Of Trickle Down - and Demand Side.

[Uncensored2008]

In several threads around the board, debates rage regarding the superiority of "Trickle Down" or "Demand Side" economics on a macro scale. What becomes rapidly clear is that most people arguing these positions don't know what the terms mean. What is "Trickle Down Economics?" What is "Demand Side Economics."

Let's start with "Demand Side." The first thing to understand is that it doesn't exist. There is no "demand side" school of thought, there never has been one. Most of those who claim to support "demand side" do so based on complete ignorance. A thought process of "supply side is Reagan, we hate Reagan and want the opposite, which is demand side." They couple this with a fuzzy misunderstanding of the theories of Lord John Maynard Keynes. Keynes was NOT an idiot, Keynes did NOT claim that demand drives markets. Whether one agree or disagrees with Keynes, the foundation of Keynesian theory is sound. Keynes did not promote the idiocy that most of those using his name as justification claim that he did.

Then there is "Trickle Down." As with demand side, there is no such thing a trickle down. It is a name that demagogues coined to deride the theories of Arthur Laffer. Laffer created a fusion of Austrian and Classical economics coupled with a spin on Keynes where tax cuts, even with rising deficits, were used to stimulate business cycles. The theory being that cuts in corporate taxes would create more jobs and that the benefits would trickle down to all levels of society.

So most of the "debate" we see is based on myth and ignorance. Should public policy be based on myth and ignorance?

This thread is created in hopes that debate on the real economic schools of thought, Classical, Austrian, Keynesian and Chicago will be discussed in a more accurate manner. So that those who speak so loudly may glean some semblance of knowledge regarding the subject they pontificate upon.

Standard Disclaimer: My bias is Rothbard, for those who know who he was.

 

[DSGE]

What do you mean "there is no demand-side school of thought"?

Maybe you should clarify what you think is meant by demand-side/Keynesian/trickle down etc.

To me "demand-side economics" refers to a theory of nominal business cycles. In the modern incarnation, frequently called "New Keynesian economics", an economy hit by nominal shocks - shocks to the money supply or demand for money - can result in changes in real variables (such as output and employment) due to "sticky" wages and prices.

I'm a Market Monetarist.

 

[samjones]

Let's start with "Demand Side." The first thing to understand is that it doesn't exist. There is no "demand side" school of thought, there never has been one. Most of those who claim to support "demand side" do so based on complete ignorance.

Are you sure that conventional economic theory doesn't include a concept of "Demand Management"?

Come back and read the rest of this post after you're done Googling.

The basic concept that only one approach to an economic problem will work and is always appropriate regardless of circumstance is the main problem with the right wing in the US. It does not matter the problem, the only solution that they can think of is to lower taxes on the monied and cutting services to the poor. It's a painfully stereotyped and narrow perspective and it's why the Republican Party is probably more at odds with itself than it is with the Democrats.

I see no reason to give tax breaks to corporations that will enable them to open more offices in India. I do not see how that helps my country. Extending UI did help my country and so I think it's a good idea.

If I wanted to hurt my country then I would agree with your point of view. But I do not, so I do not.

 

[Uncensored2008]

Are you sure that conventional economic theory doesn't include a concept of "Demand Management"?

Of course it does, Sam. Demand is a component of any and all economic views. Just as all economic schools have a component of supply, and some seek a managed supply. This is irrelevant to the issue at hand.

The misuse of the term "demand side" to denote Keynesian economics is common, but ignorant. And yes, I'm taking a pot shot at Krugman.

Come back and read the rest of this post after you're done Googling.

Googling what, precisely?

The basic concept that only one approach to an economic problem will work and is always appropriate regardless of circumstance is the main problem with the right wing in the US. It does not matter the problem, the only solution that they can think of is to lower taxes on the monied and cutting services to the poor. It's a painfully stereotyped and narrow perspective and it's why the Republican Party is probably more at odds with itself than it is with the Democrats.

Well that's nice.

But the hope here is that we move away from partisan politics and examine what the various schools actually promote, looking at the merits and flaws of them.

I see no reason to give tax breaks to corporations that will enable them to open more offices in India. I do not see how that helps my country. Extending UI did help my country and so I think it's a good idea.

I understand that partisanship is the primary motivator for you.

If I wanted to hurt my country then I would agree with your point of view. But I do not, so I do not.

Do you agree that within any market there is an unwavering force that reacts to supply and demand, an invisible hand that pushes price based on perceived value? (Starting with the basics.)

