question: How does supply-side economics work *when it is considered successful compared to alternatives*?
comment: It doesn't work and has never worked, unless by worked you mean it dramatically redistributes wealth away from the working and middle class and concentrates it in the hands of the richest people.
passages: In 2003, a Congressional Budget Office study was conducted to forecast whether currently proposed tax cuts would increase revenues. The study used dynamic scoring models as supply side advocates had wanted and was conducted by a supply side advocate. The majority of the models applied predicted that the proposed tax cuts would not increase revenues.
  
  Section::::United States monetary and fiscal experience.:Research since 2000.:Kansas experiment.
  
  In May 2012, Sam Brownback, Governor of the state of Kansas, signed into law the "Kansas Senate Bill Substitute HB 2117", which cut state income taxes deeply and was intended to generate rapid economic growth.
   In the United States, commentators frequently equate supply-side economics with Reaganomics. The fiscal policies of Republican Ronald Reagan were largely based on supply-side economics.
  
  Reagan made supply-side economics a household phrase and promised an across-the-board reduction in income tax rates and an even larger reduction in capital gains tax rates.
   Supply side proponents Trabandt and Uhlig argue that "static scoring overestimates the revenue loss for labor and capital tax cuts" and that "dynamic scoring" is a better predictor for the effects of tax cuts. To address these criticisms, in 2003 the Congressional Budget Office conducted a dynamic scoring analysis of tax cuts advocated by supply advocates. Two of the nine models used in the study predicted a large improvement in the deficit over the next ten years resulting from tax cuts and the other seven models did not.
  
  Section::::Effect on income inequality.
   Supply-side economics
  
  Supply-side economics is a macroeconomic theory arguing that economic growth can be most effectively created by lowering taxes and decreasing regulation, by which it is directly opposed to demand-side economics. According to supply-side economics, consumers will then benefit from a greater supply of goods and services at lower prices and employment will increase.
   This led supply-siders to advocate large reductions in marginal income and capital gains tax rates to encourage greater investment, which would produce more supply. Jude Wanniski and many others advocate a zero capital gains rate. The increased aggregate supply should result in increased aggregate demand, hence the term "supply-side economics".
  
  Section::::Fiscal policy theory.
   Some contemporary economists do not consider supply-side economics a tenable economic theory, with Alan Blinder calling it an "ill-fated" and perhaps "silly" school on the pages of a 2006 textbook. Greg Mankiw, former chairman of President President George W. Bush's Council of Economic Advisers, offered similarly sharp criticism of the school in the early editions of his introductory economics textbook. Mankiw wrote in June 2017: 
  
  In a 1992 article for the Harvard International Review, James Tobin wrote: 
   Supply-side economics is a school of macroeconomic thought that argues that economic growth can be most effectively created by lowering barriers for people to produce (supply) goods and services, such as adjusting income tax and capital gains tax rates and by allowing greater flexibility by reducing regulation. Consumers will then benefit from a greater supply of goods and services at lower prices.
   For example, the Tax Policy Center evaluated a detailed supply-side tax cut proposal from presidential candidate Jeb Bush in 2015. Their conclusion was that the proposal would both increase deficits dramatically and worsen after-tax income inequality.
   Supply-side economics developed in response to the stagflation of the 1970s. It drew on a range of non-Keynesian economic thought, including the Chicago School and New Classical School. Bruce Bartlett, an advocate of supply-side economics, traced the school of thought's intellectual descent from the philosophers Ibn Khaldun and David Hume, satirist Jonathan Swift, political economist Adam Smith and United States Secretary of the Treasury Alexander Hamilton.
   There is frequent confusion on the meaning of the term "supply-side economics" between the related ideas of the existence of the Laffer Curve and the belief that decreasing tax rates can increase tax revenues. Many supply-side economists doubt the latter claim while still supporting the general policy of tax cuts. Economist Gregory Mankiw used the term "fad economics" to describe the notion of tax rate cuts increasing revenue in the third edition of his "Principles of Macroeconomics" textbook in a section entitled "Charlatans and Cranks": 
  
  Section::::United States monetary and fiscal experience.:Clinton years.
   BULLET::::2. Adopting flow model economics: Flow model economics encompass low-cost ways to vary mix and volume. Lean manufacturing is a discipline that has the same goals as flow economics.
  
  BULLET::::3. Replacing forecasts with demand: This step requires efficient sharing of information up and down the chain. An ideal is for all partners to have access to the level of real-time sales as well as the business rules to react.
  
  Section::::Demand-driven supply-chain assessment.
   Section::::United States monetary and fiscal experience.:Research since 2000.
  
