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Sunday, November 6, 2022

Second Life

From Wikipedia, the free encyclopedia
 
Second Life Viewer
Developer(s)Linden Lab
Initial releaseJune 23, 2003; 19 years ago
Stable release
6.6.1.572458 / June 29, 2022; 4 months ago
EngineHavok (physics engine)
Platform
LicenseOpen-source
Websitesecondlife.com 
Second Life Server
Developer(s)Linden Lab
Initial releaseJune 23, 2003; 19 years ago
Stable release
2022-07-06.573149 / July 6, 2022
PlatformLinux
LicenseProprietary
Websitesecondlife.com 

Second Life is an online multimedia platform that allows people to create an avatar for themselves and then interact with other users and user created content within a multi player online virtual world. Developed and owned by the San Francisco-based firm Linden Lab and launched on June 23, 2003, it saw rapid growth for some years and in 2013 it had approximately one million regular users. Growth eventually stabilized, and by the end of 2017 the active user count had declined to "between 800,000 and 900,000". In many ways, Second Life is similar to massively multiplayer online role-playing games; nevertheless, Linden Lab is emphatic that their creation is not a game: "There is no manufactured conflict, no set objective".

The virtual world can be accessed freely via Linden Lab's own client software or via alternative third-party viewers. Second Life users, also called 'residents', create virtual representations of themselves, called avatars, and are able to interact with places, objects and other avatars. They can explore the world (known as the grid), meet other residents, socialize, participate in both individual and group activities, build, create, shop, and trade virtual property and services with one another.

The platform principally features 3D-based user-generated content. Second Life also has its own virtual currency, the Linden Dollar (L$), which is exchangeable with real world currency.

Second Life is intended for people ages 16 and over, with the exception of 13–15-year-old users, who are restricted to the Second Life region of a sponsoring institution (e.g., a school).

History

Philip Rosedale, founder of Second Life

Philip Rosedale formed Linden Lab in 1999 with the intention of developing computer hardware to allow people to become immersed in a virtual world. In its earliest form, the company struggled to produce a commercial version of the hardware, known as "The Rig", which in prototype form was seen as a clunky steel contraption with computer monitors worn on shoulders. That vision changed into the software application Linden World, in which people participated in task-based games and socializing in a three-dimensional online environment. That effort eventually transformed into the better known, user-centered Second Life. Although he was familiar with the metaverse of Neal Stephenson's novel Snow Crash, Rosedale has said that his vision of virtual worlds predates that book, and that he conducted early virtual world experiments during his college years at the University of California, San Diego, where he studied physics.

Second Life began to receive significant media attention in 2005 and 2006, including a cover story in BusinessWeek magazine featuring the virtual world and Second Life avatar Anshe Chung. By that time, Anshe Chung had become Second Life's poster child and symbol for the economic opportunities that the virtual world offers to its residents. At the same time, the service saw a period of exponential growth of its user base.

One of the principal developers, Cory Ondrejka, was forced to resign as chief technology officer in December 2007, with Rosedale citing irreconcilable differences in the way the company was run. Nevertheless, the platform continued to grow rapidly, and by January 2008, residents spent a total of 28,274,505 hours "inworld" and on average 38,000 residents were logged in at any moment. The maximum concurrency (number of avatars inworld) recorded was set at 88,200 in the first quarter of 2009.

Second Life was honored at the Technology & Engineering Emmy Awards for advancing the development of online sites with user-generated content in 2008, adding to the media attention. Rosedale accepted the award. although he had announced plans to step down from his position as Linden Lab CEO and to become chairman of Linden Lab's board of directors instead in March 2008. Rosedale announced Mark Kingdon as the new CEO effective May 15, 2008. In 2010, Kingdon was replaced by Rosedale, who took over as interim CEO. After four months, Rosedale abruptly stepped down from the Interim CEO position. It was announced in October 2010 that Bob Komin, Linden Lab's chief financial officer and chief operating officer, would take over the CEO job for the immediate future.

With the platform's failure to continue its high rate of growth after 2009, Linden Lab announced layoffs of 30% of its workforce in 2010. Some 21.3 million accounts were registered by this point, although the company did not make public any statistics regarding actual long-term consistent usage and numbers of dormant accounts.

Despite speculation as to the actual size of the user base, Second Life continued as a commercial success. In 2015, Second Life users cashed out approximately $60,000,000 (60 million US dollars) and Second Life had an estimated GDP of $500,000,000 (500 million US dollars), higher than some small countries.

Recognizing improvements in computing power and particularly in computer graphics, Linden Lab began work on a successor to Second Life, a VR experience called Sansar, launching a public beta in July 2017. Uptake was low and Linden Lab halted development in 2020 to focus their attention fully on Second Life. The rights to Sansar's assets were sold to Wookey Search Technologies, who are expected to continue development on the title without Linden Lab. Second Life, the usage of which peaked in the first decade of the 21st-century, has been cited as the first example of the metaverse, a concept which has been taken up by other major corporations such as Facebook in 2021. As a notable precursor (which retains a small and loyal following), it provides several examples of virtual reality social issues and lessons learned.

Classification

During a 2001 meeting with investors, Rosedale noticed that the participants were particularly responsive to the collaborative, creative potential of Second Life. As a result, the initial objective-driven, gaming focus of Second Life was shifted to a more user-created, community-driven experience.

Second Life's status as a virtual world, a computer game, or a talker, is frequently debated. Unlike a traditional computer game, Second Life does not have a designated objective, nor traditional game play mechanics or rules. It can also be argued that Second Life is a multi-user virtual world, because its virtual world facilitates interaction between multiple users. As it does not have any stipulated goals, it is irrelevant to talk about winning or losing in relation to Second Life. Likewise, unlike a traditional talker, Second Life contains an extensive world that can be explored and interacted with, and it can be used purely as a creative tool set if the user so chooses. In March 2006, while speaking at Google TechTalks, Rosedale said: "So, we don't see this as a game. We see it as a platform."

Second Life used to offer two main grids: one for adults (18+) and one for teens. In August 2010, Linden Lab closed the teen grid due to operating costs. Since then, users 16 and over can sign up for a free account. Other limited accounts are available for educators who use Second Life with younger students.

There are three activity-based classifications, called "Ratings", for sims in Second Life:

  1. General (formerly "PG"—no extreme violence or nudity)
  2. Moderate (formerly "Mature"—some violence, swearing, adult situations, some nudity)
  3. Adult (may contain overt sexual activity, nudity, and violence)

Residents and avatars

Several avatars together

There is no charge for creating a Second Life account or for making use of the world for any period of time. Linden Lab reserves the right to charge for the creation of large numbers of multiple accounts for a single person (5 per household, 2 per 24 hours) but at present does not do so. A Premium membership (US$11.99 monthly, US$32.97 quarterly, or US$99 annually) extends access to an increased level of technical support, and also pays an automatic stipend of L$300/week into the member's avatar account, and after 45 days that resident will receive a L$700 bonus, making it L$1,000 for that week. This amount has decreased since the original stipend of L$500, which is still paid to older accounts. Certain accounts created during an earlier period may receive L$400. This stipend, if changed into USD, means that the actual cost for the benefit of extended tech support for an annual payment of US$72 is only about US$14, depending on the currency exchange rates. However, the vast majority of casual users of Second Life do not upgrade beyond the free "basic" account.

Avatars may take any form users choose (human, animal, vegetable, mineral, or a combination thereof) or residents may choose to resemble themselves as they are in real life. They may choose even more abstract forms, given that almost every aspect of an avatar is fully customizable. Second Life Culture consists of many activities and behaviors that are also present in real life. A single resident account may have only one avatar at a time, although the appearance of this avatar can change between as many different forms as the Resident wishes. Avatar forms, like almost everything else in Second Life, can be either created by the user, or bought pre-made. A single person may also have multiple accounts, and thus appear to be multiple Residents (a person's multiple accounts are referred to as alts).

Avatars can travel via walking, running, vehicular access, flying, or teleportation. Because Second Life is such a vast virtual world, teleportation is used when avatars wish to travel instantly and efficiently. Once they reach their destination, they may travel in more conventional means at various speeds.

Avatars can communicate via local chat, group chat, global instant messaging (known as IM), and voice (public, private and group). Chatting is used for localized public conversations between two or more avatars, and is visible to any avatar within a given distance. IMs are used for private conversations, either between two avatars, or among the members of a group, or even between objects and avatars. Unlike chatting, IM communication does not depend on the participants being within a certain distance of each other. As of version 1.18.1.2 (2007-Aug-02), voice chat, both local and IM, was also available. Instant messages may optionally be sent to a Resident's email when the Resident is logged off, although message length is limited to 4096 bytes.

Identities in Second Life can relate to the users' personality or creating their own character. It is based on their decisions on how to express themselves. Most avatars are human, but they can choose to be vampires or animals. Sometimes, what they choose does not relate to their offline selves.

In Coming of Age in Second Life: An Anthropologist Explores the Virtually Human, anthropologist Tom Boellstorff notes that the interface of Second Life is designed with the purpose of disconnecting a player's virtual identity from their physical identity in mind. As of 2015 Second Life has made it possible to display one's legal name in the player's profile or as their screen name, but when Boellstorff first published the book in 2008 users were required to select a last name from a pre-determined list of options. Boellstorff describes this mentality as being in direct contrast to the one held by other mainstream social media websites, where anonymity is shunned and users are encouraged to make the link between their online and physical presence clear.

Content

The ability to create content and shape the Second Life world is one of the key features that separate this from online games.

