Of all the cracked out, nutty ideas that have been floated from the right wing, supply-side "voodoo" economics has to be the one that makes the least sense. Let's break down the simple premise here. Supply side economics simply states that if you give more money to people who are already fabulously wealthy, that will somehow cause the wealth fairy to sprinkle riches all over the rest of society and we'll all be happy. I'll tell you one thing, for the last thirty years we've been sprinkled with something from those at the top, and it ain't wealth.
The whole idea that continuously cutting the tax rates for the people at the top 1% of the wealth spectrum and how that will somehow create more wealth and increase governmental revenue is whole lotta bullshit that only a third grader will think is a great idea.
Here's why. Rich people do not create jobs.
Okay, now that you have gotten out of the way of any shrapnel that came from conservative heads exploding around you I will explain how things actually work.
Rich people are a consequence of capitalism, not the source.
In our system of capitalism businesses are successful because they provide a product or service to the people. The consumer decides the value of the product or service through choice, they will buy it if the product is worth the price, if not they will go to a competitor. In our society choice is the greatest tool and the consumer is the greatest asset.
Businesses can produce widgets to sell all day, but if no one has the money to buy them, that business will fail. That is why the middle class is so important, the middle class holds up the top and keeps the bottom from falling out. When the middle class has disposable income it can use to buy products and services those businesses that provide them reap the reward, that in turn puts money into government coffers through progressive taxation that fund roads and bridges, schools and firehouses, teachers, cops, firemen, post office workers, well you get the picture. It helps keep all those people into middle class jobs, which feeds this circle of wealth.
What happens when you take that wealth out and shift it to the top? It just sits there for the most part. Yes some of it gets donated to good causes, some of it used to buy things like Yachts, but most of it sits there, usually somewhere in the Caymans. It literally leaves that closed circle of wealth I described above. That's a big problem, less wealth in the system means our roads and bridges start to fall apart, teachers and firemen get laid off and the poor get essential services cut, and government debt soars. Sound familiar?
Now if you're a conservative reader that is still reading this far, first off, Kudos to you. You're probably saying "Silly Lib, poor people don't create jobs. *snort* I want to say that is one of the most simplistic, idiot statements that comes from the right. Ever heard of a guy named Bill Gates? He didn't start rich, he was an innovator, built computers in his garage, and he sure wasn't getting capital gains. Yet I'm pretty sure most of you are reading this on a machine with Microsoft Windows installed.
Henry Ford wasn't rich, Thomas Edison wasn't rich, but they all had another thing in common, they created something which led to jobs. The rich candle makers didn't innovate, they wanted to keep selling candles, the light bulb replaced those candles and therefore created new jobs, because light bulbs led to lamps, fluorescent light bulbs and whole world of new stuff that also needed people to make them, poof, jobs!
Henry Ford created the mass assembly line and good paying jobs, therefore allowing regular people to buy his cars, which made him quite wealthy. History is replete with regular people with an idea that challenges or replaces an older idea and creates a tidal wave or new jobs and innovation.
Few of those people started out wealthy, and few of the wealthy innovate and therefore, create jobs.
So why are we as a nation rewarding those who don't create new jobs, or innovate and create new ideas and are already extremely rich off older ideas and have no reason to change the status quo?
Because big business has bought those who create tax policy, this is why regular people with new ideas are crushed. Why solar and wind and other "green" energy technologies are underfunded and constantly derided by the corporate media and the right wing. I've heard of many stories of regular guys in their garages creating cars that will run on water or have created their own bio diesels or even converted their cars into electric powered vehicles. Yet they are constantly crushed by a business and state that is profiting massively off keeping things the way they are.
Supply side is an effort to take from everyone else what the person taking it already has a lot of, it's literally Romney-hood.