Voo Doo economics
Reader comment on: Trickle-Down Jobs
Submitted by ben (United States), Jun 14, 2011 11:51
I think your article is not an accurate explanation of what supply side economics entails. George HW Bush famously, and accurately, termed supply side economics "voo doo" economics. The idea that by cutting tax rates on the wealthy we would actually increase tax revenue is fiscal alchemy. There is no question that when a large business shutters its doors, it effects others around it. However, in the case you cite, the small business owners near ground zero will benefit greatly if UBS moves there. In other words, this might be a zero sum gain - hardly evidence of supply side economics (which is macro-economic theory, not micro). In our current economy we have a demand side problem, not supply side. Companies are sitting on mountains of cash that they could invest if they thought there was demand for their products. There are millions of workers (an over supply) looking for jobs. What our economy needs is help on the demand side, through government spending on a scale similar to what got us out of the Great Depression (World War II). If only the Republicans were not so ideologically opposed to government spending we might be able to avoid a lost decade. Alas, that looks not to the be the case, so lost decade here we come.
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