Supply side economics work...just not how we would like

[Vidi]

Ever since I came to this forum, whenever economics, taxes and jobs are brought up, I see the same arguments.

From the Right: Cutting taxes alllows for the job creators to invest that money and create more jobs

From the Left: The Bush Tax cuts have been in place for a decade, Where are the jobs?


Which is always followed by the usual round of the Blame Game.


Well enough of that.

Supply Side economics WORKS. It works exactly as the Right claims it does. Its just that simple.

But wait says the Left, if thats true WHERE are the jobs?

Excellent question. Heres the answer: Singapore, Guatamala, Equador, Thailand, China, Viet Nam, Mexico and a host of other countries.

You see, if America were a closed system, where tax breaks could ONLY be spent/reinvested within the system. Then it would create jobs.

But unfortuinately, our economic borders are wide open. Money can pretty much move freely both in and more importantly OUT of the country. So tax breaks here translate into more jobs for certain, but not AMERICAN JOBS.

That is the fundamental flaw with the Pro Supply Side argument. It MAY create American jobs, but its just as likely to create CHINESE jobs.

Discuss.

 

[Wiseacre]

It is apparent that you think supply side economics means nothing more than tax breaks. You are mistaken. Also, I see no logic that connects your assertions of tax breaks to jobs created overseas instead of here. Maybe you could explain your position a little more in detail. And you might want to read up a little bit on what supply side economics really is.

 

[Vidi]

It is apparent that you think supply side economics means nothing more than tax breaks. You are mistaken. Also, I see no logic that connects your assertions of tax breaks to jobs created overseas instead of here. Maybe you could explain your position a little more in detail. And you might want to read up a little bit on what supply side economics really is.

Thats EXACTLy what it means. Supply Side economics, Trickle Down Economics, Reaganomics. All the same thing. It means give tax breaks to the rich so that they can reinvest that money which will in turn create more jobs.

Unfortunately, there are no barriers at our borders keeping the money inside the country. So that money moves overseas and creates jobs there instead of here. After all more profit to be made paying a worker 20 cents an hour as oppsed to 20 dollars an hour.

Supply-side economics is a school of macroeconomic thought that argues that economic growth can be most effectively created by lowering barriers for people to produce (supply) goods and services, such as lowering income tax and capital gains tax rates, and by allowing greater flexibility by reducing regulation

Supply-side economics holds that increased taxation steadily reduces economic trade between economic participants within a nation and that it discourages investment. Taxes act as a type of trade barrier or tariff that causes economic participants to revert to less efficient means of satisfying their needs. As such, higher taxation leads to lower levels of specialization and lower economic efficiency

Supply-side economics - Wikipedia, the free encyclopedia

 

[Intense]

Ever since I came to this forum, whenever economics, taxes and jobs are brought up, I see the same arguments.

From the Right: Cutting taxes alllows for the job creators to invest that money and create more jobs

From the Left: The Bush Tax cuts have been in place for a decade, Where are the jobs?


Which is always followed by the usual round of the Blame Game.


Well enough of that.

Supply Side economics WORKS. It works exactly as the Right claims it does. Its just that simple.

But wait says the Left, if thats true WHERE are the jobs?

Excellent question. Heres the answer: Singapore, Guatamala, Equador, Thailand, China, Viet Nam, Mexico and a host of other countries.

You see, if America were a closed system, where tax breaks could ONLY be spent/reinvested within the system. Then it would create jobs.

But unfortuinately, our economic borders are wide open. Money can pretty much move freely both in and more importantly OUT of the country. So tax breaks here translate into more jobs for certain, but not AMERICAN JOBS.

That is the fundamental flaw with the Pro Supply Side argument. It MAY create American jobs, but its just as likely to create CHINESE jobs.

Discuss.

It depends on what kind of job. Telemarketing, Phone Sales, Manufacturing, can easily go where the Labor can be found cheaper. Medical, Service Industry, Transport, boil down to local boots on the ground, at least until they can get a I Pad Application that can mow your lawn, or physically deliver packages. Until then, the powers that be, can only circumvent fail Labor Compensation, by bringing cheap labor over the borders, having to settle for only what they can get away with.

