Hello Flash,
I don't agree. The idea of supply side has nothing to do with helping the rich and then expecting them to help the poor.
I believe it most certainly does. The idea is to remove regulatory/socialistic impediments to capitalism, and place fuller faith that capitalism will provide for all in due proportion. The expectation that the rich will create jobs for the poor is the way it is presumed they will help the poor. (and the only way)
"Supply-side economics is a macroeconomic theory that argues economic growth can be most effectively created by lowering taxes and decreasing regulation. According to supply-side economics, consumers will then benefit from a greater supply of goods and services at lower prices and employment will increase."
Correct. But there is a limit to the effectiveness of SSE. SSE loses effectiveness as the market becomes saturated.
When all the consumers who wish to have product have already purchased what they want, producing more volume of product becomes pointless because it will not sell. Beyond that point, there is no usefulness to creating more product, if the market is 'saturated' and the product will not sell. Employers do not hire, not because they lack funds to expand, but because that expansion will not generate acceptable ROI, return on investment. Giving employers tax breaks and fewer regulations beyond that point will not improve the economy. It will be detrimental. If the government has committed hari kari by extending such generous tax breaks that insufficient revenue is collected, it will hurt the economy because the economy depends on the government credit rating which will be subsequently downgraded as Debt/GDP rises to unsustainable levels.
Tax cuts are not limited to the wealthy and in another post I pointed out how the bottom 40% virtually pay no federal income taxes; thus, by default, any tax cuts are going more to those who pay most of the taxes.
The second part of that sentence contradicts the first. Tax cuts most certainly benefit only the wealthy precisely because the lower 40% have already had their taxes cut to zero. Just as you say, the cuts are going to those who pay, the rich. The upper 60% ARE the rich, compared to the lower 40%. Not to mention that the largest cuts have gone to the richest, and the richest corporations.[/QUOTE]
Cutting regulations is not just for the wealthy and many benefit the middle class because many regulations are designed to protect American businesses from competition increasing prices for consumers. A lot of regulations hurt small businesses at the expense of larger ones.
But those are *never* the regulations which get cut, due mainly to crony capitalism. The regulations which get cut are safety and environmental regulations. This sort of sleight of hand takes place where they claim the problem is 'over-regulation' (which is an over-simplification) and then instead of cutting the regulations which hurt entrepreneurs they cut the ones that hurt mega corporations.
Cutting taxes did not take away from government's efforts to directly help the poor.
No, but the subsequent budget cuts do.
There are 80+ means tested federal welfare programs spending over $1 trillion. This does not include entitlements such as Social Security, Medicare, and Medicaid. [Senate Budget Committee]. I don't see that these programs have been very successful but they have increased in number and spending under both parties while the poverty rate has remained stable. And, as has been expressed in other threads, a lot of those programs also provide added income for the wealthy.
They have absolutely made a quantum difference in the quality of life for America's poor. The percentage may be the same, but the definition of poor has been raised significantly. The poor in America, thanks mainly to those socialist programs and not capitalism, enjoy a lifestyle which would seem like luxury to the poor in Rio de Janeiro's shanty slums. Some of those shanties are set up in or next to the landfill, which is where many acquire possessions, food, and disease.
I don't understand why it is wrong if the wealthy benefit from tax cuts but it is ok for them to benefit from government programs---often a much higher amount (food stamps, Medicare, Medicaid). The left seems very hostile to the wealthy corporations and the right is hostile to the wealthy in Hollywood.
Neither is right.
It was the wrong thing to do without also cutting spending. The deficit is due to spending increasing at a faster rate than revenue.
Agreed as far as the debt is concerned, but I disagree with doing both, because the USA does not have a spending problem, the things the government has done have been good for people, and we should continue to do them. We thus need to increase taxes in order to balance the budget, mainly increase taxes on the wealthy, because only the wealthy can afford to pay that much. If America did not have so much wealth, America could not support this level of government spending, and America would not be great. In that case, America would be similar to Brazil, and unable to do anything for the poor.
Taxing The Rich More Makes America Great.
