To spur job creation, bring on supply-side economics

[Mott the Hoople]

Supply Side Economics = expand/grow the economy and there is enough pie for everyone to make a grab for wealth.
Keynesianism = spend more money on the government side to ensure that there is at least a miniscule GDP growth.

I guess neither could technically be called a "zero sum game" philosophy, but one is certainly more progressive and optimistic.

A yes simple slogans for simple minds that are simply wrong.

Supply Side economics, as currently applied by the GOP, is a net zero gain. More after tax income for the top marginal tax payers and less federal revenue. Supply-side economic driven cuts to marginal tax rates have never proven to increase federal revenues by creating broad based prosperity. In fact they've never proven to create broad based prosperity.

The reality is the Keynesian economic model, the model that saved capitalism, is a proven economic system that has worked for well over 70 years. That's a fact. Supply-side economics, cute slogans and all, has never demonstrated the improvements it's supporters claim and has never demonstrated it works. That's a fact too.

 

[Mott the Hoople]

I appreciate the theory's and all but what is Keynesian giving us today? We have massive deficits but we don't the growth you speak of right now and what growth we do have is all goin to the top 5% so there is no 'across the board manner' that you reference. And what's going to happen when we pull the plug on QE? That's not going to be pretty.

Wacko! No kidding we have massive deficits. The vast majority of those deficits occurred as a direct response to Supply-Side policies under GOP administrations that has, as I've pointed out, created serious structural deficits that have been exaserbated by recession in which demand was substantially curtailed and congressional Republicans touting supply-side theory have obstructed the level of stimulus spending and tax increases necessary to deal with the structural deficits and contraction in demand that the GOP's supply-side policies have created.

That's where we're currently at with the Keynesian model.

 

[Airstrip One]

From 1932 to 1937, unemployment dropped by about 2/3 during the FDR administration. 1937 is the year FDR decided to balance the budget. The US joined the war in December 1941, which is what is probably represented by the unemployment rate suddenly dropping to nearly 0% at the tail end there. That's only the final 6 months in the graph, though, it's clear he had it to full unemployment before December 1941.

Yes, but 1939 was salvaged because we started manufacturing to support the Allies, and FDR initiated Lend-Lease to the British.

Also, take note that the only significant drop in the unemployment rate was during Hoover's last year in office.

 

[Airstrip One]

A yes simple slogans for simple minds that are simply wrong.

Supply Side economics, as currently applied by the GOP, is a net zero gain. More after tax income for the top marginal tax payers and less federal revenue. Supply-side economic driven cuts to marginal tax rates have never proven to increase federal revenues by creating broad based prosperity. In fact they've never proven to create broad based prosperity.

The reality is the Keynesian economic model, the model that saved capitalism, is a proven economic system that has worked for well over 70 years. That's a fact. Supply-side economics, cute slogans and all, has never demonstrated the improvements it's supporters claim and has never demonstrated it works. That's a fact too.

There's no evidence to suggest that Keynesianism would have worked if Hitler hadn't invaded Poland. Certainly, FDR would probably not have been re-elected in 1940 the way things were in 1939. Meanwhile, supply side was implemented in 1981, and we got the bull market of 1984-2008. Also, Keynesianism didn't work from 1967-1981 under LBJ, Nixon/Ford, and Carter.

 

[The Dude]

Oh so it worked, but

 

[Airstrip One]

Oh so it worked, but

It didn't work. After 1945, when the market began to explode, we weren't aggressively pursuing Keynesianism. It made a comeback under LBJ and Nixon, and we all know what happened to the economy. The one time we really changed courses was under JFK, who cut taxes.

 

[Taft2016]

The obvious complication being overlooked is that supply side economics has an absolute limit, a theoretical zero tax state, which we've never even come close to, and consistently drift further and further away from.

Keynesianism apparently is limitless. Its advocates see no concern in comparing it being used 80 years ago in an era of balanced budgets and no national debt, and today in an era of no budgets and existing crushing debts. The only limit Keynesianism seems to have is complete societal and economic collapse, as we're starting to see around Europe.

 

[The Dude]

It didn't work. After 1945, when the market began to explode, we weren't aggressively pursuing Keynesianism. It made a comeback under LBJ and Nixon, and we all know what happened to the economy. The one time we really changed courses was under JFK, who cut taxes.

