Toddsterpatriot
Diamond Member
The problem with the supply driven theory is that it's so unreliable. Just because you give tax cuts to the wealthy doesn't mean it's gong to trickle down. If the wealthy get a tax break, they may invest in expanding US businesses but they also may invest abroad, in gold, in treasuries, or just put it in bank waiting for a stronger economy.
If sales are rising and economic forecasts are improving, business will expand if funds are available, but if consumers sales are lackluster, and forecasts are very mixed, businesses will sit on cash as will investors, just as was done over the last few years.
However, on the demand side, money put in the hands of the poor or middle class when times are hard will be spent creating an incentive for business to expand.
IMHO, the best way to simulate the economy is to push money to the poor and middle class when sales are contracting, then as sales pick up introduce tax cuts, and maintain low interest rates. However, it tax rates are already very low, the deficit is high, and interest rates are rock bottom when we enter a recession as was the case in 2009, then we're screwed. Any stimulus we apply will have negative long term effects.
Supply-side economics emphasizes economic growth achieved by tax and fiscal policy that creates incentives to produce goods and services. In particular, supply-side economics has focused primarily on lowering marginal tax rates with the purpose of increasing the after-tax rate of return from work and investment, which result in increases in supply.
I don't see the word trickle anywhere.