# Let's talk about supply side economics **URL:** \ **Category:** Great Debates\ **Created:** [February 26, 2015, 4:21pm UTC](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670 "2015-02-26T16:21:46Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![John\_Stamos\_Left\_Ear](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_stamos_left_ear/32/3198_2.png) [@John\_Stamos\_Left\_Ear](https://boards.straightdope.com/u/John_Stamos_Left_Ear)\ **Post date:** [March 2, 2015, 2:58am UTC](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670/41 "2015-03-02T02:58:33Z")
> [@Ruken](#): > > Most anybody isn’t a big loss, because most people don’t make a lot of money. However, as you already posted, rich retirees go where the taxes are low and spend their money there. No they don’t. They go where it’s warm. [AARP suggests two California cities](http://www.aarp.org/home-garden/livable-communities/info-11-2011/10-Great-Sunny-Places-to-Retire-AARP.2.html) for retirees, for example. They also put California and several other higher tax states on their [Top Ten States to retire list](http://www.aarp.org/work/retirement-planning/info-09-2010/10-best-rated-states-for-retirement.2.html) using a low cost of living, taxes and nice weather as determining factors. Their number one state is Hawaii, not exactly a tax haven. There are a ton of reasons why people move somewhere. taxes may be a factor but it’s just one factor and it is usually several spots down the priority list for most people, even retirees. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [March 2, 2015, 3:03am UTC](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670/42 "2015-03-02T03:03:27Z")
> [@John\_Stamos\_Left\_Ear](#): > > No they don’t. You told us that they do. ---
**Author:** ![John\_Stamos\_Left\_Ear](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_stamos_left_ear/32/3198_2.png) [@John\_Stamos\_Left\_Ear](https://boards.straightdope.com/u/John_Stamos_Left_Ear)\ **Post date:** [March 2, 2015, 4:44am UTC](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670/43 "2015-03-02T04:44:32Z")
No, what was said was in the article I linked with the headline “The Myth of the Rich Who Flee From Taxes” which said: > [@](#): > > But there aren’t many people like that. “Tax-induced flight is rare,” Professor Tannenwald said. “The rate of interstate migration is low to begin with. To the extent that people leave a state, or shun a potential destination, they do so primarily for other reasons, such as to find more affordable housing, better job prospects or a more attractive climate.” Admitting it happens sometimes is not the same as saying it happens often enough to make a difference. Possibly you are confusing anecdotes with data? ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [March 2, 2015, 5:20am UTC](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670/44 "2015-03-02T05:20:19Z")
> [@John\_Stamos\_Left\_Ear](#): > > No they don’t. They go where it’s warm. [AARP suggests two California cities](http://www.aarp.org/home-garden/livable-communities/info-11-2011/10-Great-Sunny-Places-to-Retire-AARP.2.html) for retirees, for example. They also put California and several other higher tax states on their [Top Ten States to retire list](http://www.aarp.org/work/retirement-planning/info-09-2010/10-best-rated-states-for-retirement.2.html) using a low cost of living, taxes and nice weather as determining factors. Their number one state is Hawaii, not exactly a tax haven. > > There are a ton of reasons why people move somewhere. taxes may be a factor but it’s just one factor and it is usually several spots down the priority list for most people, even retirees. Your first link focuses on which state has the best climate. Of course it shows which states are warm. The second link clicking through to the source evaluates the location based on 5 criteria, only one of which is related to economics. One of those criteria is the senior population growth which seems circular to me. Even when mentioning Hawaii and California they list caveats about the poor economics of the choice. Now perhaps the other criteria crowd out the tax related discussion because it’s not as important to seniors, but I don’t think you can draw that conclusion from what you’ve presented. ---
**Author:** ![ITR\_champion](https://avatars.discourse-cdn.com/v4/letter/i/c67d28/32.png) [@ITR\_champion](https://boards.straightdope.com/u/ITR_champion)\ **Post date:** [March 2, 2015, 5:56am UTC](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670/45 "2015-03-02T05:56:33Z")
> [@John\_Stamos\_Left\_Ear](#): > > While you were busy writing off sources you failed to notice that between them then liked to three studies and interviewed the people responsible for them. I did not write off any source. I pointed out that the articles from NPR and the New York Times only addressed the movement of rich people, while it’s the poor and middle class who are fleeing big-government liberalism. > [@](#): > > Although I find it amusing you think poor people have tons of money to move because they hate taxes. I don’t recall saying this. ---
