Does Trickle Down Economics work?

[Dans La Lune]

- Tax Cuts for the Rich
- Deregulation
- Cut Social Spending

The theory goes that if you give everything to the rich, their pockets won't be able to hold it all. And that if you stand beneath their pockets, you'll get the spill over.

 

[ataraxia]

This is not some controversial thing at this point. It's like asking people's opinions on if the measles vaccine is safe and effective or if the Earth is round. Trickle down economics has been definitively debunked through extensive observations and experience. There are not too many things that economists agree on or are well-established, but the law of supply and demand and the idea that there is no trickle down effect from accumulated wealth at the top are two which are.

From ChatGPT:

What the evidence shows:​

1.​

• Studies from organizations like the OECD, IMF, and various academic economists have shown that cutting taxes for the wealthy does not significantly increase GDP growth, investment, or job creation.
• In fact, a 2020 paper published in the American Economic Review looked at 50 years of data in 18 wealthy countries and found no significant growth benefit from major tax cuts for the rich.

2.​

• Trickle-down policies tend to increase income and wealth inequality. The benefits disproportionately go to top earners, while wages and living standards stagnate for the middle and lower classes.
• The IMF in 2015 concluded: “If the income share of the top 20 percent increases, then GDP growth actually declines over the medium term.”

3.​

• Reagan-era tax cuts in the 1980s did not produce the promised sustained boom; debt increased, inequality widened, and growth rates were not historically exceptional.
• Trump’s 2017 tax cuts disproportionately benefited corporations and the wealthy. While there was a short-term bump in investment, it did not lead to sustained wage growth or massive job creation.

---

What economists say:​

Most mainstream economists across the ideological spectrum agree that trickle-down economics lacks empirical support. Instead, demand-side approaches—like investing in infrastructure, healthcare, education, or putting money in the hands of lower- and middle-income earners—have stronger evidence for boosting economic activity.

---

In short:​

Yes, trickle-down economics has been widely discredited as a reliable policy framework for broad-based economic growth. While it may benefit the wealthy, there is little evidence that it helps the economy as a whole in the ways its advocates claim.

 

[Dans La Lune]

This theory has been definitively debunked. There are not too many things that economists agree on or are well-established, but the law of supply and demand and the idea that there is any trickle down effect from accumulated wealth at the top are two which are.

From ChatGPT:

What the evidence shows:​

1.​

• Studies from organizations like the OECD, IMF, and various academic economists have shown that cutting taxes for the wealthy does not significantly increase GDP growth, investment, or job creation.
• In fact, a 2020 paper published in the American Economic Review looked at 50 years of data in 18 wealthy countries and found no significant growth benefit from major tax cuts for the rich.

2.​

• Trickle-down policies tend to increase income and wealth inequality. The benefits disproportionately go to top earners, while wages and living standards stagnate for the middle and lower classes.
• The IMF in 2015 concluded: “If the income share of the top 20 percent increases, then GDP growth actually declines over the medium term.”

3.​

• Reagan-era tax cuts in the 1980s did not produce the promised sustained boom; debt increased, inequality widened, and growth rates were not historically exceptional.
• Trump’s 2017 tax cuts disproportionately benefited corporations and the wealthy. While there was a short-term bump in investment, it did not lead to sustained wage growth or massive job creation.

---

What economists say:​

Most mainstream economists across the ideological spectrum agree that trickle-down economics lacks empirical support. Instead, demand-side approaches—like investing in infrastructure, healthcare, education, or putting money in the hands of lower- and middle-income earners—have stronger evidence for boosting economic activity.

---

In short:​

Yes, trickle-down economics has been widely discredited as a reliable policy framework for broad-based economic growth. While it may benefit the wealthy, there is little evidence that it helps the economy as a whole in the ways its advocates claim.

If that's the case, you have to wonder why Republicans keep quintupling down on this theory (if they are indeed actually interested in helping the economy, rather than just hording power), and why MAGA voters believe it after all this time, having been the main recipients of its disastrous impact.

 

[MamboDervish]

Does Trickle Down Economics work?​

It certainly works for those guzzlers up top with a full bladder.

