12-07-2016, 02:30 AM
(12-06-2016, 04:41 PM)Mikebert Wrote:(12-04-2016, 05:15 PM)Warren Dew Wrote: You're confused about what supply side economics is. See my to playwrite for an explanation. It's not about investment at all.
No I think you are confused. You are confusing with supply side policy as a political concept (cut taxes to incent work) with supply side as a economic concept (incent investment to boost productivity). The plumber's productivity is fixed.
The plumber's productivity, measured in output per year, is absolutely not fixed. He can work overtime to increase it. He can go to part time or retire early to decrease it.
Quote:What you are advocating for is a form of Keynesian stimulus expressed in terms that are political palatable to conservatives.
Now you're starting to get it. That was exactly what Reagan was doing, too. He sold it to high tax low spending austerity fans as cost free, because the reduced rates would increase tax receipts, but ultimately the objective was quasi Keynesian stimulus, operating on the supply curve rather than on the demand curve to make it actually effective.
That said, operating on the supply curve rather than on the demand curve was and is important; that makes the stimulus deflationary rather than inflationary, due to the opposite slopes of the two curves. At the time the deflationary effect was directly beneficial; today it would be beneficial in that it would permit additional stimulus on the monetary side to supplement the supply side fiscal stimulus without excessive inflation.