]
  - manlymuppet 2mo ago
    Can I extend an olive branch anyways? I really believe in good faith, civil conversation, and I'd love the opportunity to make amends here. You've said you won't respond further, but seeing your passion, I think it would be great if we could have a civil conversation. I genuinely believe that trickle-down and supply-side economics are meaningfully different things, and I think there would be much to gain from hearing your perspective in more detail. My thesis boils down to the fact that supply-side economics (say for example, something like small business tax credits) often gets conflated with trickle-down economics undeservedly. Trickle-down policy--take money from the poor and give it to the rich indiscriminately--is an objectively horrible idea, but I would say also that nobody is seriously arguing for that sort of thing. (Also, I'm have no idea what "GP" stands for.)

diob 2mo ago

I mean, when I googled supply-side economics it said it was another name for trickle-down economics. I'm interested in how you'd say they differ, honestly, not trying to be argumentative. I found at least found one analysis (by a left leaning think tank, so take it for what you will) https://www.americanprogress.org/article/the-failure-of-supply-side-economics/ https://www.americanprogress.org/article/the-failure-of-supp... that seems to show that supply-side economics hasn't panned out. It seems obvious that there is an optimal tax rate, too much or too little is bad. But I'd definitely say right now we are far far on the too little side of things.

manlymuppet 2mo ago
I don't know where you're looking, but if you go to the first result for trick-down economics, the Wikipedia page, within the first few lines it mentions how the term is used, and how it was created by detractors of supply-side economics. It's never been a real policy. "the term 'trickle-down economics' was popularized by Democrats in the US to derogate Reaganomics" If you similarly look up supply-side economics, at the top of the Wikipedia page it says "not to be confused with trickle-down economics" I'll happily take you on your word that you're not trying be argumentative. It's certainly not your fault that this strawman has been so widely spread that people think it's a real policy idea now. It is confusing to me too. As for whether supply-side economics actually works, to say it "hasn't panned out" I think, is really oversimplifying. Has capitalism (efficient markets but also environmental decay) worked? Has socialism (universal healthcare but also the military) worked? It depends on who your asking and in what regard. In some ways yes and in other ways no. The category is too broad. Also, just as important as how much we tax is where we tax. Carbon tax (very good) vs stamp duty tax (very bad). Competent policy often allows you to have your cake (supporting government services) and eat it too (not sacrificing growth).
- odo1242 2mo ago
  What is the difference between how trickle-down economics is portrayed vs. the actual ideas of supply-side economics? You have to specify how / in what way it's a strawman
- 2mo ago

dasil003 2mo ago

When you are rich, it allows a lot more time and funding to come up with arguments supporting policies that will make you even more rich.

econ 2mo ago
The sad part is that, with the same formula, they could generate good ideas that also make them more rich.
- smallmancontrov 2mo ago
  Yeah, but that's hard. Taking lunch money from the poors is much easier.

diabeetusman 2mo ago

So do %s/trickle-down/supply-side/g , then, if it's the term that's bothering you. Doesn't "debunking" trickle-down economics then, by extension, debunk supply-side economics? I'm not clear on the meaningful difference

manlymuppet 2mo ago
I don't know regex, but to be clear: trickle-down economics and supply-side economics are very different things. I don't blame you for conflating them since they are intentionally very confusing. One is a policy and the other is basically the name of a common criticism for that policy. For example, the Cartesian circle does not refer to any of the many mathematical advancements Rene Descartes discovered. Instead, it's the name of a common criticism for an argument he made. You can think of it like that.
- liveoneggs 2mo ago
  You just said trick-down wasn't a real thing so how can you say it's different from supply-side?
  - manlymuppet 2mo ago
    By "not real" I mean it's not a real policy. They are different in that one is a policy and the other is not.
    - liveoneggs 2mo ago
      how about this - Trickle Down is the implementation of Supply Side theory
      - manlymuppet 2mo ago
        Yeah I think that's also very inaccurate. Supply-side theory is not about indiscriminately taking money from the poor and giving it to the rich.

alistairSH 2mo ago

You'd think so but not even a decade ago Kansas tried it again and it failed and the GOP continues to cut taxes for the wealthy and people keep electing them. Most of the nation (and world) never took any economics. This stuff is all magic or religion or whatever to them. Ronnie Raygun is as good as a saint to much of the US.

