Supply Side Economics Research Paper

Economic health is essential to the wellbeing and standard of living for the entire nation. That means that it is extremely important for a nation to do what it can to improve the overall health of the economy. Economists have created many policies over time that they believe will achieve this goal, three of which are most popular in recent history. The three policies are, supply-side economics demand-side economics, and monetary policies. The first strategy is the policy of stimulating the supply of goods and services. Supply side economics, Reagan's famed domestic policy in the 1980’s, grew popular in the late 1970's after demand-side failed to decrease unemployment and inflation. Supply-side economics focuses on increasing production through policies such as reduced government, deregulation, and lower taxes. History can attest to its success when “The Kennedy tax cut reduced rates across the board, and the top marginal rate was sliced from 91 percent to 70 percent. Both of these tax cuts were followed by strong growth and increasing prosperity” (Gwartney). Kennedy's tax cuts in the early 1920’s show a statistical increase of America's economic health, a policy supported by supply side economics. …show more content…
Demand side is a Keynesian policy meant to increase or decrease demand in order to balance the economy. Demand side economics uses policies such as fiscal policies, increasing the government spending, and lowering taxes. Demand side economics proved itself when “Clinton’s demand side policies not only paid down the Reagan/Bush deficits, they produced the first budgetary surpluses since 1969. By the time Clinton left office, the government was running surpluses of almost $140 billion per year” (Freeman). Clinton’s usage of demand side economics shows staggering statistics of positive growth. Though there is much debate on the use of demand side economics, history has shown it has had its share of