Thursday, June 13, 2013

Is It Time To Bury Supply Side Economics?

Supply side economics is based upon policies that are supposed to encourage capitalists to work harder and to invest their savings in ways that will stimulate growth.  There is little research available to support this theory, and there is some research which shows that cutting taxes for the wealthy, or for corporations, has not stimulated growth.  Economic growth is primarily constrained by demand factors.  Personal consumption is the largest demand factor and it depends primarily on income.  Slow growth in middle class income has limited middle class consumption.  Cutting middle class taxes would encourage more demand and economic growth than cutting taxes for the rich.

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