Fun with economics and the SF Examiner

I pick up the SF Examiner along with the other local papers when it's in the box.  It's a short eight page read in most issues and not a lot different in perspective than the SF Comicle.  So, you wouldn't expect to see some supply-side economics--that of the dismissed "trickle down" or "voodoo" variety-- in the Examiner.  My guess is they didn't even realize it Thursday when writing "Medicaid, SNAP cuts could cost California 140,000 jobs".   The lead reads

The federal budget plan directs the committees that control Medicaid and Supplemental Nutritional Assistance Program spending to find a combined $1.1 trillion in cuts over 10 years to help offset trillions in tax cuts — and the report finds the resulting losses would hit California the hardest.

The first bit of fun with economics is to correct the misstatement "to help offset trillions in tax cuts".  Tax rates get cut (or in this case, lower rates simply don't expire and revert upwards).  What happens to tax dollars collected after that depends on many factors, not all negative, but that is a topic for another day.  The article starts down the trickling path thusly

Such businesses would see their revenue shrink, which would trickle down to their employees further in the supply chain, across food production, farming and medical equipment manufacturing.  As firms would have to reduce salaries, staffing, or goods and services to make up for the losses, consumer habits would change too, reducing the amount state and local governments are able to collect in taxes, the report finds.

Additionally, nearly 140,000 California jobs would be lost in directly related fields such as agriculture, food processing, pharmacy and nursing, and indirectly related fields such as retail and manufacturing. The state’s gross domestic product would suffer a projected loss in 2026 of $17 billion.

All of this sounds dire.  One domino falling after another.  The Examiner finds it problematic because it's Federal (i.e. taxpayer) dollars that are disappearing.  But what is the difference if it were private sector dollars declining?  Businesses burdened by over regulation, crazy licensing and labor rules and high tax rates suffer the same consequences, minus the skim at each level of the government trough.  Will the tax-and-spend crowd notice the similarity at some point?

A trillion dollars is a lot of money anyway you look at it--even spread over 10 years.  Will getting some semblance of fiscal stability in the federal budget, deficit and debt be good in the long run?  We don't have a lot of choice given the recent trajectory.

Comments

[Joe]

Thanks to Andy Kessler mentioning "supply side progressives" in his Wall Street Journal column today on "Abundance", I found this little Wikipedia entry:

Supply-side progressivism is a political ideology that emphasizes increasing the supply of essential goods and services to make them more abundant and affordable in order to achieve progressive outcomes. Owing to this focus, supply-side progressive policy positions have collectively been referred to in literature and the media as the Abundance Agenda.

Supply-side progressivism holds that certain regulations artificially restrict the supply and drive up costs of essential goods and services, such as housing, healthcare, and higher education, while other regulations, such as antitrust law, need to be implemented or enforced to encourage market competition and innovation. They also advocate for more investment in research and development for technologies such as sustainable energy sources in order to increase abundance and reduce costs over time.[1]

History

In the United States, supply-side economics has historically been coded as right-wing, and used to justify cutting taxes for the wealthy and reducing government regulations.[2] Supply-side progressives aim to ensure that people across social classes have access to essential goods, by reducing regulations that restrict supply, and increasing regulations that improve supply and decrease cost.[3] In the early 2010s, Miles Kimball termed "supply-side liberalism" with the launch of his blog, "Confessions of a Supply-Side Liberal".[4] Over the next decade, he covered applications of supply-side liberalism on topics such as immigration[5][6] and housing.[7] In 2017, Neil Irwin of the New York Times wrote about increasing the US labor pool in his article "Supply-Side Economics, but for Liberals", including via the earned income tax credit and child-care subsidies.[8]

The rest of it is here: https://en.wikipedia.org/wiki/Supply-side_progressivism. The Wiki masters make the same mistake of calling tax rate cuts "tax cuts", but otherwise maybe there's hope yet!