Supply Side

I would think people like John McLaughlin, who are so red-hot to confront the deficit, would possess a little humility an and shut up for awhile and let the new Administration have a go at handling the economy (Column Right, Jan. 19). Where were McLaughlin and his conservative friends when Ronald Reagan used supply side (economics) to create the monster? Did they oppose it? Not them. They were right there with praise for the Gipper and supply-side economics. Cutting taxes and increasing spending will make us rich, we were told.

OWENSVILLE, Ohio - Paul D. Ryan was plucked from Congress to be Mitt Romney's running mate largely on his reputation as the wonkish and charismatic House Budget Committee chairman, but under the evening sun at the county fairgrounds he was debating beer. And ribs. And a regional favorite called Five Way, which is chili over spaghetti noodles topped with cheese, onions and beans. The architect of the Republican Party's tough-love economic platform has proved particularly adept on the campaign trail with another aspect of political life: courting voters with an appealing enthusiasm, while sometimes skimming past thorny budget details.

The phrase "supply side" usually calls up visions of Ronald Reagan and the Laffer curve . That's because it typically refers to supply-side economic theory , which argues that the way to promote production and economic growth is to cut marginal tax rates, especially the higher ones on upper incomes. I'm not an economist, but I'd argue that there's a second version of supply-side thinking at work in Washington these days. On a number of social programs, Republicans are trying to reduce the supply of federal dollars on the theory that the aid has driven up prices far faster than ordinary inflation.

The phrase "supply side" usually calls up visions of Ronald Reagan and the Laffer curve . That's because it typically refers to supply-side economic theory , which argues that the way to promote production and economic growth is to cut marginal tax rates, especially the higher ones on upper incomes. I'm not an economist, but I'd argue that there's a second version of supply-side thinking at work in Washington these days. On a number of social programs, Republicans are trying to reduce the supply of federal dollars on the theory that the aid has driven up prices far faster than ordinary inflation.

I was highly pleased to read that former President Reagan had finally acquired at least a modicum of common sense in his position on the sale of handguns. Now if we could only get him to apply a similar thinking process to "voodoo" supply-side economic theories, perhaps his clout could help us get started back on the road to fiscal sanity. JOHN C. DAVIS Irvine

Of more than passing interest is New York Times columnist William Safire's up-front support for the candidacy of Kemp. He says, "On economics, the Kemp supply-side commitment to cut taxes to stimulate growth is sincere. He's done it before with Kemp-Roth, and he can do it again as President." I agree . . . and approve. MICKEY ROONEY Los Angeles

Figures given by Warren Bennis ("Distrust Is Fueling Workers' Rage," Commentary) and Jonathan Peterson ("Settling for Slow Growth Is Seen Selling Economy Short," news analysis) in your Feb. 20 edition underscore what must be obvious to anyone that doesn't have a vested interest in supply-side economics. If the consumer doesn't have a job, he doesn't have money to spend. The economy has to slow down if there is no demand--that's a no-brainer. RICK KELLIS Woodland Hills

Your editorial did not mention the other side of the equation that comprises supply-side economics. When Art Laffer drew his famous curve on a napkin in a restaurant in Washington, he stressed both sides as more or less of equal importance. Of course the easiest part to put into effect, legislatively, was a tax reduction. This tax reduction has the exact effect that Laffer projected, i.e greatly spurring economic growth. The second part of supply-side economics, which Laffer also stressed, was to eliminate transfer payments to the upper and upper middle class (goodies if you will)

The man who nudged Steve Forbes toward the presidency had just ordered himself a vodka martini--straight up, olive--then quickly changed his mind in favor of a Diet Coke. It was only lunchtime, and in less than six hours on this January day, he was scheduled to be on national television for an interview about--what else?--Steve Forbes. Jude T.

For years prior to 1980, our country's economy limped along on elliptical wheels while our political bigwigs promoted demand-side economics. Since 1980, we have been limping along on the square wheels of supply-side economics. In a few short years, supply-side economics has more than doubled the total previous national debt. Neither lopsided economic system has served the people of our country to the best advantage. Both systems have functioned to pass the cost of their follies on down the line to our children and grandchildren, while select elements of our citizens have been living it up. Because of the dominating position of our country in the economics of our small world, the rest of the world's citizenry has likewise been disadvantaged.

