[Nanodik]

There is a significant difference between the Keynesians and the supply siders and I leave that as an exercise for you to figure out

You'll have to explain "supply siders". This may go along the lines of a "neo-classicalist" but I am not sure as I often here this in the popular media, but having not encountered it in an economic text, I am not sure what it means exactly. You seem to be describing the typical Keynesian formula for success where govt runs deficit during slow grown / recession, backs off in good times, etc.

[jwalsh07]

Supply side economics holds that increased taxation steadily reduces economic trade between economic participants within a nation. Taxes act as a type of trade barrier that causes economic participants to revert to less efficient means of satisfying their needs. As such higher taxation leads to lower economic efficiency.

"Tax cuts that increase incentives to produce and that eliminate distortions in the price system -- supply-side tax cuts -- give a double whammy. They restrain government spending and increase future income and current wealth. Permanent tax cuts are much to be preferred to temporary cuts. They are a stronger restraint on spending and do not need to be repeated." Milton Friedman

In other words while tax cuts may in the short run increase deficitits, in the long run they have affect a restraint on government spending, deficits.

Ronald Reagans fiscal policies were supply side while his monetary policy was based in Friedmans monetarism. I believ Mr Firedman moderated his views on monetarism in the last several years but I am unsure how or when. I am interested though now that we've had this discussion.