Anyway, the supply siders have a bunch of theories that rest on 'overemployment' causing inflation. In fact, I believe the entire neocon world view of economics rests on this premise. I simply don't buy it. It makes since that everybody has money so they're all out running up prices on everything. But that isn't really what happens. The supply of stuff to spend those dollars on automatically increases to meet the demand.
Inflation is all about the supply and demand for money. When the gov't has a loose money policy, more money gets borrowed which raises the supply. If this moves faster than demand, you get too much money out there which means inflation.
I agree that controlling inflation should be the top or one of the top priorities. But I also think it could be held even lower than the 2.5% or so that we seem to be able to hold steady. You can still have everyone employed, but you need to watch the money supply pretty closely.
"supply siders have a bunch of theories that rest on 'overemployment' causing inflation"
The economics class I took in college was about ten years before the advent of supply siders. The book that popularized supply side economics is The Way The World Works by Jude Wannaski. It introduced the Laffer curve to the populace and was influential in the Reagan administration.
Reagan was converted to supply side theory by Jack Kemp. It was easy because Reagan was so old that he learned economics before Lord Keynes replaced Adam Smith as the father of economics.
Don't dismiss the inflationary impact of a tight labor market both by creating shortages in bottneck points as well as the wage-push factor.