Supply Side Economics
November 3, 1999
Vice President Al Gore and First Lady Hillary Clinton have been attacking "supply-side economics," the theory that underlaid Ronald Reagan's economic policies -- but many Democrats support supply-side theory.
- In 1989, after denouncing Reagan's economic program throughout the 1980s, liberal economist Paul Samuelson of the Massachusetts Institute of Technology, a longtime adviser to Democratic presidents, conceded that "the latter half of the 1980s, historians will recognize, has been an economic success story."
- In 1994, in its annual Economic Report, President Clinton's Council of Economic Advisers admitted, "It is undeniable that the sharp reduction in taxes in the early 1980s was a strong impetus to economic growth."
- In 1996, Clinton's chief economic adviser, CEA Chairman Joseph Stiglitz, told the New York Times, "Our growth policies are supply-side."
There is further evidence that supply-side economics is well accepted by the general public, policymakers and professional economists.
In 1995, Business Week, which opposed the Reagan tax cut in 1980, said, "the basic supply-side notion has become commonplace: Economic growth depends on how tax rates, regulations, and inflation affect investment, entrepreneurship, and work effort." The same article quoted Harvard University economist N. Gregory Mankiw as saying of supply-side economics, "There's no doubt mainstream economic research is more focused on incentives and supply factors."
- In a 1996 poll, 48 percent of voters said that Reagan's economic policies were good for the country. Only 36 percent said they were not.
- Time magazine has listed economist Arthur Laffer's formulation of supply-side economics as one of the top 100 scientific accomplishments of the 20th century.
- And a few days ago supply-side economist Robert Mundell won the Nobel Prize in economics.
Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, November 3, 1999.
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