Does any country other than the U.S. believe in Supply Side Economics

[CoffeeAnnan]

[Chef]

1. Supply Side

Not in this century.

[Warpy]

2. Most of the rich people in the world believe it

as a way of rationalizing having more than they could ever want while the rest of us struggle for crumbs. They think when they get rich enough, they can create new industries and patronize new arts and do all kind of nifty things. The trouble with that is that no rich person is ever rich enough to do any of it. They all hear the wolf at the door.

[Taxloss]

3. The UK did. about 60-70 years ago.

But that was deficit spending on investment, not tax cuts and waste.

[tk2kewl]

4. I'm no economist

but I always thought it was the "Law of Supply and Demand"

I can't understand how increasing supply does anything. Seems Keynes made a lot more sense. :shrug:

[Deja Q]

5. Especially when the demand is unable to buy the bloody supply!

Either those controlling the economy are simply maliciously greedy and thinking they can get away with what they're doing (and early evidence suggests they ultimately can't), or they're being very stupid.

[CoffeeAnnan]

6. To those responding, I am talking about the American variety

based on a charlatan called Arthur Laffer, who claimed that if you keep cutting taxes, miracles of investments will materialize and the tax revenues will actually increase! No one has seen any of that increase, except Laffer himself who is now a multimillionaire.Of course, the logical absurdity of that claim is if you do not have any taxes at all the revenues will be infinite.

[Telly Savalas]

8. The idea of the Laffer curve does make sense...

It's perfectly reasonable that there is a level of taxation that optimizes revenue. However, nobody has ever offered a shred of evidence that we're anywhere close to being above this optimal point.

[Selatius]

7. The US demonstrated supply-side to the world in the 1980s

I don't think very many other nations were sold on the idea. The information gathered didn't support the hypothesis. All that happened was that it expanded the national debt and ballooned budget deficits.

The idea was that if one cut taxes that deeply, then that would spur the economy's growth to such an extent that the tax revenues generated by the growth would offset those lost by the tax cuts. That didn't pan out. The economy didn't grow. It shrank instead.

Here is a snippet:

But as early as August 1981, Stockman (Reagan's budget director) began having gnawing doubts about his budget. Computer simulations failed to project the tremendous growth he had predicted, and later he would admit to cooking the numbers (!) before selling the budget to Congress. That December, the Atlantic Monthly published an article in which Stockman made several damaging and embarrassing confessions about the entire supply-side philosophy. He admitted that the 1981 tax cut "was always a Trojan horse to bring down the top (tax) rate" for the wealthy. Cutting taxes for the rich had long ago been coined "trickle down economics" - and it was an unpopular concept with the middle class. "It's kind of hard to sell 'trickle down,'" Stockman told the interviewer. "So the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory."7

The Rosy Scenario failed to materialize. The economy did not grow out of its deficits. In 1986, Washington and the rest of the nation would again be surprised when Stockman confessed all in a book entitled The Triumph of Politics: Why the Reagan Revolution Failed.

The rise of supply-side economics.

[MisterP]

9. sure: either oligarchies or those we've crammed it into

and they're smoking hellholes because of it (but don't tell St. Tory Bliar).