Since the Reagan Administration in the 1980s,
supply-siders have averred that the best way to stimulate faster economic growth is to cut taxes on really wealthy people whom they refer to as "job creators." They claim that because cutting taxes on the wealthy increases their after-tax income, it encourages them to work more, earn more, and most importantly invest more.
That will push total national saving even lower - notwithstanding the vacuous self-funding assurances of
supply-siders. As shock absorbers, overvalued financial markets are likely to be squeezed by the arbitrage between the world's largest surplus and deficit savers.
Another part of the
supply-siders' argument in favor of a lower corporate tax rate is that it would make the U.S.
Mainly in opinion pieces that are polar opposites: "Nope, Paul Krugman's Still Wrong About Supply Side Economics," Tim Worstal of the Adam Smith Institute wrote for Forbes.com; "
Supply-Siders Still Push What Doesn't Work," Noah Smith wrote for Bloomberg.
The optimists' unreality is rivaled by that of
supply-siders, who would apply shock therapy to China's slumping state sector and immediately integrate the country's underdeveloped capital markets into today's turbulent global financial system.
Although Rhonheimer robustly defends capitalism against many unjust criticisms, he defends a substantial government role in the economy and redistributive principles that will not cheer "flat tax"
supply-siders in the US fiscal debate.
There are various examples of a gold standard: the classic and gold-exchange standards; the Bretton Woods system; the price rule advocated by
supply-siders; and the commodity basket mechanism (including gold) discussed by U.S.
What about the
supply-siders? Tax cuts play a role in encouraging economic growth, but in an age of rising deficits legislators are reluctant to slash rates aggressively.
The second plausible rejoinder to neoconservatism's critics, meanwhile, would double as a warning to the conservative movement as a whole--to Kristol's heirs as well as to his critics, to
supply-siders and interventionists and social conservatives as well as libertarians and deficit hawks.
(As to the tax cuts, the lowering of marginal rates, especially from the high rates that had existed before, was what
supply-siders saw as crucial for incentives.) Bartlett says that supply-side economics was highly successful to address the twin problems of unemployment and inflation, and that its premises have become absorbed into mainstream economic thought.
Internationally, it's probably fair to say that the
supply-siders have carried the argument in spades.
To
supply-siders, not all tax cuts are equally good.