Built into the software is a 3D modeling tool based on simple geometric shapes that allows residents to build virtual objects. There is also a procedural scripting language, Linden Scripting Language, which can be used to add interactivity to objects. Sculpted prims ("sculpties"), 3D mesh, textures for clothing or other objects, animations, and gestures can be created using external software and imported. The Second Life terms of service provide that users retain copyright for any content they create, and the server and client provide simple digital rights management (DRM) functions. However, Linden Lab changed their terms of service in August 2013 to be able to use user-generated content for any purpose. The new terms of service prevent users from using textures from third-party texture services, as some of them pointed out explicitly.

Economy

An avatar in the virtual world Second Life
 
User-generated content in the virtual world Second Life

Second Life has an internal economy and closed-loop virtual token called the "Linden dollar (L$)". L$ can be used to buy, sell, rent or trade land or goods and services with other users. The "Linden Dollar" is a closed-loop virtual token for use only within the Second Life platform. Linden Dollars have no monetary value and are not redeemable for monetary value from Linden Lab. A resident with a surplus of Linden Dollars earned via a Second Life business or experiential play can request to refund their Linden Dollar surplus to PayPal. Linden Lab reports that the Second Life economy generated US$3,596,674 in economic activity during the month of September 2005, and in September 2006 Second Life was reported to have a GDP of $64 million. In 2009, the total size of the Second Life economy grew 65% to US$567 million, about 25% of the entire U.S. virtual goods market. Gross resident earnings are US$55 million in 2009 – 11% growth over 2008. In 2013, Linden Labs released an info graphic that showed that over 10 years $3.2 billion in transactions for virtual goods had exchanged between Second Life residents, with an average of 1.2 million daily transactions.

There is a high level of entrepreneurial activity in Second Life. Residents of Second Life are able to create virtual objects and other content. Second Life is unique in that users retain all the rights to their content which means they can use Second Life to distribute and sell their creations, with 2.1 million items listed on its online marketplace. At its height circa 2006, hundreds of thousands of dollars were changing hands daily as residents created and sold a wide variety of virtual commodities. Second Life also quickly became profitable due to the selling and renting of virtual real estate. 2006 also saw Second Life's first real-world millionaire; Ailin Graef, better known as Anshe Chung (her avatar), converted an initial investment of US$9.95 into over one million dollars over the course of two and a half years. She built her fortune primarily by buying, selling, and renting virtual real estate.

Major tech corporations have tried to use Second Life to market products or services to Second Life's tech-savvy audience. IBM, for example, purchased 12 islands within Second Life for virtual training and simulations of key business processes, but has since moved on to other platforms due to maintaining costs. Others, like musicians, podcasters, and news organizations (including CNET, Reuters, NPR's The Infinite Mind, and the BBC) have all had a presence within Second Life.

Virtual goods include buildings, vehicles, devices of all kinds, animations, clothing, skin, hair, jewelry, flora and fauna, and works of art. Services include business management, entertainment, and custom content creation (which can be broken up into the following six categories: building, texturing, scripting, animating, art direction, and the position of producer/project funder). L$ can be purchased using US dollars and other local currencies on the LindeX exchange provided by Linden Lab. Customer USD wallets obtained from Linden Dollar sales on the Lindex are most commonly used to pay Second Life's own subscription and tier fees; only a relatively small number of users earn enough profit to request a refund to PayPal. According to figures published by Linden Lab, about 64,000 users made a profit in Second Life in February 2009, of whom 38,524 made less than US$10, while 233 made more than US$5000. Profits are derived from selling virtual goods, renting land, and a broad range of services.

Technology

Second Life comprises the viewer (also known as the client) executing on the user's personal computer, and several thousand servers operated by Linden Lab.

Client

Linden Lab provides official viewers for the operating systems Windows, macOS, and most distributions of Linux where the more known Chrome OS has been excluded so far. The viewer renders 3D graphics using OpenGL technology. The viewer source code was released under the GPL in 2007 and moved to the LGPL in 2010.

There are now several mature third party viewer projects, like Firestorm as the most popular one, that contain features not available in the Linden Lab 'Official' client, target other platforms or cater to specialist & accessibility needs. The main focus of third party development is exploring new ideas and working with Linden Lab to deliver new functionality.

An independent project, libopenmetaverse, offers a function library for interacting with Second Life servers. libopenmetaverse has been used to create non-graphic third party viewers.

There are several Alternate Viewers published by Linden Lab used for software testing by volunteers for early access to upcoming projects. Some of these clients only function on the "beta grid" consisting of a limited number of regions running various releases of unstable test server code.

Server

Each full region (an area of 256×256 meters) in the Second Life "grid" runs on a single dedicated core of a multi-core server. Homestead regions share 3 regions per core and Openspace Regions share 4 regions per core, running proprietary software on Debian Linux. These servers run scripts in the region, as well as providing communication between avatars and objects present in the region.

Every item in the Second Life universe is referred to as an asset. This includes the shapes of basic 3D polygon objects formally known as Primitive Mesh (commonly known as primitives or prims for short), the digital images referred to as textures that decorate primitives, digitized audio clips, avatar shape and appearance, avatar skin textures, LSL scripts, information written on notecards, and so on. Each asset is referenced with a universally unique identifier or UUID.

Assets are stored on Isilon Systems storage clusters, comprising all data that has ever been created by anyone who has been in the Second Life world. Infrequently used assets are offloaded to S3 bulk storage. As of December 2007, the total storage was estimated to consume 100 terabytes of server capacity. The asset servers function independently of the region simulators, though the region simulators act as a proxy for the client, request object data from the asset servers when a new object loads into the simulator. Region simulators areas are commonly known as sims by residents.

Each server instance runs a physics simulation to manage the collisions and interactions of all objects in that region. Objects can be nonphysical and non-moving, or actively physical and movable. Complex shapes may be linked together in groups of up to 256 separate primitives. Additionally, each player's avatar is treated as a physical object so that it may interact with physical objects in the world. As of 9 July 2014, Second Life simulators use the Havok 2011.2 physics engine for all in-world dynamics. This engine is capable of simulating thousands of physical objects at once.

Linden Lab pursues the use of open standards technologies, and uses free and open source software such as Apache, MySQL, Squid and Linux. The plan is to move everything to open standards by standardizing the Second Life protocol. Cory Ondrejka, former CTO[63] of Second Life, stated in 2006 that a while after everything has been standardized, both the client and the server will be released as free and open source software.

In January 2021, Linden Labs completed the migration of all of its services and databases to AWS servers.

OpenSimulator

In January 2007, OpenSimulator was founded as an open-source simulator project. The aim of this project is to develop a full open-source server software for Second Life clients. OpenSIM is BSD Licensed and it is written in C# and can run under Mono environment. From 2008, alternative grids began to emerge and many of these allow cross visits from other grids through the hypergrid protocol using OpenSimulator.

Applications

Arts

Second Life residents express themselves creatively through virtual world adaptations of art exhibits, live music, live theater and machinima, as well as other art forms.

Competitive entertainment

A wide variety of recreational activities, both competitive and non-competitive, take place on the Second Life Grid, including both traditional sports and video game-like scenarios.

Education

Second Life is used as a platform for education by many institutions, such as colleges, universities, libraries and government entities. Since 2008, the University of San Martin de Porres of Peru has been developing Second Life prototypes of Peruvian archeological buildings, and training teachers for this new paradigm of education. The West Virginia University (WVU) Department of Special Education has used Second Life widely in education, and it provided teaching certification and certificates of degree in seven different distance education programs. WVU started a pilot program in the college's computer lab in spring 2011.

Embassies

The Maldives was the first country to open an embassy in Second Life. The Maldives' embassy is located on Second Life's "Diplomacy Island", where visitors will be able to talk face-to-face with a computer-generated ambassador about visas, trade and other issues. "Diplomacy Island" also hosts Diplomatic Museum and Diplomatic Academy. The Island is established by DiploFoundation as part of the Virtual Diplomacy Project.

In May 2007, Sweden became the second country to open an embassy in Second Life. Run by the Swedish Institute, the embassy serves to promote Sweden's image and culture, rather than providing any real or virtual services. The Swedish Minister for Foreign Affairs, Carl Bildt, stated on his blog that he hoped he would get an invitation to the grand opening.

In September 2007, Publicis Group announced the project of creating a Serbia island as a part of a project Serbia Under Construction. The project is officially supported by Ministry of Diaspora of Serbian Government. It was stated that the island will feature the Nikola Tesla Museum, the Guča Trumpet Festival and the Exit Festival. It was also planned on opening a virtual info terminals of Ministry of Diaspora.

On Tuesday December 4, 2007, Estonia became the third country to open an embassy in Second Life. In September 2007, Colombia and Serbia opened embassies. As of 2008, North Macedonia and the Philippines have opened embassies in the "Diplomatic Island" of Second Life. In 2008, Albania opened an embassy in the Nova Bay location. SL Israel was inaugurated in January 2008 in an effort to showcase Israel to a global audience, though without any connection to official Israeli diplomatic channels. In 2008 Malta opened an embassy on Second Life.

Religion

The Anglican Cathedral of Second Life.

Religious organizations have also begun to open virtual meeting places within Second Life. In early 2007, LifeChurch.tv, a Christian church headquartered in Edmond, Oklahoma, and with eleven campuses in the US, created "Experience Island" and opened its twelfth campus in Second Life. In July 2007, an Anglican cathedral was established in Second Life; Mark Brown, the head of the group that built the cathedral, noted that there is "an interest in what I call depth, and a moving away from light, fluffy Christianity".