 

[Uncensored2008]

What do you mean "there is no demand-side school of thought"?

Precisely what I said.

Just like "trickle down" is it a term of ignorance.

Maybe you should clarify what you think is meant by demand-side/Keynesian/trickle down etc.

I would rather you describe what you think the key difference between "demand side" and Keynesian economic is?

To me "demand-side economics" refers to a theory of nominal business cycles. In the modern incarnation, frequently called "New Keynesian economics", an economy hit by nominal shocks - shocks to the money supply or demand for money - can result in changes in real variables (such as output and employment) due to "sticky" wages and prices.

That's a good definition, though still the Keynesian school of thought. It appears to attempt to address shortcomings with traditional Keynesian thought.

One of the criticism of Rothbard on Keynes was the dedication Keynes has to rigidity of wages. In Keynesian models, wage is strictly rigid and the only means of compensation offered the labor market, ergo if supply falls in a particular labor market, wages must rise. What fails to account is other means of benefits, obviously health, holiday and vacation, but also working conditions and on the job perqs.

The New Keynesians also recognize the flaw in Keynes due to sticky wages, but still fail to acknowledge non-wage compensation as a common mitigation of them.

I base my view primarily on a section of "Man, Economy, and State" Chapter 11—Money and Its Purchasing Power (continued)

I'm a Market Monetarist.

Hmm, neo-Freidman. Interesting.

 

[samjones]

Do you agree that within any market there is an unwavering force that reacts to supply and demand, an invisible hand that pushes price based on perceived value? (Starting with the basics.)

The problem is that you refuse to consider the merits of any view other than your own and you aren't really able to support your own views with actual facts ... or at least you don't have any facts that couldn't easily be interpreted multiple ways. I can see why you are naturally inclined to be arrogant and dismissive under these circumstances. When you start with the attitude that you are right and everyone else is stupid you really don't have any choice.

 

[Uncensored2008]

The problem is that you refuse to consider the merits of any view other than your own and you aren't really able to support your own views with actual facts ... or at least you don't have any facts that couldn't easily be interpreted multiple ways. I can see why you are naturally inclined to be arrogant and dismissive under these circumstances. When you start with the attitude that you are right and everyone else is stupid you really don't have any choice.

So..

You have no thoughts at all on economics and only want to campaign for Obama.

I understand.


Here is what I referenced, that you could not grasp;

{As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.} An Inquiry into the Nature and Causes of the Wealth of Nations - Adam Smith

 

[DSGE]

What do you mean "there is no demand-side school of thought"?

Precisely what I said.

Just like "trickle down" is it a term of ignorance.

Maybe you should clarify what you think is meant by demand-side/Keynesian/trickle down etc.

I would rather you describe what you think the key difference between "demand side" and Keynesian economic is?

It's your thread. You started off by claiming there's some ignorance. Pretty sure the onus is on you define and explain first.

But I'll explain my view anyway. There is no difference. Keynes, maybe not invented, but formalised demand side economics. When people say "demand-side economics", they refer to business cycles. In aggregate, supply is vertical and normally Say's law applies. That is, aggregate demand doesn't matter. The act of supplying creates its own demand. Prices adjust to make us rich enough to buy the stuff we produce. So in that case any business cycle must occur due to shocks to the supply side; productivity, taxes, regulation, etc. Keynes noticed that Say's law doesn't necessarily apply always in a monetary economy. We can have periods of "insufficient aggregate demand". Demand driven business cycles, hence "demand-side economics".

That's a good definition, though still the Keynesian school of thought. It appears to attempt to address shortcomings with traditional Keynesian thought.

One of the criticism of Rothbard on Keynes was the dedication Keynes has to rigidity of wages. In Keynesian models, wage is strictly rigid and the only means of compensation offered the labor market, ergo if supply falls in a particular labor market, wages must rise. What fails to account is other means of benefits, obviously health, holiday and vacation, but also working conditions and on the job perqs.

The New Keynesians also recognize the flaw in Keynes due to sticky wages, but still fail to acknowledge non-wage compensation as a common mitigation of them.

That's not true. I mean, it's super obvious, right? We include real non-wage compensation. But while in reality "wage" specifically means the pay packet with money in it, not including benefits, in econ "wage" means all hourly compensation. If you only include money-wages in your analysis, people will yell at you.

I base my view primarily on a section of "Man, Economy, and State" Chapter 11—Money and Its Purchasing Power (continued)

I'll get around to reading it. Maybe today.

