Ismael Hossein-Zadeh: Governments of the core capitalist countries have since the Great Depression of the 1930s applied two major types of economic stimuli: demand-side, or Keynesian, and supply-side, or neoliberal. Demand-side policies aim at boosting the purchasing power of workers and other masses of the people directly: injecting buying power into the economy through large scale investment in infrastructural projects and other employment-generating undertakings... Champions of supply-side economics purport to offer stimulus measures to revive a stagnant economy. However, they do this in an indirect, roundabout or two-step process. The first step aims at further enriching the rich, either through fiscal policies of tax cuts for the wealthy or monetary policies of asset-price inflation, which also largely benefit the wealthy. The second step consists, essentially, of a wish: it is hoped that, following the injection of additional resources into the coffers of the 1% in the first step, the 99% would then benefit from the ensuing trickle-down effects, thereby boosting aggregate demand and economic activity.
Posted on: Fri, 18 Jul 2014 18:31:32 +0000
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