The First Unitarian Universalist Congregation of Second Life was established in 2006. Services have been held regularly, making the FUUCSL Congregation one of the longest-running active congregations in Second Life.

The Egyptian-owned news website Islam Online has purchased land in Second Life to allow Muslims and non-Muslims alike to perform the ritual of Hajj in virtual reality form, obtaining experience before actually making the pilgrimage to Mecca in person.

Second Life also offers several groups that cater to the needs and interests of humanists, atheists, agnostics, and freethinkers. One of the most active groups is SL Humanism which has been holding weekly discussion meetings inside Second Life every Sunday since 2006.

Relationships

Romantic relationships are common in Second Life, including some couples who have married online. The social engagement offered by the online environment helps those who might be socially isolated. In addition, sex is often encountered. However, to access the adult sections requires age verification. There are also large BDSM and Gorean communities.

Second Life relationships have been taken from virtual online relationships into personal, real-world relationships. Booperkit Moseley and Shukran Fahid were possibly the first couple to meet in Second Life and then marry in real life. Booperkit travelled to the United States to meet Shukran and he returned to England with her after one week. They married in 2006, had twin boys in 2009, and are still married. Some couples meet online, form friendships, and eventually move to finding one another in the real world. Some even have their weddings on Second Life, as well as in a real-world setting.

Relationships in virtual worlds have an added dimension compared to other social media, because avatars give a feeling of proximity making the voyeur experience more intense than simply a textual encounter. The complexities of those encounters depend on the engagement levels of the people behind the avatars, whether they are engaging disassociatively (entertainment only), immersively (as if the avatar was them), or augmentatively (meaning they engage for a real-life purpose).

Science

Second Life is used for scientific research, collaboration, and data visualization. Examples include SciLands, American Chemical Society's ACS Island, Genome, Virginia Tech's SLATE, and Nature Publishing Group's Elucian Islands Village.

Social network

Second Life can be a real-time, immersive social space for people including those with physical or mental disabilities that impair their first lives, who often find comfort and security interacting through anonymous avatars. (Indeed, some academics believe using Second Life might even help improve motor ability for people with Parkinson’s disease.). An example of how Second Life has been used by disabled people is Wheelies, the widely publicised disability themed nightclub founded by Simon Stevens.

Music streams

ShoutCast and Icecast Internet radio stations can be streamed into a land parcel in Second Life. Streaming codecs are currently MP3 as AAC and OGG are not currently supported. There are internet radio providers that offer these services or select from a list compiled by Lindal Kidd and is updated whenever by whoever as there's no officiant for it. At the time of this writing, media on a prim (MOAP) is not a reliable enough way of displaying media and such, sites listed work best with Parcel Media or Parcel Audio.

Work spaces

Second Life gives companies the option to create virtual workplaces to allow employees to virtually meet, hold events, practice any kind of corporate communications, conduct training sessions in 3D immersive virtual learning environment, simulate business processes, and prototype new products.

In 2020, CEO of Second Life Ebbe Altberg announced a microsite for Second Life to serve as a space for digital meetings to take place amidst global social distancing, self-isolation, and quarantine orders during the COVID-19 pandemic.

Notable events and influence

Ban of Woodbury University

The controversial campus of Woodbury University's School of Media, Culture and Design, which was deleted in 2010 by Linden Lab

Linden Lab has twice, in 2007 and 2010, banned a California educational institution, Woodbury University, from having a representation within Second Life. On April 20, 2010, four simulators belonging to the university were deleted and the accounts of several students and professors terminated, according to The Chronicle of Higher Education. Edward Clift, dean of the School of Media, Culture and Design at Woodbury University, told The Chronicle of Higher Education that their campus "was a living, breathing campus in Second Life", including educational spaces designed mostly by students, such as a mock representation of the former Soviet Union and a replica of the Berlin Wall. According to Clift, the virtual campus did not "conform to what Linden Lab wanted a campus to be".

The article in The Chronicle of Higher Education concluded with: "Meanwhile, many people in Second Life expressed on blogs that they were glad to see the virtual campus go, arguing that it had been a haven for troublemakers in the virtual world."

The Alphaville Herald

In 2004, the newspaper The Alphaville Herald, founded and edited by the philosopher Peter Ludlow, migrated to Second Life, and in the following years the newspaper played a prominent role in reporting on Second Life and in the public discussion of the game. The newspaper, which was known as The Second Life Herald from 2004 to 2009, was later edited by the Internet pioneer Mark P. McCahill. According to scholars Constantinescu and Decu, The Alphaville Herald was the first "virtual free press," pioneering mass communication in virtual worlds.

2007 "Virtual Riot"

In January 2007, a "virtual riot" erupted between members of the French National Front (FN) who had established a virtual HQ on Second Life, and anti-racism activists, including Second Life Left Unity, a socialist and anti-capitalist user-group. Since then, several small Internet-based organizations have claimed some responsibility for instigating the riots.

Marketing

Corporate marketers, especially during the height of Second Life in the cultural zeitgeist of 2005–2010, have been accused of being overly credulous of the actual reach and influence of Second Life. Journalists have theorized this might be partially due to blithely accepting total account statistics rather than harder-to-discern active player counts. Reasons for account "inflation" can include in-world systems which encourage the creation of bogus extra accounts such as "traffic bots" which simply remain stationary in a store, causing the system to rank the store as popular because there are people there, as well as simply idle and long inactive accounts. One article in Wired featured a marketer for Coca-Cola who found Second Life to be essentially deserted when personally inspecting it, yet still funded a marketing campaign there anyway from fear of missing out.

Griefing and denial of service attacks

Second Life has been attacked several times by groups of residents abusing the creation tools to create objects that harass other users or damage the system. This included grey goo objects which infinitely reproduce, eventually overwhelming the servers; orbiters which throw an avatar so far upwards they cannot get back down in a reasonable timeframe without teleporting; cages which surround avatars, preventing them from moving, and similar tools. Although combat between users is sanctioned in certain areas of the world, these objects have been used to cause disruption in all areas. Attacks on the grid itself, such as Grey Goo, are strictly forbidden anywhere on the grid. It was possible to perpetrate denial-of-service attacks (DoS) on other users simply by scripting objects that spew screen filling characters from anywhere on the grid to another avatar's location, thereby disabling a clear view to the virtual world. Bugs in the client and server software were also exploited by griefers to kick users, crash servers, and revert content before being patched out.

The Emerald client and in-world logging scripts

The Emerald client was developed by a group of users based on Snowglobe, an opensource fork of the Second Life client. Several groups alleged that the Emerald viewer contained Trojan code which tracked user details and demographics in a way that the developers could later recover. One of these groups was banned from Second Life by Linden Lab after publishing their discovery. Shortly afterward, a member of the Emerald team was accused of a DDOS attack against another website. In response, Linden Lab revoked Emerald's third-party viewer approval and permanently banned several of Emerald's developers. Due to what happened with Emerald, Linden Lab instituted a new third-party viewer policy.

The support staff and one of the developers of the Emerald project, who was not banned, left to work on a new viewer project, Phoenix (using some of the Emerald codebase, but without Off-the-Record Messaging nor any potentially malicious code). The Phoenix team are now the developers behind Firestorm Viewer, a fork of Second Life's "viewer 2.0" open source client.

Criticism and controversy

Second Life has seen a number of controversies, as well. Issues range from the technical (budgeting of server resources), to moral (pornography), to legal (legal position of the Linden Dollar, Bragg v. Linden Lab). Security issues have also been a concern.

Regulation

In the past, large portions of the Second Life economy consisted of businesses that are regulated or banned. Changes to Second Life's terms of service in this regard have largely had the purpose of bringing activity within Second Life into compliance with various international laws, even though the person running the business may be in full compliance with the law in their own country.

On July 26, 2007, Linden Lab announced a ban on in-world gambling due to federal and state regulations on Internet gambling that could affect Linden Lab if it was permitted to continue. The ban was immediately met with in-world protests.

In August 2007, a $750,000 in-world Linden Dollar bank or Ponzi scheme called Ginko Financial collapsed due to a bank run triggered by Linden Lab's ban on gambling. The aftershocks of this collapse caused severe liquidity problems for other virtual "Linden Dollar banks", which critics had long asserted were scams. On Tuesday, January 8, 2008, Linden Lab announced the upcoming prohibition of payment of fixed interest on cash deposits in unregulated banking activities in-world. All banks without real-world charters closed or converted to virtual joint stock companies by January 22, 2008. After the ban, a few companies continue to offer non-interest bearing deposit accounts to residents, such as the e-commerce site XStreet, which had already adopted a zero-interest policy 3 months before the Linden Lab interest ban.

Technical issues

Second Life has suffered from difficulties related to system instability. These include increased system latency, and intermittent client crashes. However, some faults are caused by the system's use of an "asset server" cluster, on which the actual data governing objects is stored separately from the areas of the world and the avatars that use those objects. The communication between the main servers and the asset cluster appears to constitute a bottleneck which frequently causes problems. Typically, when asset server downtime is announced, users are advised not to build, manipulate objects, or engage in business, leaving them with little to do but chat and generally reducing confidence in all businesses on the grid.

Another problem is inventory loss, in which items in a user's inventory, including those which have been paid for, can disappear without warning or permanently enter a state where they will fail to appear in-world when requested (giving an "object missing from database" error). Linden Lab offers no compensation for items that are lost in this way, although a policy change instituted in 2008 allows accounts to file support tickets when inventory loss occurs. Many in-world businesses will attempt to compensate for this or restore items, although they are under no obligation to do so and not all are able to do so. A recent change in how the company handles items which have "lost their parent directory" means that inventory loss is much less of a problem and resolves faster than in recent years. "Loss to recovery times" have gone from months (or never) to hours or a day or two for the majority of users, but inventory loss does still exist.

