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Culture, Society and Praxis

Article Title

Supply-Side Fallacy

Document Type

Main Theme / Tema Central

Abstract

In this timely article, Brendel explores the economic theory that, according to the author, has generated the staggering budget deficit of the US. The deficit has grown by over 50% in recent years while economic growth has remained below average. With the largest financial meltdown of recent history looming, this article finds the economic ideas of the Bush administration largely at fault. According to Brendel, “the economic upturns believers in supply-side economics promised to the American public never materialized, instead supply-side economics has merely increased income inequality and budget deficits.” The author explains how between 1950 and 1980, the U.S. economy prospered despite a top marginal tax rate in excess of 70%, and again in the 1990s despite a considerable tax hike. Yet, this historical trend did not respond with the “trickle down” desired positive effects to cuts to the top marginal tax rate proposed by this economic ideology. Instead, income inequality has skyrocketed to pre-depression era heights and budget deficits have ballooned.

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