Reduce taxes to increase tax revenue? That seems illogical on its face. But Steve Poizner is banking on it to balance the state's books if he's elected governor. Or maybe he's just banking on the tax cut promise to win Republican votes in next June's gubernatorial primary. Regardless, the state insurance commissioner has firmly staked out the lower-tax position and appears to believe in it with religious fervor. It's not my intention to denounce or preach any economic faith -- to render judgment in the long-running argument between so-called supply-siders and the Keynesian school.

Jude Wanniski, a former journalist turned political consultant who helped popularize supply-side economics and infuse it into President Reagan's political agenda, has died. He was 69. He died Monday at Morristown Memorial Hospital in Morristown, N.J., of an apparent heart attack, according to his company, Polyconomics Inc. Wanniski took credit for coining the term "supply-side economics" when he was writing editorials espousing the theory for the Wall Street Journal in the early 1970s.

Although Congress has now agreed to a scaled-back version of President Bush's tax plan, the president has clearly had a more difficult time selling a tax cut this year than he did two years ago. Disappearance of the surplus made his job more difficult, certainly. But on the other hand, the economy is in much worse shape, which normally makes Congress highly receptive to anything labeled a "stimulus" program.

Stephen Friedman has found himself in the line of fire. Hard-line conservative activists have ginned up an attack that's delayed his appointment as President Bush's top economic advisor. They complain, in effect, that Friedman, a staunch Republican, won't pass their "litmus test" of devotion to tax cuts.

It's official. Fiscal year 1998 is over. For the first time in 30 years, Congress has balanced the budget. Actually, we have a $60-billion surplus. Next year the budget will be balanced even after excluding the Social Security fund surplus. This is a remarkable achievement for the country. A balanced federal budget is a monumental event, like the Berlin Wall coming down or a man hitting 70 home runs in one season.

My kids are heading into their fourth week of school. And I'm still standing in line at my neighborhood school supply store. A three-hole punch, another stick of glue, a box of colored pencils for the art assignments that keep coming home . . . even with school well underway, the list of what they need seems endless. I grumble at the inconvenience and expense of it all--never realizing what a luxury the items in my cart would be to children in other parts of town.

Reduce taxes to increase tax revenue? That seems illogical on its face. But Steve Poizner is banking on it to balance the state's books if he's elected governor. Or maybe he's just banking on the tax cut promise to win Republican votes in next June's gubernatorial primary. Regardless, the state insurance commissioner has firmly staked out the lower-tax position and appears to believe in it with religious fervor. It's not my intention to denounce or preach any economic faith -- to render judgment in the long-running argument between so-called supply-siders and the Keynesian school.

When Ronald Reagan was President, he sometimes presented fiction as the truth. Fiction is sometimes presented as truth. Roberts mentions that during Reagan's reign the inflation rate was 4.7%. He doesn't mention that it was coupled with severe unemployment. He mentions that the nation has grown wealthier. Yes, but only for the very wealthy. We enthroned the wealthy and throttled the poor. Eight million more persons fell to the poverty line. He doesn't state what deregulation did to our economy.

Vice President Al Gore and Republican vice presidential candidate Jack Kemp each appealed to minority voters Friday--pushing conflicting views of how best to improve the economic condition of the nation's cities. Gore, touring a gritty neighborhood here that is the site of one of the Clinton administration's "empowerment zones," argued in favor of targeted government assistance to help bring economic development to poor neighborhoods, and warned that Republican policies would make matters worse.

Bob Dole, like George Bush, never liked supply-side tax cuts because they were the political property of Jack Kemp. Now that Kemp is no longer a political rival, Dole can have a political face lift, exchanging his dour demeanor for supply-side optimism. This is a happy development. Nevertheless, Dole will get only one cheer from supply-siders for a conversion based on expediency rather than conviction.