What do you think of trickle down economics?

Question

I want to know what you think of trickle down economics- essentially giving tax cuts to the rich in hopes that they will use the extra money to invest, spurring the economy, then the money eventually makes its way back down to the middle class, and beyond. It also holds that when investors are taxed more, they lose the will to invest/make money thus hurtin our economy.

I myself, can't seem to make much sense of it. The means is giving more money to the rich, the ends is getting money to the poorer. If thats the case, wouldn't giving money to the poor be more direct? A-la Bush's Stimulus?

Don't the rich already have enough income? I dont mean this in a snarky way- I mean that literally, don't they have enough income to do whatever the h**l they want with it, regardless of how much taxes they have? For example, half our nations money belongs to the richest 10% of Americans...I dont see how tax breaks on their income will effect their ability to invest.

Answer 1

This is what I think of trickle down economics:

Who wants a trickle? I want a flood.

Something to think about.

Warren Buffett is currently the richest man in the world according to Forbes magazine at net worth of $62 Billion.

That's $62,000,000,000. Billion with a 'B'.

If Warren Buffett lost 99% of all of his income. That's Ninety-Nine percent as in nearly all of pepperoni pizza in the pizza box, the gas tank is on E & running on fumes, there's only a little swallow of juice left in the carton.

If he lost this much he'd STILL be worth $620 Million. $620,000,000. Million with an 'M'.

So even after losing virtually ALL of his money he'd STILL be richer than nearly everybody on the planet. He'd be worth a little over half an Oprah. A little over half a billion. Richer than most entertainers, sports stars, and even CEOs. He would not begin to hurt for money.

As a matter of fact, money makes money since it is a momentum based system. He'd be able to restore that wealth due to the high wealth he already possesses.

A person whose income is $30,000 a year...if that person lost 99% of that money, they'd be worth....$300.

A person goes from middle class to homeless with a 99% cut. And what momentum are you really going to get out of $300?

See the critical flaw in trickle down economics?

Human beings are greedy creatures by nature. Nothing really trickles, ladies and gentlemen.

John Lucas

Answer 2

It's a nice theory, but in practice doesn't work.  The assumption is, as you say, the rich will increase their spending, thus sending more money into the economy.  However, in the age of global economy, there is no guarantee that the increased income of the wealthy is going into our economy as opposed to another market where goods may be acquired more cheaply or put into foreign investments that will not be taxed.  Essentially it hands additional income to those already at the top of the ladder and allows them to do with it what they will.  For it to work, those receiving the immediate benefit must act in good will toward those who supposedly receive the delayed benefit.  It's almost like a reverse pyramid scheme in some ways.

Answer 3

It did NOT work when Ronnie & DADDY tried it, it ain't gonna work under junior either.

Answer 4

Actually that "trickle down" DID GIVE EVERY TAX PAYING CITIZEN A TAX BREAK.  You will be shocked to see your tax increase when this bill expires.

That trickle down is to the big business that need money to create jobs, expand, pay health care, etc.  You tax business's whether big or small, you end up axing your own future you fool.

Answer 5

i never got to see any trickle of extra money coming in for odd jobs. actually the opposite is going on. everyone is tightening their grip on the money they got. I've lost the extra income i had for being a carrier. now we use the post office and now internal mail takes 2 or 3 days to deliver. time is money but not as much as paying me for gas. next time give to poor the money and we'll pay bills and the money is right back with the wealthy and the under class has more credit to run up. every one is happy.

Answer 6

Most of trickle-down economics is to give the tax cuts to the rich and mostly to corporations.  It is believed that when they get that money, they'll want to use it to make more money.  Some in investing in the stock market, but mostly in investing in their own businesses.  Either by expanding current businesses or creating new ones.

But since they need people to run these businesses, a whole bunch of new jobs are supposed to be created for the middle and poor classes to take.  Then everybody wins.

Its a good idea in theory, I even used to subscribe to it myself.  But I've seen it in action three times, and all three times the economy went way downhill.  Under Reagan, the stock market crashed in 1987.  And now under both President Bushes, we have been in recession.  Obviously there is a flaw in the plan.

I found some.  It is true that the corporation owners will create new businesses and expand old ones.  However, they still want to save money.  So they automate wherever they can, thus losing some jobs.  They hire as few people as possible and at as low a wage as they can get away with; thus limiting how many get a job and how much money they get.  They buy the cheapest materials they can get without risking a lawsuit for defective products (and sometimes they even go ahead and get that cheap), thus forcing their supplier companies to also limit jobs and pay (not that they wouldn't on their own).  Then they force their employees to put those materials together into a product as quickly as possible to limit overtime.

Then they sell that product on the market for as high a price as they can get away with.  So basically the employee, who is also the consumer, has little money to work with but has to constantly buy ever more expensive products.  And they are still the luckier ones, there are plenty who don't even get the low-paying jobs.

