Reply to post: Re: I don't get it

Republican tax bill ready to rescue hard-up tech giants, struggling rich


Re: I don't get it

Here is the problem with supply side economics and every first year econ student knows its. The basic fact of the supply and demand curve.

Lets look at how they say trickle down is supposed to work:

Give businesses more capital and they will hire people to increase production.

But increasing production increases supply, and increasing supply with a static demand means prices have to go DOWN. No business is going to invest in new employees and capital just to see revenue per widget drop. So they will sit on the cash, buy back shares, give bigger bonuses to C-level management, or make financial investments.

You have to work on the demand side because increasing demand always increases supply side revenue. Don't believe me, it's Christmas, look at the prices of the hot toys on eBay.

If the demand is there, businesses will increase production without external forces. Or their competitors (existing or new ones) will.

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