Does supply or demand side economics work better?
All these bailouts and now Obama is going to cut taxes for the middle and lower classes. Politics aside, I wonder if cutting taxes for employers would stimulate the economy more than cutting taxes for employees.
Supply side economics is a forward looking approach to economics.
It's widely agreed that long-term growth in the economy comes only from the supply side.
Demand side fiscal policy is disputable in terms of how much it will work. monetary policy works pretty well but in the end demand can only be controlled for so long.
In the long run the economy returns to a long run equilibrium, which is entirely determined by long run supply.
Supply side policies are best going into the future.
Cutting taxes for employers is a fantastic policy. Unfortunately as we've seen recently, most people only view that as being tax cuts for the rich. People forget that there is a difference between a rich person and a company.
Finally though, there will be a supply side effect from all tax cuts, even if it is cuts to poorer people. It will effect the marginal cost of each hour they work, and therefore labour supply. If people are paying less tax they will be more inclined to take jobs, perhaps at lower wages.
But yes your logic is sound.
