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Britestar

What is the effect of modern free market globalization on supply side economic theory?

By far, most economist dismissed supply side economics as a trojan horse excuse to give money to the rich for political purposes. Even during the economically domestic times, it was never viewed with success. How can it work in a global economy?
Kenny93101:

Personally, I don't think the global economy, or more appropriately the economy of the rich, is the problem with globalization. Globalization destroys cultures, forces the gap between the rich and the poor to widen, and creates monstrosities like this: http://upload.wikimedia.org/wikipedia/en/3/38/Kfcq8cropped.JPG

Little:

what in the hell is that... tell me theres a mcdonalds and a walmart down the street...

Lovely:

I almost agreed with you hayloosey until I saw your reference.

Russ:

Mundell and Laffer both spoke that the lowering of marginal tax rates will bring additional economic activity (supply). With increased globalization of markets, however, the increased economic activity lies beyond the scope of the taxing authority, and thus, supply side fails, as the increase in activity brings no higher revenue.

Britestar:

Hello, russ. I've noticed questions about the future effectiveness of the Federal Reserve, due to globalization, by statements made by Greenspan during his book reviews.

Russ:

Hi, Gary- all Central Banks are feeling the "pinch" of the flow of international capital- you are right.

Mmiller1977:

There is much to be discussed upon this topic, However I feel you may be attempting to complete some type of homework task.
I myself am looking for investment opportunities which can in some way be linked to your question.
I can only recommend that you begin to research some web sites, www,investopedia.com has some great articles, some of which relate to your question.

Russ:

sorry, but Gary is past the homework age.

Britestar:

Hello, B_Banished. I'm 56 years old and am looking for opinion not information.

Gonzo:

Please explain the "give" money to the rich thing. Whose money was given and to who was it given and what did they do with it? I don't understand.

Britestar:

Hello, Porkchops. It usually refers to who benefits from a government program, change of policy, or tax reduction.

Gonzo:

Oh, so if the rich get a tax break they are actually getting their own money.

Lovely:

Thanks Chops that is absolutely true and funny at the same time.

Britestar:

What part of govenment program and change of policy, didn't you understand? My guess is that it is the same thing as the question which you did not attempt to answer. I simply made a statement that most economist believe supply side theory is a trojan horse for political purposes and not a valid economic theory. This is a fact.

Ze'_Enigma of Dissidence..!!!:

Supply-side economics is a school of macroeconomic thought that argues that economic growth can be most effectively created using incentives for people to produce (supply) goods and services, such as adjusting income tax and capital gains tax rates. This is essentially the economic principles being followed by the Bush Administration.

Had it not been for the Iraq war and military spending, it is doubtful that our economy could sustain the limited growth that we have experienced in the past six years. One reason is that cheap labor in other parts of the world are being accessed by the very people who are benefiting from tax cuts. Rather than reinvesting in American productiion to building more improved production facititlies and plants, corporations are replacing the costs of new technology with investments where productivity results can be achieved with cheap labor. We see the results of supply side economics in what has happened to the economy of Michigan today. We see it in the cost of energy, where oil companies haven't invested their huge profits in building a single new refinery. We see it in the ennormous trade deficits. We see it in the rapidly growing national debt. And we see it in the falling value of the U.S. dollar.

Not only is our wealth being distributed to make more wealth among the rich, but service industries like Insurance companies, especially health care, are raking in billions in profits without using those dollars to lower the costs of health care insurance. So even in this area the facet of a tickle down effect has been shut off.

Instead of the so-called economic benefits of a supply side economy being accrued to our nation, they are benefiting nations that indirectly subsidize their labor markets by having no minimum wage laws.

On the other hand,

?Santa's Helper?:

Gibberish plus gibberish equals gibberish. I'm a fan of the free market economy when it is defined as an economy in which no government is dabbling. Unfortunately, we live in a world where that almost never happens, and never for long.

Britestar:

Hello, Changed. I always figured they left off the quotation marks.

Little:

supply side economics is futile if there isnt disposable income on the demand side... you have to fix that first... say an 18% flat tax across the board with no itemization... if you make 1000 a year, your tax is 180 bucks... if you make 100,000, its 18,000... a million is 180K... the more money you make, the bigger piece of the pie you pay... exactly the opposite of what you have today, where the middle class is paying the largest portion of taxes...

Little:

i might also add that the tax rate would apply for business as well... no more incentives... no more tax breaks... plain and simple... flat tax across the board... individual or business... this would stimulate the ecomomy by producing a larger ciece of the disposable income pie, which would spur supply side growth...

is there a downside to this besides the rich wont get as rich?

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