 

[Intense]

It is apparent that you think supply side economics means nothing more than tax breaks. You are mistaken. Also, I see no logic that connects your assertions of tax breaks to jobs created overseas instead of here. Maybe you could explain your position a little more in detail. And you might want to read up a little bit on what supply side economics really is.

Thats EXACTLy what it means. Supply Side economics, Trickle Down Economics, Reaganomics. All the same thing. It means give tax breaks to the rich so that they can reinvest that money which will in turn create more jobs.

Unfortunately, there are no barriers at our borders keeping the money inside the country. So that money moves overseas and creates jobs there instead of here. After all more profit to be made paying a worker 20 cents an hour as oppsed to 20 dollars an hour.

Supply-side economics is a school of macroeconomic thought that argues that economic growth can be most effectively created by lowering barriers for people to produce (supply) goods and services, such as lowering income tax and capital gains tax rates, and by allowing greater flexibility by reducing regulation

Supply-side economics holds that increased taxation steadily reduces economic trade between economic participants within a nation and that it discourages investment. Taxes act as a type of trade barrier or tariff that causes economic participants to revert to less efficient means of satisfying their needs. As such, higher taxation leads to lower levels of specialization and lower economic efficiency

Supply-side economics - Wikipedia, the free encyclopedia

What bothers me more than the Tax issue is the Subsidies, and Government supported Schemes that give the Power Players unfair advantage. Too many schemes and scams.

 

[Wiseacre]

It is apparent that you think supply side economics means nothing more than tax breaks. You are mistaken. Also, I see no logic that connects your assertions of tax breaks to jobs created overseas instead of here. Maybe you could explain your position a little more in detail. And you might want to read up a little bit on what supply side economics really is.

Thats EXACTLy what it means. Supply Side economics, Trickle Down Economics, Reaganomics. All the same thing. It means give tax breaks to the rich so that they can reinvest that money which will in turn create more jobs.

Unfortunately, there are no barriers at our borders keeping the money inside the country. So that money moves overseas and creates jobs there instead of here. After all more profit to be made paying a worker 20 cents an hour as oppsed to 20 dollars an hour.


So big corps have money and it can go outside the country. Which number one, is an EXCELLENT reason to incentivize them not to do so. But it does not automatically follow that just because money can flow out that it necessarily will. And there are other factors besides the labor costs, which I think you might have overstated somewhat. For instance, is there a market for whatever you are producing in and/or near your foreign plant. Shipping costs are kinda growing quite significant, and as I said there are other things involved.

Supply-side economics is a school of macroeconomic thought that argues that economic growth can be most effectively created by lowering barriers for people to produce (supply) goods and services, such as lowering income tax and capital gains tax rates, and by allowing greater flexibility by reducing regulation

Supply-side economics holds that increased taxation steadily reduces economic trade between economic participants within a nation and that it discourages investment. Taxes act as a type of trade barrier or tariff that causes economic participants to revert to less efficient means of satisfying their needs. As such, higher taxation leads to lower levels of specialization and lower economic efficiency

Supply-side economics - Wikipedia, the free encyclopedia

Taxes and regulations are a part of supply side economics, but not exclusively so. Anything that can be done to reduce costs or improve the quality and make it more valuable is what supply side is all about. It's not just taxes.

 

[Vidi]

It is apparent that you think supply side economics means nothing more than tax breaks. You are mistaken. Also, I see no logic that connects your assertions of tax breaks to jobs created overseas instead of here. Maybe you could explain your position a little more in detail. And you might want to read up a little bit on what supply side economics really is.

Thats EXACTLy what it means. Supply Side economics, Trickle Down Economics, Reaganomics. All the same thing. It means give tax breaks to the rich so that they can reinvest that money which will in turn create more jobs.

Unfortunately, there are no barriers at our borders keeping the money inside the country. So that money moves overseas and creates jobs there instead of here. After all more profit to be made paying a worker 20 cents an hour as oppsed to 20 dollars an hour.


