Economics 101- Demand Side vs. Supply Side (featuring Jim Quinn)

[LucyLabrador1]

Supply Side makes more sense.... OWNED!

[whitetig2]

WHY WOULD A BUSINESS HIRE A WORKER IF NOONE IS BUYING THEIR GOODS!!!!.Supply side economics is foolish.

[Salvysahagun]

@whitetig2

Because they have to pay someone to make those goods.

[MyLittleBomb]

@Salvysahagun but know one can buy the goods you tool! Fucking think about it. Has trickle down ever worked? Since reagan and the bushes they have slowly destroyed the economy by letting the rich keep too much money. It's only gotten worse and will continue to do so.

If the poor don't have money to buy things the entire system shuts down which is what you're seeing. The rich have accumulated so much wealth the poor (engine) have no more gas to spend.

[Salvysahagun]

@MyLittleBomb

Before you critize Reagan please look at the economy of the 70s. Something had to be done to increase investment with out more inflation.

[pete990]

The people of SF are totally ludicrous to vote for that Pelosian nonsense. The Illinoisan fools who voted for Soetero Carnalvalbarka bin Obama over my homie Keyes owe the nation an apology. Good reasoning to debunk Keynesian nonsense.

[ZZIshamelZZ]

be creating new busineses. They are broke. This is why you see public debt increasing in relation to GDP during the Reagan and Bush and Bush II presidencies, and falling (slightly) during Clinton who balanced the budget.

[ZZIshamelZZ]

upper-end luxury goods like yachts. The money that goes to banks is then recirculated to more businesses that don’t really need to be created to produce more stuff we don’t really need (or really even want that badly if there wasn’t a positional goods arms race – for status – and marketing wasn’t so damn good), but the people who would actually run the businesses and work there don’t have the money to

[slsslc]

@ZZIshamelZZ personaly i think the problem is people treat econimics as either trickle down or bottom up. In reality money moves both ways. I worked for years in construction and made almost all of my money from the disposable income of rich people. Then the money i spend goes to not only the rich, and to corpirations, but to the factory workers and other blue collar workers. One of the big problems is when goverment takes money out of that back and forth through taxation

[slsslc]

@ZZIshamelZZ for example, in the 90's there was a luxory tax on yachts and planes and other high end goods. The result was that the rich bought less of these (Boo Hoo for them) and due to low sales many of the workers that made theses luxury goods lost their jobs. In the end the goverment spent more in unemployment for those workers than they got from the taxes.

[ZZIshamelZZ]

@slsslc Thanks for the thoughtful response. I agree that money moves both ways, but I think the heart of the question is which class moves the money in ways that are better (obviously depends on definition here of "better"). In your example about the 90's luxury tax - if the wealthy stopped buying yachts, then what were they doing with their money? investing in other industries? creating jobs in more utilitarian services? I don't know, but I think a big part of what I object to about trickle

[ZZIshamelZZ]

down is that it assumes the wealthier are spending their money in ways that help everyone more. I think that when the middle class has a bigger stake in where money is spent, it's on more utilitarian goods - so it increases jobs in industries like construction, and decreases jobs in industries like yachting. I'd love to hear your response, because as I said I'm trying to sort all this out.

[flyoverjoe]

@ZZIshamelZZ I'll assume everything you said is correct. Though like you said, who decides what is better and more utilitarian? My question is; why not let the man who earns the money determine what is a better or more utilitarian use for it? Is this not a free country?

[ZZIshamelZZ]

able to sustain our natural resources indefinitely, replenishing what we take.

