[efarmer]

The Republican party abandoned a truer conservatism that was practiced by Eisenhower and perhaps would have been by Goldwater. Reagan like Obama now, knew he had to break the death spiral and deficit spend while working on morale and get back to conservative fiscal policy when conditions allowed. They bought their base with corporate welfare for campaign donations, and fear and consumer credit for votes, and they opposed the Democrat social welfare that bought the competing votes.
This runs until the corporate and social welfare bankrupts the system. We are there.
It is time to kill the chicken, sprinkle the blood around, and see if we can break the "bad spell".
At least the Voodoo doctors made a financial killing in addition to offing the required chickens...

[americandream]

I would term the various American governments from the founding of your country, shades of feudal elitism but with a bourgeoisie edge. To argue that self-interest has a noble aspect in some variant long lost in your past is to therefore ignore your history.

The rot in the American impulse for something other than the stench of inherited privilege died with the continuation of enslavement even whilst they were contemplating equity and freedom from arbitrary government. After that, compromise and lack of integrity ingrained itself into the national character.

Establishing a principle nation is one thing, adhering faithfuly to those principles is another. Personally, I think you paid too high a price so that a few plantation owners could have access to free labour. It has cost your nation generationally and in accounting terms, at a cost that must far have exceeded the gains.

The American project has been sullied forever as a consequence and only a fresh start will do. Something bigger than that original dream of free and equal men.

The Republican party abandoned a truer conservatism that was practiced by Eisenhower and perhaps would have been by Goldwater. Reagan like Obama now, knew he had to break the death spiral and deficit spend while working on morale and get back to conservative fiscal policy when conditions allowed. They bought their base with corporate welfare for campaign donations, and fear and consumer credit for votes, and they opposed the Democrat social welfare that bought the competing votes.
This runs until the corporate and social welfare bankrupts the system. We are there.
It is time to kill the chicken, sprinkle the blood around, and see if we can break the "bad spell".
At least the Voodoo doctors made a financial killing in addition to offing the required chickens...

[copious.abundance]

I'm not a supply-sider (I don't subscribe to any particular economic philosophy other than generic "capitalism"), but the popular notion of supply-side economics as described by pstarr is rather simplistic.

Supply-side economics at its heart says, "Supply creates its own demand." This is the reverse of what Keynes said ("demand creates its own supply" - though that is actually known as Say's Law).

In supply side economics, the premise is a sort-of "build it and they will come" attitude. There is probably some truth in it. It says if you make something, someone somewhere will eventually consume it. If you produce too much of it, and/or there is insufficient demand for it, the seller will lower the price, thus encouraging consumption of it after all. The worldview here is that supply comes before demand.

In demand-side economics, the premise is that demand for something must exist before anyone will supply it. You can build all the widgets you want, but if no one wants them and/or no one can afford them, then the supplier is wasting their time. On the other hand, if there exists sufficient demand for something, someone somewhere will find a way to fulfill that demand. So in this worldview, demand comes before supply. As with supply-side economics, there is truth in this too.

My own view is that this debate is splitting hairs and it's really an irreconcilable chicken-and-egg question.

From a policy standpoint, demand-side economics leads itself to government supplying the demand when, for whatever reason, the private sector and consumer is unable to do so.

For supply-siders, since they believe demand will materialize regardless - as long as government doesn't do anything to distort markets - they don't think anything should be done as long as the supply side (producers) are left alone to produce whatever they want to produce. Then the demand will follow.

Since I believe the whole debate is a chicken-and-egg question I don't think either policy prescriptions make much difference, at least in the long run.

[americandream]

These various shades of interventionism or not, as the case may be, contemplate a market based economy however. Whether the market is fiscally stimulated through its demand constituents (aka Keynesianism which had its genesis during a period of contraction in an age synonymous with protectionist tendencies) or is naturally robust as contemplated by its unfettered supply constituents, (aka the single borderless deregulated global market or a certain economic theory), the underlying mechanism of resource allocation remains the market. Private capital premised on profit and capital growth which in turn revolves around annual growth and the continued expansion of market potential. In that context, it is less clear which come first, supply or demand, each being obviously contextual. However, to term the supply school of market economy voodoo is to entirely miss the role played by each brand of market economics in overall capital.