**Author:** ![John\_Stamos\_Left\_Ear](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_stamos_left_ear/32/3198_2.png) [@John\_Stamos\_Left\_Ear](https://boards.straightdope.com/u/John_Stamos_Left_Ear)\ **Post date:** [March 2, 2015, 6:02am UTC](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670/46 "2015-03-02T06:02:39Z")
> [@Bone](#): > > Even when mentioning Hawaii and California they list caveats about the poor economics of the choice. It’s almost as if there’s more than one factor that people weigh when deciding where to retire… ---
**Author:** ![John\_Stamos\_Left\_Ear](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_stamos_left_ear/32/3198_2.png) [@John\_Stamos\_Left\_Ear](https://boards.straightdope.com/u/John_Stamos_Left_Ear)\ **Post date:** [March 2, 2015, 6:08am UTC](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670/47 "2015-03-02T06:08:12Z")
> [@ITR\_champion](#): > > I did not write off any source. I pointed out that the articles from NPR and the New York Times only addressed the movement of rich people, while it’s the poor and middle class who are fleeing big-government liberalism. So you cannot contradict the three studies then? You just don’t like who reported them? > [@](#): > > I don’t recall saying this. You said: > [@](#): > > But migration patterns suggest that there are millions of poor and middle class people who think they’ll be better off in more free state rather than a less free one. There are admittedly a lot of weasel words there. The fact that they “think” they’ll be better off doesn’t mean they actually move, they just think about it… And “more free state” can mean a lot of things. But in the context of this conversation, I think my interpretation of it as you thinking millions of poor people are moving to places with less taxes for that specific reason is not unwarranted. Maybe you can say what you mean without the weasel words? ---
**Author:** ![John\_Stamos\_Left\_Ear](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_stamos_left_ear/32/3198_2.png) [@John\_Stamos\_Left\_Ear](https://boards.straightdope.com/u/John_Stamos_Left_Ear)\ **Post date:** [March 2, 2015, 6:22am UTC](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670/48 "2015-03-02T06:22:49Z")
Incidentally, the [Center for Retirement Research](http://crr.bc.edu/) has lots of neat information about retirement and two studies in particular that are relevant here: > [@](#): > > [Determinants and Consequences of Moving Decisions for Older Homeowners](http://crr.bc.edu/working-papers/determinants-and-consequences-of-moving-decisions-for-older-homeowners/) (8/2009) > > This paper examines moving trends, determinants, and consequences using the original cohort of the Health and Retirement Study (HRS). We find that a full 30 percent of homeowners in the HRS cohort move over the 1992-2004 period, but most moves occur close to home. Overall, two types of movers emerge from the analysis – those who affirmatively plan to move and those who react to changing circumstances. As proxies for these two types, this study uses the presence or absence of a negative shock, such as death of a spouse or entry into a nursing home. Our results show that the factors that help determine a move are similar for both groups, while the consequences of a move vary. > > [Geographic Mobility Among Residents in Seniors Housing and Care Communities: Evidence from the Residents Financial Survey](http://crr.bc.edu/working-papers/geographic-mobility-among-residents-in-seniors-housing-and-care-communities-evidence-from-the-residents-financial-survey/) (4/2012) > > Despite the stereotype of retiring in Florida, recent work has documented very little home equity changes among the elderly (Venti and Wise 2002, 2004; Anderson, French, and Lam 2004; Fisher et al. 2007), and that most home equity changes are precipitated by a major life event, such as a spouse passing or entry into a nursing home. Haverstick and Zhivan (2009) find that the 2-year moving rate for homeowners is less than 10 percent, and that most of those moves are short-distance (less than 20 miles) More evidence that any migration that occurs among retirees is a smaller number that many might think and is definitely not motivated by tax rates alone, and probably not even as a leading factor for those who do consider it. ---
**Author:** ![ITR\_champion](https://avatars.discourse-cdn.com/v4/letter/i/c67d28/32.png) [@ITR\_champion](https://boards.straightdope.com/u/ITR_champion)\ **Post date:** [March 2, 2015, 6:42am UTC](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670/49 "2015-03-02T06:42:39Z")
> [@John\_Stamos\_Left\_Ear](#): > > So you cannot contradict the three studies then? No, nor do I have any desire to, since they’re irrelevant to anything I’ve said. > [@](#): > > But in the context of this conversation, I think my interpretation of it as you thinking millions of poor people are moving to places with less taxes for that specific reason is not unwarranted. Maybe you can say what you mean without the weasel words? You seem to have forgotten what statement is at issue here. Let me remind you: > [@](#): > > Although I find it amusing you think poor people have tons of money to move because they hate taxes. So you said that I think that “poor people have tons of money”. In reality I never said any such thing, and anyone can verify that easily by reading my posts. That means you were flatly wrong. ---
