What is supply-side economics?
Q: What is supply-side economics?
A: Supply-side economics, also known as trickle-down economics, is a theory that suggests that if taxes are cut on the wealthiest people in society, they will use their extra money to invest in the economy.
Q: What do supporters of supply-side economics believe?
A: Supporters of supply-side economics believe that taxes punish productivity and if they were lowered, people would produce more goods and services. They also support limited government spending, low inflation, and regulating the economy less.
Q: Who supported supply-side economics with a theory called a Laffer Curve?
A: Economist Arthur Laffer supported supply-side economics with a theory called a Laffer Curve.
Q: How was supply-side economics used during Ronald Reagan's presidency?
A: During Ronald Reagan's presidency in the 1980s, income taxes on the wealthiest Americans were cut from 70% to 50% to 28%, and capital gains taxes were cut.
Q: What do supporters of supply-side economic policies say about them?
A: Supporters of supply-side economic policies mention that those tax cuts have resulted in economic recovery during the 1980s and the strong economic boom in the 1990s and first decade of the 21st century.
Q: What criticisms are there for these policies?
A: Critics of supply side economic policies say that it results in a bigger gap between rich and poor by giving wealthy people more money without much trickling down to poorer individuals or families. They also criticize that reduction in taxes results in cutting programs for those who need it most. Additionally, critics point out large tax cuts combined with increases military spending has resulted in government debt.
Q: What is voodoo economics?
A: Voodoo Economics is another term for Supply Side Economics which suggests cutting taxes on wealthy individuals or businesses will result in money trickling down to poorer individuals or families even though this rarely happens.