Second Life functions by streaming all data to the user live over the Internet with minimal local caching of frequently used data. The user is expected to have a minimum of 300kbit/s of Internet bandwidth for basic functionality. Due to the proprietary communications protocols, it is not possible to use a network proxy service to reduce network load when many people are all using the same location, such as when used for group activities in a school or business.

Quality assurance

Criticism of quality assurance of Second Life states that Linden Lab focuses too much on bringing new features to the production environment instead of fixing long-standing bugs that, in the worst case, cause financial loss for the users. On April 30, 2007, an open letter signed by over 3,000 users was sent to Linden Lab to protest the quality assurance process of the company. Linden Lab has responded to the open letter.

Frame rate

Computer hardware and Internet connections capable of smoothly rendering high quality content in other MMOGs may perform poorly in Second Life, resulting in low frame rates and unresponsive controls on even minimal graphical configurations. The problem is especially prevalent when large numbers of avatars congregate in one area. The problem is largely due to the fact that the world is entirely user created, and the majority of content created by users is made without any sort of basic graphical optimization. As a result, objects with both unnecessarily high polygon counts, and unnecessarily high resolution textures are prevalent. It is not uncommon for users to have to download and use upwards of a dozen times the amount of resources than would actually be required for the equivalent visual result. Certain areas have guidelines for script usage, which helps reduce lag by reducing resources used server-side, but does nothing to alleviate the primary issue above.

Congestion

A single region (65,536 m2 of land hosted on a single CPU) is set to accommodate a limited number of Residents (40 on 'mainland' regions, up to 100 on private islands), causing some popular locations such as teleportation points to become inaccessible at times. It is possible for an area of land a Resident has paid for to become inaccessible because another area in the same region has exhausted the avatar limit.

Customer security

On September 8, 2006, Linden Lab released a news bulletin that revealed their Second Life database had been compromised and customer information, including encrypted passwords and users' real names, had likely been accessed. However, it was later revealed that the hacker had in fact been focused on trying to cheat the in-world money system and their access to personal information was believed incidental, although a full alert was still raised for safety's sake.

Fraud and intellectual property protection

Although Second Life's client and server incorporate digital rights management technology, the visual data of an object must ultimately be sent to the client in order for it to be drawn; thus unofficial third-party clients can bypass them. One such program, CopyBot, was developed in 2006 as a debugging tool to enable objects to be backed up, but was immediately hijacked for use in copying objects; additionally, programs that generally attack client-side processing of data, such as GLIntercept, can copy certain pieces of data. Such use is prohibited under the Second Life TOS and could be prosecuted under the Digital Millennium Copyright Act.

Linden Lab may ban a user who is observed using CopyBot or a similar client, but it will not ban a user simply for uploading or even selling copied content; in this case, Linden Lab's enforcement of intellectual property law is limited to that required by the "safe harbor" provisions of the DMCA which used to require a regular mail DMCA complaint. However, since 2019 an electronic DMCA complaint form is also available.

A few high-profile businesses in Second Life have filed such lawsuits, none of the cases filed to date have gone to trial, and most have been dismissed pursuant to a settlement agreement reached between the parties. Another case where settlement and dismissal was gained may be found in the matter of Eros, LLC v. Linden Research, Inc. As of October 7, 2010, the case was transferred to private mediation and the plaintiffs filed for dismissal of charges on March 15, 2011.

Most users in the world as paying, private individuals are, likewise, effectively unprotected. Common forms of fraud taking place in-world include bogus investment and pyramid schemes, fake or hacked vendors, and failure to honor land rental agreements. A group of virtual landowners online have filed a class action lawsuit against the company, claiming the company broke the law when it rescinded their ownership rights. The plaintiffs say a change in the terms of service forced them to either accept new terms that rescinded their virtual property ownership rights, or else be locked out of the site.

OpenSpaces

Linden Lab, for a period, offered Openspace regions to users: regions which were purchased in packs of four, with all four running on a single CPU core, intended to be placed next to an existing region to create the effect of larger size. The fee for 4 Openspaces was identical to that for a single private region. However, in March 2008, this rule was modified to permit Openspaces to be bought individually and placed elsewhere, as well as increasing the prim load each one could handle. Openspaces were made available for a US$415 downpayment plus a US$75 monthly fee.

In October 2008, Linden Lab announced that the Openspaces being used for this purpose were being misused; there was in fact no technical throttle limiting their usage. Linden Lab raised the monthly fee per Openspace to US$125, the same cost as half a region; added an avatar limit of 20; and renamed it to Homestead.

A week after the initial announcement Linden Lab stated its intention to add technical limits. A revised Openspace product, with far fewer prims, a no-residency rule, and costing the same monthly amount, was announced.

In May 2009, Linden Lab announced they were "grandfathering" Openspace sims (now rebranded as "Homesteads"), after a protracted protest movement caused a major amount of negative publicity and funded potential litigation.

Sex

Some media attention has been given to sexual activity involving avatars with a childlike appearance. The United Kingdom and Germany are among the countries investigating new laws to combat simulated child pornography. The USA has attempted to pass several laws forbidding simulated child pornography; however, each one has been struck down by the US Supreme Court as an infringement on the First Amendment right to free speech.

As of May 2007, two such countries, Germany and Belgium, have launched a police investigation into age of consent-related offenses in Second Life (including both trading of non-virtual photography and involuntary virtual sexual activity with childlike avatars by means of virtual identity theft). Linden Lab responded by issuing a statement that any "depiction of sexual or lewd acts involving minors" was a bannable offence.

In France, a conservative family union, Familles de France, sued Linden Lab in June 2007, alleging that Second Life gave minors access to sexual content, including bondage, zoophilia and scatophilia, as well as gambling, and advertisements for alcohol, drugs or tobacco. Linden Lab pointed out that the virtual world is not meant for children (people under the age of 18) because of the mature content and interactions within Second Life. However, minors aged between 13 and 17 can access Second Life, but they will be restricted to what they can see or do based on age. The Second Life world is split into sections/worlds and each one is given a maturity rating similar to films: General, Moderate and Adult. Minors aged 13–17 can access areas with a General Rating only.

Second Life Main Grid regions are rated either "General", "Moderate", or "Adult" (previously "PG", "Mature", or "Adult"). Builds, textures, actions, animations, chat, or businesses that are of an adult nature are regulated by the Second Life Terms of Service to only occur in simulators with a Moderate or Adult rating. General rated sims exist as an alternative for residents who do not wish to reside in areas where adult-oriented activities and businesses are permitted.

Linden Lab has created an Adult rated "mainland" continent named Zindra in response to its other "mainland" continents being mostly General.

Unauthorized copying of content

Second Life features a built-in digital rights management system that controls the movement of textures, sounds, scripts, and models with the Second Life servers at Linden Lab. At some point, though, this data must be sent to a user's computer to be displayed or played—an issue fundamental to any system attempting to apply restrictions to digital information.

In November 2006 controversy arose over a tool called CopyBot, developed as part of libsecondlife and was intended to allow users to legitimately back up their Second Life data. For a brief period, an unmodified CopyBot allowed any user to replicate SL items or avatars (although not scripts, which run only on the servers at Linden Lab). Later changes to the SecondLife protocols prevented unmodified copies of CopyBot from working. Nevertheless, the basic issue of users being able to duplicate content that is sent to them remains.

Residents who copy content belonging to other users face being banned from Second Life, but Linden Lab has so far never sued any of these users for copyright infringement; since the resident creators (and not Linden Lab) retain ownership of the rights, it is not clear whether Linden Lab would legally be able to do so. Linden Lab does, however, comply with DMCA takedown notices served to them against resident content; serving a DMCA Takedown Notice is the normal procedure recommended by Linden Lab for having copyrighted content illegally resold on Second Life.

Any user who uploads, publishes or submits any content keeps the intellectual property rights of that content, however both Linden Lab and other users gain their own rights from your content. Linden Lab receives a content license from anything a user uploads to the server. Section 7.3 of the Second Life terms of service states; "you hereby automatically grant Linden Lab a non-exclusive, worldwide, royalty-free, sub-license able, and transferable licence to use, reproduce, distribute, prepare derivative works of, display, and perform the content solely for the purpose of providing and promoting the service".

A user who uploads their content to a public area also gives a content licence to other users as well, which allows other users to replicate and record for use in Machinima (as outlined in section 7.4, Snapshot and Machinima Policy).

Regardless of what rights and licences are given, Linden Lab takes no responsibility for the outcome of any dispute between users or the server regarding content. Section 10.2 states; "you release Linden Lab (and its officers, directors, shareholders, agents, subsidiaries, and employees) from claims, demands, losses, liabilities and damages (actual and consequential) of every kind nature, known and unknown, arising out of or in any way connected with any dispute you have or claim to have with one or more users, including whether or not Linden Lab becomes involved in any resolution or attempted resolution of the dispute". Section 10.3 repeats a similar passage but regarding the responsibility of Linden Lab during any data or technical fault.

Litigation

Bragg v. Linden Lab

In 2006, attorney Marc Bragg sued Linden Lab, claiming that it had illegally deprived him of access to his account after he discovered a loophole in the online land auction system which allowed regions to be purchased at prices below reserve. Although most users and commentators believed that Bragg would have no chance of winning, a number of legal developments occurred as a result of the case, including a court ruling that parts of the Second Life Terms of Service were unenforceable, due to being an unconscionable contract of adhesion. The case eventually ended with Bragg's virtual land and account being restored to him in a confidential out-of-court settlement. Since the settlement created no legal precedent, it left users with confusion as to what legal rights they truly had with respect to their virtual land, items, and account. Many of Bragg's legal arguments rested on the claim—advertised on Linden Lab web site—that virtual land within Second Life could be "owned" by the purchasing user, which was removed shortly after the settlement.

Eros, LLC and Grei v. Linden Lab

Eros, LLC and Shannon Grei brought forth a class action suit in US District Court in Northern California against Linden Research, Inc on September 15, 2009 (Case4:09-cv-04269-PJH). Court papers allege the defendants knowingly and profitably turned a blind eye to copyright and trademark violations within the Second Life service.

Evans et al. v. Linden Lab

In 2010, a group of banned SL users filed suit against Linden Lab and CEO Philip Rosedale, in the same Pennsylvania Federal District Court that the Bragg case was adjudicated in, with the same judge, to deal with further land seizures and account suspensions by the Lab against various customers. Due to the Terms of Service agreement changes since the Bragg case, defendants attorneys successfully argued to move the suit to federal court in California, where the case lingered for several years. The judge did rule that there was a basis to turn the litigation into a class action, and that there were two classes under which claimants could file claims. The primary class was those who suffered economic damages to their livelihoods, through loss of their business revenues in SL. The secondary class was those who suffered property losses from loss of land, money on hand, and virtual goods in avatar inventories. In May 2013, attorney for defendants negotiated a settlement agreement with one of the lead attorneys that, in plain language, agreed to refund region setup fees for private island owners, pay land owners 2 Linden Dollars per square meter of virtual land, refund all L$ and USD amounts in the plaintiffs' accounts at the time of suspension, and allow the plaintiffs the option of either receiving $15US as compensation for loss of accounts and inventory virtual goods OR restoration of their accounts in order to sell their goods on the SL Marketplace. The settlement agreement went to final hearing in March 2014, with an objection from claimant Mike Lorrey as to the vagueness of certain terms in the settlement as to which fees exactly would be refunded. With the resolution of that objection, claimants who had filed claims prior to March 28, 2014, began to receive settlement money a few months later.

In popular culture

Since its debut in 2003, Second Life has been referred to by various popular culture media, including literature, television, film and music. In addition, various personalities in such media have themselves used or employed Second Life for both their own works and for private purposes.

In September 2006, former Governor of Virginia Mark Warner became the first politician to appear in a MMO when he gave a speech in Second Life. Musicians followed suit, with Redzone being credited by Wired and Reuters as the first band to tour in Second Life in February 2007. Then, in June 2008, author Charles Stross held a conference in Second Life to promote an upcoming novel. Second Life was also featured prominently, and used as a tool to locate a suspect, in the television show CSI: NY in 2007. In the American sitcom The Office, Dwight Schrute (Rainn Wilson) is known to play the game, most notably in the episode "Local Ad".

Research

Much of the published research conducted in Second Life is associated with education and learning. Unlike computer games, Second Life does not have a pre-defined purpose and allows for highly realistic enactment of real life activities online. One such study tested the usefulness of SL as an action learning environment in a senior course for management information systems students. Another presented a case study in which university students were tasked with building an interactive learning experience using SL as a platform. Both problem-based learning and constructionism acted as framing pedagogies for the task, with students working in teams to design and build a learning experience which could be possible in real life.

Situated learning has also been examined in SL, in order to determine how the design and social dynamics of the virtual world support as well as constrain various types of learning. The paper, "The future for (second) life and learning", published in the British Journal of Educational Technology, examines the potential of Second Life to further innovative learning techniques. It notes trends within the SL innovation to date, including the provision of realistic settings, the exploitation of pleasant simulated environments for groups, and the links with other learning technologies. It also considers the creativity sparked by SL's potential to offer the illusion of 3-D ‘spaces’ and buildings, and points to infinite imaginative educational possibilities.

HealthInfo Island provides tips on staying healthy to Second Life residents.

Second Life has also offered educational research potential within the medical and healthcare fields. Examples include in-world research facilities such as the Second Life Medical and Consumer Health Libraries (Healthinfo Island—funded by a grant from the US National Library of Medicine), and VNEC (Virtual Neurological Education Centre—developed at the University of Plymouth, UK).

There have also been healthcare related studies done of SL residents. Studies show that behaviors from virtual worlds can translate to the real world. One survey suggests that users are engaged in a range of health-related activities in SL which are potentially impacting real-life behaviors.

Another focus of SL research has included the relationship of avatars or virtual personas to the 'real' or actual person. These studies have included research into social behavior and reported two main implications. The first is that SL virtual selves shape users' offline attitudes and behavior. The research indicated that virtual lives and physical lives are not independent, and our appearances and actions have both online and offline consequences. The second deals with experimental research and supports the idea that virtual environments, such as SL, can enable research programs in that people behave in a relatively natural spread of behavioral patterns.

The SL avatar-self relationship was also studied via resident interviews, and various enactments of the avatar-self relationship were identified. The study concluded that SL residents enacted multiple avatar-self relationships and cycled through them in quick succession, suggesting that these avatar-self relationships might be shaped and activated strategically in order to achieve the desired educational, commercial, or therapeutic outcomes.

Anthropologist Tom Boellstorff describes the anthropological applications of studying Second Life and its userbase in Coming of Age in Second Life: An Anthropologist Explores the Virtually Human. Boellstorff explores the relationship between anonymity and community when everyone in a community belongs to varying degrees of anonymity, and how this feeds into the idea of digital collectivity. He also comments on the phenomenon of data becoming "part of social context" that has been observed both inside and outside of Second Life as surveillance becomes more integrated into everyday life. He stresses the difference between the concepts of anonymity and pseudonymity, identifying Second Life users as belonging to the latter group of people - though their avatars are not directly linked to their real identities and reputations, they have forged new ones in this online space, a unique effect of creating an online persona in the digital age.

Supply-side economics

From Wikipedia, the free encyclopedia
 
Supply-side economics is a macroeconomic theory that postulates economic growth can be most effectively fostered by lowering taxes, decreasing regulation, and allowing free trade. According to supply-side economics, consumers will benefit from greater supplies of goods and services at lower prices, and employment will increase.

Supply-side fiscal policies are designed to increase aggregate supply, as opposed to aggregate demand, thereby expanding output and employment while lowering prices. Such policies are of several general varieties:

  1. Investments in human capital, such as education, healthcare, and encouraging the transfer of technologies and business processes, to improve productivity (output per worker). Encouraging globalized free trade via containerization is a major recent example.
  2. Tax reduction, to provide incentives to work, invest and take risks. Lowering income tax rates and eliminating or lowering tariffs are examples of such policies.
  3. Investments in new capital equipment and research and development (R&D), to further improve productivity. Allowing businesses to depreciate capital equipment more rapidly (e.g., over one year as opposed to 10) gives them an immediate financial incentive to invest in such equipment.
  4. Reduction in government regulations, to encourage business formation and expansion.

A basis of supply-side economics is the Laffer curve, a theoretical relationship between rates of taxation and government revenue. The Laffer curve suggests that when the tax level is too high, lowering tax rates will boost government revenue through higher economic growth, though the level at which rates are deemed "too high" is disputed. A 2012 poll of leading economists found none agreed that reducing the US federal income tax rate would result in higher annual tax revenue within five years. Critics also point out that several large tax cuts in the United States over the last 40 years have not increased revenue.

The term "supply-side economics" was thought for some time to have been coined by the journalist Jude Wanniski in 1975, but according to Robert D. Atkinson, the term "supply side" was first used in 1976 by Herbert Stein (a former economic adviser to President Richard Nixon) and only later that year was this term repeated by Jude Wanniski. The term alludes to ideas of the economists Robert Mundell and Arthur Laffer.

Historical origins

Robert Mundell popularized the theory of supply-side economics after developing the theory with Arthur Laffer in the 1970s

Supply-side economics developed in response to the stagflation of the 1970s. It drew on a range of non-Keynesian economic thought, including the Chicago School and New Classical School. Bruce Bartlett, an advocate of supply-side economics, traced the school of thought's intellectual descent from the philosophers Ibn Khaldun and David Hume, satirist Jonathan Swift, political economist Adam Smith and United States Secretary of the Treasury Alexander Hamilton.

Bartlett stated in 2007 that

Today, hardly any economist believes what the Keynesians believed in the 1970s and most accept the basic ideas of supply-side economics – that incentives matter, that high tax rates are bad for growth, and that inflation is fundamentally a monetary phenomenon. Consequently, there is no longer any meaningful difference between supply-side economics and mainstream economics.

...

Today, supply-side economics has become associated with an obsession for cutting taxes under any and all circumstances. No longer do its advocates in Congress and elsewhere confine themselves to cutting marginal tax rates – the tax on each additional dollar earned – as the original supply-siders did. Rather, they support even the most gimmicky, economically dubious tax cuts with the same intensity. ... today it is common to hear tax cutters claim, implausibly, that all tax cuts raise revenue.

Current day advocates of supply-side economic policies claim that lower tax rates produce macroeconomic benefits and emphasize this benefit rather than their traditional ideological Classical liberals opposion to taxation because they opposed government in general. Their traditional claim was that each man had a right to himself and his property and therefore taxation was immoral and of questionable legal grounding. On the other hand, supply-side economists argued that the alleged collective benefit (i.e. increased economic output and efficiency) provided the main impetus for tax cuts.

