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The Importance Of Supply-Side Economics

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With the current presidential election taking place, one of the most important actions a voter can take is deciding which economic ideas they support and which ones are represented in each candidate’s tax plan. Some may support Keynesian ideas, which favor the idea of spending government money to create jobs and eliminating taxes on the lower and middle class to create demand. Supply-side economics (also known as trickle-down economics) tend to have the opposite expectation in ideas; this form of economics favors lower taxes for businesses in order to create revenue to put back into businesses. Also, supply-side economics supports the idea of saving government money by limiting its spending. Lastly, there are classical economic ideas which support ideas such as free trade and limiting the government’s involvement in problems with economics. Though one may expect each candidate to stick to one economic idea, this is typically not the case; many of these candidates plan to mix these ideas. …show more content…

This holds some truth as in Johnson’s plan, he agrees with “eliminating the Federal government as an obstacle to state…decisions.” This ideas supports classical economics as he wants to limit the government's power in federal intervention. He also says that “regulation should not be used to manipulate the economy” which is the entire basis of classical economics; this way, the government does not control the market, which classical economics says will always correct itself. However, when it comes to businesses, Johnson does agree with some supply-side ideas; he wants to “get rid of the double-taxation on…businesses.” This plan, under trickle-down economics, would stimulate business revenue, creating

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During the campaign of 1980, Ronald Reagan announced a formula to fix the nation’s economy. He claimed an inordinate tax burden, intemperate government regulation, and huge social spending programs hindered growth. Reagan proposed a 30 percent tax cut for the first three years of his term in office. The bulk cut would be directed towards the upper income levels. The economic theory was called supply-side of trickle-down economics.

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Reagan had tripled the federal debt from $900 billion to 2.7 trillion. Reagan had increased executive’s take of federal earnings by 3%. Which before was 1.4%. Next, during Reagan’s presidency, Supply side economics or better known as Trickle side economics was created by an economist named Robert Mundell. His theory argues that economic growth can be created easily by lowering regulation and decreasing tariffs.

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In Powell’s writing he stated that FDR “seemed willing to try practically anything as long as it involved more government control over the economy” , this very point shows why the conservative party, as pointed out by Phillips-Fein, was so aggressive in reducing the need for government control. In both cases it seems apparent that since the New Deal was unleashed that there was a persistent movement in supporting and opposing

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Johnson had been voted into office, right off the bat he wanted to stop the assault of poverty, though as previously in my last paragraph the Economy was fairly good, but there was still a shocking amount of poverty in the United States. President Johnson ran his campaign on the idea of a war against poverty and when he got into office the OEO , also known as the Office of Economic Opportunity, “created an array of new educational, employment, housing, and health-care programs”(Brinkley 699) This was done to help offer opportunities to those who were living below the poverty line, and even though it was helpful for a while the effects were impossible to sustain. In the attempts to end poverty the OEO spent three billion dollars. The program then came to a halt because the United States entrance into a war in Southeast Asia and that became a first priority(Brinkley 699).

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Johnson was distracted from his Great Society/War on Poverty plans by the Vietnam War.. The War on Poverty helped poor to rise to middle-classes and poverty rate decreased. It come up short in fixing structural reform of the economy and employment advantages. One court case example is the Loving v. Virginia.

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United States History & Government: Constitutional & Geopolitical Patterns, 2001 had stated about Hoover, “... Republicans followed a trickle-down theory… if government legislation protected the wealth of big corporations and the well-to-do, their continued investments would expand the economy and a better life would ‘trickle down’ to workers and

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This would help increase production, jobs, and economic prosperity. He also urged for gov. Spending during economic turmoil to boost consumer income and demand, this was widely supported among Democrats. Many critics claimed this plan to be similar to Hoover’s “trickle-down economics”, which advocated reducing taxes on businesses and the wealthy. Congress passed the Economic Recovery Act of 1981, which included a 25% income tax decrease over a period of three years.

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So no matter who wins each candidate has their pros and cons which is what makes them either widely loved or

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As Patterson discusses, the systematic educational reforms that Johnson put into place were multi-faceted. They included a mix of solutions to racial, religious, and regional issues in schools. As a member of an impoverished farming family in his childhood, Johnson drew on his own past to create policy that increased the access and funding that under-privileged children had to education. One of the most important and influential notions of the education reforms from the Great Society blueprint has to do with the bi-partisanship that Johnson was able to develop. Johnson’s bill included the addition of federal funding to 90% of school districts in the United States.

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In the election of President Ronald Reagan he pronounce a plan for a possible thirty percent tax cut in the first three years of him becoming president. Reagan’s special designed policy would attack the 1980 recession and stagflation. He had faith that with the free market and capitalism would solve controversy. His policies and the “greed is good” mood of America at the time coordinated and through that he expected a win. Reaganomics is established on the speculation of the supply side of economics.

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By providing direct relief and financial assistance to the needy, the economic cycle will begin again, starting with increased income. In the past, our nation attempted the process of trickle down economics, which provides money to CEOs and bosses, in hopes that the money would work its way down to the average worker. However, the rich, for the most part, never used the money in a way to benefit jobs and the nation. Along with providing relief to the needy, the government must continue to play a big role in the nation’s economic recovery, as we have effectively for the last four years. By taking a large government approach, the government will invest in creating jobs, helping businesses, and providing relief.

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Freidman believed economic freedom to be an essential need in securing political freedom. Any manipulation on a person’s economic freedom such as a tax for social security takes away from a person’s total freedom. To provide total freedom to the people coercion must not exist (Friedman, 1975). It is economic power that can balance political power. When the market is left alone under the invisible hand it balances out both what the seller and consumer desire.

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Reagonomics The Supply Side of Economics was first presented to the world during the late 1970’s as a byproduct of the Keynesian economic policy. This form of economics argues the fact that with the introduction of reducing the tax rates along with governmental regulations, the growth of the economy will be the result of the production for the supply goods and services at a much affordable price for the consumers of which may have access to more disposable income to spend on them. Just 10 years later, the Reagan and branded the supply side economics to the world that it is now recognized as Reaganomics. Overall, his vision of the supply side economics were predicated on four major principles.

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980 Words | 4 Pages

Here’s the deal, the government is debating whether federal income tax rates in American should be raised or not. Raising federal income tax rates in America generates resources rapidly, offsets cost of lower families, and creates a savings income. Raising tax reduction on the American people will contribute towards

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791 Words | 4 Pages

Classical economics emphasises the fact free markets lead to an efficient outcome and are self-regulating. In macroeconomics, classical economics assumes the long run aggregate supply curve is inelastic; therefore any deviation from full employment will only be temporary. The Classical model stresses the importance of limiting government intervention and striving to keep markets free of potential barriers to their efficient operation. Keynesians argue that the economy can be below full capacity for a considerable time due to imperfect markets. Keynesians place a greater role for expansionary fiscal policy (government intervention) to overcome recession.

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