History fail dork

 

[Mott the Hoople]

There's no evidence to suggest that Keynesianism would have worked if Hitler hadn't invaded Poland. Certainly, FDR would probably not have been re-elected in 1940 the way things were in 1939. Meanwhile, supply side was implemented in 1981, and we got the bull market of 1984-2008. Also, Keynesianism didn't work from 1967-1981 under LBJ, Nixon/Ford, and Carter.

Like hell there isn't. Great Britain and Sweden had ended the depression in their nations prior to WWII and the US would have ended it sooner had FDR embraced full implementation of Keynesian economics sooner. Than you're convienantly failing to mention how both Ike, via his infrastructure program had implemented, effectively, Keynesian theory and that Nixon had famously quipped "We're all Keynesian" when asked about economic policy. The evidence and facts about both economic systems are there. If you fail to see it, that's your problem. The facts are, The Keynesian model works. Supply-Side theory had never proven what it claims.

 

[The Dude]

It worked like a charm in WWII. Fucking millennial loser.

 

[Taft2016]

Than you're convienantly failing to mention how both Ike, via his infrastructure program had implemented, effectively, Keynesian theory

That doesn't fit in with my understanding of the Eisenhower Administration. I've always understood it to be one of high taxation and deep austerity to pay off the war debt, to the point of frequent recessions.

 

[Airstrip One]

It worked like a charm in WWII. Fucking millennial loser.

Even if this were true, it's not a model we can repeat unless you want to draft 20 million troops and start WWIII. Then, we could take advantage of the wrecked European and Asian economics for 15 years.

 

[cawacko]

Like hell there isn't. Great Britain and Sweden had ended the depression in their nations prior to WWII and the US would have ended it sooner had FDR embraced full implementation of Keynesian economics sooner. Than you're convienantly failing to mention how both Ike, via his infrastructure program had implemented, effectively, Keynesian theory and that Nixon had famously quipped "We're all Keynesian" when asked about economic policy. The evidence and facts about both economic systems are there. If you fail to see it, that's your problem. The facts are, The Keynesian model works. Supply-Side theory had never proven what it claims.

The '70's and stagflation did not show Keynesian worked. In fact it made the Keynesians question their economic beliefs.

 

[Cancel 2016.2]

Fucking hilarious. Talk about stupid. Supply siders have been tanking our economy and putting people out of work, stagnating the wages of those who do have jobs and giving the stupendous growth in productivity from the last 40 years to just a handful of people and you want more of it?

How do you spell "STUPID"?

S*U*P*P*L*Y S*I*D*E*R!

LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL

The above is the most idiotic comment you have ever made... which is saying a lot.

I would love for you to show us where 'supply side' economics 'tanked' our economy, put people out of work etc...

 

[Cancel 2016.2]

Mott, what has Keynesian economics done for us here? What has QE done for us? What about the actual issues the professor addresses? Why aren't banks lending? How much longer does the Fed need to stick with monetary stimulus and how bad will we feel the affects when it's done? (it's highly highly optimistic to think the Fed can print money like it has and there will be no ill effects when it stops)

They don't need to loan as long as they have risk free arbitrage. If they can borrow money from the Fed at 0-0.25% and then buy Tbonds at 2-3%... they lock in the spread with no risk.

 

[Cancel 2016.2]

Wild ass guess, you don't own a lot of stock!

The stock market has little to do with why banks are not lending.

 

[Cancel 2016.2]

We've waited over 30 years for trickle down to work, so where are all the jobs it was supposed to create? Oh yea, first they went to Mexico then your conservative leaders made insane trade deals with your Communists Chinese allies. All at the cost of American jobs, society and economy. The only thing it (trickle down) did create was a world wide depression in 2008 that I believe is the purpose of your 'free trade' and 'trickle down' bullshit.

Thom Hartmann, one of the great thinkers of our time, too bad your conditioning won't let you understand him.

Where are all the jobs your ideology was supposed to create? 30 yrs is enough time to implement and see the results of trickle down. Bottom line, it's a failed ideology that needs to be treated like a cancer on the U.S.

So when unemployment rate was under 5%???

Supply side economics had little to do with the economic problems of 2008. The repeal of Glass Steagall did.

 

[Cancel 2016.2]

I laughed because the failure of supply side economics has been so well documented as to not really be in dispute. Only those who have a political stake in increasing income inequality support it.

This is complete nonsense. But since you believe it is so well documented, then surely you will be able to link us up to this documentation you speak of.

The failures of this over simplistic model are legion.