The last point that confuses is me the idea that by giving more money to the wealthiest, then more wealth is created for everyone because wealthy people take that money and make new businesses, which supply more jobs. In reality what we see, at least as it appears to me (and I’m prepared to be proven otherwise) is that the wealthy give their money to bankers so that they can make more money and perhaps buy upper

[ZZIshamelZZ]

at good jobs), then we would all rise in standard of living…together. The decrease in wealth for the richest might slightly disincentivize some people from working as hard (although Daniel Pink’s Drive proves otherwise), which would mean that we might have to wait a few more years to get the next thing as cool as the iPad, but it would probably come eventually. Also, the immense motivation makes us forget about other much more important long-term factors of a good economy, such as being able

[ZZIshamelZZ]

even if somehow making the majority of the wealth creators (the middle class who actually produce the goods and services) less productive and with lower social capital (unemployed, poorly educated) does increase GDP overall, the inequality is rising significantly, and if we just slowed down and made everyone more capable of contributing significantly to society (access to good education, financial resources to obtain higher education and start up capital for businesses, opportunities at good

[ZZIshamelZZ]

that they pay a lot of money to get really good people making the stuff to look really neat, and convincing middle class consumers to buy it. Isn’t this where stuff like sub-prime loans come from? Where those who control the money are so incentivized to get people to spend more that they give loans to people who clearly cannot afford to do so, who clearly should save and not spend? I also don’t quite understand why GDP is the number one goal here. I mean,

[ZZIshamelZZ]

“Post-Consumer Prosperity”). The “suppliers” are incentivized to create want where there is none – and this leads to institutions like media sometimes being used or want-inducing purposes, like Cosmo magazine which makes women think they need to buy more expensive lip gloss to be beautiful. It would seem to me then that since the incentive is so strong (the whole economy depends on it!) for suppliers to produce more, and therefore somehow create more demand to meet that increased production,

[ZZIshamelZZ]

making people want more stuff. This is why we end up with marketing that tricks people into feeling that what they have is adequate. This is why the average size of our houses have gone from 1,750 square feet in 1978 to 2,479 square feet in 2007. This is why the costs of weddings have increased 2.5x since 1980, and most importantly, this is why our average houshold credit card debt has increased 231 percent since 1990. (I’m getting these numbers from economist Robert Frank’s article

[ZZIshamelZZ]

I'm here to understand this better, not from a bias political slant, but I'm having a very hard time understanding the logic of this. Supply-side economics supposedly is inserting capital into the hands of the wealthy so that they will create new enterprises, thereby both creating jobs and creating more "supply," more stuff to buy and consume. However, that extra supply is supposed to be met by demand that comes out of nowhere. This means the system for generating more wealth is dependent upon

[rookea195]

And of course, so does the government spending, which eventually leaves you with the debt we have today D:

[rookea195]

hey this is like broken window fallacy yeh?

if people were left almost to themselves (low taxes) businesses would expand (creating jobs) and therefore everyone would be happy.

if government tax those same businesses more they actually TAKE AWAY that money. The jobs that the "create" would have been there if they hadn't taxed people, and so would be the money the businesses were taxed.

in short, the higher taxes cost the economy.

[paleoton]

A business will only expand if they are selling more. Why would they expand if they don´t have anyone to sell to?.But an increase in the demand in the same proportion as your taxes,  is always more profitable. Let´s say the sales is 10 and taxes are 3(30%), you have 7 as result. In the US the top 10% has 72% of the wealth, so 10% wealth redistribution, would mean like 25% increase in the demand. So For the business 10 would turn into 12.5 and tax 3.3, result 9,2. Everybody wins

[TalkerOne]

@paleoton which is why Sweden is a super power .....

[paleoton]

@TalkerOne If they had the same population as the US, they would be.

[paleoton]

@TalkerOne Actually that is how US became a superpower as well, suply economics only started to be an american policy during the Reagan administration. US was a superpower before that!

[MyLittleBomb]

@paleoton This guy actually knows what he is talking about. Trickle down economics is a fucking joke. It doesnt work, has never worked and will never work.

IF you think the the rich will give you back your money you're crazy. The republicans now are even talking about taxing the poor with federal income taxes. That will completely stop the economy.

[paleoton]

@MyLittleBomb I agree with you, but who is the guy you´re talking about?

[aaasssfffdddiii]

This was very good. It sums up the last 100 years of economic theory... If Demand-Side worked, Japan would have been booming in the 1990s.

[TalkerOne]

@aaasssfffdddiii Well said.