Supply Side Economics or Reaganomics – What is it?

1. Supply Side Economics or Reaganomics – What is it? This particular theory in macroeconomics conceptualizes in favor of tax cuts and benefits cuts. They, in turn, produce more goods and provide incentives for work. The Supply Side Economics theory also sheds light on the increased supply of labor and goods. As indicated by Supply-Side Economics, consumers are expected to benefit from a noteworthy increase in the supply of products and enterprises at lower costs through the policy. This would in turn increase employment prospects. The policy was later implemented to counter a long period of slow economic progress with high rates of unemployment and inflation by President Ronald Reagan of The United States of America.

2. What is Reaganomics? Reaganomics refers economic policies implemented by Ronald Reagan between the years 1981 to 1989 during his tenure as the 40th President of The United States. The introduction of these economic policies was in response to America’s stagflation during the ‘70s. Stagflation in simple terms means economic contraction with inflation in double digits. Reaganomics was to the conservative combined highly influenced by the Supply Side Theory in Economics and was in close contact with the Trickledown Theory. Focal areas of Reaganomics: Growth in Government Spending: The implementation of Reaganomics made the American economy witness a slowdown in government spending. Taxes: Reagan focused on tax cuts enough so that it stimulated consumer demand. He also cut corporate taxes of which the effect was unclear. Regulations on Business: Under President Reagan, import barriers were increased. He also eased out Bank Regulations as well as deregulated long-distance telephonic services, cable TV, interstate bus services, and ocean shipping. Expansion in the supply of money: By using contractionary monetary necessary to tame out of bounds inflation that was being faced by the US for the past few years. policies, that was Benefits of Supply-Side Economics or Reaganomics: Decrease in Government Expenditure: It cannot really be said that Government expenditure was cut off at large rates. However, the pace in the growth of spending lessened. Reduced Taxes: Tax cuts were aimed at the top earners of the country. As a part of the supply- side economics, top bracket income taxes were cut from 70% to 28%. An increase in social security, payroll, and excise taxes make up for the tax cuts.

3. Slowdown of Money Growth to counter Inflation: Interest rates were increased in the Central banks to make lending more expensive thus in the process bringing inflation under control. Lessened Regulations: The regulations and restrictions imposed by President Nixon were eliminated as a part of the implementation of Reaganomics. As a part of the execution procedure of Supply-Side Economics, cable, long-distance telephonic service, interstate bus service, and ocean shipping were also deregulated. You can read the full content: https://www.businessupside.com/2020/12/22/supply-side-economics-or-reaganomics-what-is- it/ •••••••••••••••••••••••••• Business Upside Email ID: support@businessupside.com Phone No.: +1-425-605-0775 Visit Us: https://www.businessupside.com/ Stay Connected Via: https://www.facebook.com/businessupside https://www.youtube.com/channel/UCuSkeS5oU-B2tRIBDYntmaw https://twitter.com/BusinessUpside1