Thursday, October 15, 2009

Supply-Side Economics: An Ideological Farce

For those of you that don't know, supply-side economics is a farce. The Wikipedia definition of supply-side economics:

"Supply-side economics is a school of macroeconomic thought that argues that economic growth can be most effectively created using incentives for people to produce (supply) goods and services, such as adjusting your income tax and capital gains tax rates, and by allowing greater flexibility by reducing regulation. Consumers will then benefit from a greater supply of goods and services at lower prices."

I would disagree with the above definition where it describes supply-side economics as a "school" of macroeconomic thought. I would argue that any true academic study on the matter has been distorted for political gain. Even the elder Bush referred to supply-side economics as "voodoo economics." Of course it cost him a second term, but that is another matter.

Hosted by

No comments: