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The Problem With Supply Side Economics
Forbes ^ | 02/10/2011 | Bill Flax

Posted on 06/12/2011 6:20:17 PM PDT by billflax

Supply side economics invokes the most basic element of human nature: self-interest. We all seek to improve our material circumstances. The tinier the tax man’s bite, the greater is our incentive to produce. As tax burdens lighten, motivation heightens, sparking a robust economy. Allowing producers to enjoy their hard earned gains is both just and effective.

Contrasted with demand side economics it’s a no-brainer. It is neither just nor effective to funnel public money to political favorites hoping they will spend lavishly and thus stimulate production. Paying people not to produce inspires little effort. Depriving producers of needed capital so it can instead be transferred according to political whim ridicules the very pretense of stimulus.

Even calling political waste “investments” merely makes the semantics more palatable to gullible voters. Rather than paying people to consume others’ wealth hoping this will rejuvenate production, it obviously works far better to let producers enjoy their gains. We will always direct our own resources better than will politicians or their bureaucratic henchman. It’s not rocket science. Tax cuts incent production; profligate spending enables sloth and encourages corruption.

(Excerpt) Read more at blogs.forbes.com ...


TOPICS: Business/Economy; History; Society; The Guild
KEYWORDS: amfyoyo; besidesthezot; federalspending; ibtz; obama; ronaldreagan; supplyside; taxes; teaparty; youmustbenewhere; zeronomics; zot; zotsylvania
Supply side economics gives Washington too much tax money to waste.
1 posted on 06/12/2011 6:20:21 PM PDT by billflax
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To: billflax

The problem is not supply side economics— it’s amibtious politicians who then take the extra revenues and spend it foolishly.


2 posted on 06/12/2011 6:32:19 PM PDT by Lysandru
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To: billflax
It's a long article to get to a fairly obvious conclusion.

If you're in a hurry, here it is:

We should find that point on the Laffer Curve which generates the highest tax revenue and then cut taxes further by several magnitudes.

Sound advice.

3 posted on 06/12/2011 6:36:01 PM PDT by samtheman
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To: billflax

Tax cuts do not always increase revenue. It depends on where you are on the Laffer curve.


4 posted on 06/12/2011 6:37:29 PM PDT by Sherman Logan
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To: Lysandru

The other issue is Wall Street. They no longer want to invest in long term productive assets in the United States. Instead of a place to raise equity capital, Wall Street is a casino where speculators spin the 401K’s and IRA’s of the public, siphoning off huge fees and living their customers and the taxpayers holding the bag when they fail.


5 posted on 06/12/2011 6:38:19 PM PDT by Soul of the South (When times are tough the tough get going.)
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To: Sherman Logan
Tax cuts do not always increase revenue. It depends on where you are on the Laffer curve.

Who, except a total idiot, doesn't think we are WAAAAAAAAAAAY to the right of the inflection point on the laffer curve?

6 posted on 06/12/2011 6:41:21 PM PDT by central_va ( I won't be reconstructed and I do not give a damn.)
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To: billflax; SunkenCiv; shibumi; Larry Lucido; 50mm; Eaker; Salamander; Markos33

Welcome to Free Republic.


7 posted on 06/12/2011 6:49:06 PM PDT by TheOldLady (FReepmail me to get ON or OFF the ZOT Lightning ping list.)
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To: TheOldLady

15 spyware, 17 cookies.

Gotta be a new record.


8 posted on 06/12/2011 7:03:29 PM PDT by Salamander (I wear my sunglasses at night.)
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To: Salamander; SunkenCiv; shibumi; Larry Lucido; 50mm; Eaker; Markos33

Check out the goodies Sal found.


9 posted on 06/12/2011 7:19:50 PM PDT by TheOldLady (FReepmail me to get ON or OFF the ZOT Lightning ping list.)
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To: Sherman Logan
Tax cuts do not always increase revenue. It depends on where you are on the Laffer curve.

Do you seriously think we have to worry about even getting near that point?

10 posted on 06/12/2011 7:23:24 PM PDT by YankeeReb
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To: billflax

The problem with supply-side economics at the moment is that it’s not being tried.


11 posted on 06/12/2011 7:24:33 PM PDT by Colonel_Flagg ("Mr. Romney and Mr. Obama are not rivals, they're running mates." - Rep. Thaddeus McCotter)
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To: Salamander
15 spyware, 17 cookies. Gotta be a new record.

Please edumacate me on what you mean.

12 posted on 06/12/2011 7:37:05 PM PDT by BreezyDog
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To: billflax; TheOldLady; Salamander; 50mm; darkwing104; Larry Lucido; humblegunner; Eaker; ...

Here at FreeRepublic we have a supply of readers, to the tune of over 1MM page views per day.

