SUPPLY vs. DEMAND

It is really difficult to get a handle on the effect government has on our everyday lives without understanding a few underlying principles, including the jargon that accompany them. One such grouping of words that comes up frequently is "Supply-Side Economics," and "Demand Side Economics."

And then the party that destroys words consistently attacks and pins a epithet on a word---like "Trickle Down Economics"---and it confuses people even more. Guess which of the two types of economics has this negative appellation attached to it? We'll get to that in a minute.

Let me share a few ideas about each type of economic activities---especially those imposed by government---and then you judge, you decide which is best for the country.

DEMAND SIDE
This theory tries to increase demand with government infusion of money. Some call it stimulus. Lately, the Liberals are calling it investments. Demand Side uses government controls to control and manipulate production.
There are three ways they do this:
       1)  They borrow money, if needed. And it's always needed. Margaret Thatcher said;
            "Liberal always fails because sooner or later they run out of other people's money."
            This increase in deficits and debt causes inflation. They think they can pay off the debt with cheaper money.
       2)  They raise taxes, especially on the high earners.
       3)  They "Redistribute Wealth." They do not promote growth, except in government.

SUPPLY SIDE
This strategy incentivizes production, the supply side, by lowering restraints (read regulations at every level). Their emphasis is on expansion of business and investment.
They do this by:
       1)  Slash tax rates (especially at the margin---the next dollar).
       2)  Eliminate regulatory high hurdles. Make sure laws are passed by our representatives, not bureaucrats like the EPA.
       3) Rein in inflation with tighter monetary policy.

One is proposed by the Keynesians who are Socialists, Big Government types. One is by Free Market Enthusiasts and Constitutionalists. Funny thing, that "Trickle Down Wealth" works. But the most amazing thing is that such a failed, stale, destructive concept as "Keynesian Style Demand Side Economics" gets the time of day. It should be abandoned, repealed and thrown in the trash-bins of history.
More on Keynes and the President's Destruction machine coming up in a few more blogs.
Wade