So big corps have money and it can go outside the country. Which number one, is an EXCELLENT reason to incentivize them not to do so. But it does not automatically follow that just because money can flow out that it necessarily will. And there are other factors besides the labor costs, which I think you might have overstated somewhat. For instance, is there a market for whatever you are producing in and/or near your foreign plant. Shipping costs are kinda growing quite significant, and as I said there are other things involved.

Supply-side economics is a school of macroeconomic thought that argues that economic growth can be most effectively created by lowering barriers for people to produce (supply) goods and services, such as lowering income tax and capital gains tax rates, and by allowing greater flexibility by reducing regulation

Supply-side economics holds that increased taxation steadily reduces economic trade between economic participants within a nation and that it discourages investment. Taxes act as a type of trade barrier or tariff that causes economic participants to revert to less efficient means of satisfying their needs. As such, higher taxation leads to lower levels of specialization and lower economic efficiency

Supply-side economics - Wikipedia, the free encyclopedia

Taxes and regulations are a part of supply side economics, but not exclusively so. Anything that can be done to reduce costs or improve the quality and make it more valuable is what supply side is all about. It's not just taxes.

Youre ignoring the fact that its the most fundamental principle of Supply Side economics.

And if you fall back on the Supply creates demand argument. That is false and every manufacturer in America whos implemented lean manufacturing and just in time princiles over the last 20 years knows this.

 

[Wiseacre]

Thats EXACTLy what it means. Supply Side economics, Trickle Down Economics, Reaganomics. All the same thing. It means give tax breaks to the rich so that they can reinvest that money which will in turn create more jobs.

Unfortunately, there are no barriers at our borders keeping the money inside the country. So that money moves overseas and creates jobs there instead of here. After all more profit to be made paying a worker 20 cents an hour as oppsed to 20 dollars an hour.


So big corps have money and it can go outside the country. Which number one, is an EXCELLENT reason to incentivize them not to do so. But it does not automatically follow that just because money can flow out that it necessarily will. And there are other factors besides the labor costs, which I think you might have overstated somewhat. For instance, is there a market for whatever you are producing in and/or near your foreign plant. Shipping costs are kinda growing quite significant, and as I said there are other things involved.

Taxes and regulations are a part of supply side economics, but not exclusively so. Anything that can be done to reduce costs or improve the quality and make it more valuable is what supply side is all about. It's not just taxes.

Youre ignoring the fact that its the most fundamental principle of Supply Side economics.


The fundamental principle of supply side is to make a product or service more valuable or cheaper. Taxes is only one avenue to do that.


And if you fall back on the Supply creates demand argument. That is false and every manufacturer in America whos implemented lean manufacturing and just in time princiles over the last 20 years knows this.

If a producer or service provider can find a way to cut costs then their service or product can be priced lower. If the price is lower, they can sell more of it. That is how supply side can increase it's own demand. Example: Henry Ford developed the assembly line, so he could greatly enhance the production of Ford automobiles. Supply was increased and made cheaper, and as a result demand was greatly increased.

 

[Vidi]

Taxes and regulations are a part of supply side economics, but not exclusively so. Anything that can be done to reduce costs or improve the quality and make it more valuable is what supply side is all about. It's not just taxes.

Youre ignoring the fact that its the most fundamental principle of Supply Side economics.


The fundamental principle of supply side is to make a product or service more valuable or cheaper. Taxes is only one avenue to do that.


And if you fall back on the Supply creates demand argument. That is false and every manufacturer in America whos implemented lean manufacturing and just in time princiles over the last 20 years knows this.

If a producer or service provider can find a way to cut costs then their service or product can be priced lower. If the price is lower, they can sell more of it. That is how supply side can increase it's own demand. Example: Henry Ford developed the assembly line, so he could greatly enhance the production of Ford automobiles. Supply was increased and made cheaper, and as a result demand was greatly increased.

