A rising tide lifts all boats

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The aphorism "a rising tide lifts all boats" is associated with the idea that improvements in the general economy will benefit all participants in that economy, and that economic policy, particularly government economic policy, should therefore focus on the general macroeconomic environment first and foremost. The phrase is said to be coined by Irish Taoiseach Sean Lemass.^{[1] [2]} It is also associated with John F. Kennedy, who employed the expression to combat criticisms that his tax cuts would benefit mostly wealthy individuals.^{[3] [4] [5]}

The expression also applies to free market policies, in that comparative advantage production and subsequent trade would theoretically increase incomes for all participating entities. It is a favorite proverb of former U.S. Treasury Secretary Robert Rubin.

The substantive aspect of the statement is that economic growth which raises the GDP of the entire economy will also raise the incomes of all of the individuals within the economy. There is, of course, criticism of this statement, as there many examples in economic history (including but not limited to recent American economic history) in which an increase in GDP per capita did not raise the incomes of large groups of individuals in the society.

[edit] See also

• Keynesian economics
• Supply-side economics
• Trickle-down economics

[edit] References

1. ^ Speech by Martin Cullen TD, Minister for Transport at the South East 2020 Conference. Department of Transport, Ireland (24 June 2005).
2. ^ Speech by Mr. Callanan. Seanad Debates, Vol. 182, No. 4. Office of the Houses of the Oireachtas (7 December 2005).
3. ^ John F. Kennedy (October 3, 1963). Remarks in Heber Springs, Arkansas, at the Dedication of Greers Ferry Dam.. The American Presidency Project. Retrieved on April 7, 2007.
4. ^ Gene Sperling. "How to Refloat These Boats", Washington Post, December 18, 2005, p. Page B03. Retrieved on April 7, 2007.
5. ^ Thomas E. Nugent (July 28, 2006). A Rising Tide...In More Ways than One:The wisdom of the JFK-Reagan-Bush tax-cut model. National Review Online. Retrieved on April 7, 2007.

[edit] External links

• Hines, James R., Hilary W. Hoynes, and Alan B. Krueger. "Another Look at Whether a Rising Tide Lifts All Boats", National Bureau of Economic Research: NBER Working Paper No. 8412, August 2001.