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Does Trickle Down Economics Work Or Not?

biff_poindexter

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Trump Officials Say Trickle-Down Economics Will Work For Tax Plan?Here's Why That's Wrong

From the article “The rising tide lifts all boats idea remains a popular GOP theory, namely that a tax cut for the very rich creates indirect benefits for the middle class and lower-class Americans.” Basically the more money the wealthy have the better for everyone.

I am not an expert on economics but a rising tide lifting all boats sounds like a pretty solid premise. In light of what Senator Rubio admitted earlier this week about the failure of the tax bill to deliver on what they claimed it would do so far -- trickle down economics is in the news again.

Is anyone here in favor of trickle down or do you oppose it?
 
Trickle down economics is just code for crony capitalism.

Which is corruption, not actual capitalism.
 

First off, no proponent of Supply-Side Economics (to my knowledge) has ever called it "Trickle Down Economics." Or if they do, they know little to nothing about the theory. "Trickle Down Economics" is what opponents of Supply Side economics called it. This would be like me starting up a thread straw-manning Demand-Side Economics and asking "Is anyone here in favor of Venezuelan Starvation Economics and thinks that it will work?"

Yes, supply side economics works. But here is the thing: It works to lower unemployment; it works to expand corporate profit; it works to do that because help private individuals keep more of their own money (whether a lot or a little) to invest their money where they believe it will do the most good to for them, rather than where the government believes it will do the most good for them. But, and here is the thing, it does nothing to cure deficits. I do not believe you can can cut taxes and keep spending at the same rate, and then claim with any degree of certainty that the future explosion of economic growth will make up for the ballooning debt.

Well, I take that back. You can claim that. But you would probably be lying through your teeth by doing so.
 
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a) a rising tide raises all boats is not a good metaphor for trickle down economics
b) trickle down suggests that a trickle down is an acceptable result and its not or it suggests that it is actually a trickle which it is not

We should rename it to something like "squeezing the last tiny bit down". Lets see if the GOP can sell Squeezing the last tiny bit down because that is what really happens.
 
Unfortunately since the GOP refused to support a reasonable reduction in the Corp Tax Rate, they turned what could have been sound tax policy into yet another round of whatever you want to call it.

The fact remains that they went too far. Cutting the nominal rate to 26% would have been just fine thank you. We are getting NOTHING, I repeat NOTHING for that last $600B of debt and deficit that results from going all the way to a nominal rate of 21%. We just took $600B and threw it down a rathole. That is the problem.
 

Do you know who coined the term "trickle down" economics? I certainly don't -- I thought the term "Voo-Doo" economics was the term meant to demonize this economic theory.
 
Felis Leo said:
Yes, supply side economics works.
Click to expand...

Great hallucination!

"This supply-side snake oil is peddled on the premise that when the wealthy do well, income gains trickle down to the middle class and everyone benefits from a growing economy. But that hasn’t happened—real median income has sharply decoupled from productivity gains in recent decades (particularly since 2000) and income gains have been incredibly concentrated at the top of the earnings distribution."
https://www.epi.org/blog/supply-side-abject-failure/

Those crazie Commies at Bloomberg say:
"... but tax cuts and austerity -- even if they could both be accomplished at the same time -- are policies with very little promise. To boost growth, the U.S. should look to other policies, like better infrastructure, stronger antitrust enforcement and more investment in research and technology."
https://www.bloomberg.com/view/articles/2017-08-01/supply-siders-still-push-what-doesn-t-work

There are other problems with the idea, but since supply side is a religion, I don't think reality is going to interfere with your outlook.
 
If you have the balls to go out and earn a buck it works just fine.

I was right out of HS when Reagan took office. I saw an opportunity and ran with it with my first real business. I worked my ass off with 12 hour days 6 days or more a week, but after 16 years I was in great shape. The economy turning around brought me the comfortable lifestyle I can afford today.

Other business owners had liquid assets to spoil themselves with, I took advantage of their need for being spoiled and made out well because of it.
 
late said:
Trickle down economics is just code for crony capitalism.

Which is corruption, not actual capitalism.
Click to expand...

You know, for 8 years we had "Trickle UP" Obamanomics, it didn't work.

The Reagan Supply side "trickle down" approach that Trump is loosely following, works.
 
Renae said:
1) You know, for 8 years we had "Trickle UP" Obamanomics, it didn't work.

2) The Reagan Supply side "trickle down" approach that Trump is loosely following, works.
Click to expand...

1) That doesn't make sense.

2) If you look at the facts, it worked in reverse.
 
lefty louie said:
Take my statement in it's entirety or not at all.
Click to expand...

There would be no point in doing so.

There is a point to observing that your comment had not a thing to do with economics.
 
late said:
There would be no point in doing so.

