how can anybody defend supply side economics when supply exceeds demand?

It's really not very difficult.

Inflation causes real wage increases (but not purchasing power parity) which destroys labor b/c businesses want to outsource and lay people off. Supply side economics (by reducing taxes on producers, by increasing producer subsidy, and by reducing barriers to entry) puts deflationary pressure on prices. If you stabilize the currency (the goal after stagflation) and you eliminate or reverse price inflation, you actually stabilize the labor force (by creating "stagnant" real wage) and you stop outsourcing pressure. Furthermore, even though real wages are stagnant, purchasing power parity is held steady or perhaps improved in some instances as corporate taxes and governmental regulatory waste are no longer passed on to the consumer.

The temporary excess of supply reduces prices and moves the economy towards a more efficient equilibrium (if an entire economy can have just one equilibrium). Outsourcing pressure is relieved by wage stabilization and prices are stable. Liberals have correctly pointed out that stagnant real wages makes it difficult to get a bigger piece of the pie that's being baked by the top 1%. They are correct, but socialism and income redistribution to do not remedy the situation. Only improving purchasing power parity of the dollar can aid trickle down. The only way to help the middle class up is not to pull the top down, but to use education to teach them how to fish (so to speak) and teach them how to build an asset base for the next generation of their family. That explains why Reagan pushed for college loans (unfortunately consumers have not paid attention to tuition costs).

If I gave you 1 million dollars right now b/c I am rich and you are poor, I certainly could never expect you to build a billion dollar empire. You'd need training, assistance from others, and ideas/products/services that people need. The same is true of income redistribution. It really only stimulates the retail economy and the consumer debt sector unless people understand how personal finance and business work. It's kind of difficult to believe they understand business or finance when they are demanding higher taxes on businesses or they demand more money from the wealthy. Surely even the most liberal citizens can understand that taxing a rich man does not make a poor man better off. If anything, economic theory indicates the exact opposite. We've raised Federal tax revenues from 500B in 1980 to 2.5T in 2007 by cutting taxes! Yes, the rich have more, but so do all of our massive social programs.

Trickle down was working splendidly all the way through Clinton's admin, but during the late 1990s our currency became so powerful that people started lusting after imports. It started to hurt our balance of trade and when the Chinese economy started to surge and oil prices started to rise, we had an epidemic. Despite the Feds best effort to devalue our currency (again to stop outsourcing and to close our trade deficit), consumers never got the memo. They continued buying more imported goods on credit and buying more SUVs which required more oil imports.

Besides the housing collapse, lower middle class got poorer during the Bush years b/c purchasing power parity disintegrated due to rising oil prices. Part of this was the Fed's fault, and part of it was the Chinese fault (buying oil and failing to develop it) and a much bigger part was consumers behaving really badly.

The impoverishment of our nation at the end of the long boom had little/nothing to do with temporary excess supply. The flaw in logic is that you are only focusing on real wages not on the purchasing power parity of the wage they earn. You're focusing on governmental regulation to control capitalism (it doesn't) rather than consumer demand (the real regulator of capitalism). It's the same mistake people make nearly every time they criticize supply side. If you think back, purchase power parity was so good it started causing some minor problems at the end of the 1990s.

Supply side couldn't have been used after the economy collapsed. Bush/Obama know that, and they changed course to Keynesian. You can't use a deflationary economic system to manage an economy struggling with deflation. Once the economy stabilizes, supply side is one of the best options for managing a growing economy. Businesses hate it. Any wonder they've bought Congress?

Easily. Mostly it's because we know what supply-side economics is.

Natural laws do not change with circumstances. When supply exceeds demand the laws of supply and demand still apply.

Re-distribution of wealth is inevitable. There are EXACTLY two disagreements on the details

1) All Democrats demand the GUARANTEED redistribution of wealth by voluntary means should be PREVENTED and REPLACED by FORCE.

2) No Democrat believes the self-evident FACT that new wealth is constantly created. (nor anything else that's self-evident.) Therefore, they REALLY BELIEVE the only way for "the poor" to survive is through means already long-PROVED to hurt the economy and make the poor even WORSE-OFF.

Your logic seems fine. From what I gather China has a considerable amount of the money in the world economy and the USA among many others are in debt. Apparently there is a lot of effort going in to convincing the Chinese that they really should give something back and not hoard all the wealth - seems them being a nuclear power prevents the more traditional solutions of going to war to solve such economic problems.

"Supply-side economics is a school of macroeconomic thought that argues that economic growth can be most effectively created by lowering barriers for people to produce (supply) goods and services, such as adjusting income tax and capital gains tax rates, and by allowing greater flexibility by reducing regulation. Consumers will then benefit from a greater supply of goods and services at lower prices."

http://en.wikipedia.org/wiki/Supply-side_economics

What you are talking about is not supply-side economics.

You're not bringing up the part where you simply drop the supply if there's too much for the demand.

Phelps Dodge, which was recently bought out by Freeport McMoran, does this as a regular part of their existence. Too much copper on the market? Simply stop mining it for a while. They control the price of copper by doing that.

What is so hard about understanding such a simple concept that you had to write four paragraphs and cram them into the one paragraph above?

When supply exceeds demand prices fall unless prices are being control by hedge fund manager like George Soros (big democrat supporter and collapser of world currencies) manipulates prices.

Right in the middle of your rant, I found the following idiotic statement: "Re-distribution of wealth is what drives the us economy."

It's kind of like the housing market where I live. There are so many vacant houses and little demand. Supply side has to rely on high demand, and without that demand it falls on its side.

The flaws in this argument... It doesn't work. See the USSR for more details.

When you punish people for success and innovation.. you end up with nobody even trying anymore.

What?