**Author:** ![John\_Stamos\_Left\_Ear](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_stamos_left_ear/32/3198_2.png) [@John\_Stamos\_Left\_Ear](https://boards.straightdope.com/u/John_Stamos_Left_Ear)\ **Post date:** [March 2, 2015, 7:05am UTC](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670/50 "2015-03-02T07:05:32Z")
> [@ITR\_champion](#): > > No, nor do I have any desire to, since they’re irrelevant to anything I’ve said. Oh, you mean you didn’t say: > [@](#): > > it seems that people are fleeing from high-tax, high-regulation states… and heading towards low-tax, low-regulation states Or is this more weaseling on your part: You didn’t actually mean that they were doing so _because_ of taxes, you just added the tax and regulation stuff for shits and giggles? Which is it? Either way, I don’t care. Whether you actually claimed it or not is irrelevant to it being wrong. It’s wrong either way. > [@](#): > > You seem to have forgotten what statement is at issue here. Let me remind you: > > So you said that I think that “poor people have tons of money”. In reality I never said any such thing, and anyone can verify that easily by reading my posts. That means you were flatly wrong. So you think relocating doesn’t cost money? Because you asserted (possibly - as I said, you used weasel words) that poor people were relocating. You even used the word “millions.” ---
**Author:** ![ITR\_champion](https://avatars.discourse-cdn.com/v4/letter/i/c67d28/32.png) [@ITR\_champion](https://boards.straightdope.com/u/ITR_champion)\ **Post date:** [March 2, 2015, 7:16am UTC](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670/51 "2015-03-02T07:16:26Z")
[QUOTE=John\_Stamos’\_Left\_Ear] So you think relocating doesn’t cost money? [/QUOTE] No, I do not think that relocating does not cost money. In most cases, it does cost money. ---
**Author:** ![John\_Stamos\_Left\_Ear](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_stamos_left_ear/32/3198_2.png) [@John\_Stamos\_Left\_Ear](https://boards.straightdope.com/u/John_Stamos_Left_Ear)\ **Post date:** [March 2, 2015, 7:47am UTC](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670/52 "2015-03-02T07:47:50Z")
And for the hell of it here’s a list of [US states by Population Growth Rate](http://en.wikipedia.org/wiki/List_of_U.S._states_by_population_growth_rate) since the 2010 Census. New Hampshire, [one of the best states for taxes](http://en.wikipedia.org/wiki/State_tax_levels_in_the_United_States), is 41st. Nearby Massachusetts, which has one of the highest income tax rates in the country, is right around the average. Oregon has the highest income tax rate in the whole country yet ranks 20th for population growth, ahead of many states with much lower income taxes. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [March 2, 2015, 12:19pm UTC](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670/53 "2015-03-02T12:19:46Z")
> [@John\_Stamos\_Left\_Ear](#): > > No, what was said was in the article I linked with the headline “The Myth of the Rich Who Flee From Taxes” which said:Admitting it happens sometimes is not the same as saying it happens often enough to make a difference. Possibly you are confusing anecdotes with data? Here’s a hint: It’s a good idea to the read all the words you cut and paste into a thread. Maybe you should go back and check what you told us about retirees. ---
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [March 2, 2015, 2:48pm UTC](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670/54 "2015-03-02T14:48:09Z")
> [@John\_Stamos\_Left\_Ear](#): > > And for the hell of it here’s a list of [US states by Population Growth Rate](http://en.wikipedia.org/wiki/List_of_U.S._states_by_population_growth_rate) since the 2010 Census. > > New Hampshire, [one of the best states for taxes](http://en.wikipedia.org/wiki/State_tax_levels_in_the_United_States), is 41st. Nearby Massachusetts, which has one of the highest income tax rates in the country, is right around the average. Oregon has the highest income tax rate in the whole country yet ranks 20th for population growth, ahead of many states with much lower income taxes. Total population growth includes immigration which is driven more by cultural factors and geographic proximity. If you just use [internal migration](http://www.newgeography.com/content/003359-moving-north-dakota-the-new-census-estimates) then the data becomes more clear. If you take the top ten states for growth from internal migration and compare them with the top states for population lost from internal migration you can see a large movement of people from high tax states to low tax states. The [average total state tax burden per capita](http://en.wikipedia.org/wiki/State_tax_levels_in_the_United_States) for the ten states that have lost the most people to other states was $2,832. The average total tax burden per capita for the states that have gained the most people is $2,009. That is a difference of 40%. ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [March 2, 2015, 6:58pm UTC](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670/55 "2015-03-02T18:58:52Z")
Put simply, supply side economics is that version of Keynesianism which is most politically expedient to the right wing party in a two party system. It takes Keynes invocation to cut taxes to stimulate GDP aggregates seriously, while the OP’s favored version of Keynesianism involves stimulating GDP aggregates by borrowing money and dropping it in the lap of the politically connected. ---
