TylerFromNE asked:
When you fund tax cuts by going into debt*, you’re actually cannibalizing your supply of capital to finance current consumption, aren’t you?
When you fund tax cuts by going into debt*, you’re actually cannibalizing your supply of capital to finance current consumption, aren’t you?
The only “supply” of anything “supply-side” economics ever brought us was a glut of throw-away consumer crap made by Chinese slave labor.
*That’s not to say I’m opposed to deficit financing of large-scale public-sector investment in certain circumstances like… oh… now.
Beef missile,
I probably should have phrased that better… You are of course right. Essentially what I’m asking is since Keynesian theory supports investment while the more aptly titled “psuedo-supply-side economics” encourages consumption, it’s actually just the opposite in the long run – Keynesian policy increases supply, while neoliberal policies consume it – no?
Ben
Wesley
Its only supply side if its spent on things like education or infrastructure – things which will shift the AS curve on the ADAS diagram. If its not spent on things which can raise supply but demand – such as government tax relief etc this is demand side. Supply side is crucial for the long run of an economy.
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Oh right I see what you mean, i think in the UK we have a different phrase for that or something. Yea mate your right the govt in USA and over here in the Motherland seem to just encourage consumption to keep the economy ticking over to the detriment of government and trade deficits. I guess its what keep the economy looking nice for election time.
I wish our governments would look to the long term – we need investment in education and science to compete. The money which should be invested is just going on throw away consumables as you said
Shirley
You are right.
They don’t know where the money went now.
And this Chinese slave labor products are poisoning us.