Tell me about Supply-side economics

The Something Awful Forums > Discussion > Ask/Tell > Tell me about Supply-side economics

Xelkelvos: Dec 19, 2012

While this may be more appropriate in D&D, asking here seemed like a better bet for a straight answer. I'm an engineering student so economics is not exactly the forte of most of us and tends to draw people towards ideas that can be "mathematically proven" as apparently Austrian school economics is when compared to Keynesian school and takes into account supply and production where the other only takes into account demand (dunno if these assertions are true or not out if they're valid). Can I get a full explanation on it and why it is or isn't valid when compared to Keynesian? Also can someone explain the same for Keynesian as it seems to be more favored on these boards.

# ¿ Sep 23, 2015 21:50

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# ¿ May 9, 2024 08:57

Xelkelvos: Dec 19, 2012

Justin Godscock posted:

OP, can you please re-phrase your question because I am a legit economics student (also, supply and demand is the bread and butter of economics no matter which school you subscribe to) and I really don't know what you're asking.

You want the dictionary definition of supply-side economics but you kinda went off on a tangent and I have no idea what you want to know.

Edit: I'll give you the dictionary definition anyways but a brief one: Basically, supply-side economics involves increasing production of the supply to spur economic growth. What this usually means (post-Reagan Republicans are loving HUGE at this, BTW) is lower taxes and less government intervention in the economy (they are seen as hurdles towards those that produce under this system) to spur growth. This means that the people that makes goods are able to do so, employ more people who then make money to spend on those goods. This is also known as "trickle down economics" where the money from increased business activity goes down towards the masses in the form of increased wages from increased growth. I should also warn you this is a political lightning rod as to how effective this truly is because of recent attention on income inequality over the last 30 years.

It probably also doesn't help that I know nothing about Keynesian economics other than it's based around demand. It was engineering student talking to engineering student so neither of us likely knew all that much beside the broader points on our respective sides. His arguments were largely the broad Libertarian talking points about how regulation caused the two most recent crashes due to over regulation and so forth and I basically conceded since I didn't know much myself.

so basically the definitions of both schools and the pros and cons of each is what I'm asking. and probably any evidence of one or the other working. I could probably try on D&D too.

Edit: also that Keynesian basically funnels wealth more downwards rather than upwards, so to speak.

Xelkelvos fucked around with this message at 05:07 on Sep 24, 2015

# ¿ Sep 24, 2015 04:57

Xelkelvos: Dec 19, 2012

Engineers should generally never be trusted outside of their scope of work unless they can demonstrate otherwise. (See also: Groverhouse)

That being said, what's the Demand side version of that then?

# ¿ Sep 24, 2015 05:53

Xelkelvos: Dec 19, 2012

Commie NedFlanders posted:

Keynesian policies pump more money into the pockets of the working class through jobs programs or benefits.

This temporary boost in low wage income increasing consumer spending. This inevitably goes back to businesses, but because it's an increase in demand rather than supply, businesses are forced to hire more people, which further stimulates spending.

You want to keep the capital flowing, but supply side economics makes it too easy for the wealthy to just sit on it and accumulate interest. There's no incentive built,in to actually spur growth, just remove imaginary obstacles

Well, no direct incentives to build societal growth or the wealth of those around them. All of the direct incentives are deflationary to the currency and incentivise safe stockpiling and spending as little as possible to minimize risk.

Edit: I understand the base concepts of Keynesian okay enough, but the benefits of Supply-side and their justifications seem utterly opaque. I'd likely get a direct answer to this if I went into the Libertarian hell hole, but I'd rather add a few extra holes into my head than to venture into those pits of insanity.

Xelkelvos fucked around with this message at 03:10 on Sep 30, 2015

# ¿ Sep 30, 2015 03:06

Xelkelvos: Dec 19, 2012

icantfindaname posted:

So first off, "Keynesianism" in terms of academic theory isn't a thing, other than the fact that Keynes was basically the founder of what is now Macroeconomics. Keynes' theory is a standard, integral part of the academic social science of economics. Austrian "economics" is basically bullshit charlatanism that literally rejects scientific empiricism (because scientific empiricism indicates that government intervention is needed to maximize GDP). So as for the bolded loving . See here. The thing about demand is complete bullshit. The guy you're talking to should take an Econ 101 course, and stop reading literature distributed by libertarian lobbying groups

A better explanation for why autistic engineering types like libertarianism is because their education in the humanities is usually awful and they're more susceptible to intellectual snake oil because of it, combined with the fact that they tend to be whiter, maler and wealthier and thus stand to benefit materially from it

One of the courses we were actually required to take was Engineering Economics.

It was mostly about using Excel and time-value of money.

I've actually taken macroeconomics myself out of personal interest while getting a psych degree so I'm obviously more amenable to more humanistic topics compared to some of my peers.

# ¿ Oct 1, 2015 19:16

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# ¿ May 9, 2024 08:57

Xelkelvos: Dec 19, 2012

Spazzle posted:

How is using logic and arguing from first principles really different from having a broad, poorly specified model?

Because if those first principles are wrong or flawed, then the proceeding logic is wrong too. The proper way to go about it is to refine those principles and assumptions until they reflect reality or otherwise account for the variance in some way by adjusting the model.

# ¿ Oct 3, 2015 19:07

The Something Awful Forums > Discussion > Ask/Tell > Tell me about Supply-side economics