The fact that Keynesianism was given effect during an era far removed form the current day does not minimise it's application to the capitalist. The intent is to fine tune the demand side in the event of a regional contraction, whilst still maintaining the emphasis on unfettered global supply.

[deMolay]

The real VOODOO is being practised by Obama. He went to the Robert Mugabe school of Economics. And learned how to run the printing press. He is a supply sider of funny money in the Trillions especially to his supporters and cronies at Goldman Sachs etc. And he is letting it drip down from his buddies to the slob on the street.

[Rod_Cloutier]

It doesn't matter who is right, the supply siders or the demand side, nature will impose ultimate limits on fuel, food, and population.

I think I read a Montequest editiorial here about Liebig's law that 'Population is constrained by the least abundant essential resource, whether that be water, food, shelter, security from predation, or whatever else is essential'.

I think all the economic thinkers have come up against the wall of reality in approaching economic theory. We either have a booming economy, or a contracting 'bust' economy- the steady state economy idea has never been attempted or proven to exist. Leaders use this reality all the time in their propoganda; allow us to do business in your country/ region tax free or we will move our investment and jobs somewhere else, vote Republican or jobs will be lost, vote Democrat or jobs will be lost, et al.

For the future, with real supply and demand limitiations we have to get away from this 'boom or bust' thinking.

[Xenophobe]

If you produce too much of it, and/or there is insufficient demand for it, the seller will lower the price, thus encouraging consumption of it after all. The worldview here is that supply comes before demand.

Sounds similar to a Jevons type argument?

[copious.abundance]

If you produce too much of it, and/or there is insufficient demand for it, the seller will lower the price, thus encouraging consumption of it after all. The worldview here is that supply comes before demand.

Sounds similar to a Jevons type argument?

Sort-of, but Jevon's Paradox is more about efficiency of production due to technological inputs. Supply-side economics, while possibly influenced by efficiency improvements, does not depend on them.

Supply side economics says that, Let's say someone decided to produce wood-carved figurines to sell in a gift shop, and sell them for $50 each. At first no one wants to buy them, so the seller lowers the price to, say, $30. Then maybe people will start buying them - or maybe the price needs to go down to $10 before people start buying them. At some point the "price is right" to spur demand. But the technology of producing these wood figurines has nothing to do with the argument.

Jevon's paradox, if we applied it to our figurine example, would be something like . . . Figurine maker buys a machine which can carve out tons of wood figurines really quickly and easily, so that the seller can sell tons of them at $5 or $10 a piece. That would encourage lots of people to consume these figurines. So, Jevon's Paradox does depend on a supply-side argument, but supply-side economics does not depend on Jevon's Paradox-type technological improvements.

[Pops]

I'm no economist but it seems to me we've burnt both ends of this candle

We encouraged demand by making "the ability to pay" free for the signing - but then the good old US consumer maxed out his credit card - and now revolving debt has fallen for 21 months straight.

We've also provided supply to the point that, well, we're over supplied:

09 store closings...

not that there aren't lots of burger and pizza joints opening to replace the 3,400 closed GM and Chrysler stores.

[patience]

OF2 said: "In supply side economics, the premise is a sort-of "build it and they will come" attitude. There is probably some truth in it."

That has been true, all right, as witness all the imported Chinese crap causing our lanfills to bulge now. If you make something and put a "Sale" tag on it at the Wally Mart, some idiot will think he has to have it--right up until his card is maxxed out. Idiots running amok, aided and abbetted by the media and marketting people. Fun while it lasted, I suppose, for those who were into that sort of thing.

The Voodoo is over. All we have now is the hangover, and it's a doozy. The only trickle down to the masses was if they sat under the economic urinal.