 

[Wiseacre]

Do you want a theoretical debate or a practical one? Frankly, I don't know if many people want to discuss the theories behind a specific economic model. I'd rather talk about what's practical here and now, what'll work and what won't. To do that, we need to define and describe a little more thoroughly what the different approaches are.

Demand side economics as I understand it is the approach that puts more money into the hands of the lower and middle class in hopes they will spend it. If they do, then we have increased demand, which means the supply side ramps up production and we get more jobs, and more spending, and an upward spiral results.

Supply siders believe it's all about reducing the costs of production, so we make more stuff at a lower price. Lower prices mean more demand, which means production is ramped up and we get more jobs, which translates into more spending, and an upward spiral results.

Except it ain't that simple in either case. There's so many other factors involved in both processes, sustainability for one and foreign competition for another. It's lazy thinking to say that all we need to do is redistribute the wealth or lower taxes. It's a lot more complicated than that.

 

[Uncensored2008]

It's your thread. You started off by claiming there's some ignorance. Pretty sure the onus is on you define and explain first.

I have no objection.

I simply didn't want to dominate and crush an actual discussion.

Definitions.

Supply side: A theory by Arthur Laffer that combines elements of Austrian, Classical and an element of Keynesian thought.

Demand side: A term used by those who lean toward leftward politics to improperly denote Keynesian economics.

But I'll explain my view anyway. There is no difference. Keynes, maybe not invented, but formalised demand side economics. When people say "demand-side economics", they refer to business cycles. In aggregate, supply is vertical and normally Say's law applies. That is, aggregate demand doesn't matter. The act of supplying creates its own demand. Prices adjust to make us rich enough to buy the stuff we produce. So in that case any business cycle must occur due to shocks to the supply side; productivity, taxes, regulation, etc. Keynes noticed that Say's law doesn't necessarily apply always in a monetary economy. We can have periods of "insufficient aggregate demand". Demand driven business cycles, hence "demand-side economics".

That's a good definition, though Keynes never used the term "demand side." Keynes focused on the sometimes erratic behavior of aggregate demand in the business cycle, which is influenced on both public and private behavior in the market.

One of the most adamant Keynesian in my lifetime was Richard Nixon. Keynes coupled the use of stimulus to rigid or anchored elements in an economy. Wages and prices being the most common objects to attempt to affect. Nixon actually placed a wage and price freeze on the nation in an attempt to create rigidity for the stimulus to work. The results were a disaster, of course. And from this, I learned that Keynesian methods don't actually work.

That's not true. I mean, it's super obvious, right? We include real non-wage compensation. But while in reality "wage" specifically means the pay packet with money in it, not including benefits, in econ "wage" means all hourly compensation. If you only include money-wages in your analysis, people will yell at you.

True, which is one of the areas that Keynesians trip over their underwear on. Friedman particularly pilloried Keynes on this fact, the introduction of capital by necessity increased inflation, devaluing the benefit of the added capital, particularly in regard to wages. Fringe benefits avoid the trappings of inflation. Medical care doesn't decline in value as inflation eats away at currency.

I'll get around to reading it. Maybe today.

Rothbard is brilliant.

 

[samjones]

The problem is that you refuse to consider the merits of any view other than your own and you aren't really able to support your own views with actual facts ... or at least you don't have any facts that couldn't easily be interpreted multiple ways. I can see why you are naturally inclined to be arrogant and dismissive under these circumstances. When you start with the attitude that you are right and everyone else is stupid you really don't have any choice.

So..

You have no thoughts at all on economics and only want to campaign for Obama.

I understand.

I don't think anybody is campaigning for Obama yet. Even David Axelrod seems to simply go on to Sunday morning talk shows and faithfully recount the moronic and self-destucutive things the Republican Candidates did the week before.

But when people do go out campainging for Obama they'll be talking about a DJIA and Nasdaq that are sitting at pre-bubble highs and unemployment dropping and no major corporate meltdowns during the Obama administration.

They'll be talking about progress made getting the housing market back on track and work being done to encourage employers to bring jobs back home.


They won't be quoting Adam Smith and they won't be grinning insanely and giving decrepit leers as they rant about a gold standard and Austrian Economics.

That's why 4 years from now we'll still be talking about President Obama's economic policy.

 

[Uncensored2008]

Do you want a theoretical debate or a practical one?

I'm open.

I tend towards theory. But that isn't meant to set a parameter.

Frankly, I don't know if many people want to discuss the theories behind a specific economic model. I'd rather talk about what's practical here and now, what'll work and what won't. To do that, we need to define and describe a little more thoroughly what the different approaches are.

