# American Economy - Boom or Bust? **URL:** \ **Category:** Great Debates\ **Created:** [January 20, 2024, 12:09pm UTC](https://boards.straightdope.com/t/american-economy-boom-or-bust/996379 "2024-01-20T12:09:40Z")\ **Posts on this page:** 4\ **Page:** 3
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [January 27, 2024, 8:00pm UTC](https://boards.straightdope.com/t/american-economy-boom-or-bust/996379/41 "2024-01-27T20:00:29Z")
> [@Sam\_Stone](#): > > I’m very familiar with the term. I also know that it’s now used as a general replacement for ‘supply side economics’. Originally pejorative, it’s now taken to describe a system whereby if you set conditions for producers to thrive, the results will trickle down to everyone. Especially in a situation where producers are being choked by regulations and taxes. > > The pejorative is that it’ll be just a ‘trickle’. And it’s true that wealth of the wealthiest increases faster than the wealth of the poor in such a situation. But the key thing is that they both do better. > > I would rather live in a society where everyone is getting richer even if the gap between rich and poor is growing, than in a society where we are all getting poorer or stagnating together. I would be interested in seeing the data that everyone actually does do better under supply side economic policies. Because intuitively it feels like propaganda to push for deregulation and tax structures that favors wealthy bankers and the expense of services like schools, infrastructure, health care, social safety nets, pretty much anything except for law enforcement and the military. It also feels like the only thing the “producers” are producing are hedge funds and self-serving technology platforms designed to enhance their own wealth. Everyone isn’t getting “richer” if only the top 1% realizes rapid growth while most other people’s growth barely keeps pace with inflation. ---
**Author:** ![Mijin](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mijin/32/9369_2.png) [@Mijin](https://boards.straightdope.com/u/Mijin)\ **Post date:** [January 27, 2024, 8:04pm UTC](https://boards.straightdope.com/t/american-economy-boom-or-bust/996379/42 "2024-01-27T20:04:09Z")
If trickle down works, why don’t Republican administrations have better GDP growth? [![](https://en.wikipedia.org/wiki/U.S._economic_performance_by_presidential_party#/media/File:Real_GDP_growth_by_U.S._President,_from_Eisenhower_to_Biden.png) ](https://en.wikipedia.org/wiki/U.S._economic_performance_by_presidential_party#/media/File:Real_GDP_growth_by_U.S._President,_from_Eisenhower_to_Biden.png) (note that this data only goes up to the first quarter of 2023, so understates GDP growth under Biden a little) ---
**Author:** ![Dr.Strangelove](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr.strangelove/32/6613_2.png) [@Dr.Strangelove](https://boards.straightdope.com/u/Dr.Strangelove)\ **Post date:** [January 27, 2024, 8:11pm UTC](https://boards.straightdope.com/t/american-economy-boom-or-bust/996379/43 "2024-01-27T20:11:38Z")
> [@Euphonious\_Polemic](#): > > Dismiss the entire concept. No, I won’t do that either. There is some effect, but your original link was presenting an extreme version of what happened. Your Bank of Canada link says the _opposite_ of what you said–that while markups increased, they _didn’t_ contribute to inflation: > We show that, counter to what we would expect if firms were using their market power to raise prices, increases in the markups of Canadian firms do not coincide with the high inflation in 2021 and 2022. Rather, the data suggest that **the contribution of changes in markups to inflation was limited**. > We find that firms’ measured markups did grow after the onset of the COVID-19 pandemic. However, our results do not indicate that this markup growth was inflationary. **Most of the growth in markups occurred during 2020, a year characterized by low inflation**. Moreover, markup growth began to decline in 2021 as inflation started to increase, suggesting that the contribution of changes in markups was mild and decreasing. Specifically, our estimates suggest that markup growth accounted for less than one-tenth of inflation in 2021. Furthermore, **by 2022, when inflation reached its highest levels in recent history, growth in markups was near zero or negative**. The fact that markup growth was not aligned with the dynamics of inflation indicates that the recent rise in inflation was driven primarily by changes in costs rather than by firms leveraging their market power to increase prices. ---
**Author:** ![ralfy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ralfy/32/600_2.png) [@ralfy](https://boards.straightdope.com/u/ralfy)\ **Post date:** [January 29, 2024, 2:06am UTC](https://boards.straightdope.com/t/american-economy-boom-or-bust/996379/44 "2024-01-29T02:06:11Z")
As long as the world economy remains dependent on the dollar, there will only be misplaced concerns, and the borrowing and spending binge can continue. But as a multipolar world emerges, then there might. [Previous page](https://boards.straightdope.com/t/american-economy-boom-or-bust/996379.md?page=2)