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Does Supply-Side Or Demand-Side Are Best For Economic Growth?

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Without determined economic policies and strong political will, the United States may have never recovered from the many economic crises it has faced. Economic policies encompass a wide range of government measures to change the economy, and are extremely important for reversing downturns in the economy. The goals of economic policy are economic growth, stable prices, and full employment of the workforce. In general, an economic policy is successful if it reduces unemployment, reduces inflation, and encourages economic growth although these are not the only metrics. There is debate among economists over whether supply-side or demand-side are best for economic growth, coupling these with monetary policy are key for maintaining a healthy economy. …show more content…
Supply-side policy began during the Presidency of Richard Nixon in the 1970's to try and reverse the inflation and unemployment seen at that time. To achieve this, the government cut taxes and reduced regulations for businesses to increase production. The main guiding principle is a reduction of government spending and regulation. The most successful implementation of these policies was during the Presidency of Ronald Reagan, which significantly reduced inflation but resulted in a larger federal deficit. To do this taxes were lowered for businesses and individuals while government spending was reduced and many industries were deregulated. Thanks to Reagan's policies, "Unemployment fell to 5.3% by 1989, inflation was reduced from 13.5% to 3.2% by 1983, and 20 million new jobs were created." While Reagan's supply-side policies were effective, demand-side policies can be equally effective under different

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