Soo...I go out tonight to a local bar. I have several drinks and I'm having a good time. The drinks are reasonably priced.
Out of nowhere, I notice a bottle of Wild Turkey 101 sitting on the shelf.
Keep in mind: I haven't paid more than $1.50 for any drink to this point.
I ask the bartender: "How much for a shot of Wild Turkey 101?"
Cahnman: "Eh, no thanks."
All of a sudden, the thought hits me: I would TOTALLY buy that shot (and probably still be at the bar instead of coming home and blogging this incident) if they were charging $2.50.
Then it hits me: Supply side economics has repercussions in daily (microeconomic) life.
For those of you who went to public school, let me explain: Price Signals REALLY matter!!!
Given the price of the Wild Turkey 101 shot(s), I chose to come home and blog about the fact that Wild Turkey 101 shots are prohibitively expensive instead of staying at the bar and drinking Wild Turkey 101.
The bar had the opportunity to, quite literally, take another thirty dollars of my money had they NOT overcharged for Wild Turkey 101. Instead, I'm back home blogging about supply-side (micro)economic incentives.
What does this mean for national economic policy? It means we should make good things (like Wild Turkey shots) as cheap as possible.
In the words of Rick Santelli: "President Obama, ARE YOU LISTENING?!?"
I hope this helps.
That is all.