Personally, I'd rather be pissed off than pissed on.

 

[ataraxia]

If that's the case, you have to wonder why Republicans keep quintupling down on this theory (if they are indeed actually interested in helping the economy, rather than just hording power), and why MAGA voters believe it after all this time, having been the main recipients of its disastrous impact.

This is nothing. These poor fools are still chasing cat eating Haitians, cancer causing wind turbines, stolen presidential elections, looking at cavemen riding dinosaurs in their creationist museums, and fighting those autism-causing vaccines. They operate in an alternate virtual reality of bull$hit. Unfortunately, they are in charge. Doesn't make them educated or informed.

This is what they look like trying to operate in the real world, while wearing the VR headsets of all of the Koch brothers, Rupert Murdoch, and Trump lies. They are just hurting themselves, while those guys and the rest of the world just laugh at them. Unfortunately, they are hurting the rest of us too. It's like having a drunk driver wearing a VR headset as your Uber driver. Buckle up!

 

[Individual]

The tax code, the tax code.

 

[MamboDervish]

This is nothing. These poor fools are still chasing cat eating Haitians, cancer causing wind turbines, stolen presidential elections, looking at cavemen riding dinosaurs in their creationist museums, and fighting those autism-causing vaccines. They operate in an alternate virtual reality of bull$hit. Unfortunately, they are in charge. Doesn't make them educated or informed.

This is what they look like trying to operate in the real world, while wearing the VR headsets of all of the Koch brothers, Rupert Murdoch, and Trump lies. They are just hurting themselves, while those guys and the rest of the world just laugh at them. Unfortunately, they are hurting the rest of us too. It's like having a drunk driver wearing a VR headset as your Uber driver. Buckle up!

+1 .... Perfect

And we all thought digital analog was just an oxymoron.

 

[Peter]

If you give me $5T I won't suddenly go out and hire thousands of people.
Likewise if I give Apple and extra $1T in tax cuts they won't go out and hire thousands of extra staff or give huge pay rises to those they already employ they'll use the money to buy back stock and give the CEO a whacking great bonus.
The staff will maybe get a pizza party and a $5 gift card.

Woo Hoo, that rrillion dollars really trickled down to the common worker.

 

[Napoleon]

Of course it works. Working people receive paychecks don’t they?

 

[Peacenik]

If it really worked they would be talking it up instead of using all kinds of wedge issues to get poorly informed emotional voters.

'Oh, powerless immigrants have more control over the economy than the greedy rich and powerful!' /s

 

[What if...?]

- Tax Cuts for the Rich
- Deregulation
- Cut Social Spending

The theory goes that if you give everything to the rich, their pockets won't be able to hold it all. And that if you stand beneath their pockets, you'll get the spill over.

Nothing has ever “tricked down” from the rich that anybody would want to get on them.

 

[rahl]

Of course it works. Working people receive paychecks don’t they?

No, it doesn’t work. There has never been some magical increase in economic output when republicans try this. We have 4 decades of data showing this.

 

[What if...?]

If that's the case, you have to wonder why Republicans keep quintupling down on this theory (if they are indeed actually interested in helping the economy, rather than just hording power), and why MAGA voters believe it after all this time, having been the main recipients of its disastrous impact.

Propaganda is a helluva drug.

 

[Napoleon]

No, it doesn’t work. There has never been some magical increase in economic output when republicans try this. We have 4 decades of data showing this.

What we have is thousands of years of history demonstrating that selling product equals pay for the workers who made it from the entities profiting from those sales. That is trickledown economics.

 

[What if...?]

Of course it works. Working people receive paychecks don’t they?

Wouldn’t they have had to be compensated in order for business to get them to do literally anything? To make any money at all?

From time to time we hear someone say out loud that we should shut up and be grateful they have a job.

Somehow forgetting that if folks didn’t do the work and buy the output they wouldn’t have any money at all.

 

[rahl]

We we have is thousands of years of history demonstrating that selling product equals pay for the workers who made it from the entities profiting from those sales. That is trickledown economics.

No it isn’t. Trickle down economics is the theory of giving the rich more money and it magically trickles down to the peons. The economic data shows this never happens.

