GOP about to pass secret health care bill while they think no one’s paying attention

[Lexicus]

You know, so much of that is because people mistake Trickle Down for Supply Side. Like, so so sooooooo much.

What do you see as the difference between them? That is, are there supply-side policy measures that are not also trickle-down policy measures?

 

[stinkubus]

You would've thought that the Great Depression, once and for all, would have disabused humanity that Say's "Law" was correct, but it just never dies.

 

[Cutlass]

You would've thought that the Great Depression, once and for all, would have disabused humanity that Say's "Law" was correct, but it just never dies.

Say's law is necessary to justify supply side economics. If you throw out Say's Law, like you should, then you also throw out supply side economics. And trickle down economics. And voodoo economics. So it has been politically rehabilitated.

 

[El_Machinae]

What do you see as the difference between them? That is, are there supply-side policy measures that are not also trickle-down policy measures?

There are two steps required when having the discussion. First you need to determine if the person is using a fiat money economic model, or a backed currency model. Much of the original discussion on supply side was done during the transition to fiat, and so most of the discussion won't apply to a modern conception of the economy. The second step is to make sure that the conversation being had is using a fiat money economic model.

"Trickle-down", essentially, is "let rich people have money, and they will hire you to do things they want". Both economic models basically compress into that, each time. And both times they're mostly wrong. There are only a handful of cases I can think of where trickle-down actually lead to a net increase in aggregate wealth. Most of the time it does what we know it does, trickles wealth upwards.

Supply side is a different beast. The idea with supply side is that "people with money will spend it in ways to make them more money". Obviously, any supply side spending will also create income for the supplier of that service or product. When I buy solar panels, I am creating jobs just as much as if I spend my cheque on chicken wings and beer. What differentiates supply side from 'trickle down' is that the spender doesn't have to be rich. Using cash today to buy a cavity filling in order to avoid a root canal tomorrow is supply-side. Insulating your house is supply side. Building a factory in a region with low wages is supply side. Whatever, it's policies the get people to spend in ways that increase aggregate supply.

Discussing supply vs demand in economics is a bit of a trick. It's like discussing width vs length when discussing area. Obviously, people spending money is going to affect the 'demand' side of the equation. But the difference between supply side and trickle down is terrifically important. People spending in ways that increase the aggregate supply adds to the aggregate wealth. Trickle down likely won't, except in a handful of specialized examples.

Keep in mind, the problem in 2008 was an aggregate demand problem. It was solved by people getting money, basically so that they'd keep spending in ways that they were before, but more bad debts being cleared. But any and all spending done by people receiving their cheques that boosted aggregate supply ended up adding to long-term growth. This is why so many people wanted the government to be drastically increasing spending in ways that made good fiscal sense (infrastructure, science, climate change policies, etc.) instead of merely just giving people cash.

This is a healthcare thread. There have been few instances of successful wealth creation as grand as things like the rollout of mass polio and smallpox vaccines. Someone spent money boosting the aggregate supply, and it manifested as super-cheap vaccines that basically saved resources in a way that Universal Iron Lung Coverage never would have.