"One's own employees ought to be one's own best customers," Mr. Ford said years later. "Paying high wages," he concluded, "is behind the prosperity of this country."

Ford disagrees.

They even named the principle after him.

http://en.wikipedia.org/wiki/Fordism
In a Fordist system the worker is paid relatively high wages in order to buy in large quantity the products turned out in mass production.

 

[uscitizen]

Ever since I came to this forum, whenever economics, taxes and jobs are brought up, I see the same arguments.

From the Right: Cutting taxes alllows for the job creators to invest that money and create more jobs

From the Left: The Bush Tax cuts have been in place for a decade, Where are the jobs?


Which is always followed by the usual round of the Blame Game.


Well enough of that.

Supply Side economics WORKS. It works exactly as the Right claims it does. Its just that simple.

But wait says the Left, if thats true WHERE are the jobs?

Excellent question. Heres the answer: Singapore, Guatamala, Equador, Thailand, China, Viet Nam, Mexico and a host of other countries.

You see, if America were a closed system, where tax breaks could ONLY be spent/reinvested within the system. Then it would create jobs.

But unfortuinately, our economic borders are wide open. Money can pretty much move freely both in and more importantly OUT of the country. So tax breaks here translate into more jobs for certain, but not AMERICAN JOBS.

That is the fundamental flaw with the Pro Supply Side argument. It MAY create American jobs, but its just as likely to create CHINESE jobs.

Discuss.

Truth!

I have been saying for years that this was the inevitable outcome of globalization and "free trade". WE go down while the rest of the world goes up.

 

[Moonglow]

Ever since I came to this forum, whenever economics, taxes and jobs are brought up, I see the same arguments.

From the Right: Cutting taxes alllows for the job creators to invest that money and create more jobs

From the Left: The Bush Tax cuts have been in place for a decade, Where are the jobs?


Which is always followed by the usual round of the Blame Game.


Well enough of that.

Supply Side economics WORKS. It works exactly as the Right claims it does. Its just that simple.

But wait says the Left, if thats true WHERE are the jobs?

Excellent question. Heres the answer: Singapore, Guatamala, Equador, Thailand, China, Viet Nam, Mexico and a host of other countries.

You see, if America were a closed system, where tax breaks could ONLY be spent/reinvested within the system. Then it would create jobs.

But unfortuinately, our economic borders are wide open. Money can pretty much move freely both in and more importantly OUT of the country. So tax breaks here translate into more jobs for certain, but not AMERICAN JOBS.

That is the fundamental flaw with the Pro Supply Side argument. It MAY create American jobs, but its just as likely to create CHINESE jobs.

Discuss.

It depends on what kind of job. Telemarketing, Phone Sales, Manufacturing, can easily go where the Labor can be found cheaper. Medical, Service Industry, Transport, boil down to local boots on the ground, at least until they can get a I Pad Application that can mow your lawn, or physically deliver packages. Until then, the powers that be, can only circumvent fail Labor Compensation, by bringing cheap labor over the borders, having to settle for only what they can get away with.

One other thingy; Supply side also includes the loss of jobs due to the trade imbalance.
Consumers need to look and buy US of A made products. As long as we import more than export unemployment will stay high.
Right now corporations want a trade pact with Asia, trying to open new markets.

 

[Wiseacre]

Youre ignoring the fact that its the most fundamental principle of Supply Side economics.


The fundamental principle of supply side is to make a product or service more valuable or cheaper. Taxes is only one avenue to do that.


And if you fall back on the Supply creates demand argument. That is false and every manufacturer in America whos implemented lean manufacturing and just in time princiles over the last 20 years knows this.

If a producer or service provider can find a way to cut costs then their service or product can be priced lower. If the price is lower, they can sell more of it. That is how supply side can increase it's own demand. Example: Henry Ford developed the assembly line, so he could greatly enhance the production of Ford automobiles. Supply was increased and made cheaper, and as a result demand was greatly increased.

"One's own employees ought to be one's own best customers," Mr. Ford said years later. "Paying high wages," he concluded, "is behind the prosperity of this country."

