UNDER CONSTRUCTION

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What is Supply Side Public Policy?

Supply Side Public Policy applies supply side economics to specific public policy questions to find new ways to increase the supply of public goods and decrease public ills. It begins with the observation that most public policy matters can be reduced to a question of supply: we want more of a good thing or less of a bad thing, or both.  So we seek to change the supply of things.  Therefor, supply side economics (which studies the incentives to work, invest and supply stuff) may suggest solutions to certain public policy problems.

Supply side economics suggests that if you want more of something, tax it less.  But that does not mean if you want less of something, tax it more.  It means rather, that you have some options.  For instance, if you want less of a bad thing, instead of taxing it more, you could simply reduce taxes on a good alternative.  You might do that because any tax is a tax on prosperity, and reduces the wealth of the nation.  Tax cuts generally increase prosperity, and increase individual liberty by giving individuals more economic power and choices.

So the potential of Supply Side Public Policy is that it may be possible to increase some good things and decrease public ills simply by cutting certain taxes, while increasing the general prosperity and liberty as a deliberate side effect.  Indeed we can reduce government size, spending and debt by replacing less efficient public policies.  Further this is done without raising taxes, or increasing government, or passing restrictive legislation, and without reducing liberty or prosperity.  It is painless.

This supply side approach stands in stark contrast to the usual tax/spend/regulate approach to public ills and goods: subject ills to punitive taxes, heavily regulate or ban them, create large and expensive bureaucracies to monitor and regulate them – all of which diminishes liberty and prosperity and other core values too. Public goods are often also supplied by means of heavy taxes and government debt to pay for government agencies that often supply expensive goods of poor quality.  All of which is rather painful.

Painful policies attract more political opposition, and so are usually unsustainable over the long term.  Painless policies are easier to adopt, and easier to sustain.  Supply Side Public Policy is potentially then a more sustainable way to accomplish social and environmental goals.

In the aggregate, Supply Side Public Policies could gradually reduce overall taxes and cost of government, and increase awareness of the power of tax cuts to produce positive change.

The Atlas/21stCentrist New Idea Challenge invites proposals seeking to develop the theory of Supply Side Public Policy, and potential new applications thereof.  Pro Bono Medical Reform and Supply Side Environmentalism are both applications of Supply Side Public Policy.

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