The Economic Crisis and the Pending Debate
This is not a political blog, but I think it would be unwise to avoid this topic. As a young professional, you should be keeping up on these matters.
We all know that both the US and global economies are in bad shape at this moment. The question is, what can we do about it? We just elected someone on the precept of change, but can he really change the economy?
The current policy is essentially pure supply-side economics (also referred to as Reaganomics or sometimes incorrectly as Trickle-Down economics). It has been this way since the early 1980s. The basic principal is to give tax breaks and other economic benefits to the producers of goods and to investors, on the assumption that they will then create more jobs and spur more industrial activity. The benefits of this activity will then “trickle down” to everyone else. For example, a tax break to company could help create more jobs. Those jobs produce wages and would be considered a benefit to the person who received those wages.
The debate on our horizon will be a debate for and against this policy. You’ve heard President-Elect Obama say he wants to end tax breaks for the rich and for companies making record profits. This is essentially a battle cry against supply-side economics. I think we would all be well served to read up on the arguments so that we can have informed opinions.
Arguments in favor:
Arguments against:
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November 11th, 2008 at 9:45 am
Hey Dan,
Good post but, you are making a common mistake in confusing supply side economics with trickle down economics. See this article that explains the difference:
http://www.capmag.com/article.asp?ID=4183
November 12th, 2008 at 10:13 am
Oh yes, I would love to share my earnings with people that dont have jobs and dont plan on getting one anytime soon. Trickle down is the way to do it, but there has to be a way to gauge “greed” at the top. After all, that is what stirred up this whole mess (along with homeowners, or ex-homeowners that bit off more than they could swallow)
November 13th, 2008 at 6:04 pm
You are right Brandon; my assertion that supply-side and trickle-down are the same thing is a bit too strong. I’ll revise the post to weaken the association. Wikipedia also recognizes that the two are connected, but only by a weak link.http://en.wikipedia.org/wiki/Supply-side_economics
November 24th, 2008 at 6:06 pm
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