Editing Supply-side economics (section)

=== Reaganomics ===
In the United States, commentators{{who|date=December 2021}} frequently equate supply-side economics with [[Reaganomics]].{{citation needed|date=December 2021}} The administration of [[Republican Party (United States)|Republican]] president [[Ronald Reagan]] promoted its fiscal policies as being based on supply-side economics. Reagan made supply-side economics a household phrase and promised an across-the-board reduction in income tax rates and an even larger reduction in capital gains tax rates.<ref>(Karl Case and Ray Fair, 1999: pp. 781–2).</ref> During [[Ronald Reagan presidential campaign, 1980|Reagan's 1980 presidential campaign]], the key economic concern was double digit [[inflation]], which Reagan described as "[t]oo many dollars chasing too few goods", but rather than the usual dose of tight money, recession and layoffs, with their consequent loss of production and wealth, he promised a gradual and painless way to fight inflation by "producing our way out of it".<ref>Case & Fair, pp. 781–2.</ref>

Switching from earlier monetary policy, [[Federal Reserve]] chair [[Paul Volcker]] implemented tighter monetary policies including lower money supply growth to break the [[inflationary psychology]] and squeeze inflationary expectations out of the [[economic system]].<ref>Malabre, Jr., pp. 170–1.</ref> Therefore, supply-side supporters argue that Reaganomics was only partially based on supply-side economics.{{citation needed|date=March 2021}}

Congress under Reagan passed a plan that would slash taxes by $749 billion over five years. Critics claim that the tax cuts increased budget deficits while Reagan supporters credit them with helping the 1980s economic expansion and argued that the budget deficit would have decreased if not for massive increases in military spending.{{better source needed|reason=CapX is a run by a conservative British think tank|date=March 2021}}<ref name="capx">{{cite web|date=June 22, 2017|title=Busting the Left's myths about Reaganomics|url=https://capx.co/busting-the-lefts-myths-about-reaganomics/|website=CapX}}</ref> As a result, Jason Hymowitz cited Reagan—along with [[Jack Kemp]]—as a great advocate for supply-side economics in politics and repeatedly praised his leadership.<ref>Malabre, Jr., p. 188.</ref>

Critics of Reaganomics claim it failed to produce much of the exaggerated gains some supply-siders had promised. [[Paul Krugman]] later summarized the situation: "When Ronald Reagan was elected, the supply-siders got a chance to try out their ideas. Unfortunately, they failed." Although he credited supply-side economics for being more successful than [[monetarism]] which he claimed "left the economy in ruins", he stated that supply-side economics produced results which fell "so far short of what it promised", describing the supply-side theory as "free lunches".<ref>Malabre, Jr., p. 195.</ref>