What is the trickle down theory ( in economy)?

Question

What is the trickle down theory ( in economy)?

Answer 1

That is basically what happened in 90's from reforms in the 80's.  People used to be taxed at 70% when considered rich... .the tax reliefs meant they had about 30% more money to invest, spend etc.  It gave incentives for people to work a bit more and gain more.  

that money  invested provides jobs, new biz etc and that means more money for those without money.  

In other words the benefits trickle down the ladder.

I haven't read wilkepedia's stuff but here is link

http://en.wikipedia.org/wiki/Trickle-dow...

Answer 2

The theory that wealth trickles downward from the corporate world to the laborers through more jobs.  It's also called Reaganomics because he was an advocated of supply side economics that started from the top down.  Boost wall street to eventually help main street.  In reality it's more like this though.  Most housing is directed at the upper-middle class, who then occupy it for two decades, before it's worn out and trickles down to become a lower class neighborhood.  Then when prices are low enough, wealthy young people looking for deals come back and buy out the neighborhood and renovate, kicking all the poor people into the next neighborhood to trickle down to them.  It makes sense, we don't have to target housing to the poor, because there's so many 20 to 30 year old ones available to them when we keep helping the wealthy....

Answer 3

Love your answer Che...In a nutshell it means steal from the poor, give to the rich.  I refer to it as reaganomics because he was the bozo who implemented it in the 80's and our economy has never been the same.  Do you know before the 80's, it only took 1 paycheck to run a household? And yes that included a wife children and two cars.

Answer 4

"trickle-down theory," is a term used in political rhetoric to classify economic policies perceived to benefit the wealthy and then "trickle-down" to the middle and lower classes. The theory states that if the top income earners invest more into the business infrastructure and equity markets, it will in turn lead to more goods at lower prices, and create more jobs for middle and lower class individuals. This sentiment is captured in John F. Kennedy's argument, "a rising tide floats all boats". Proponents argue economic growth flows down from the top to the bottom, indirectly benefiting those who do not directly benefit from the policy changes. However, others have argued that "trickle-down" policies generally do not work, and that the trickle-down effect might be very slim.