How, and to whom has Supply-side Theory, or "Trickle-Down" Economics been supposedly dis-proven?

Question

Doesn't the US have the largest and wealthiest lower and middle class in the world?  I have heard that if you make just $30K/year, you are in the top 7% wealthiest in the world.  Isn't this due, at least in part, to the government providing tax relief to businesses, large or small, which in turn pass these tax breaks, in the form of reduced costs, on to the consumer?

Anonymous · Accepted Answer

It hasn't been disproven. There are a bunch of Keynesian in power now so there is much debate between the Administration and the supply siders.

TheKitten · Answer

Perhaps, but the a few recent administrations can hardly claim credit for all of the economic growth that has gone on since the end of World War II.

Furthermore, if the point is to help the poorest, reviving infrastructure in poor neighborhoods (education, in particular), would be more to the point. Of course, there are ideological and political questions here that go beyond simple questions of efficiency vs equity. (i.e. it is true that encouraging investment will ultimately benefit your economy as a whole, but to claim that your ultimate aim is to help the poorer is a bit strange to say the least, since they will benefit in the long term and indirectly). If the point is to help the poor, helping the poor is what you should be doing.,

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How, and to whom has Supply-side Theory, or "Trickle-Down" Economics been supposedly dis-proven?

2 Answers