As in classical economics, supply-side economics proposed that production or supply is the key to economic prosperity and that consumption or demand is merely a secondary consequence. Early on, this idea had been summarized in Say's Law of economics, which states: "A product is no sooner created, than it, from that instant, affords a market for other products to the full extent of its own value."

Supply-side economics rose in popularity among Republican Party politicians from 1977 onwards. Prior to 1977, Republicans were more split on tax reduction, with some worrying that tax cuts would fuel inflation and exacerbate deficits.

In 1978, Jude Wanniski published The Way the World Works in which he laid out the central thesis of supply-side economics and detailed the failure of high tax rate progressive income tax systems and United States monetary policy under Richard Nixon and Jimmy Carter in the 1970s. Wanniski advocated lower tax rates and a return to some kind of gold standard, similar to the 1944–1971 Bretton Woods System that Nixon abandoned. 

 

Three different Laffer curves: t* represents the rate of taxation at which maximal revenue is generated and the curve need not be single-peaked nor symmetrical

Definition and principles

James D. Gwartney and Richard L. Stroup provide a definition of supply-side economics as the belief that adjustments in marginal tax rates have significant effects on the total supply. Gwartney and Stroup said "that the supply-side argument provided the foundation for the Reagan tax policy, which led to significant reductions in marginal tax rates in the United States during the 1980s".

Barry P. Bosworth has provided another definition by presenting the supply-side economics from two perspectives:

  1. "A broad interest in the determinants of aggregate supply – the volume and quality of the capital and labor inputs and the efficiency with which they are used"
  2. "A narrower focus on tax reductions as a means of increasing the supply of savings, investment, and labor."

Supply-side vs. previous approaches to economic policy

Supply-side economics has originated as an alternative to Keynesian economics, which focused macroeconomic policy on management of final demand. Demand-side economics relies on a fixed-price view of the economy, where the demand plays a key role in defining the future supply growth, which also allows for incentive implications of investment.

The Keynesian policy approaches focus on demand management as a major instrument to affect aggregate production and GNP, while Monetarism focuses on management of monetary aggregates and credit. Unlike supply-side economics, demand-side economics is based on the assumption that increases in GNP result from increased spending.

Traditional policy approaches were challenged by the theory of supply-side economics in the Reagan Administration of the 1980s. It claims that fiscal policy may lead to changes in supply as well as in demand. So, when marginal tax rates are high, consumers pursue additional leisure and current consumption instead of pursuing current income and extra income in the future. Therefore, there is a decline in work effort and investment, which in turn causes a decrease of production and GNP, regardless of the total demand levels.

On these assumptions, supply side economists formulate the idea that a cut in marginal tax rates has a positive effect on economic growth.

Role of the marginal tax rates

The main focus of supply-side economics is promotion of economic growth. In this regard, some studies have suggested to consider two relative prices.

The first one influences decisions of individuals on the distribution of their income between consumption and savings. The cost of individual’s decision to assign a unit of income to either consumption or savings is a future value of the unit, which has been given up by choosing either to consume or to save. The unit of income value is defined by the marginal tax rates. Therefore, higher tax rates would decrease the cost of consumption, which would cause a fall in investment and savings. At the same time, lower tax rates would cause the investment and savings levels to rise, while the consumption levels would fall.

The second price influences decisions of individuals on the distribution of their time between work and leisure. The cost of individual’s decision to allocate a unit of time either to work or leisure stands for current income, which was given up by choosing either work or leisure. The cost also includes the future income, which was given up for leisure instead of enhancing the professional skills. The value of lost income is defined by the tax rate assigned to the additional income. Therefore, the increase in marginal tax rates leads to a decrease in the price of leisure. However, if the marginal tax rate decline, the cost of leisure increases.

Both the amount of retained and taxed income is determined by the marginal tax rate. That is why, from a supply-side economist's standpoint, marginal tax rates play a significant role in determining the development of the economy. Due to crucial role in determining how much time workers will spend on work and leisure or how much income will be spent on consumption and for savings, supply-side economists insist on decreasing tax rates as they believe it could improve the growth rates of the economy.

Laffer curve

Laffer curve illustrates a mathematical relationship between tax revenues and tax rates, which was popularized by economist Arthur B. Laffer in 1974. Supply-side economics highly depends on the implications, which follow from the relationship presented by the curve. It shows that higher tax rates can sometimes decrease the tax base, which will lead to the decrease in tax revenues even if the tax rates are high. Due to the effect exerted by taxes on the taxed income, the adjustment of tax rates may not lead to proportional changes in tax revenues. That is why, some supply-side economists insist that the decreasing of too high tax rates can result in the increase of the tax revenues.

The Laffer curve embodies a postulate of supply-side economics: that tax rates and tax revenues are distinct, with government tax revenues the same at a 100% tax rate as they are at a 0% tax rate and maximum revenue somewhere in between these two values. Supply-siders argued that in a high tax rate environment lowering tax rates would result in either increased revenues or smaller revenue losses than one would expect relying on only static estimates of the previous tax base.

This led supply-siders to advocate large reductions in marginal income and capital gains tax rates to encourage greater investment, which would produce more supply. Jude Wanniski and many others advocate a zero capital gains rate. The increased aggregate supply should result in increased aggregate demand, hence the term "supply-side economics".

History

Reaganomics

In the United States, commentators frequently equate supply-side economics with Reaganomics. The administration of Republican president Ronald Reagan promoted its fiscal policies as being based on supply-side economics. Reagan made supply-side economics a household phrase and promised an across-the-board reduction in income tax rates and an even larger reduction in capital gains tax rates. During Reagan's 1980 presidential campaign, the key economic concern was double digit inflation, which Reagan described as "[t]oo many dollars chasing too few goods", but rather than the usual dose of tight money, recession and layoffs, with their consequent loss of production and wealth, he promised a gradual and painless way to fight inflation by "producing our way out of it".

Switching from earlier monetary policy, Federal Reserve chair Paul Volcker implemented tighter monetary policies including lower money supply growth to break the inflationary psychology and squeeze inflationary expectations out of the economic system. Therefore, supply-side supporters argue that Reaganomics was only partially based on supply-side economics.

Congress under Reagan passed a plan that would slash taxes by $749 billion over five years. Critics claim that the tax cuts increased budget deficits while Reagan supporters credit them with helping the 1980s economic expansion and argued that the budget deficit would have decreased if not for massive increases in military spending. As a result, Jason Hymowitz cited Reagan—along with Jack Kemp—as a great advocate for supply-side economics in politics and repeatedly praised his leadership.

Critics of Reaganomics claim it failed to produce much of the exaggerated gains some supply-siders had promised. Paul Krugman later summarized the situation: "When Ronald Reagan was elected, the supply-siders got a chance to try out their ideas. Unfortunately, they failed." Although he credited supply-side economics for being more successful than monetarism which he claimed "left the economy in ruins", he stated that supply-side economics produced results which fell "so far short of what it promised", describing the supply-side theory as "free lunches".

Clinton years

The chart shows average federal tax rates paid by various levels of the income distribution. During the Clinton era, taxes on upper incomes were higher than during the Reagan era. Paul Krugman argued how higher taxes on higher income persons, combined with higher job creation under Clinton, represented a counter-example of the supply-side tax-cut doctrine. Krugman linked his own version of this chart to the preceding article, illustrating the average tax rate of the top 1%.

Clinton signed the Omnibus Budget Reconciliation Act of 1993 into law, which raised income taxes rates on incomes above $115,000, created additional higher tax brackets for corporate income over $335,000, removed the cap on Medicare taxes, raised fuel taxes and increased the portion of Social Security income subject to tax, among other tax increases. Frankel and Orszag described the “progressive fiscal conservatism" of the 1993 package: "Such progressive fiscal conservatism combines modest attempts at redistribution (the progressive component) and budget discipline (the fiscal conservative component). Thus the 1993 package included significant spending reductions and tax increases. But it concentrated the tax increases on upper-income taxpayers, while substantially expanding the Earned Income Tax Credit, Head Start, and other government programs aimed at lower earners." The tax increases led to greater revenue (relative to a baseline without a tax increase).

The bill was strongly opposed by Republicans, vigorously attacked by John Kasich and Minority Whip Newt Gingrich as destined to cause job losses and lower revenue.

Economist Paul Krugman wrote in 2017 that Clinton's tax increases on the rich provided counter-example to the supply-side tax cut doctrine: "Bill Clinton provided a clear test, by raising taxes on the rich. Republicans predicted disaster, but instead the economy boomed, creating more jobs than under Reagan."

Supply-side economist Alan Reynolds argued that the Clinton era represented a continuation of a low tax policy (from the 1980s):

In reality, tax policy was not unambiguously better in the eighties than in the nineties. The highest income tax rate was 50 percent from 1983 to 1986, but below 40 percent after 1993. And the capital gains tax was 28 percent from 1987 to [1997], but only 20 percent in the booming years of 1997-2000. On balance, there were good and bad things about both periods. But both the eighties and the nineties had much wiser tax policies than we had from 1968 to 1982.

Kansas experiment

In May 2012, Sam Brownback, Governor of the state of Kansas, signed into law the "Kansas Senate Bill Substitute HB 2117", which cut the number of individual income tax brackets from three to two, and cut the top income tax rates from 6.45% and 6.25% to 4.9% and the bottom rate from 3.5% to 3%. It also eliminated the 7% tax on "pass-through" income, income that businesses — such as sole proprietorships, partnerships, limited liability companies, and subchapter S corporations — pass on to their owners instead of paying corporate income tax on, for the owners of almost 200,000 businesses The law cut taxes by US$231 million in its first year, and cuts were projected to increase to US$934 million annually after six years.

