There are three examples in recent history of supply side economic policies and how this pro-growth macro-economic theory has jump started severe recessions that led to years of economic growth. The proof of its effectiveness can be seen even with all the smoke and mirrors put up by big government liberals.
Supply side economists believe that if you put the capital that already exists back into the hands of the taxpayer and decrease government regulation that it will result in greater economic activity, more business investment, and more risk taking by entrepreneurs. This will then lead to a growing economy with more tax revenue and more job opportunities with ever increasing wages.
Hillary Clinton and many liberals call this theory “trickle down” and that it just leads to more government deficits. They call it trickle down because they say it just benefits the rich and doesn’t create the promised economic growth. They deny it works because if the American people knew that it did, they would lose political power and their liberal agenda could not progress.
Progressives believe the only way to stimulate the economy is to take more of the capital that exists through tax increases so that the government can then decide how to spend it. Then, they believe, all this spending will put more money into the economy, which will then lead to more demand for products and services. This theory, however, hasn’t worked in the Obama years, which have seen an increase of almost 10 trillion dollars in U.S. debt, an anemic recovery from the recession of 2008, and a GDP of less than 3% every year of his presidency.
John F. Kennedy got ‘America moving again’ with two large tax cuts that became law in 1962 and in 1964. The second half of the 1950’s decade had several years of low GDP with the recessions of 1958 and 1960 led JFK to advocate in the 1960 campaign for big tax cuts for business and for the personal tax payer. Those tax cuts resulted in high economic growth until the Nixon recession of 1970.
Ronald Reagan’s 1980 slogan, "Let's Make America Great Again" was a pro-growth vision born from the oil crisis of the mid 70’s and the energy crisis of 1980. His economic policy was referred to as Reaganomics. Ronald Reagan in his first Inaugural address famously said, “Government is not the solution to our problem; government is the problem.” Reagan’s economic policy positions included major tax cuts, reduced government spending, and reduced government regulation.
During Reagan’s first two years, the U.S. was dealing with another recession brought about by the Iranian regime’s reduced oil output and thereby imposing higher energy prices.
But the U.S. economy took off in 1983 with a GDP of 7.83%. This boom, many can argue, continued through the Clinton administration as lower taxes and reduced government interference fueled the economy and birthed the computer revolution. In fact, Bill Clinton conceded in his 1996 State of the Union Address that, "the era of big government is over.”
Reagan, however, failed in one of his policy goals and that was to reduce government spending. Government spending outpaced revenue because of increases to the defense budget and with all the pork projects put into every bill by the Democratic controlled Congress that Reagan needed passed. Liberals don’t like to remember this history, but at the time, Reagan advocated for the “line item veto” so he could cut out pork projects that had nothing to do with the bill he needed passed.
This extra spending is what led to the budget deficits. It was not his tax cuts, as liberals like to incorrectly say. Tax receipts went up during Reagan’s two terms and not down. It was an increase to government spending that added to our nation’s debt.
George Bush came into office during the recession of 2001. His tax reductions also stimulated the economy until the 2008 housing crisis. Liberals like to say that it was free-markets and less regulation that caused the turmoil, but it wasn’t the free-markets, it was because of Democratic government intervention. They forced banks to reduce their lending requirements to expand home ownership among low income wage earners and then they guaranteed the loans with Fanny Mae and Freddie Mac. This led to easy loans to people who became overextended and to a huge housing bubble as demand for housing sky rocketed. If the free markets were left alone, they would have balanced risk/reward in lending and the housing bubble would have never happened. In fact, the Bush administration warned Congress of these dangerous lending policies, but they were ignored and even ridiculed.
Donald Trump will “Make America Great Again” by implementing supply-side pro-growth policies so that America can finally fully recover from the recession that began in 2008. If Hillary Clinton is elected, we can expect large tax increases, big government spending and low growth for years to come.