thegagne 2mo ago
Non-typical Kansas voter here. I reviewed candidates and any mention of “cut taxes” is a hard no from me. I have kids, and I want to make sure their schools are fully funded. The only tax cuts I would support would be on essentials like food and clothing. I also don’t like targeted new taxes, like taxing sports gambling and recreational drugs, because it unnecessarily entrenches those in our society. Even worse is when they earmark it, like using casino money to fund schools.

watwut 2mo ago

I have literally seen it being defended, in all seriousness, after the economy crash. When the financial institutions were bailed out. Maybe not the name, but the literal idea that the money given to them will flow down. There were even graphics gping with it. Again, in all seriousness. So yes, it needs to be debunked.

anonymars 2mo ago
I think a large part of the issue, ignoring the self-interest one (certainly those of money will argue that their taxes should be less) is that both the supply and demand side can interfere with the proper functioning of the economy My quick take is that during the 2008-ish great financial crisis, those in power were children of the 1970s supply-side shocks (demand>supply resulting in shortages and inflation), and used precisely the wrong tool to handle the demand-side shock of the GFC: interest rates were zero-to-negative, indicating a surplus of investable cash and no place to put it to work, and policymakers responded by...cutting everything on their side to the bone as well (austerity). At a high level: the economy was literally trying to pay the government to spend money on productive investment, but this once-in-a-lifetime opportunity was largely squandered

vlovich123 2mo ago

Can you describe the defensible policies of supply-side economics? That's as vague a term as trickle-down economics to me. Supply-side economics is based on a flawed premise of looking at only the Laffer curve and saying if taxes are too high the economy suffers, therefore we must make the tax rate arbitrarily low. In reality though there are more nuances to making the tax rate arbitrarily low (e.g. high inflation and cost of living for starters).

manlymuppet 2mo ago
Sure. I think supply-side economics deserves more nuance than simply thinking we need to make the tax rate arbitrarily low. The Laffer curve isn't the only thing you should look at, since where you tax can be just as important as how much you tax. Take corporate taxes for example. If one were to advocate to get rid of corporate taxes, you might think that person unabashedly biased. What kind of person would want to give breaks to the richest people (corporations) when everyday people are the most in need of those kind of cuts, right? But the reality is that when you tax corporations, that is one of the most economically damaging taxes you can do. How about then, rather than taxing corporations, you tax the benefactors of those corporations directly? When you tax Walmart, sure you tax the C-suite, but you also make it so that Walmart can hire less people, and invest less in the economy. Rather than taxing the corporation, what if you just taxed the C-suite directly? Tax the Walton family, or the highest earning employees directly, and you get to have your cake and it too since you get similar amounts of tax revenue without damaging the economy nearly as much. You'll see this often in the social democracies of Scandinavia, like Sweden or Denmark. These are countries with strong welfare states, and yet, the corporate tax rates are often lower than the U.S., even if you look at the most red states. This is supply side economics at work, and an example of how supply-side economics can be easily misrepresented.
- orwin 2mo ago
  You can't do that, because the Walton family and others are really, really good at avoiding getting taxed. Even small business owners like my uncles do whatever they can to avoid any sort of taxes. I never paid VAT on sport equipments or DIY equipment, which are what they sold, but we also managed for my whole school life to avoid paying VAT on school supplies, and it's probably the same for my 22 cousins. Tax avoidance is a really good hobby for those people.

brightball 2mo ago

I always like to approach this conversation with a question: Should business that actually do create jobs in practice get bigger tax breaks? For example, if I by some miracle create a 1 man company that makes $100 million / year profit and somebody else creates a company that makes $100 million / year profit but has 2,000 employees...should the two companies be taxed differently? Walmart employees 1.6 million people in the US. 68% are full time. Average salaries range from $18.25 / hr (field associate) to $27 / hr (supply chain). Median $30,520 across all US employees. 156,000 employees are estimated to be enrolled in Medicaid (9.4%). Amazon employees 1.1 million. $23 / hour average for field / fulfillment. Median $53,211 across all US employees. 123,000 employees are estimated to be enrolled in Medicaid (11.7%). Both offer pretty extensive career development, training and tuition assistance programs. Profit per employee: - Walmart $10,800 / employee (1.6 million employees) - Amazon $50,000 / employee (1.1 million employees) By comparison: - AppLovin $3.7 million / employee (898 employees) - NVIDIA $2.86 million / employee (42,000 employees) So what if we actually had a tax strategy that literally was aimed at "job creators" rather than "capital gains"? What would that look like?

