Therefore, it pays for government to reduce tax rates to build up the tax base and raise tax collections. The combination of taxes and spending programs is at least as important as the overall level of tax revenues and expenditures. Exhibit 10-1 lists the types of taxes the government collects and the various programs on which government spends. Supply-siders consider some of these more productive than others and would, thus, rearrange the taxing and spending priorities. For example, many social services programs are considered anti-productive because they impede the work effort and defense programs are considered productive because they ensure a safe and secure political climate for the acquisition of capital and the conduct of trade.
Regulation can be price, quantity, social, environmental, product, geographic, etc.
Without any government regulation, private markets are left to their own devices to best allocate resources, distribute income, and stabilize economic activity. At that point, government must reduce the restrictions to improve the economic climate. Antitrust Regulation Antitrust laws are especially designed to break down restrictive monopolies and to keep markets competitive so that prices remain flexible and resources are free to move among competing alternatives. The Money Supply Supply-side economists are monetarists in disguise. They believe that the Fed should target the rate of growth of the money supply.