When I read comments on social media with commentators remarking about trickle down economics and how it has never worked, how it will never work and how it is designed by the rich to make the rich richer and the poor poorer.

So when I read a comment or tirade about trickle down economics, I pretty much know this individual has probably never taken an economics class. Much less macro-economics and is just parroting some dribble they heard from someone else supporting their left-wing political views who has never studied macro-economic policy.

I\’m not saying supply-side economics is not without its criticisms, but give me a well researched and articulated argument without resorting to butt-hurt emotional names. Nor am I stating that I am the authority on macro-economic policy as I am not an economist. Now, I know there is are warring factions on macro-economic policy based upon individual’s personal political views. Supply-side economics focuses on reducing the barriers for producing goods and services by decreasing regulation and reducing taxes.

According to the theory, consumers benefit by the reduction of prices increasing the opportunities of full employment in response to the stagflation, that is simultaneous high inflation and high unemployment that Keynesian theory was unable to solve. Supply-side economics generally opposed Keynesian economic theory and the failure to tackle the problems associated with stagflation – that is simultaneous high inflation and high unemployment.

Keynesian theory is interesting as British economist John Maynard Keynes argued aggregate demand, and not supply determined economic activity calling on fiscal and monetary policy to counter recessions. Notwithstanding, Keynesian economic policy was successfully implemented countering the laissez-faire failures of the great depression of the 1930s when the economy didn’t rebound as expected.

Even more interesting is Keynesian fiscal policy includes increased government spending, tax cuts or a combination of both. As such, the standard Keynesian response to a recession is a fiscal stimulus to increase total demand as they argue a leakage from the demand side exceeds investment.

Then an injection to the economy in the form of increased spending restores the equilibrium. A criticism of increased spending is increased taxes to support such spending. If increased spending is financed by increased taxes then reduced spending is the likely result. If increased spending occurs with tax cuts then the budget deficit increases and eventually taxes have to rise or increased borrowing occurs driving up interest rates.

In Australia, a large number of working households receive more in government benefits than they pay in tax with 40% of all households and 30% of working households paying no net tax. Both supply-side and aggregate demand models generally include tax cuts initially with the tax cuts viewed from totally different perspectives.

Interestingly, as tax rates are progressive in many countries, or known as marginal tax rates in Australia with a greater percentage of tax paid as income increases. The concept is based on the ability to pay with lower tax rates for lower income earners and higher tax rates for high income earners. The whining about tax cuts making the rich richer and the poor poorer really doesn’t stand up to scrutiny.