Supply Side Policies Didn’t Fail, Keynesian Ones DID...

"Higher taxes reduce revenues, kill prosperity and deliver widespread deprivation or poverty." (JMK)

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"Then why did the economic gaps increase during Reagan and Bush years? Why has the poverty level increased over the past few years?

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“Everything you have just named is happening, and we have one of the lowest tax burdens of the top bracket. Not only do we have one of the lowest of the top bracket, we are making the bottom bracket carry a higher burden.” (a liberal poster)

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Actually, widespread income disparities are not only very natural and expected, given the vast differences in skills value, they’re also very GOOD for the economy.

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I take it on faith, since I’ve never heard anyone assert anything so frivolous as, "most skills, like most people are fairly equal and there just shouldn't be some skills valued at 50 or even 100 times that of others." And because I've never heard that inanity asserted, so I don't believe I've ever really crafted an argument against that claim.

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Suffice to say, some skills (ie. thoracic surgery, investment banking, patent law, etc) are so rare and difficult to master that the demand is far greater than the supply and those skills ARE rightly valued at 50 or even 100 times that of more average, mundane and plentiful skills like teaching HS history, construction or emergency service work.

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Wide disparities in income do not cause, nor are they even related, in any meaningful way, to poverty rates.The G W Bush ACROSS-the-BOARD tax cuts greatly INCREASED tax revenues!

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Critics inanely charge that "If people took the SAME amount of income upfront, non-TAX deferred with higher TAX rates in place, the government would've taken in even MORE revenue."

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But that's utter NONSENSE. Fact is, the top 10% of income earners already pay over 70% of all income taxes and they only account for 46% of all income. Moreover, the top 20% of income earners account for nearly 35% of all the labor in this economy! It is the lower income earners in this country who are UNDER-TAXED! As you'd expect those earners have the most valuable skills, fuel much of the investment that creates new jobs AND they have the MOST "disposable income."

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When tax rates are lowered (down to about the 20% level) those folks take more and more of their income UPFRONT and non-tax deferred, likewise when tax rates rise, they SAVE by deferring more of their income in tax-deferred vehicles....and THAT (taking care of themselves and their families) is what LOWERS tax revenues, because even with across-the-board tax hikes, that 70% of income taxes that top 10% of earners pays CANNOT be made up.

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That ultimately translates into less investment and LESS job creation.

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The idiocy that "Well, then the government will hire more people," is just that, idiocy. With shrinking revenues the government CAN'T hire more people....and even if the federal government borrowed to hire more, state and local governments would have to lay more workers off due to falling revenues (those entities MUST balance their books and can't borrow like the fed) and that would more than offset any federal hiring.

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Ultimately job creation is a private sector function.As you've agreed, I've proven that G W Bush's administration was as Keynesian as Richard Nixon's and despite the increased revenues from those tax cuts, that administration spent MORE (even adjusted for inflation) than even LBJ did on reckless and irresponsible social spending.

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The foolish bi-partisan effort to "increase mortgage lending to low-income Americans" is what caused the global credit crisis. That too, was a Keynesian scheme.Supply Siders (like you and I) look at such things (the HUGE disparity in homeownership rates) and say, "Well, poorer people should rent and save up until they can put down the 20% needed to get a conventional mortgage."

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I think we can both agree that the idea of government pushing banks to extend more loans to lower income individuals harms the more affluent home buyers by also raising their lending rates and ultimately creates the kind of "credit socialism" (the printing of credit without backing) that resulted in the housing bubble that popped in 2008.

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G W Bush's administration moved AWAY from Reagan-Gingrich Supply-Side policies and embarked on a Nixonian Keynesian agenda. Barrack Obama is following that up with a Carter-Redux....even MORE Keynesianism.

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More bad policies always bring about more bad results.