Supply Side Economics Failure

Conservatives think that since the president is a liberal that he is “tax and spend” liberal. This is not only untrue, it is a fallible stereotype considering that Teddy Roosevelt (a republican) introduced the progressive income tax to protect middle class citizens from plutocracy. In which he was right to do since even after a series of small tax cuts for the rich since Reagan, the rich were still able to cease our government via Federal Reserve Act of 1913, but that’s another story.

The economy looked much like it did in 2008 as it did in 1928, right before the crash of 29. Supply side economics or the “trickle down theory” has widely been accepted as the driving force of the economy’s prosperity despite the fact that the policy was considered a radical one. On paper, it creates the same economic disparity between the rich and middle class that was existent during the time of Herbert Hoover. And just like the boom of the “roaring twenties” we had a boom of the first decade of the millennium. What a great start.

Since WWII and the New Deal, the economy was growing in favor of 90% of the country until Reagan took us into another trickle down economy. Before this, most tax cuts given by every president since FDR have been modestly directed toward the consumer base.

Understandably, most Americans feel that if taxes are raised then jobs will be lost.

Three things that discredit this logic:

1. Jobs have not been created under this policy, jobs have been lost.
2. It is true that jobs are lost when taxes are higher on the consumer base, which is still the case right now.
3. Obama is technically not going to raise taxes at all. His plan is to allow the Bush Tax Cuts to expire in 2011.

Even if that were considered “raising” taxes, that only includes the top 5% of Americans. That’s a 3% tax increase on those who make over $250,000 a year or more, which comes to a loss of at least $7500 per year per person making over that amount. Those tax cuts have not trickled down and have cost our budget at least $300 billion a year since 2003. So $300 billion a year times 5 years is about a trillion and a half dollars. That just includes those making around $250,000. Who knows how much more from the bigger corps. Not to mention all these accounts or tax havens these people keep offshore or the fact that people who work in the stock market only pay 15% on their income. No president in history has cut taxes during a time of war until Bush. This trillion dollar war could have and should have been paid for by the corporate machines that benefit from this war like the Constitution states.