Ford disagrees.

They even named the principle after him.

Fordism - Wikipedia, the free encyclopedia
In a Fordist system the worker is paid relatively high wages in order to buy in large quantity the products turned out in mass production.

I'm sure that's very interesting, but what does it have to do with supply side economics?

 

[Vidi]

If a producer or service provider can find a way to cut costs then their service or product can be priced lower. If the price is lower, they can sell more of it. That is how supply side can increase it's own demand. Example: Henry Ford developed the assembly line, so he could greatly enhance the production of Ford automobiles. Supply was increased and made cheaper, and as a result demand was greatly increased.

"One's own employees ought to be one's own best customers," Mr. Ford said years later. "Paying high wages," he concluded, "is behind the prosperity of this country."

Ford disagrees.

They even named the principle after him.

Fordism - Wikipedia, the free encyclopedia
In a Fordist system the worker is paid relatively high wages in order to buy in large quantity the products turned out in mass production.

I'm sure that's very interesting, but what does it have to do with supply side economics?

Nothing. I was answering your point that it was SUPPLY that increased demand. Thats simply not true.

Ford increased WAGES, which increased his customer base, which created demand for his product.

None of which disputes my original point that the American economy is part of the larger global economy so supply side economics creates jobs, but not necessarily in America.

 

[Wiseacre]

" Nothing. I was answering your point that it was SUPPLY that increased demand. Thats simply not true. "

I think it is true, the higher wages weren't THAT high, although I confess I'd have to fact check that. What I'm pretty sure of is that a lot more people were able to buy autos than just the Ford employees. It wasn't their wages that made a difference, it was the advances in productivity that greatly lowered the costs and allowed Ford to produce and sell to a whole lot more people at much lower prices. And THAT is supply side economics where supply DID create it's own demand.

" Ford increased WAGES, which increased his customer base, which created demand for his product. "

Not by much. I do not think Ford's customer base was in any way limited to his own employees. In fact I would suggest they were a very small part of that base, and their wages made very little difference in the demand for his cars.

" None of which disputes my original point that the American economy is part of the larger global economy so supply side economics creates jobs, but not necessarily in America. "

Can't argue with that, except to say that demand/stimulus economics does not necessarily create jobs in America either. There's no study that I know of that indicates more money in the hands of low income people will all be spent; much of it may well go to paying down debt, mortgages, or saved. And who's to say how much of the money that is spent will be on American goods? Seriously - if we don't find ways to make our stuff better and cheaper then our economic recovery will not be as robust as it could be. And THAT is purely supply side econ.

 

[Twofox]

I think this is another case of ignoring the real issue, and shouting at a straw man to keep the status quo.

It's really about why Keynsian economics doesn't work. We've used that model for the last, I dunno, 30-50 years and look where it's gotten us. But instead of debating why we should change that to something like the Austrian model, we endlessly debate trickledown, and supply side issues. Let's look at the core of the matter first, the economic model.

 

[Intense]

I think this is another case of ignoring the real issue, and shouting at a straw man to keep the status quo.

It's really about why Keynsian economics doesn't work. We've used that model for the last, I dunno, 30-50 years and look where it's gotten us. But instead of debating why we should change that to something like the Austrian model, we endlessly debate trickledown, and supply side issues. Let's look at the core of the matter first, the economic model.

Let's look more at Increased Free Market completion without the Monopoly protections, which create imbalance, and subsidies that shore up and pick favorites. Government has n obligation to keep the playing field clear of obstructions, not pick favorites. Until the corruption is removed from any system, it's unfair to judge it as failed. Corrupted, yes. Failed? no.

 

[Vidi]

I think this is another case of ignoring the real issue, and shouting at a straw man to keep the status quo.

It's really about why Keynsian economics doesn't work. We've used that model for the last, I dunno, 30-50 years and look where it's gotten us. But instead of debating why we should change that to something like the Austrian model, we endlessly debate trickledown, and supply side issues. Let's look at the core of the matter first, the economic model.