  In 2003, Alan Murray, who at the time was Washington bureau chief for CNBC and a co-host of the television program Capital Report, declared the debate over supply-side economics to have ended "with a whimper" after extensive modeling performed by the Congressional Budget Office (CBO) predicted that the revenue generating effects of the specific tax cuts examined would be, in his words, "relatively small". Murray also suggested that Dan Crippen may have lost his chance at reappointment as head of the CBO over the dynamic scoring issue.
   In 1986, Martin Feldstein — a self-described "traditional supply sider" who served as Reagan's chairman of the Council of Economic Advisors from 1982 to 1984 — characterized the "new supply siders" who emerged circa 1980:
   The Bill Clinton years represent a counter-example to supply side economics as tax increases coincided with record job creation. President Clinton presided over the budgets for fiscal years 1994–2001. From 1998 to 2001, the budget was in a surplus for the first time since 1969.
   Supply-chain optimization has applications in all industries manufacturing and/or distributing goods, including retail, industrial products, and consumer packaged goods (CPG).
  
  Section::::Approaches and solutions.
   According to Max Ehrenfreund and economists he consulted, an explanation for the reduction instead of increase in economic growth from the tax cuts is that "any" benefits from tax cuts come over the long, not short run, but what does come in the short run is a major decline in demand for goods and services. In the Kansas economy cuts in state government expenditures cut incomes of state government "employees, suppliers and contractors" who spent much or most of their incomes locally. In addition, concern over the state's large budget deficits "might have deterred businesses from making major new investments".
   It has been contended by some supply-side critics that the argument to lower taxes to increase revenues was a smokescreen for "starving" the government of revenues in the hope that the tax cuts would lead to a corresponding drop in government spending, but this did not turn out to be the case. Paul Samuelson called this notion "the tape worm theory—the idea that the way to get rid of a tape worm is [to] stab your patient in the stomach".
   Typical policy recommendations of supply-side economics are lower marginal tax rates and less regulation. Maximum benefits from taxation policy are achieved by optimizing the marginal tax rates to spur growth, although it is a common misunderstanding that supply side economics is concerned only with taxation policy when it is about removing barriers to production more generally.
   In the developing country public health setting, John Snow, Inc. has developed the JSI Framework for Integrated Supply Chain Management in Public Health, which draws from commercial sector best practices to solve problems in public health supply chains.
  
  Section::::Management.
   Secondly, the techniques are claimed to be "commercially effective". The companies publish case studies that show how clients have achieved significant and measurable benefits in terms of reduced inventory and lower logistics cost levels, while typically maintaining or improving customer service through better predictability and improved availability. There is limited published data outside of these case studies, and a reluctance for some practitioners to publish details of their successes (which may be commercially sensitive), therefore hard evidence is difficult to come by. Last, not least, independent advisors or benchmarks show the stickiness and benefits achieved in specific sub-sectors.
   The Laffer curve, a theoretical relationship between rates of taxation and government revenue which suggests that lower tax rates when the tax level is too high will actually boost government revenue because of higher economic growth, is one of the main theoretical constructs of supply-side economics.
   Section::::United States monetary and fiscal experience.:Research since 2000.:Bush tax cuts.
  
  During his presidency, President Bush signed the Economic Growth and Tax Relief Reconciliation Act of 2001 and Jobs and Growth Tax Relief Reconciliation Act of 2003. 
  
  In 2007, the Bush administration pointed to the long period of sustained growth, both in GDP and in overall job numbers as well as increases in personal income and decreases in the government deficit.
   An analysis of the Bush tax cuts by the Economic Policy Institute claims that the Bush tax cuts have failed to promote growth since all macroeconomic growth indicators were well below average for the 2001–2005 business cycle. These critics argue the Bush tax cuts have done little more than deprive the government of revenue necessary to keep a balanced budget.
   Section::::Effect on tax revenues.
   Powerful suppliers (e.g. labour suppliers) can influence profitability of an industry though charging higher prices, limiting service quality or by shifting costs to the industry participants. A supplier group is powerful if:
  
  BULLET::::- It is more concentrated than the industry it is selling to
  
  BULLET::::- It doesn't heavily rely on the industry to gain revenue
  
  BULLET::::- Switching costs are high for the industry members
  
  BULLET::::- Suppliers produce unique products that have no substitutes
  
presuppositions: Supply-side economics is considered successful. Supply side economics works. Supply-side economics works.
corrections: Supply-side economics does not work for the working and middle classes. It doesn't work. Supply-side economics doesn't work - it redistributes wealth away from working/middle classes and puts it in the hands of the wealthiest.
raw_presuppositions: Supply-side economics is considered successful. Supply side economics works. Supply-side economics works.
raw_corrections: Supply-side economics does not work for the working and middle classes. It doesn't work. Supply-side economics doesn't work - it redistributes wealth away from working/middle classes and puts it in the hands of the wealthiest.