I don’t claim to be an expert on economics, but I think I know enough to explain why I consider supply-side economics to have been such a disasterous failure since the Reagan years. It was nothing more than a scam to trick people into voting Republican.
When you cut taxes for the wealthy during a recession, they do indeed invest more in the economy, but mainly to benefit themselves rather than to benefit society as a whole. As a result, the gap between rich and poor increases, even as economic activity skyrockets. People become rich by hoarding money rather than spending it, and so the money supply circulating decreases. The Federal Reserve may attempt to solve the problem by printing more money, but this causes inflation, itself a sign of economic distress. Inflation hurts the poor and middle classes, while the wealthy accumulate still more money. Eventually, we end up with ANOTHER recession only a few years after the earlier one ended! So the economic growth caused by the tax cuts may make revenues appear to increase for a short time, but the crash that comes later makes that issue moot. And the default response of the “conservatives” to the new recession is…….more stupid tax cuts!
One thing that can definintely be said about the lies and hypocrisy of many Republicans was that while they did cut taxes, they did NOT reduce the size of government. In fact, they INCREASED it! The Department of Veterans Affairs and the Department of Homeland Security were both started under Republican administrations (and even this Liberal wants them shut down as unnecessary). And even Reagan blew up military spending while denouncing the excess size of government. Hey, the military IS part of the government! HELLO!!!!
The mistake the “conservatives” kept making was to judge the success of their economic policies by their short term effects, and ignore the downturns that their own policies caused later. What we really need is a set of policies that can generate long-term, slow, and steady economic growth and development that is not likely to result in a crash later. As the old saying goes, “There is no such thing as a free lunch.” So maybe we could try this: