The assumption behind the theory of supply-side economics is that businesses would use excess capital (money) to hire more workers.
In Reaganomics businesses would receive large tax cuts, which would leave them with more capital (money). After that, the businesses would use this money in order to hire more workers. These workers would then be able to make more products/goods and also would be able to buy more goods themselves since they would have a steady income.
No, it is not illegal. Actually a lot of schools around the world use this as a method of punishment. In some schools there are not even janitors the kids have to clean the school themselves punishment or not.