Wrong again mutt.

Supply Side Economics overstates the behavioral changes to tax rates. Labor supply, investment and business activity are just not as responsive to tax changes as supply siders would lead you to believe. That's not to say there's no response it's just that the response tends to be the restructuring of income and not the creation of income. Which is not was supply sider envisage, unless you're a tax lawyer.

Supply Siders don't place enough emphasis of budget deficits. As Dick Cheney famously quipped, to them, budget deficits don't matter. As a Keynesian I'm no deficit hawk, there is a time and a place for deficit spending. Namely as economic stimulus during recession or depression when there is a contraction in demand. Ultimately though we must pay for what we spend. History clearly shows that supply side tax cuts, since they don't have the growth effects their adherents tout, are causally linked to structural budget deficits (and by that I mean deficits even at full economic capacity) making a sustainable economic path virtually impossible.

Ahhh... so you rely upon Dick Cheney as your source of 'supply side economic knowledge'? That explains your ignorance on the topic.

The above is also pure nonsense with regards to tax cuts creating structural deficits. Spending was, is and will continue to be the problem. Did you notice that we continue outspending revenue even in this extreme Keynesian approach?

Neither supply side nor Keynsian economic theories work if you outspend revenue every year.

Were you aware that Keynes supported tax cuts (to a degree) as a way to spark growth?

Supply Side Economics is also a significant contributor to income inequality. Supply-Side economics is a net zero sum proposition. All you essentially accomplish with supply side tax cuts is raise after tax income on the wealthy while losing federal revenues with no net economic growth. The wealthy gain income without adding value or economic growth. The rest of us lose federal revenue that's needed for important services like defense, building roads, hospitals, schools etc. Result, no net gain. No economic growth. Since supply siders are essentially redistributing income upwardly and not producing value is why I often refer to supply side economics as reverse socialism.

You really shouldn't attempt discussing economics. You clearly have no clue what you are talking about. Tell us Mutt... are you really pretending that there was no economic growth from 1981-2000?

What years did revenue go DOWN in that time frame? You claim spending went down... show us when it did so. Surely with Reagans tax cuts you can show the years that revenue declined.

Then there's the fact that in the never, never land of supply-siders demand never, ever contracts. Thus stimulus spending to offset demand contractions (a central principle of Keynesian economics) are never required cause in supply side land demand never contracts. That just doesn't fit their model. Economic growth and prosperity are always just one marginal tax cut away. How they can miss current demand constraints that are so clearly evident is beyond me.

LMAO... so tell us Mutt... what is more efficient...

1) the government taking $800B and politicians deciding where to spend the money to 'help' the people or...

2) The government giving the people $800B in tax cuts and letting the people spend it where they most need it

So yea, this notion of the OP is selling that Supply Side Economics is our route to prosperity and it's ONLY ONE MORE TAX CUT FOR THE WEALTH AWAY is pretty damned laughable given the evidence.

Both Keynesian and supply side work when implemented properly. Your problem is that you listen to Cheney to educate yourself on supply side and you listen to Obama for your Keynesian knowledge.

As for me, I'm sticking with an economic system that is proven to work during periods of constraints in demand that do actually stimulate economic growth and prosperity in an across the board manner based on increasing productivity and adding value, Keynesian Economics.

So with all of the Keynesian economic 'stimulus' of the past five years... you claim that the benefits have been across the board? You are going to pretend it isn't the top 1% that have made out during this time while the average worker has seen wages decline? That income inequality hasn't increased in the past five years? Is that what you are pretending Mutt?

 

[Cancel 2016.2]

Read your history. Keynesian economics saved capitalism.

Link us up.

 

[Cancel 2016.2]

A yes simple slogans for simple minds that are simply wrong.

Supply Side economics, as currently applied by the GOP, is a net zero gain. More after tax income for the top marginal tax payers and less federal revenue. Supply-side economic driven cuts to marginal tax rates have never proven to increase federal revenues by creating broad based prosperity. In fact they've never proven to create broad based prosperity.

The reality is the Keynesian economic model, the model that saved capitalism, is a proven economic system that has worked for well over 70 years. That's a fact. Supply-side economics, cute slogans and all, has never demonstrated the improvements it's supporters claim and has never demonstrated it works. That's a fact too.

LMAO... you keep saying 'thats a fact'... any supporting documentation Mutt? Are you pretending the economic boom of the 1982-2000 time frame was due to Keynesian economics?