Since none of the schools of thought are particularly new, we have a pretty solid practical foundation for each.

The Nixon-Ford-Carter disaster will always form a solid example that Keynesian economics don't work.

Demand side economics as I understand it is the approach that puts more money into the hands of the lower and middle class in hopes they will spend it. If they do, then we have increased demand, which means the supply side ramps up production and we get more jobs, and more spending, and an upward spiral results.

What makes you think that stimulus monies are directed toward any particular class?

The primary concept of Keynes is that capital introduced into the market will stimulate demand and prime the pump of production. Keynes details a multiplier effect that each dollar introduced will reverberate economic activity in excess of its face value many times over. But this doesn't specify where dollars are spent, only that capital be infused in the market to spur aggregate demand.

Supply siders believe it's all about reducing the costs of production, so we make more stuff at a lower price. Lower prices mean more demand, which means production is ramped up and we get more jobs, which translates into more spending, and an upward spiral results.

Hmm, I've never seen supply side economics postulate this.

Generally, Laffer stated that the amount of capital consumed by taxes created barriers to production and that lowering taxes on business would free capital by eliminating these barriers and cause the rate of production to rise, generating more taxes in the mix, ala the famous "Laffer Curve."

Please note that Laffer views the increased production as a means of infusing capital into the market and spawning a multiplier effect in the same manner that Keynes described. The notion the "Supply Side" and "Keynesian" are opposites is belied by this, Laffer includes a healthy dose of Keynes in his theories.

Except it ain't that simple in either case. There's so many other factors involved in both processes, sustainability for one and foreign competition for another. It's lazy thinking to say that all we need to do is redistribute the wealth or lower taxes. It's a lot more complicated than that.

On this we agree.

 

[Uncensored2008]

I don't think anybody is campaigning for Obama yet. Even David Axelrod seems to simply go on to Sunday morning talk shows and faithfully recount the moronic and self-destucutive things the Republican Candidates did the week before.

But when people do go out campainging for Obama they'll be talking about a DJIA and Nasdaq that are sitting at pre-bubble highs and unemployment dropping and no major corporate meltdowns during the Obama administration.

They'll be talking about progress made getting the housing market back on track and work being done to encourage employers to bring jobs back home.


They won't be quoting Adam Smith and they won't be grinning insanely and giving decrepit leers as they rant about a gold standard and Austrian Economics.

That's why 4 years from now we'll still be talking about President Obama's economic policy.

Sam;

I like you. I really do.

But this discussion is about economics.

 

[Wiseacre]

What makes you think that stimulus monies are directed toward any particular class?


Surely you've noticed that Obama and the Dems are hell-bent on letting the Bush Tax Cuts expire for the $200k and above crowd, and extending them for everyone else. Most USMB lefties will categorically state that all there is to it, redistribute wealth to those who lack it, they'll spend it and all's right again in the world.


The primary concept of Keynes is that capital introduced into the market will stimulate demand and prime the pump of production. Keynes details a multiplier effect that each dollar introduced will reverberate economic activity in excess of its face value many times over. But this doesn't specify where dollars are spent, only that capital be infused in the market to spur aggregate demand.


The question revolves around that multiplier, it's not constant. There may be times when it is very beneficial, but other times when it isn't. The issue becomes whether or not it's worth it to pump a lot of money into the economy, what's the benefit relative to some other alternative action.


Quote:
Supply siders believe it's all about reducing the costs of production, so we make more stuff at a lower price. Lower prices mean more demand, which means production is ramped up and we get more jobs, which translates into more spending, and an upward spiral results.

Hmm, I've never seen supply side economics postulate this.

Generally, Laffer stated that the amount of capital consumed by taxes created barriers to production and that lowering taxes on business would free capital by eliminating these barriers and cause the rate of production to rise, generating more taxes in the mix, ala the famous "Laffer Curve."


Part of making production costs lower is lowering the cost of investment capital; the marginal and capital gains tax rates will influence investment. How much influence is open to debate, it's gping to depend on many factors I think. Back in the 90s Clinton raised those rates but it didn't make a damn bit of difference. The dot.com boom was on and it was time to make money - animal spirits and irrational exuberance rule the day. But that was then and this is now; not much in the way of high spirits and exuberance these days. IMHO, only a fool or an ideologue would expect the same result.

 

[samjones]

Surely you've noticed that Obama and the Dems are hell-bent on letting the Bush Tax Cuts expire for the $200k and above crowd, and extending them for everyone else. Most USMB lefties will categorically state that all there is to it, redistribute wealth to those who lack it, they'll spend it and all's right again in the world.

