supply-side economics

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Related to Voodoo economics: Reaganomics

supply-side economics,

economic theory that concentrates on influencing the supply of labor and goods as a path to economic health, rather than approaching the issue through such macroeconomic concerns as gross national product. In the United States during the 1980s, supply-side economics was associated with conservative proponents of the free-market system. Such measures as tax cuts and benefit cuts to the unemployed are basic supply-side tactics, with the intention of increasing the incentive to work and produce goods and services. The theory holds that high marginal tax rates and government regulation discourage private investment in areas that fuel economic expansion, and that more capital in the hands of the private sector will "trickle down" to the rest of the population. The theory gained popularity during the late 1970s, with a tax revolt in California and economic hardship during the CarterCarter, Jimmy
(James Earl Carter, Jr.), 1924–, 39th President of the United States (1977–81), b. Plains, Ga, grad. Annapolis, 1946.

Carter served in the navy, where he worked with Admiral Hyman G. Rickover in developing the nuclear submarine program.
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 administration (1977–81). Arthur Laffer and his "Laffer curve" doctrine became the heart of the economic programs of Ronald ReaganReagan, Ronald Wilson
, 1911–2004, 40th president of the United States (1981–89), b. Tampico, Ill. In 1932, after graduation from Eureka College, he became a radio announcer and sportscaster.
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's presidency, during which tax rates were cut substantially. Although supply siders maintain that the tax cuts of the 1980s were responsible for the decade's economic growth, critics argue that such policies caused massive federal deficits, penalized the poor and middle class, and induced excessive speculation that severely damaged America's economy. The subsequent tax increases under Presidents George H. W. Bush and Bill Clinton and the concurrent corporate investment, economic growth, and drop in unemployment during the 1990s further undercut supply-side suppositions.

Bibliography

See V. Canto, Foundations of Supply-Side Economics (1983); R. L. Bartley, The Seven Fat Years (1992).

References in periodicals archive ?
Lib Dem Nick Clegg is right when he called the Tory plans voodoo economics and accused them of being "the party of funny money and sums which don't add up".
Best remembered for coining the phrase "voodoo economics" during the Reagan administration, economist Paul W.
Only theUnited Statesand theUnited Kingdom have employed a form of voodoo economics over the last 10 years, convincing us all that we were getting richer whereas in fact we now know that we have actually all been getting poorer.
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Bush called "voodoo economics." A year later, California passed Proposition 13 capping property taxes, and Time magazine almost ran out of extreme metaphors--"avalanche," "earthquake," "revolutionary"--to describe it.
For Mr Miyet and GESAC, this is voodoo economics, and their submission to DG Internal Market again offers some country-to-country comparisons.
Studio voodoo economics also make it hard to pinpoint a figure.
Let's face it, we're a mess, too easily seduced by will-o'-the-wisp promises of salvation through fundamentalist religion, dogmatic political ideologies, post-modern quackery, voodoo economics, the so-called Free Market, or that 20th century contradiction in terms, sustainable development, (to name, as Gore Vidal might say, but a few).
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If the subject of economic plans came up, Bush simply called Reagan's initiatives "voodoo economics." Use this same reasoning when evaluating quotes or statistics.
His deficit-causing supply-side tax cuts (derided by the elder Bush as "voodoo economics") were sold with phony numbers and sleight-of-hand accounting.
Although this may sound strange, it is not what used to be called Voodoo economics; it is basic economics.