Some quick facts on how poorly supply-side economics works:

[Zynx]

To defeat the Republicans, we need fast, ready to deploy data points that people don't have to spend a life time sifting through to figure them out. Here are some brief numbers I have been working on:

*Under Ronald Reagan, his huge tax cut plan was passed in August of 1981 when unemployment was 7.4%. Four years later, in August of 1985, unemployment was 7.1%: http://www.miseryindex.us/urbymonth.asp

*Both Reagan and Bush passed significant supply-side tax cuts. Supply-side tax cuts are designed to spur the investment side of the economy under the theory that future growth will be stronger with more investment and the best way of doing this is to cut tax rates on the owners of capital. Funny thing is that Gross Private Domestic Investment grew by the following rates:

Bush: 0.8% per year
Reagan: 4.7% per year
vs.
Clinton: 8.8% per year
LBJ: 6.3% per year
and even Nixon: 4.5% per year

As such, even the part of the economy that was supposed to be stimulated by their policies either didn't grow or grew less than presidents without supply-side policies, on average.

FDR, just for shits and giggles, had Gross Private Domestic Investment growth of 35.8% per year for the years 1933-1941. So much for the argument he constrained investment. Granted, it was coming off of a low base, but still.

*Average GDP growth rates:
Bush, once 2008 is fully revised by March, will likely have had the slowest GDP growth rates since Herbert Hoover:
(Average GDP growth rates by president as of 2007)
JFK: 4.3%
LBJ: 5.2%
Nixon: 2.9%
Ford: 2.5%
Carter: 3.3%
Reagan: 3.5%
H.W. Bush: 2.2%
Clinton: 3.7%
W: 2.3%

Reagan grew by less than Clinton, LBJ, and JFK and not appreciably faster than Carter. Bush grew far slower than almost all presidents except his father and Ford.

*Federal Revenue Growth:
Supply-siders contend that you get more revenue than you otherwise would have had as the result of supply-side tax cuts. Well, here is the comparison of Federal Income Tax revenue as January of last year(so Bush's numbers are actually worse than this):

Clinton Years
Receipts 1993: $842 billion
Receipts 2001: $1.483 trillion
Growth: 76%

Bush Jr. Years
Receipts 2001: $1.483 trillion
Expected 2009: $ 2.086 trillion
Growth: 40.6%

Reagan Years
Receipts 1981: $469 billion
Receipts 1989: $727 billion
Growth: 55%

These are all two term presidents who implemented significant tax policy changes. Clinton had the fastest economic and revenue growth of them all. Bush, with the most decidedly supply-side policies, had the slowest economic and revenue growth. Clinton also beat the crap out of Reagan with an exactly opposite tax strategy. These numbers exclude Social Security and Medicare tax revenues, but the story is precisely the same.

This is my first crack at this sort of comparison in this particular debate. Feel free to use these numbers.

[corruptmewithpower]

1. Fascinating!

[Zynx]

2. Facts are wonderful things.

[Sarah Ibarruri]

3. That's excellent! Thank you. nt

[Zynx]

4. I'm trying to do all I can on this front because Republicans are making so much shit up.

They are full of it and have to have the facts crammed down their throats.

[Sarah Ibarruri]

8. Exactly. It's important to not lose sight of that. I try to do my part too. nt

[On the Road]

5. Thank You

I had never seen those numbers.

Can you relate gross domestic investment to gross domestic product? I don't know the latter term and don't know what' included in it.

[Zynx]

6. GDP is the sum of all the goods and services produced in the United States in a single year.

The equation is the following:

GDP = Consumption + Investment + Government + (Exports-Imports)

Gross Domestic Investment has to do with the purchases of capital equipment and construction of new residential and commercial buildings. This is the part of the economy Republicans are supposedly trying to stimulate with supply-side tax cuts. The reasoning behind this is that if you cut taxes for upper-income earners, you will encourage them to deploy investment in new plant and equipment to expand. This would boost investment. The idea is that this leads to higher longer term growth by expanding the productive capacity in the economy. That's all well and good in theory. The problem is that it doesn't work.

[On the Road]

9. The Funny Thing is

that the key tenet of supply-side economics is arugably true -- that bolstering investment rather than consumption is the best long-term policy.

The supply-side policy, however, does not result in an increase in investment, as your numbers show. What's happened in practice is that the resulting resulting deficits prevent direct government investment in infrastructure and the government debt sucks out money out of the economy that could be used for private investment.

[Zynx]

11. Indeed. All that has happened is that we have supplemented domestic investment for foreign

investment. I think the primary thing that is needed for investment is a stable economic environment where fiscal and monetary policy are not gyrating all over the place.

[JDPriestly]

7. Fascinating.

[Jim__]

10. I agree with everything you say about supply side economics. I am curious ...

... about the numbers you cite for FDR. I found this website that gives bigger numbers for Gross private Domestic Investment (and I included in the excerpt his unemployment numbers because I had never seen these before):

Conservative revisionists like to point out that unemployment exceeded 20% during the New Deal. However, they ignore the fact that official unemployment figures were not kept during the 1930s. The unemployment rates from this time are data-based estimates calculated in the 1950s. Remarkably, they do not include workers who were employed in public works projects like dams, bridges, roads, aqueducts, libraries, schools, museums, military installations, and parks. Inclusion of these workers lowers the effective unemployment rate to only 4%.

Despite the revisionists' claims of reduced business investment during the New Deal, the actual figures indicate otherwise. Gross private domestic investment increased by 37% in 1933, a staggering 112% in 1934, and a whopping 82% in 1935. All told, gross private domestic investment increased an unfathomable 880% from 1933 through 1938. Wealthy business magnates like J. Paul Getty would later praise FDR and the New Deal for saving capitalism from itself and protecting our society from revolt, insurrection, revolution, or worse, complete collapse.

He doesn't give the source. Do you have any idea why his numbers are so different from yours?

[Zynx]

12. In 1938 it dropped an awful lot. It dropped over 30%.

However, if you do my number (35.8%) to the eighth power for the eight years I am averaging, investment was 11.5x higher in 1941 than in 1933.