Eventually, it becomes too expensive to buy these things.  But the employee/consumer still needs much of these things.  So they do what they can to afford it.  Initially, they pay cash.  When they run low, they switch over to credit cards and run up that bill.  With the extremely high interest rates, that gets very expensive; and many have run up bills that are practically unpayable now because of how high they've gotten.  They still need money to pay for food and those bills, so they try to borrow it in loans.

But again, with low money they default on the loans.  So they try to borrow the money off their homes in mortgages.  But we remain without money, so they default there as well.  We have seen all of these things occur very recently; we have a credit crisis, a mortgage crisis, defaulted loan crisis.  Everything that I had predicted based on this has shown up.

Eventually they just learn to have to do without and quit buying.  The corporations don't understand why demand has dropped off, and instead of cutting prices and raising wages to counter the problem; they do the absolute worst thing they can do.  They try to save money by cutting wages and get profits again by RAISING prices.  This only makes the situations worse, much worse.  We also see that in rising inflation.

Eventually the corporations are able to put it together.  Unfortunately its almost always after the employee/consumer is out of money and the corporations can no longer make money off consumers.  So they start losing money because they can't sell anymore; and where do they get the money to give raises?  It's too late then, the damage is done.

Trickle-down economics was a nice idea.  It has some merit.  But its setup is perfectly designed to destroy our economy, not save it.

Instead, we must get money to those who will actually use it.  And that means tax cuts to the middle and lower classes.  They don't want money for money's sake; they want it to buy things.  So they will spend it; rather than corporations who want money itself because that is how they convince investors to invest in them.

So we cut taxes to the middle and poor classes.  We raise them on corporations (for a short time) and use that money to pay down the National Debt.  That will raise the value of the dollar as we no longer owe other countries.  That will also lower the cost of a barrel of oil, which is measured in dollars.  Its gone up because the dollar isn't worth as much, so it takes more of them to equal the same barrel of oil.  Raise the value of the dollar, and it takes fewer of them to equal the barrel of oil.  That also will lower prices at the pump, and for transportation of goods; which will lower prices all around.

But we cannot completely s***w the corporations.  Their goals may hurt the economy, but they do provide jobs.  We s***w them, we lose jobs and s***w the economy just as bad or worse.  So we get rid of taxes altogether on investment returns for those who invest in companies that stay in America.  This will encourage investment; since between a choice of putting money in a company that gets you a profit and you pay no taxes on that profit, or simply leaving it in a bank where you get very little back and you have to pay taxes on it--most will choose to make the profit with no taxes.  The corporations still get their money, but it will be from investors and not the government.  Then they can use it as they would have in trickle-down economics, and create new businesses and more jobs.

It will also encourage corporations to remain in America.  If they get more investments for staying here because of no taxes on investors; they'll want to stay where the money is.

And after the National Debt is paid off, and we actually stop increasing it with pointless wars and with wasteful spending, we can cut taxes to the corporations at that point.  Then they get the money again; but only after everyone else has been helped.  Everyone really does win then.

Answer 7

The trickle down concept does work but its slow.  The optimum is to eliminate taxes altogether and then there would be no reason to give anything back because nothing was stolen (and I mean stolen).  Actually the tax breaks to the rich won't really help because the rich are smart enough to avoid taxation legally - how the h**l do you really think they got rich.

Answer 8

i just really wish that everyone could do away with social and financial status.  that would end all the high class low class B.S.

Answer 9

It makes perfect sense and the prosperity of 90s is a direct result of trickle down policies from the Reagan adminstration in the 80s.  The problem is that people actually expect the economy to improve RIGHT NOW and fail to realize that it can take years for policies to have the long term effects they were designed to have.  

Here is the way I look at it............you can raise taxes on corporations, punish them for doing so well, and maybe seeing a temporary spike in tax revenue.....OR.....you can lower taxes on corporations, make it easier for them to do business, make it easier for them to grow and hire more people, and as their revenues go up so does the tax revenue that they pay.  

BOTTOM LINE:  I would rather have 10% of a million than 20% of a hundred thousand.  But that's not how the democrats in Washington see it.

Answer 10

How?

With the Highway men with the mask?

With non-existence rights on tribe of original descendant?

With fringe benefits of 30% equity rights on everything in life off the land?

With oppression and slavery in idol worshiping the dead Mummy with whiff of rotten stench of empty skeleton of skull and bones with two empty eye sockets of failures and horrors of the past from the graveyards of different ghostly ancestor's culture and custom as cheap-skate glory of success of National identity.

In short-changing, conning and deceiving little children in broad daylights with self lack of knowledge ?

Luke 6.39-40,41-45,46-49

What do you think?

Answer 11

It's not about money. It's all about power, and the thrill of entertainment, using real humans making real screams as they did in the Coliseum in Rome.

Perhaps it's time you studied your history. It's returning soon.

http://www.youtube.com/watch?v=s27Ilv84b...

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