The cuts were based on model legislation published by the conservative American Legislative Exchange Council (ALEC), and were supported by The Wall Street Journal, supply-side economist Arthur Laffer, economics commentator Stephen Moore and anti-tax leader Grover Norquist. The tax cuts have been called the "Kansas experiment", and was described by the Brookings Institution as "one of the cleanest experiments for how tax cuts effect economic growth in the U.S."

Brownback compared his tax cut policies with those of Ronald Reagan, but also described them as "a real live experiment ... We'll see how it works.", Brownback forecast his cuts would create an additional 23,000 jobs in Kansas by 2020, and was intended to generate rapid economic growth, which he said would be "like a shot of adrenaline into the heart of the Kansas economy." On the other hand, the Kansas Legislature's research staff warned of the possibility of a deficit of nearly US$2.5 billion by July 2018.

By 2017, state revenues had fallen by hundreds of millions of dollars causing spending on roads, bridges, and education to be slashed, but instead of boosting economic growth, growth in Kansas remained consistently below average. A working paper by two economists at Oklahoma State University (Dan Rickman and Hongbo Wang) using historical data from several other states with economies structured similarly to Kansas found that the Kansas economy grew about 7.8% less and employment about 2.6% less than it would have had Brownback not cut taxes. In 2017, the Republican Legislature of Kansas voted to roll back the cuts, and after Brownback vetoed the repeal, overrode his veto.

According to Max Ehrenfreund, economists generally agree that an explanation for the reduction instead of increase in economic growth from the tax cuts is that "any" benefits from tax cuts come over the long, not short run, but what does come in the short run is a major decline in demand for goods and services. In the Kansas economy cuts in state government expenditures cut incomes of state government "employees, suppliers and contractors" who spent much or most of their incomes locally. In addition, concern over the state's large budget deficits "might have deterred businesses from making major new investments".

One problem Kansas encountered is that while studies have shown that tax cuts increase economic growth, the increased revenue from that growth at the new lower tax rates are only enough to make up for 10-30% of the tax cuts, meaning that to avoid deficits, spending cuts must also be made.

Trump years

Supply-side advocates Laffer and economics commentators Stephen Moore and Larry Kudlow played prominent roles in formulating Trump’s economic policies by advising him on his tax cut, as well as encouraging him to lower trade barriers. Laffer and Moore wrote a 2018 book about the policy, Trumponomics, with a foreword by Kudlow. Economist Gregory Mankiw reviewed the book in Foreign Affairs, and characterized the statements around Trump's policies as "snake-oil economics". He criticized the authors for un-apologetically parroting the president's claimed annual growth rates spawned by his tax cut to be 1-4%, when the highest reasonable estimates were around 0.5%, but also credits them for continuing to support the consensus view that free trade is good for all, against the president's mercantilist views. He also criticized them for following a simplistic "economic growth will solve all problems" approach, when previous presidential economic advisors had been more nuanced, recognizing the unavoidable tradeoff between equity and efficiency in their approaches to managing the economy.

Trump implemented individual and corporate income tax cuts which took effect in 2018. Rutgers economics professor Farrokh Langdana claimed that the Trump tax cuts were an example of supply-side tax policy, citing a letter from economists long-associated with the supply-side theory describing them as such.

Fiscal policy theory

One benefit of a supply-side policy is that shifting the aggregate supply curve outward means prices can be lowered along with expanding output and employment. This is in contrast to demand-side policies (e.g., higher government spending), which even if successful tend to create inflationary pressures (i.e., raise the aggregate price level) as the aggregate demand curve shifts outward. Infrastructure investment is an example of a policy that has both demand-side and supply-side elements.

Supply-side economics holds that increased taxation steadily reduces economic activity within a nation and discourages investment. Taxes act as a type of trade barrier or tariff that causes economic participants to revert to less efficient means of satisfying their needs. As such, higher taxation leads to lower levels of specialization and lower economic efficiency. The idea is said to be illustrated by the Laffer curve.

Supply-side economists have less to say on the effects of deficits and sometimes cite Robert Barro’s work that states that rational economic actors will buy bonds in sufficient quantities to reduce long-term interest rates.

Effect on economic growth and tax revenues

Bruce Bartlett stated in 2007 that "The original supply-siders suggested that some tax cuts, under very special circumstances, might actually raise federal revenues. ... But today it is common to hear tax cutters claim, implausibly, that all tax cuts raise revenue."

Some contemporary economists do not consider supply-side economics a tenable economic theory, with Alan Blinder calling it an "ill-fated" and perhaps "silly" school on the pages of a 2006 textbook. Greg Mankiw, former chairman of President President George W. Bush's Council of Economic Advisers, offered similarly sharp criticism of the school in the early editions of his introductory economics textbook. "Tax cuts rarely pay for themselves. My reading of the academic literature leads me to believe that about one-third of the cost of a typical tax cut is recouped with faster economic growth."

In a 1992 article for the Harvard International Review, James Tobin wrote: "The 'Laffer curve' idea that tax cuts would actually increase revenues turned out to deserve the ridicule."

Karl Case and Ray Fair wrote in Principles of Economics, "The extreme promises of supply-side economics did not materialize. President Reagan argued that because of the effect depicted in the Laffer curve, the government could maintain expenditures, cut tax rates, and balance the budget. This was not the case. Government revenues fell sharply from levels that would have been realized without the tax cuts."

Supply side proponents Trabandt and Uhlig argue that "static scoring overestimates the revenue loss for labor and capital tax cuts" and that "dynamic scoring" is a better predictor for the effects of tax cuts.

A 1999 study by University of Chicago economist Austan Goolsbee examined major changes in high-income tax rates in the United States from the 1920s onwards. It concluded that there were only modest changes in the reported income of high-income individuals, indicating that the tax changes had little effect on how much people work. He concluded that the notion that governments could raise more money by cutting rates "is unlikely to be true at anything like today's marginal tax rates." In 2015, one study found that in the past several decades, tax cuts in the U.S. seldom recouped revenue losses and had minimal impact on GDP growth.

A 2008 working paper found that in the case of Russia, "tax rate cuts can increase revenues by improving tax compliance."

The New Palgrave Dictionary of Economics reports that estimates of revenue-maximizing tax rates have varied widely, with a mid-range of around 70%. According to a 2012 study, "the U.S. marginal top [tax] rate is far from the top of the Laffer curve." A 2012 survey found a consensus among leading economists that reducing the US federal income tax rate would raise GDP but would not increase tax revenue.

John Quiggin distinguishes between the Laffer curve and Laffer's analysis of tax rates. The Laffer curve was "correct but unoriginal", but Laffer's analysis that the United States was on the wrong side of the Laffer curve "was original but incorrect."

1920s tax cuts

Proponents of supply-side economics have sometimes cited tax cuts enacted in the 1920s as evidence that tax cuts can increase tax revenue. After World War I, the highest tax bracket, which was for those earning over $100,000 a year (worth at least $1 million a year now), was over 70 percent. According to The Heritage Foundation, revenue acts of 1921, 1924 and 1926 reduced this tax rate to less than 25 percent, yet tax revenues actually went up significantly. Tax historian Joseph Thorndike argues that the tax cuts helped "bolster" growth but did not "cover the full cost of those tax cuts".

Revenue Act of 1964

Proponents of supply-side economics sometimes cite tax cuts enacted by President Lyndon B. Johnson with the Revenue Act of 1964. John F. Kennedy had the year prior advocated a drastic tax-rate cut in 1963 when the top income tax rate was 91%, arguing that "[t]ax rates are too high today and tax revenues too low, and the soundest way to raise revenues in the long run is to cut rates now". The CBO concluded in 1978 that the tax cuts reduced tax revenue by $12 billion and that only between $3 billion to $9 million were recaptured due to bolstered economic growth. According to the CBO, "most of this rise [in revenues] was due to economic growth that would have taken place even without the tax cut."

At the same time, some studies have found a relatively robust response to tax cuts from the top 5% of tax returns. There has been identified an increase of 7.7% in revenues from the top 5%, from $17.17 billion US in 1963 to $18.49 billion in 1965. Hereby, the data have provided evidence that the group has been in the prohibitive part of the Laffer curve, because its input to total tax revenues have increased despite the tax rates decreasing significantly.

Reaganomics

Ronald Reagan gives a televised address from the Oval Office, outlining his plan for tax reductions in July 1981

Supply-siders justified Reagan's tax cuts during the 1980s by claiming they would result in net increases in tax revenue, yet tax revenues declined (relative to a baseline without the cuts) due to Reagan's tax cuts, and the deficit ballooned during Reagan's term in office. The Treasury Department studied the Reagan tax cuts and concluded they significantly reduced tax revenues relative to a baseline without them. The 1990 budget by the Reagan administration concluded that the 1981 tax cuts had caused a reduction in tax revenue.

Both CBO and the Reagan Administration forecast that individual and business income tax revenues would be lower if the Reagan tax cut proposals were implemented, relative to a policy baseline without those cuts, by about $50 billion in 1982 and $210 billion by 1986. FICA tax revenue increased because in 1983 FICA tax rates were increased from 6.7% to 7% and the ceiling was raised by $2,100. For the self-employed, the FICA tax rate went from 9.35% to 14%. The FICA tax rate increased throughout Reagan's term and rose to 7.51% in 1988 and the ceiling was raised by 61% through Reagan's two terms. Those tax hikes on wage earners, along with inflation, were the source of revenue gains in the early 1980s.