At your blog, you have a demand for blog hits, to the tune of 17 cookies (which pay you a per hit fee) and 15 spyware thingys which obviously are another source of revenue for you, and an invasion of privacy for us.

If you want FReepers to read your stuff, you can just post it here, as an act of good faith. We do not support this site just to give you a soapbox, and we sure as hell don’t do it so that you can gunk up our computers and track our movements about the internet.

This is a community. Sometimes it is a feisty one, sometimes a calm and reasoned one. But one thing it is not, is a marketing tool for you.

I speak now for myself and a few other like-minded FReepers. Perhaps you would also like to read what the owner of this site has said on the subject?

http://www.freerepublic.com/focus/bloggers/2636843/posts?page=552#552

Or perhaps you’d rather hear it from the Moderators?

http://www.freerepublic.com/focus/f-news/2722423/posts

And in closing - just as a word of advice - arguing against Conservative economics, specifically Reaganomics/Supply Side Economics is not a good way to insure your longevity as a Freeper. I’ve seen n00bies get The ZOT for lots less.

Just sayin’


13 posted on 06/12/2011 7:47:07 PM PDT by shibumi (Ego Nunquam Ubi Sub Ubi!)
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To: BreezyDog

It means that if you click on this guy’s blog without wearing a condom, your computer is going to get a social disease.


14 posted on 06/12/2011 7:48:39 PM PDT by shibumi (Ego Nunquam Ubi Sub Ubi!)
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To: Sherman Logan
Tax cuts do not always increase revenue. It depends on where you are on the Laffer curve.

While the Laffer curve represents reality, it is not the correct measure to determine tax policy.

Think of a new plot, the CurlyDave curve, where we plot GDP vs. tax rate. We want to adjust tax rates to maximize GDP, not to maximize government revenues.

15 posted on 06/12/2011 7:56:42 PM PDT by CurlyDave
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To: CurlyDave

>> We want to adjust tax rates to maximize GDP, not to maximize government revenues.<<

You are right, but the point of supply side is to maximize personal production - the increased tax revenues are just a way to sell it and a way to point out the hypocrisy of the redistributionists. So, supply side is great theory, and balanced with a target % of GDP for all tax expenditures is fabulous.


16 posted on 06/12/2011 8:02:06 PM PDT by C. Edmund Wright (American Thinker Columnist / Rush ghost contributor)
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To: Sherman Logan
Tax cuts do not always increase revenue.

The rule is that taxes inhibit economic growth. Tax revenues are a function of economic activity, but economic activity is not a function of tax rates. If economic activity increases, tax revenues increase. If economic activity decreases, tax revenues decrease.

Basically as a society, we should decide what fraction of our total economic output should go towards funding government, and then we should set rates accordingly. The only fair way to do that is to implement a flat tax. Historically, the current 'progressive' tax system has resulted in roughly 19% of economic output being directed into government coffers. We could implement a flat 19% rate (no deductions) and achieve the same numbers.

17 posted on 06/12/2011 8:04:06 PM PDT by Hoodat (Yet in all these things we are more than conquerors through Him who loved us. - (Rom 8:37))
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To: Salamander

Man, these blogs are always full of such trash....


18 posted on 06/12/2011 8:10:38 PM PDT by DeoVindiceSicSemperTyrannis (Want to make $$$? It's easy! Use FR as a platform to pimp your blog for hits!!!)
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To: Sherman Logan
Tax cuts do not always increase revenue. It depends on where you are on the Laffer curve.
 
And it also depends on whether the only arrow in the quiver is tax cuts.
 
The key to government-initiated economic stimulation is whether tax cuts (especially with respect to the producers-businesses) are coupled with reduction/elimination of excessive regulatory burdens on those producers...in other words, a package that actually reduces unnecessary costs to the businesses, costs that are directly or indirectly attributable to the policies/laws/regulations of the government.
 
Sometimes, tax cuts in and of themselves will stimulate enough to produce a net increase in revenue to the government, but as you point out it would depend on where you are on the Laffer curve.  But couple tax cuts with other measures that actually reduce government-induced burdens on businesses, and you'll see economic growth every time, along with the associated increases in tax revenues tied to that growth.
 
Add to that tax cuts that allow individuals/families to keep more of their earnings and you have a recipe for sustained growth.
 
What would, in theory, do all of the above (from a tax standpoint)? 
 
Tax reform that replaces all taxes with a consumption tax (again, in theory)

19 posted on 06/12/2011 8:48:11 PM PDT by Let_It_Be_So (Once you see the Truth, you cannot "unsee" it, no matter how hard you may try.)
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To: Hoodat

‘The only fair way to do that is to implement a flat tax.’