[americandream]

Below is the idiotic inconsistencies of conservative thought devoid of any integrity as it badmouths its own recent platitudes.

Not only does it bad mouth the demand side, it also vilifies the supply side.

In one fell swoop it attacks the very system it professes to want to serve.

Clearly it invokes such emotional hysteria that the poor reader or listener is hardly in any position to realise that without any of these variants, there would be no capitalism, no conservatism (whether neo-conservative or true blue old school conservative), no liberalism nor all the other parasites that seek to intellectualise the pyramid scheme that constitutes the market economy. Unless of course, one remains resolutely objective.

Next in line for invocation will be patriotic conservatism, more bouts of supply side propaganda, another perilous decline into even greater personal debt, the appointment of another demand man (the next Mr Change who may well be Mexican or even Asian) to undo the mess created by excessive supply greed, more conservative mind games and on and on we go until the global economy is fully bankrupted and the long suffering taxpayer finally wakes up to the fact that he is being screwed.

The real VOODOO is being practised by Obama. He went to the Robert Mugabe school of Economics. And learned how to run the printing press. He is a supply sider of funny money in the Trillions especially to his supporters and cronies at Goldman Sachs etc. And he is letting it drip down from his buddies to the slob on the street.

[Outcast_Searcher]

Conservatives still believe in so-called "supply-side" economics, a simple-headed theory that wants to believe government may spend all it wants, as long as the tax rate for the rich is historically low, because the rich are the engine of the economy and if left unfettered, wealth will "trickle down" to the lowly unwashed common folk. It makes no more sense than any state religion.

The only popular economic philosophy less realistic than this is that of the far left. It acts like (and often states) that more taxation and wealth redistribution are always helpful. And it has the nerve to do this while damning the productive people it confiscates the earnings from. Couple this with their viewpoint that government programs running or at least controlling virtually every aspect of the economy will "fix things" and you have true fiscal madness.

The current administration, with cries of "oh, those poor people" to justify more and more unfunded spending, is the epitome of this. Naturally, this is justified by Keynsian economics, which has shown itself to be just as unreliable as trickle-down economics.

It sure would be nice to try and meet somewhere in the middle, like IMO, president Clinton did. He actually shrank the size of the federal government and ended the "welfare forever" program. If a Republican had tried fundamentally reforming welfare, there would have been rioting in the streets of various big cities.

But no, let's have $trillion plus deficits forever, greatly expand government, and blame it all on George Bush, when the results are less than promised. Yeah, that'll work, just like it has so far.

[Ludi]

It sure would be nice to try and meet somewhere in the middle, like IMO, president Clinton did. He actually shrank the size of the federal government and ended the "welfare forever" program.

And globalized us all to hell.

[americandream]

Actually, the far left as you characterise it is merely the supply side with a demand face. Marxists remain resolute in the belief that market economics will fall in on itself and that policies that arise naturally and organically from those ashes will prevail. The fact that those policies will be the about face of market economics is as natural as is the revulsion of a victim for the criminal.

As for Clinton and this other variant of the liberal left, remember that all Western largesse is sustained by vastly discounted barrels of energy (oil) from client states such as Nigeria and Saudi Arabia. We saw what happens with unruly ones such as Iraq. So the Clintonesque dream is another one of those subsidised ones you so evidently despise.

Conservatives still believe in so-called "supply-side" economics, a simple-headed theory that wants to believe government may spend all it wants, as long as the tax rate for the rich is historically low, because the rich are the engine of the economy and if left unfettered, wealth will "trickle down" to the lowly unwashed common folk. It makes no more sense than any state religion.

The only popular economic philosophy less realistic than this is that of the far left. It acts like (and often states) that more taxation and wealth redistribution are always helpful. And it has the nerve to do this while damning the productive people it confiscates the earnings from. Couple this with their viewpoint that government programs running or at least controlling virtually every aspect of the economy will "fix things" and you have true fiscal madness.

The current administration, with cries of "oh, those poor people" to justify more and more unfunded spending, is the epitome of this. Naturally, this is justified by Keynsian economics, which has shown itself to be just as unreliable as trickle-down economics.

