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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