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Supply-Side Hooey

Aug 15, 2008
Supply-side economics, often conflated with the term “trickle-down economics,” is premised upon a simple proposition: Cut taxes and the economic growth resulting from the freed-up capital will more than make up for the lost revenue. Our nation has been in thrall to this reasonable-sounding notion for thirty years, since the Reagan administration gave it a go. You will recall our national debt hit $1 trillion for the first time during Reagan’s first year in office1 and went soaring into the stratosphere from there through Bush 1, only to be tamed, finally, by a Clinton administration that left office with a budget surplus. The “Big Lie” has continued throughout the Bush 2 administration, however, and the national debt is now $9.5 trillion, increasing over $1.7 billion every day (largely thanks to the Iraq and Afghani conflicts).2

It’s time to bury the Supply-Side, Trickle-Down fantasy, and the Center on Budget and Policy Priorities does so handily in their recent report, “Evidence Shows that Tax Cuts Lose Revenue.” And there’s so much evidence that even Bushite economists are backpedalling from such absurd voodoo economics.

Reminder: Have you claimed your Economic Stimulus Payment yet? Five million Americans who aren’t required to file a tax return haven’t.3 Go to this IRS web page to find out how you can get yours.
1The Presidents, by Henry F. Graff, Simon and Schuster, 2002, p. 518.
2U.S. National Debt Clock
3“More Than 5 Million Americans Still Need to Claim Their Economic Stimulus Payments,” from the Center on Budget and Policy Priorities (CBPP)
tags: Economics | Taxes

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