While I work on a longer reply to all of the questions I've been asked....Let me adress "supply side" economics.
You may recall this as the "trickle down" theory, later rebranded as the "rising tide lifts all boats" ideal puppeted here. This argument makes sense so long as two things are true:
The economy is being held back by a shortage of capital available for investment, and that high earners are being held back from investing because they do not have the money to do so.
Given that we are currently in a situation in which corporations are sitting on record amounts of uninvested capital and within the last year we've seen some of the most profitable quarters in all of American history, it's a little hard to see how those descriptions apply.
Since we're philosophizing rather than getting into nuts and bolts and black-letter law and BOHICA without lube, let me first state I'm no economist and don't profess to be well versed in the art/science.
It's been well postulated, however, that the fundamental REASON that corporations are sitting on all that capital, they're flush with cash, is very simple...
...they're waiting.
What are they waiting for? I never thought you'd ask. They're waiting for more CERTAINTY in economic forecasting; they're looking for a more disciplined approach to monetary policy (printing all that money over and over and over again does not do well for things like AAA bond ratings), and they're certainly looking to get rid of Barry so that monetary policy, in particular, can be addressed to provide that level of certainty they need.
The demand-side approach to tax cuts favors cuts for low and middle earners, in the hope that they will spend the extra money and thus stimulate the economy; this is essentially using tax cuts as a form of Keynesian stimulus. That argument makes sense so long as two things are true:
Tax cuts, in the form we've seen, are veritable band-aids. They provide a sense of comfort and relief, when, in fact, that wound is festering with infection. They're political toys - and have not much more effect on the economy than that.
Actually, there are no clear affirmative conclusions to be drawn here except that we have overwhelming reasons to reject the claims being made by supply-side tax cut enthusiasts. The data certainly do not show that tax cuts never stimulate economic growth, nor even that they never stimulate economic growth enough to pay for themselves.
I will revert to the original argument -- if you want to get less of something (economic growth), tax it. You can argue all you want about supply-side economic theory, but there's one very curious thing about it.
It works, or at least it worked in the 1980s. Are we that far removed from things not to revert back to that model, rather than the extremely archaic Keynesian model of the 1930s?
