Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.2 9/18/84 exptools; site whuts.UUCP Path: utzoo!lsuc!watmath!clyde!cbosgd!ihnp4!houxm!whuxl!whuts!orb From: orb@whuts.UUCP (SEVENER) Newsgroups: net.politics Subject: Re: Supply-side Economics: the Savings Rate Message-ID: <364@whuts.UUCP> Date: Wed, 6-Nov-85 09:00:03 EST Article-I.D.: whuts.364 Posted: Wed Nov 6 09:00:03 1985 Date-Received: Thu, 7-Nov-85 21:39:35 EST References: <1475@teddy.UUCP> <7800591@inmet.UUCP>, <756@whuxl.UUCP> <264@pyuxii.UUCP> Organization: AT&T Bell Laboratories Lines: 41 > The great theorist explains all again. Phooey, Sevener, you > seem to have Tip O'neil's party line rhetoric down pat. > First, supply side economics DOES depend on consumer spending, > not the savings rate. > T. C. Wheeler Unfortunately I have no articles with direct quotes from supply-side advocates as to their theory and its voodoo benefits. However I have some quotes from a New York Times Business Day article, Sept. 18,1984: "The key supply-side tenet is that lowering marginal tax rates will have a substantial incentive effect on work and *investment*, fostering long-term, noninflationary growth. In addition, the theory holds, this growth will eventually shrink the budget deficits." "Support for the 25% across the board tax cut in 1981 was built on assertions by ardent proponents such as Mr. Laffer and Representative Jack Kemp that lowering tax rates would not add to deficits but would instead so energize the economy that more tax revenues would be generated." This article quotes Mr. Roberts a former official in the Treasury Dept. and supply-side advocate : "As the theory is postulated", he said, "*investment* is leading the recovery, growing at three times the rate of consumer spending." Another economists points out however that investment spending had to go up after the severe recession, and that it was still *below* the 12.1% rate in 1981. Moreover he pointed out that in fact *consumer spending* had *increased* to 62.9% of GNP from 62% of GNP in 1981. Frankly T.C., you don't know what you're talking about. The reason it is called *supply-side* economics is that the economy can be made to grow by increasing the *supply* of goods and output-which is supposed to occur through increased investment in productive machinery to produce that increased supply. To pay for increased investment requires increased savings. Even our dingbat President understands that! tim sevener whuxn!orb