The Electric Commentary

Thursday, November 02, 2006

Supply Side Obesity

Supply side economics, basically, is the theory that tax cuts for the wealthy/middle class will "trickle down," via spending and investment, to eventually make everyone wealthier. "Lifting all boats" is the cliche. Moreover, the cuts will actually increase future taxes by taking a smaller percentage of a larger pie.

Most lefties, and the first President Bush, and I don't really buy supply side economics, at least not completely.

But, there is one area where lefties seem to adhere to this principle. In explaining the American obesity problem, one of the factors that they often cite is farm subsidies specifically, and the plentiful availability of food more generally. So basically they believe that the government:

1. Injects food into the "food economy" through subsidies to agribusinesses and other food companies.
2. That this creates an increased supply of food.
3. That this supply, through trade, eventually makes its way to the poor and middle class, causing enormous weight gain.

In other words, a subsidy at the top "trickles down" to even the poorest parts of society, making everyone fat, and gradually "sinking all boats," if you will.

I guess if the theory serves your preconceived notions, why not run with it?

4 Comments:

  • I don't think the parallel is that close. Federal subsidies specifically and directly reward increased food production. Thus it is not "trickle down". Instead it directly incentivizes increased supply. Tax cuts on upper incomes are not similarly contingent.

    By Blogger Scott H, at 2:42 PM  

  • How so? Tax cuts are specifically intended to be spent by the rich and trickle down to the poor. Isn't that spot on?

    By Blogger PaulNoonan, at 6:06 PM  

  • My thinking was that the tax cuts in question don't specifically reward creating more jobs or spending money on domestic products/services. "Trickling" involves several steps that the lefties can say don't always happen. The main such step one from the fat theory involves lower priced food => people eating more. The getting paid to produce food resulting in more food being produced is much more direct. There is also the matter that the gov't pays some producers to create less food in order to keep prices higher. Anyway, they're different steps to dispute, so you can not believe that the process occurs by not believing those steps happen. That was just my initial thought, I'm not especially attached to it.

    By Blogger Scott H, at 11:01 PM  

  • Interesting post. Granted there are many confounding variables, like sedentary lifestyle, x-box, and a lack of sticktoitivness of today's youth when it comes to sports.

    Still, I agree with your premises, in that it is evidence in support of "trickle down" in another area actually trickeling down.

    I think the best critiques of trickle down tax cut economics point out that these tax cuts usually come when the government is running huge deficits, and are not certain to stay in place. In other words, the wealthy never really feel "secure" with the tax cuts to start spending and investing in the amounts which would justify the tax cuts. Also, there is some argument that really wealthy people are buying all that they want or need already, in essence, that they're doing so well, they can't spend the more money they gain through tax cuts in the amounts that would justify the tax cuts. Therefore, I am generally against general tax cuts during deficits.

    As soon as we run a surplus, if ever again, though, I say lets give trickle down another try. The wealthy keep their money in banks and stocks, which allow people to borrow for businesses, homes, and it allows companies to expand.

    That, or the surplus could be used to colonize the ocean floor.

    By Anonymous Phil, at 11:50 AM  

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