 

[Helix]

The national political direction is a bit like a steering wheel on a curvy, treacherous road. Sometimes it's time to adjust left, sometimes, right, and sometimes a swerve is in order. When you only steer hard in one direction, you go in circles and risk driving off of a cliff. It's not a perfect analogy, but you have to look at the road and the rearview and plan accordingly.

That being said, if the rates are extraordinarily high such as in a post war situation, then yes, trickle down will have a benefit. When almost all of the wealth is already going to the rich, it's not going to have the same benefit, and you need to look at demand side policies. This is somewhat intuitive.

 

[What if...?]

We we have is thousands of years of history demonstrating that selling product equals pay for the workers who made it from the entities profiting from those sales. That is trickledown economics.

No, it isn’t.

That’s just business.

No workers? Nothing is produced to sell.

No money to buy things? Nothing gets sold.

Nobody got rich all by themselves. Even if they found a pile of gold it’s just pretty metal if nobody has money to buy it from them.

 

[Grand Mal]

- Tax Cuts for the Rich
- Deregulation
- Cut Social Spending

The theory goes that if you give everything to the rich, their pockets won't be able to hold it all. And that if you stand beneath their pockets, you'll get the spill over.

You know that sign that used to be at the cash register of every diner in America- "If you're so smart, why aren't you rich?"
On the other side it says, "If you're so rich, you must be smart!"
Low-functioning rightists think wealthy people must be intelligent and they want to appear intelligent themselves by agreeing with them. That's why a rightist who loves to hunt and fish will oppose environmental issues and a rightist who twists wrenches for a living will be anti-union. And that's why crack-pot ideas like 'trickle-down economics' have legs. Because wealthy people convince low-functioning rightists to agree with them.

 

[Grand Mal]

Give a rich man $1000 and he'll say, "Thank you very much!" and add it to his stash. Give a poor man $1000 and he'll say, "Thank you very much!" and go out and spend it around the neighbourhood.

 

[antiquity]

- Tax Cuts for the Rich
- Deregulation
- Cut Social Spending

The theory goes that if you give everything to the rich, their pockets won't be able to hold it all. And that if you stand beneath their pockets, you'll get the spill over.

Actually it has in the past..however along with tax cuts congress and both parties n the past and present will just spend any savings gained. Trickle down from Reagan policies created a balanced budget during the Clinton administration.

 

[ataraxia]

Of course it works. Working people receive paychecks don’t they?

Getting a paycheck does not mean added GDP is trickling down.

What we have is thousands of years of history demonstrating that selling product equals pay for the workers who made it from the entities profiting from those sales. That is trickledown economics.

It doesn't work.

The Two Santas Strategy: How the GOP has used an economic scam to manipulate Americans for 40 years | Milwaukee Independent

www.milwaukeeindependent.com

Here is the graphs since we started gutting FDR's New Deal programs and instituting Ronald Reagan's trickle down. Show us where the trickle down is happening here:

 

[Gatsby]

Tax cuts for the rich generally do not benefit anyone else much, unless the current level of taxation is insanely high or insanely inefficient. (Aside from tariffs, our tax regime is not.) Conservatives sometimes like to cite JFK's tax cuts as an example of this working, but...the top marginal tax rate was 91% when JFK was president. I think most everyone agrees that that's too high. There just isn't that much benefit to cutting taxes on rich people from 37% to 35% or whatever. The tax cuts certainly will not pay for themselves, and with the interest payments on the monstrous deficits they create, they won't even produce much economic growth.

 

[Dans La Lune]

Actually it has in the past..however along with tax cuts congress and both parties n the past and present will just spend any savings gained. Trickle down from Reagan policies created a balanced budget during the Clinton administration.

Reagan tripled the debt and deficit with this tax cuts. Clinton balanced the budget through tax increases on the rich, gutting welfare, and due to the Dot Com Bubble of the 1990s (but had burst by the 2000s).

Bush Junior then enacted... *wait for it*...

TAX CUTS FOR THE RICH.

Next time, though... next time... Republicans will provide real benefit for the Middle Class.

 

[GIJane]

As my Granddaddy always said. "I ain't never been paid by a poor man"