There is a point to observing that your comment had not a thing to do with economics.
Click to expand...

I don't think you understand economics then, I pointed out exactly how the trickle down thing worked out well for me, first hand insight.
 
In the context it being justification for one policy over another, it's 100% meant to confuse you. Don't fall for it. I will show you exactly where the trick is that they are trying to pull on you.

Here are two things anyone honest should largely be able to agree to (unless I screwed up of course). (see link below on what fiscal policy is if you don't believe me)

1. spending boosts the economy:
Significant government spending under most market conditions will have a significant positive effect on short-term economic growth (and possibly long-term, but debt is factored in long-term).
Tax cuts are essentially the same thing for this general notion.

2. Where you spend that money, has varied short-term and long-term effects on the economy, and the population in general.
This goes to the concept of a multiplier. For every dollar you spend in #1, how big of an impact will it have? Since it's generally above 1x, , then #1 is true that it's generally positive.

So spending boots the economy.
Spending on different areas, boosts the economy by different factors.

So when they pass tax cuts for the ultra-rich and corporations, they argue that this is good BECAUSE of trickle down economics. Which is absurd.
You can see that they are saying #2 - when they choose to enrich themselves primarily with government spending, this is good BECAUSE of #1, that any spending will in general boost the overall economy.

That's a complete and total mind-****. And the nation loses every time someone buys that nonsense.

Let's imagine investing in Wall Street and with the utlra-wealthy (via tax cuts primarily), boosts it 1.1x for every dollar. It improves 500K people's quality of life by 0.0001%.
Imagine each $1 invested into poor/middle class rebates/checks, boosts the economy by 1.5x. And it improves 50M people's quality of life measurably by say 20%.
Alternatively, investing $1 in national infrastructure (roads, bridges, parks, etc.), boosts it by 2x

Would you argue that we should primarily invest in the rich as a nation based on that?
No.
Maybe you would consider investing in outliers first (like crumbling roads or something that's obviously hurting), and then with the rest, consider a combination of short-term and long-term investment to help everyone the entire economy, short and long-term to some degree.
Yes?

(this does not say if we should be spending at all while running $666B deceits)


https://www.investopedia.com/ask/an...cal-policy-have-multiplier-effect-economy.asp
 
lefty louie said:
I don't think you understand economics then, I pointed out exactly how the trickle down thing worked out well for me, first hand insight.
Click to expand...

There is an inherent flaw in supply-side economic: if people are not confident about the state of the economy, they cut back on spending on the purchase of goods and services. If people stop purchasing goods and services, companies can’t earn a profit.
 

Agreed, but there is no doubt about the way people looked at the economy under Reagan as compared with Carter.
 
jnug said:
a) a rising tide raises all boats is not a good metaphor for trickle down economics
b) trickle down suggests that a trickle down is an acceptable result and its not or it suggests that it is actually a trickle which it is not.
Click to expand...
Yes, much more succinct than my long-winded explanation.

Trickle-down is good for 99.9% of people because they get a fraction of what the 0.1% get.
The wealthy/corporations obviously think that's acceptable, what's the big deal? I'll take my pie and give you crumbs. See? Everyone got a bit of pie! All is good!
 
lefty louie said:
Agreed, but there is no doubt about the way people looked at the economy under Reagan as compared with Carter.
Click to expand...

Reagan did not fully subscribe to supply side theory of economics though, if he dod he would not have increased government spending on military contracts.
 
Renae said:
You know, for 8 years we had "Trickle UP" Obamanomics, it didn't work.

The Reagan Supply side "trickle down" approach that Trump is loosely following, works.
Click to expand...

That's funny, it sure as **** got us out of the hole that W and his fellow fascist party left us in. How can you argue that it didn't work when you know damn well what the economy was doing when he took over and what it was doing when he passed it to Cheeto Bennito. Is there any amount of liberal success the right can't pretend away.

Once again, the superlative form of dumb is always shamelessly ready to prove it to everyone.
 
Unitedwestand13 said:
Reagan did not fully subscribe to supply side theory of economics though, if he dod he would not have increased government spending on military contracts.
Click to expand...

The military spending was his way of pumping trillions of borrowed money into the economy to put some lipstick on the fiscal pig his tax cuts created. When he cut taxes, it immediately sent the country into a recession and only his typical borrow and spend republican economic cover up created the appearance of prosperity. It was really the beginning of the end for our nation. He was a popular president against all rational fiscal thinking. People liked his presence and were too dumb to understand how horrible a person he was.
 
lefty louie said:
I don't think you understand economics then, I pointed out exactly how the trickle down thing worked out well for me, first hand insight.
Click to expand...

Once economist described that era as "flood up", not trickle down.

It's great that you did well.

But it has sweet f all to do with anything beyond your checkbook.
 
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