Proof that Supply Side Economics doesn't work

[Yo_Mama_Been_Loggin]

For months, companies have been sitting on the sidelines with record piles of cash, too nervous to spend. Now they're starting to deploy some of that money - not on hiring workers or building factories, but to prop up their share prices.

Sitting on these unprecedented levels of cash, U.S. companies are buying back their own stock in droves. So far this year, firms have announced they will purchase $273 billion of their own shares, more than five times as much compared with this time last year, according to Birinyi Associates, a stock market research firm. But the rise in buybacks signals that many companies are still hesitant to spend their cash on the job-generating activities that could produce economic growth.

http://www.washingtonpost.com/wp-dyn/content/article/2010/10/06/AR2010100606772.html?hpid=topnews

[Abq_Sarah]

1. Without demand

Supply is worthless.

I could run out and hire 50 people tomorrow but without demand for my services, they'll have nothing to do and I'll go bankrupt.

[Pab Sungenis]

2. But those 50 people will help fuel the economy, helping feed demand

for your services. It's a vicious circle.

[Abq_Sarah]

3. Yes it is

And as long as people don't feel secure enough to start spending the money they have, it's not going to change.