It sure would be nice to try and meet somewhere in the middle, like IMO, president Clinton did. He actually shrank the size of the federal government and ended the "welfare forever" program. If a Republican had tried fundamentally reforming welfare, there would have been rioting in the streets of various big cities.

But no, let's have $trillion plus deficits forever, greatly expand government, and blame it all on George Bush, when the results are less than promised. Yeah, that'll work, just like it has so far.

[Ludi]

It sure would be nice to try and meet somewhere in the middle, like IMO, president Clinton did.

So you'd be happy with tax rates where they were during the Clinton administration? You're in favor of allowing the Bush tax cuts to lapse?

"The Clinton years showed the effects of a large tax increase that Clinton pushed through in his first year, and that Republicans incorrectly claim is the "largest tax increase in history." It fell almost exclusively on upper-income taxpayers."

http://www.factcheck.org/askfactcheck/d ... deral.html

Wasn't Clinton punishing the productive people?

[Outcast_Searcher]

It sure would be nice to try and meet somewhere in the middle, like IMO, president Clinton did.

So you'd be happy with tax rates where they were during the Clinton administration? You're in favor of allowing the Bush tax cuts to lapse?

. . .

Wasn't Clinton punishing the productive people?

I think getting tax rates back to where they were in the Clinton era COUPLED WITH an end to the rapid increase in federal spending on redistribution would be a reasonable FIRST STEP of a compromise toward ending the budget hemmoraging. (If the economy recovers, then I'd like to see more reduction in "emergency" wealth transfer spending).

However, I hear almost NO ONE talking about restoring all the tax rates to the Clinton era rates. Only about hitting the most productive people, as the left and this administration constantly advocate.

I give Clinton credit for success, for moderation, for an ability to drum up an effective compromise. As a libertarian, I would prefer flat taxes (with only a large standard personal deduction - NO special interest deductions/credits) at a fairly low rate -- but modern first world democracies increasingly want high government spending for all sorts of programs (i.e. Europe, and increasingly the US). I want balanced budgets, actually preferably a small surplus to meet emergencies -- someone has to pay taxes to make that happen.

[americandream]

Presumably as libertarien you will be in favour of the absolute freeing up of global trade, the removal of all overseas stationed Amercan led Western armed forces necessary to maintian resource imbalances, the complete removal of taxpayer subsidies underwriting the infrastructure used by private wealth and all the other hiddens provided by the commons to fund returns on investment (the environment comes to mind.)

A free market is precisely that. One devoid not only of the application of the fiscal to the taxpayer (its his taxes after all), but to that other hidden recipient, the investor.

[Outcast_Searcher]

Presumably as libertarien you will be in favour of the absolute freeing up of global trade, the removal of all overseas stationed Amercan led Western armed forces necessary to maintian resource imbalances, the complete removal of taxpayer subsidies underwriting the infrastructure used by private wealth and all the other hiddens provided by the commons to fund returns on investment (the environment comes to mind.)

A free market is precisely that. One devoid not only of the application of the fiscal to the taxpayer (its his taxes after all), but to that other hidden recipient, the investor.

Yes, that is implied, though I didn't state it explicity. I want to do away with the entire complex network of favors and incentives that our fiasco of a tax system has put in place.

I admit that may be hard on some investors, but OTOH, paying a much lower tax rate should more than compensate for that over time. For example, Barney Frank scored a lot of points with me for openly suggesting we eliminate all our foreign bases of our allies -- the ones where we pay and they benefit. (I would do this gradually, say over a decade, to give our allies time to adapt - but I certainly have endorsed the PRINCIPLE for a long time).

(Now - I don't see how to get it to work, and here's why. Every time I bring up a flat tax and use eliminating the tax credits for kids, and the tax deductibility of mortgage interest as examples of things that have to go away to achieve a flat and low tax rate -- well over 90% of people have a da** fit and act like I want to rape their grandma instead of fix the tax code.)