It has been contended by some supply-side critics that the argument to lower taxes to increase revenues was a smokescreen for "starving" the government of revenues in the hope that the tax cuts would lead to a corresponding drop in government spending, but this did not turn out to be the case. Paul Samuelson called this notion "the tape worm theory—the idea that the way to get rid of a tape worm is [to] stab your patient in the stomach".

There is frequent confusion on the meaning of the term "supply-side economics" between the related ideas of the existence of the Laffer Curve and the belief that decreasing tax rates can increase tax revenues. Many supply-side economists doubt the latter claim while still supporting the general policy of tax cuts. Economist Gregory Mankiw used the term "fad economics" to describe the notion of tax rate cuts increasing revenue in the third edition of his 2007 Principles of Macroeconomics textbook in a section entitled "Charlatans and Cranks":

An example of fad economics occurred in 1980, when a small group of economists advised Presidential candidate, Ronald Reagan, that an across-the-board cut in income tax rates would raise tax revenue. They argued that if people could keep a higher fraction of their income, people would work harder to earn more income. Even though tax rates would be lower, income would rise by so much, they claimed, that tax revenues would rise. Almost all professional economists, including most of those who supported Reagan's proposal to cut taxes, viewed this outcome as far too optimistic. Lower tax rates might encourage people to work harder and this extra effort would offset the direct effects of lower tax rates to some extent, but there was no credible evidence that work effort would rise by enough to cause tax revenues to rise in the face of lower tax rates. [...] People on fad diets put their health at risk but rarely achieve the permanent weight loss they desire. Similarly, when politicians rely on the advice of charlatans and cranks, they rarely get the desirable results they anticipate. After Reagan's election, Congress passed the cut in tax rates that Reagan advocated, but the tax cut did not cause tax revenues to rise.

In 1986, Martin Feldstein — a self-described "traditional supply sider" who served as Reagan's chairman of the Council of Economic Advisors from 1982 to 1984 — characterized the "new supply siders" who emerged circa 1980:

What distinguished the new supply siders from the traditional supply siders as the 1980s began was not the policies they advocated but the claims that they made for those policies ... The "new" supply siders were much more extravagant in their claims. They projected rapid growth, dramatic increases in tax revenue, a sharp rise in saving, and a relatively painless reduction in inflation. The height of supply side hyperbole was the "Laffer curve" proposition that the tax cut would actually increase tax revenue because it would unleash an enormously depressed supply of effort. Another remarkable proposition was the claim that even if the tax cuts did lead to an increased budget deficit, that would not reduce the funds available for investment in plant and equipment because tax changes would raise the saving rate by enough to finance the increased deficit ... Nevertheless, I have no doubt that the loose talk of the supply side extremists gave fundamentally good policies a bad name and led to quantitative mistakes that not only contributed to subsequent budget deficits but that also made it more difficult to modify policy when those deficits became apparent.

Bush tax cuts

During his presidency, President Bush signed the Economic Growth and Tax Relief Reconciliation Act of 2001 and Jobs and Growth Tax Relief Reconciliation Act of 2003, which entailed significant tax cuts. In 2003, the Congressional Budget Office conducted a dynamic scoring analysis of tax cuts advocated by supply advocates, and found that the Bush tax cuts would not pay for themselves. Two of the nine models used in the study predicted a large improvement in the deficit over the next ten years resulting from tax cuts, but only by making the assumption that people would work harder from 2004 to 2014 because they believed that tax rates would increase again in 2014, and they wanted to make more money before the tax cuts expired.

In 2006, the CBO released a study titled "A Dynamic Analysis of Permanent Extension of the President's Tax Relief". This study found that under the best possible scenario making tax cuts permanent would increase the economy "over the long run" by 0.7%. This study was criticized by many economists, including Harvard Economics Professor Greg Mankiw, who pointed out that the CBO used a very low value for the earnings-weighted compensated labor supply elasticity of 0.14. In a paper published in the Journal of Public Economics, Mankiw and Matthew Weinzierl noted that the current economics research would place an appropriate value for labor supply elasticity at around 0.5.

The Congressional Budget Office (CBO) estimated that extending the Bush tax cuts beyond their 2010 expiration would increase the deficit by $1.8 trillion over 10 years. The CBO also completed a study in 2005 analyzing a hypothetical 10% income tax cut and concluded that under various scenarios there would be minimal offsets to the loss of revenue. In other words, deficits would increase by nearly the same amount as the tax cut in the first five years with limited feedback revenue thereafter.

Nobel laureate economist Milton Friedman agreed the tax cuts would reduce tax revenues and result in intolerable deficits, though he supported them as a means to restrain federal spending. Friedman characterized the reduced government tax revenue as "cutting their allowance".

Douglas Holtz-Eakin was a Bush administration economist who was appointed director of the Congressional Budget Office in 2003. Under his leadership, the CBO undertook a study of income tax rates which found that any new revenue from tax cuts paled in comparison to their cost.

Dartmouth economics professor Andrew Samwick was the chief staff economist for the Bush Council of Economic Advisers from July 2003 to July 2004. Writing on his blog in 2007, Samwick urged his former colleagues in the Bush administration to avoid asserting that the Bush tax cuts paid for themselves, because "No thoughtful person believes it...Not a single one."

Trump tax cuts

The New York Times reported in November 2018 that the Trump tax overhaul "has fattened the paychecks of most American workers, padded the profits of large corporations and sped economic growth." Cautioning that "its still early but ten months after the law took effect, the promised 'supply side' bump is harder to find than the sugar-high stimulus." The writers explained that "It's highly unusual for deficits...to grow this much during periods of prosperity" and that "the fiscal health of the U.S. is deteriorating fast, as revenues have declined sharply" (nearly $200 billion or about 6%) relative to the CBO forecast prior to the tax cuts. Results for 2018 included:

  • Contrary to claims the tax cuts would pay for themselves, the budget deficit rose to $779 billion in fiscal year 2018, up 17% versus the prior year.
  • Corporate tax revenues were down by one-third in fiscal year 2018.
  • Stock buyback activity increased significantly.
  • GDP growth, business investment and corporate profits increased.
  • A typical worker in a large company got a $225 raise or one-time bonus, due to the law.
  • Real wage growth (adjusted for inflation) was slightly slower in 2018 than 2017.

Analysis conducted by the Congressional Research Service on the first-year effect of the tax cut found that little if any economic growth in 2018 could be attributed to it. Growth in GDP, employment, worker compensation and business investment slowed during the second year following enactment of the tax cut, prior to the emergence of the COVID-19 pandemic.

Following the Trump tax cut, top White House economic advisor Larry Kudlow falsely asserted that federal revenues had increased about 10% since the tax cut, though they had actually declined. He also falsely asserted that the CBO had found the "entire $1.5 trillion tax cut is virtually paid for by higher revenues and better nominal GDP."

Effect on income inequality

Income inequality can be measured both pre- and after-tax. There is no consensus on the effects of income tax cuts on pre-tax income inequality, although one 2013 study indicated a strong correlation between how much top marginal tax rates were cut and greater pre-tax inequality across many countries.

For example, the Tax Policy Center evaluated a detailed supply-side tax cut proposal from presidential candidate Jeb Bush in 2015. Their conclusion was that the proposal would both increase deficits dramatically and worsen after-tax income inequality.

Criticism

Supply side economics has been criticised for benefiting high income earners, as graph shows the change in top 1% income share against the change in top income tax rate from 1975–1979 to 2004–2008 for 18 OECD countries: the correlation between increasing income inequality and decreasing top tax rates is very strong

Critics of supply-side policies emphasize the growing federal deficits, increased income inequality and lack of growth. They argue that the Laffer curve only measures the rate of taxation, not tax incidence, which may be a stronger predictor of whether a tax code change is stimulative or dampening.

Writing in 2010, John Quiggin said, "To the extent that there was an economic response to the Reagan tax cuts, and to those of George W. Bush twenty years later, it seems largely to have been a Keynesian demand-side response, to be expected when governments provide households with additional net income in the context of a depressed economy."

Cutting marginal tax rates can also be perceived as primarily beneficial to the wealthy, which some see as politically rather than economically motivated:

Back in 1980 George H. W. Bush famously described supply-side economics — the claim that cutting taxes on rich people will conjure up an economic miracle, so much so that revenues will actually rise — as "voodoo economic policy." Yet it soon became the official doctrine of the Republican Party, and still is. That shows an impressive level of commitment. But what makes this commitment even more impressive is that it’s a doctrine that has been tested again and again — and has failed every time...In other words, supply-side economics is a classic example of a zombie doctrine: a view that should have been killed by the evidence long ago, but just keeps shambling along, eating politicians’ brains.
Paul Krugman

Mr. David Stockman has said that supply-side economics was merely a cover for the trickle-down approach to economic policy—what an older and less elegant generation called the horse-and-sparrow theory: If you feed the horse enough oats, some will pass through to the road for the sparrows.
John Kenneth Galbraith

Studies, which have analysed the tax cuts in 2001 (EGTRRA), provided controversial conclusions: the decrease in taxes have provided a generally positive impact on the future output from the effect of the lower tax rates on human capital accumulation, private saving and investment, labor supply; however, the tax cuts have produced adverse effects such as higher deficits and reduced national savings. Thus, Gale and Potter (2002) concluded that these tax cuts could not affect the GDP levels in any significant way in the next 10 years.

Connected car

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