**Author:** ![GeorgeLTirebiter](https://avatars.discourse-cdn.com/v4/letter/g/b5ac83/32.png) [@GeorgeLTirebiter](https://boards.straightdope.com/u/GeorgeLTirebiter)\ **Post date:** [March 9, 2015, 2:40pm UTC](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670/56 "2015-03-09T14:40:06Z")
Trickle down or piss up a drain pipe? Let’s break it down a bit. Reaganomics? He’ll always be blamed trashing the economy in the 80"s, but who planted trickle down in his small mind - David Stockman, the then Director of the Office of Management and Budget. Face it, Reagan never had an original thought in his life - it was all scripted. Paul Krueger should be Chief Economic Advisor for life. Hell, he’s even won the Nobel Prize for Economics. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [March 9, 2015, 3:32pm UTC](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670/57 "2015-03-09T15:32:47Z")
> [@GeorgeLTirebiter](#): > > Paul Krueger should be Chief Economic Advisor for life. Hell, he’s even won the Nobel Prize for Economics. You mean Krugman? ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [March 14, 2015, 5:18pm UTC](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670/58 "2015-03-14T17:18:28Z")
The simple, simple version of the supply side theory is as follows: Say we have a million dollars with which to grow the economy. If we give one million people $1 each (demand side), they might buy a small soda or whatnot and have near zero effect on the economy. If we give that $1 million to a person who starts a business, then that person can hire employees who can support a family. The person creates a product or service that benefits the community or alternatively, competes with others in the community, bringing the price down for that service. The business (and its employees) pay taxes to the federal, state, and local governments. The business improves an otherwise vacant structure and makes it more aesthetically pleasing. The original $1 million grows and adds value above the initial outlay. The demand side argument seems to be that increasing money in consumers hands will increase business and growing the economy that way. The problem with that is that it requires endless supplies of cash (from somewhere) to cause these consumer purchases to continue. A one time trillion dollar stimulus might be good for businesses because of the increased purchasing, but the business owner isn’t going to expand or hire new employees because he knows it is a one time surge. Again, this is simplistic, but money in the hands of business owners creates more wealth which then “trickles down” to others through employment. ---
**Author:** ![Robot\_Arm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/robot_arm/32/18280_2.png) [@Robot\_Arm](https://boards.straightdope.com/u/Robot_Arm)\ **Post date:** [March 14, 2015, 5:51pm UTC](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670/59 "2015-03-14T17:51:17Z")
> [@jtgain](#): > > If we give that $1 million to a person who starts a business, then that person can hire employees who can support a family. The person creates a product or service that benefits the community or alternatively, competes with others in the community, bringing the price down for that service. The business (and its employees) pay taxes to the federal, state, and local governments. The business improves an otherwise vacant structure and makes it more aesthetically pleasing. The original $1 million grows and adds value above the initial outlay. Why is that person going to start that business; is it out of the goodness of his heart, or does he think he can turn a profit? Call me cynical, but I tend to think it’s the latter. And if that’s true, if there’s an untapped market that can be served at a profit, some investors will lend him the $1 million he needs to get it started. He doesn’t need the gift. Conversely, if there isn’t a profit out there waiting to be made, giving one person $1 million won’t suddenly make it so. ---
**Author:** ![AdamF](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/adamf/32/6246_2.png) [@AdamF](https://boards.straightdope.com/u/AdamF)\ **Post date:** [March 14, 2015, 7:19pm UTC](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670/60 "2015-03-14T19:19:56Z")
> [@jtgain](#): > > If we give that $1 million to a person who starts a business, then that person can hire employees who can support a family. The person creates a product or service that benefits the community or alternatively, competes with others in the community, bringing the price down for that service. This assumes that: 1. Government is better than banks and private investors at picking successful businesses. 2. The business creates a new product. Simply increasing competition will reduce cost, forcing competitors to reduce wages to compete. 3. Consumers have extra disposable income to spend. Simply shifting their disposable income from one business to another wouldn’t have much net benefit. [Previous page](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670.md?page=2) [Next page](https://boards.straightdope.com/t/lets-talk-about-supply-side-economics/713670.md?page=4)