twoodfin 2mo ago
It would incentivize the wrong things: All else being equal, you want to produce more with less labor and other inputs. It’s a good thing farming needs an order of magnitude fewer farmers than a century ago.
- magicalist 2mo ago
  > All else being equal, you want to produce more with less labor and other inputs Is that actually true? Maybe I'm being dense right now but that's not completely apparent to me. More abundance per person does seem generally better (albeit there's eventually diminishing marginal utility), but that's not the same thing as society as a whole producing more with less labor. Maybe "all else being equal" is the operative condition here, like assuming that the economy would be able to absorb newly freed labor into new economic activity? You can also optimize some good things out of existence in this manner, and it's still not clear that robots are going to be able to swoop in and save that kind of newly uneconomical activity, at least within my lifetime.

autoexec 2mo ago

The actual paper never uses the phrase trickle-down economics and just covers how tax cuts for the rich don't improve the economy but does increase income inequality

deleted 2mo ago

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bluealienpie 2mo ago

So no candidate ran on tax cuts? Explicitly for high income earners?

gamblor956 2mo ago

Trickle down economics is just another name for supply-side economics. They're one and the same. The difference is that the name "supply side economics" focuses on the the beneficiaries while the name "trickle down economics" focuses on the results. Supply side economics owners claimed that benefits would "flow" down from the capital owners. The pejorative name "trickle-down economics" accurately reflects that the quantity of benefits that "flows" down to everyone else from those benefiting from massive tax cuts is a mere trickle of the money that the supply side saved from the tax cuts.

regularization 2mo ago

> Trickle-down economics has never been a real economic policy, and never been seriously advocated by federal policy-makers. It is an entirely pejorative term created by detractors of supply-side economics. https://thehill.com/homenews/house/3522907-gop-lawmaker-byron-donalds-says-trickle-down-economics-does-work/ https://thehill.com/homenews/house/3522907-gop-lawmaker-byro... Well here is one of those federal policy-makers you say doesn't exist, a Republican congressman, advocating four years ago for trickle down economics and advocating for "...letting the free market - and yes, trickle down economics, which does work - actually flourish in the United States"

smallmancontrov 2mo ago
If only big players had KPIs like us little folks! r>g is close to a complete debunk of the trickle-down narrative, today and through history, and it's a remarkably sturdy result.
win311fwg 2mo ago
That's not serious advocacy as trickle-down economics isn't a policy that can be implemented. The policy associated with trickle-down economics is known as supply-side economics. Trickle-down economics is something created for a comedy bit to express, in a humorous way, why supply-side economics doesn't work. Even if you don't buy into the underlying message of the comedy routine and believe that supply-side economics does work, you still cannot implement that comedy routine as government policy. That... doesn't make any sense. Clearly that guy you refer to was performing his own comedy routine.
- smallmancontrov 2mo ago
  "Supply-side economics" is a technocratic rebranding of trickle-down economics, adding just enough nuance to force the draw rhetorically while advocating policy that is completely indefensible to anyone who has enough time to properly examine the nuance.
  - win311fwg 2mo ago

vannevar 2mo ago

The article focuses specifically on the economic effects of tax cuts, concluding that they have little overall positive effect on economic or job growth. This is consistent with meta-studies looking at the relevant research. To the extent that "supply-side economics" predicts that tax cuts will stimulate the economy, it's fair to say that it has indeed been debunked.

miyoji 2mo ago

This is ridiculous. "Trickle-down economics" is just another name for "supply-side economics". You can also call it "voodoo economics", as George H.W. Bush did. They're all referring to the exact same failed policies that have been criticized for failing to achieve what they claim to achieve for 130 years.

throw0101a 2mo ago

> The policies of supply-side economics, however, are much more defensible, but it seems people would much rather pick on the strawman. Lowering taxes is one of the policies of supply-side economics: > Supply-side economics is a macroeconomic theory postulating that economic growth can be most effectively fostered by lowering taxes, decreasing regulation, and allowing free trade.[1][2] * https://en.wikipedia.org/wiki/Supply-side_economics https://en.wikipedia.org/wiki/Supply-side_economics Along with decreasing regulation and allowing free trade, so you've just knocked down one of the reasons to think about supply-side stuff seriously.