Sorting out the many hues of supply-side economics

''Reagan still believes in voodoo,'' declared a headline in Wednesday's Atlanta Constitution.

The accompanying article argued that President Reagan, by holding fast to his economic programs, was espousing supply-side economics - ''voodoo'' in George Bush's famous pre-election phrase.

Much of the media, the public, and Congress have used the term supply-side economics as a synonym for Reagonomics.

But supply siders, attending a conference sponsored by the Atlanta Federal Reserve Bank, paint a picture of their economics that is somewhat different than the public image. Supply-side theory is not new, many noted. It is not fairly represented by exotic theories such as the Laffer curve.

And, most surprisingly, it is not synonymous with Reagonomics.

Supply side's theory holds that high marginal tax rates are a weight on the back of the economy. Slash the rates and business will bound ahead. The extreme version, promulgated by economist Arthur Laffer and shown graphically in the ''Laffer curve,'' holds that tax revenues will quickly surge ahead far enough to offset the tax cut. But supply siders say last year's tax cut was offset by inflation-induced bracket creep.

''We have yet to see a dramatic reduction in personal income tax rates,'' said Rep. Jack Kemp (R) of New York, a staunch supply sider, in a short interview.

''It's hard to believe, but the tax burden on the economy is higher now than it was under Jimmy Carter,'' Mr. Kemp said.

And, unlike jellybeans, supply-side theories are not sweeping the nation's capital. ''I happen to be in a minority, at least in some of the policymaking circles in Washington,'' said Representative Kemp.

Murray Wiedenbaum, chairman of the Council of Economic Advisers, continued an effort to put distance between the administration and the fringe of supply-side theory. In an obvious reference to the Laffer curve, Mr. Wiedenbaum told the conference, ''from the outset the Reagan administration has proceeded on the assumption that there was no free lunch.''

''Our published estimates always showed that revenues from the reduced tax rates we were proposing would not be as large as the revenues from the pre-existing higher tax rates that then were facing us,'' said Mr. Wiedenbaum.

In other words, an unshackled economy does not instantly expand and provide new riches in tax revenues.

Mr. Kemp and other supply siders here agree that a Laffer-curve policy is not a panacea. But they say the real issue is not the speed and power of the economy's response to a tax cut - it is whether there is any response at all.

''There is a law of diminishing return. That's all Laffer was trying to say, '' Mr. Kemp later told the conference. ''We can debate from now to the end of time where we are on that curve. Tax reform was absolutely essential in this country. It still is.''

The need for reduction in marginal tax rates is something all supply siders agree on. High taxes, they say, have taken away much of our incentive to produce wealth. But beyond that central theory consensus begins to break down, this conference showed. No two supply siders agree on exactly what their economics entails. Some say their discipline fits nicely with monetarism, which stresses keeping money-supply growth stable and modest so prices will stay stable. Others say monetarism is a failure, an unstable crone of a theory that clashes with their own beliefs.

Some push for a return to some form of gold standard, because they want an inanimate anchor for the money supply.

A monetarist, Virginia Polytechnic Institute economist David Meiselman, proposed another anchor: Tell the Fed to clamp down even harder. Set money supply growth at zero. Gross national product growth will be fueled by the increase in the speed with which money moves around - that is, its velocity.

This ''would add a most welcome note of certainty to all markets, drive down interest rates now, eliminate inflation, stabilize the economy, and prevent government from using inflation as a tax collector,'' said Mr. Meiselman. ''Supply siders, to their credit, have emphasized many of the old tools and truths of economics.''