Personaly, I would like to see a “Fair Tax” on all goods and services paid by the end user of goods and services with no exception. Why? Because every time I would buy an item the rate of tax would be staring me in the face. The difference is point of “view”. People get use to seeing the “bottom line” on a pay check. But when you go to buy an item(which could be several times a day)and the tax goes up 1% you would notice and get ticked off enough to end some elite politician’s dream of redistribution of money.


20 posted on 06/12/2011 9:44:10 PM PDT by steveab (When was the last time someone tried to sell you a CO2 induced climate control system for your home?)
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To: Hoodat

‘The only fair way to do that is to implement a flat tax.’

Personaly, I would like to see a “Fair Tax” on all goods and services paid by the end user of goods and services with no exception. Why? Because every time I would buy an item the rate of tax would be staring me in the face. The difference is point of “view”. People get use to seeing the “bottom line” on a pay check. But when you go to buy an item(which could be several times a day)and the tax goes up 1% you would notice and get ticked off enough to end some elite politician’s dream of redistribution of money.


21 posted on 06/12/2011 9:47:22 PM PDT by steveab (When was the last time someone tried to sell you a CO2 induced climate control system for your home?)
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To: BreezyDog

The website has adware/trackers/beacons which, besides making money for the blogger, also track you once you leave the website.

Some of them [most notably Google Friend] even “harvest” any private email addresses you may have on your machine that are linked to GMail accounts.

The others just snoop on you and keep track what your ‘surfing habits’ are.

[maybe some folks like being ‘watched’ by tracking companies but I don’t]

The cookies are deposited on your machine and can be ‘activated’ when you go to another site that has compatible trackers.

All in all, it’s not a happy thing.

The majority of ‘make money on the internet!’ bloggers couldn’t care less how badly your security is compromised.

They get paid for clicks, not clear consciences.

If you’re running Firefox, get the ABINE and Ghostery plug-ins and you can kill all the cookies and adware/tracker/beacons sites and set it so they can *never* access your computer again.

That’s why I get to be the canary in the coal mine.

I can go look at what’s lurking there and not be harmed by [most] of it.

I still “purge” the crap off my system, periodically, just in case the plug-ins missed it.


22 posted on 06/12/2011 11:35:05 PM PDT by Salamander (I wear my sunglasses at night.)
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To: shibumi

LOL

Terse but applicable.


23 posted on 06/12/2011 11:37:02 PM PDT by Salamander (I wear my sunglasses at night.)
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To: TheOldLady; SunkenCiv; shibumi; Larry Lucido; 50mm; Eaker; Markos33

I’m currently taking Cefuroxime for sinus pain.

I’m covered for cyber-cooties.


24 posted on 06/12/2011 11:38:55 PM PDT by Salamander (I wear my sunglasses at night.)
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To: DeoVindiceSicSemperTyrannis

Yeah, and they’ve got lots of tracker/ad/cookie crap, too.

:]


25 posted on 06/12/2011 11:40:04 PM PDT by Salamander (I wear my sunglasses at night.)
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To: Salamander; TheOldLady

Thanks!


26 posted on 06/13/2011 3:13:27 AM PDT by SunkenCiv (Thanks Cincinna for this link -- http://www.friendsofitamar.org)
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To: SunkenCiv

Stay clean!

;D


27 posted on 06/13/2011 3:47:44 AM PDT by Salamander (I wear my sunglasses at night.)
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To: Colonel_Flagg

You’re exactly right.

I don’t know what kind of economics is being “tried” right now.

America-destructonomics? zer0nomics? obamanationomics? Dieinfidelonomics?

Whatever it is, it’s disgusting.


28 posted on 06/13/2011 4:54:20 AM PDT by TheOldLady (FReepmail me to get ON or OFF the ZOT Lightning ping list.)
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To: billflax

My comments were made in open forum. Please post any reply in the same manner.

In your private reply, you said I obviously didn’t read your column. You’re right.

I will not go offsite to give hits to a blogger who’s pimping his work on a site that I and my fellow FReepers are supporting specifically so that we have a clean and safe environment in which to read news and opinion.

You want to be read and understood? Post it here. You want to be perceived as a pimp? Keep doing what you’re doing now.

If you value your own integrity, you might want to check out what kind of adware/spyware is being foisted on your readers. I’m just one less on the hit (sucker) count.


29 posted on 06/13/2011 7:12:16 AM PDT by shibumi (Ego Nunquam Ubi Sub Ubi!)
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To: Salamander

Thanks for being the canary in the coal mine by listing all the junk on a lot of sites. :-) *hugs*


30 posted on 06/13/2011 9:13:49 AM PDT by DeoVindiceSicSemperTyrannis (Want to make $$$? It's easy! Use FR as a platform to pimp your blog for hits!!!)
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