Because consumer spending is about 70% of total GDP, it’s far and away the most important component of the economy when it is time to stimulate.


Demand siders will routinely push for getting money in the hands of consumers. That effectively puts each and every one of us into the benefit loop.


Supply siders routinely push for cutting taxes on businesses and getting money to suppliers who will supposedly then produce more goods at cheaper prices. That effectively takes consumers clear out of the benefit loop and routinely results in stock buybacks and rewarding executive with higher salaries.


Literally tons of research on this issue have clearly and consistently supported demand siders. The research has always turned said that and likely always will.


This truth was probably most eloquently phrased by Will Rogers when he commented on President Hoover’s failed attempt to fight back the Great Depression.


“(Hoover) didn’t know that money trickles up (not down). Give it to the people at the bottom and the people at the top will have it before nightfall, anyhow. But it will at least have passed through the poor fellows hands.”


Simply keep in mind that our best economies (booms) have always happened when people had plenty of money to spend and our worst economies have happened when people didn’t have money to spend. In fact, that’s why that 70% portion of GDP is labelled “consumer spending” not “business enrichment.”


Don Hardesty, Topeka