I don't think we can be 100% certain what Obama will do with the Bush tax cuts, but my take on this would simply be that it favors the middle class tax bracket. AFAICT, the rich would still enjoy the same benefits of the Bush tax cuts at the portions of their income that are taxed at the middle brackets and those that have less of their income taxed at the top rate (the rich, but no so rich) would be affected less than the very rich.

This is a really good idea because it is painfully obvious in the USA right now that the rich are badly undertaxed and doing so hurts our country's well-being. It has sent us deeply into debt. This problem is amplified by the fact that the shoddy and corrupt business dealings of the super-wealthy have also sent us into a deep recession brought on by a housing finance crisis.

Taken together with the fact that the middle-class is shrinking and the super-rich are only getting super-richer, I can only see any move by Obama to tax the rich at a higher rate and retain lower taxes for the middle class as being nothing more or less than patriotism motivated by a love for Country. I don't know what motivates people like Mitt Romney to continue to insist that he is entitled to pay a lower effective tax rate than people like me.

It smells like raw greed.

 

[Wiseacre]

Surely you've noticed that Obama and the Dems are hell-bent on letting the Bush Tax Cuts expire for the $200k and above crowd, and extending them for everyone else. Most USMB lefties will categorically state that all there is to it, redistribute wealth to those who lack it, they'll spend it and all's right again in the world.

I don't think we can be 100% certain what Obama will do with the Bush tax cuts, but my take on this would simply be that it favors the middle class tax bracket. AFAICT, the rich would still enjoy the same benefits of the Bush tax cuts at the portions of their income that are taxed at the middle brackets and those that have less of their income taxed at the top rate (the rich, but no so rich) would be affected less than the very rich.

This is a really good idea because it is painfully obvious in the USA right now that the rich are badly undertaxed and doing so hurts our country's well-being. It has sent us deeply into debt. This problem is amplified by the fact that the shoddy and corrupt business dealings of the super-wealthy have also sent us into a deep recession brought on by a housing finance crisis.

Taken together with the fact that the middle-class is shrinking and the super-rich are only getting super-richer, I can only see any move by Obama to tax the rich at a higher rate and retain lower taxes for the middle class as being nothing more or less than patriotism motivated by a love for Country. I don't know what motivates people like Mitt Romney to continue to insist that he is entitled to pay a lower effective tax rate than people like me.

It smells like raw greed.

Guess we'll have to agree to disagree. I do not believe the rich are undertaxed, nor do I think the country's well-being is hurt by the current tax rates. And I certainly do not think the marginal tax rates resulting from the Bush Tax Cuts are responsible for driving us deeply into debt. The entire tax cuts cost us about 3.7 trillion over ten years, but 3 trillion of that was the cuts below the top 1%. What's driving us into deeper debt is the out of control spending that Obama and the democrats simply refuse to cut.

I will say this: if and when the economy gets back into high gear, THEN we should raise taxes to get more revenue and reduce our deficit/debt. But to do so now is foolish IMHO. Likewise I do not support an immediate balanced budget, we should not drastically cut spending but instead do it gradually so as not to adversely impact economic growth. And we better be changing our entitlement programs, we cannot afford them as is.

 

[Uncensored2008]

Surely you've noticed that Obama and the Dems are hell-bent on letting the Bush Tax Cuts expire for the $200k and above crowd, and extending them for everyone else. Most USMB lefties will categorically state that all there is to it, redistribute wealth to those who lack it, they'll spend it and all's right again in the world.

I don't think that the goal of the Obama administration is to apply Keynesian theory in such a way as to create economic activity. I think the administration has a vastly different agenda.

The question revolves around that multiplier, it's not constant. There may be times when it is very beneficial, but other times when it isn't. The issue becomes whether or not it's worth it to pump a lot of money into the economy, what's the benefit relative to some other alternative action.

That's possible. The one thing we know for sure is that the Porkulus resulted in no multiplier effect. The trillion dollars of deficit spending was consumed primarily in shoring up public employee pensions, which did nothing to stimulate aggregate demand. Replenishing pension funds does not infuse capital into the economy. Even from a strictly Keynesian standpoint, the Obama actions were destined to fail.