Edited

Let's start with your assertion that Keynesian economics have been in play for the last 30-50 years. You've completely ignored Milton Friedman with that statement and his effect on our economic policy. Prior to Friedmans influence on President Reagan, this country enjoyed its most prosperous 30 years. And that was when Keynesian economics were in play unfettered.

And you support the Austrian model? What model is that exactly?

As one of the fundamental principles of the Austria school is that all models are flawed and only logical thought based on illogical human action. According to that theory all test ability and mathematical modeling are impossible.

Basically, the Austrian school holds to the theory of Fuck it, we don't know, there's no way to know, let's try this.

Yeah, let's do that.

 

[Wiseacre]

I think this is another case of ignoring the real issue, and shouting at a straw man to keep the status quo.

It's really about why Keynsian economics doesn't work. We've used that model for the last, I dunno, 30-50 years and look where it's gotten us. But instead of debating why we should change that to something like the Austrian model, we endlessly debate trickledown, and supply side issues. Let's look at the core of the matter first, the economic model.

Let's look more at Increased Free Market completion without the Monopoly protections, which create imbalance, and subsidies that shore up and pick favorites. Government has n obligation to keep the playing field clear of obstructions, not pick favorites. Until the corruption is removed from any system, it's unfair to judge it as failed. Corrupted, yes. Failed? no.

Right now, gov't has no incentive to change a system that clearly is rewarding them handsomely. Changing campaign finance laws isn't going to change that, even if you could get them past the Supreme Court, which looks unlikely unless you can pack the Court with more liberal judges.

Frankly, I only see one way out of this morass: a lot less gov't spending so the amount of money available to be wasted or misused is more limited. And then the public is going to have to get more involved with making sure our elected officials are spending OUR money more wisely and effectively. Which is one reason why I like the Tea Party movement; they ain't perfect but in this regard I think they are moving in the right direction.

 

[The Rabbi]

Wow. Just wow. Edited.

For starters, the economy sucked before Reagan. That was sort of a big reason he got elected.
Second, "supply side" policy targets the supply of items. The theory is if you make it profitable for people to produce and innovate then they will do that. If you punish them for doing that, they won't. And that is the case, demonstrably so. This has nothing to do with globalization.

But let's consider globalization. We have not seen the kind of inflation we saw in the 1970s since that time. In fact, inflation has been low for the last 20 years. Why? Globalization. Reduced costs. Increased efficiency. We have outsourced low skill manufacturing and insourced high skilled design, marketing, finance, and other functions. The US has been a net beneficiary of globalization, which is why unemployment was very low until the recent turn in the economic cycle. Few were complaining about globalization in 2005 when the UE rate was 5%.

We could erect tariffs and build everything here and it would cost double what it does now. Is that really what we want, destroying our export business in the process? I think not.

 

[Vidi]

Wow. Just wow.

For starters, the economy sucked before Reagan. That was sort of a big reason he got elected.
Second, "supply side" policy targets the supply of items. The theory is if you make it profitable for people to produce and innovate then they will do that. If you punish them for doing that, they won't. And that is the case, demonstrably so. This has nothing to do with globalization.

But let's consider globalization. We have not seen the kind of inflation we saw in the 1970s since that time. In fact, inflation has been low for the last 20 years. Why? Globalization. Reduced costs. Increased efficiency. We have outsourced low skill manufacturing and insourced high skilled design, marketing, finance, and other functions. The US has been a net beneficiary of globalization, which is why unemployment was very low until the recent turn in the economic cycle. Few were complaining about globalization in 2005 when the UE rate was 5%.

We could erect tariffs and build everything here and it would cost double what it does now. Is that really what we want, destroying our export business in the process? I think not.

Edited.

The 50's and 60's were pure economic growth. The 70's economy was fi8ne. GDP stiill grew. The perception that the economy was bad was a myth brought on by two Oil Embargos.

Now look at the average income levels

See how the GDP and average income diverge when the embargos happened and though GDP continued to rise, average incomes did not.

Now consider what effect that had on tax revenue.