Why has the supply side economy not worked as projected when introduced to ensure the welfare of all?

Answer 1

Your question assumes that supply side economics was introduced to ensure the welfare of all. It was not. It was merely a way to cut taxes for the rich. When the rich get a tax cut that allows them to buy a house and the middle class gets a tax cut that will not even pay a one month payment on a house loan this is not ensuring the welfare of all.

Beyond that --- it did not work because the Propaganda told was a that the rich would invest their tax cuts creating more jobs, but their investments were made in a way to move jobs out of the country, creating jobs in China or India not in the US.

There is an economic term called the marginal propensity to spend. Given one extra dollar how much of that is spent by an individual. The problem is that most analysis for this is based on middle class workers not on the rich. Most middle class workers will spend all of any extra tax cut given to them which will spur the economy. But not the ultra-rich, where most of american wealth has gravitated over the last 30 or so years. Mitt can only own a few houses. But middle class america can own 100 million houses and create a real job market for builders, suppliers of things to furnish a house, etc.

Regan broke with supply side economics in his second term when he realized it was not working and went for a tax increase. That lesson was learned in the 1980's but the propaganda today wants us to go back to that failed economic policy.