Part of making production costs lower is lowering the cost of investment capital; the marginal and capital gains tax rates will influence investment. How much influence is open to debate, it's gping to depend on many factors I think. Back in the 90s Clinton raised those rates but it didn't make a damn bit of difference. The dot.com boom was on and it was time to make money - animal spirits and irrational exuberance rule the day. But that was then and this is now; not much in the way of high spirits and exuberance these days. IMHO, only a fool or an ideologue would expect the same result.

Investments in bubbles are often irrational. The dot-com bubble was certainly the most irrational I have seen. Generally, investors must have some confidence that they will enjoy a return on capital employed. With an ROCE of 10% on a project, a 45% tax rate may well make the return unattractive. Even 15% harms many capital projects. Punishing investment in capital is insane, the capital gains tax should be no more than 0.0%

 

[samjones]

That's possible. The one thing we know for sure is that the Porkulus resulted in no multiplier effect. The trillion dollars of deficit spending was consumed primarily in shoring up public employee pensions, which did nothing to stimulate aggregate demand. Replenishing pension funds does not infuse capital into the economy. Even from a strictly Keynesian standpoint, the Obama actions were destined to fail.

The "Obama actions" failed.

The Bush stimulus in February '08 intended to avert recession succeeded.

The Bush stimulus in July '08 intended to solve the subprime crisis succeeded.

The Bush stimulus in October '08 intended to bail out the banks succeeded.

But the Obama stimulus of July '09 "failed".

Throughout this mess Krugman was saying on a daily basis that the stimulus packages weren't nearly large enough and throughout this mess 2 different Presidents kept going back to the well for more stimulus money. But Krugman is a Commie who lies through his teeth.

Today we are expected to believe, from the Ron Paul Whackjobs, that Trickle Down Economics is called for, but someone that doesn't equal "stimulus". This is just sound economic theory.

Puh-lease. Give it a rest. Your eyes are turning brown.

 

[Uncensored2008]

The "Obama actions" failed.

Did they fail, or were they simply not intended to do what many assumed them to be designed for?

The Bush stimulus in February '08 intended to avert recession succeeded.

Do you have evidence and economic theory to support your claim?

The Bush stimulus in July '08 intended to solve the subprime crisis succeeded.

The Bush stimulus in October '08 intended to bail out the banks succeeded.

But the Obama stimulus of July '09 "failed".

Throughout this mess Krugman was saying on a daily basis that the stimulus packages weren't nearly large enough and throughout this mess 2 different Presidents kept going back to the well for more stimulus money. But Krugman is a Commie who lies through his teeth.

Today we are expected to believe, from the Ron Paul Whackjobs, that Trickle Down Economics is called for, but someone that doesn't equal "stimulus". This is just sound economic theory.

Puh-lease. Give it a rest. Your eyes are turning brown.

Do you have evidence and economic theory to support your claim?

 

[itfitzme]

debates rage regarding the superiority of "Trickle Down" or "Demand Side" economics on a macro scale.

A search of the forum for "Trickle Down" returns the last use of the term in December 1 of 2011.

"Newt invented "trickle down" and led the fight against Communism ...
Dec 1, 2011 ... I helped Ronald Reagan and Jack Kemp develop supply side economics. I helped lead the effort to defeat communism in the Congress."

"www.usmessageboard.com/.../196801-newt-invented-trickle-down-and-led- the-fight-against-communism-ask-him.html"

Perhaps, so that others don't mistakenly use it differently then you properly define it, you would be so kind as to add it to the list of definitions.

So far we have

Supply side: A theory by Arthur Laffer that combines elements of Austrian, Classical and an element of Keynesian thought.

Demand side: A term used by those who lean toward leftward politics to improperly denote Keynesian economics.

This would help tremendously so that we might compare and contrast "Trickle Down" to "Supply Side" and not confuse the concepts.

Could you reference the threads and posts in which the concepts of "trickle down" have been used without being specifically referred to as "trickle down"? A sample of representative posts should suffice.

This is important, after all, as the concepts of "trickle down" and "supply side" have been conflagrated in the comments. We will be unable to know which were which.

Also, please define what is "not supply side". In examining the definitions that you provided, it appears that "Demand Side" does not exist.

As there is a terms for "Supply side" there clearly is something that is not "supply side". After all, if there isn't something that is "not supply side" there would be no purpose for having the term "Supply side". Unfortunately, whatever it is remains unidentified.

Perhaps you mean that "Keynesian economics" is what is being referred to by the improperly used term "Demand Side" and that we should just simply remove "Demand Side" as a term and replace it with the correct term "Keynesian economics"?

I am sure, for the purposes of this thread, everyone will have no problem replacing the term "Keynesian economics" when they think "Demand Side".