Trickle-Down Economics

Caleb · Post by **Caleb** » 03 Nov 2006 06:23

With elections cropping up all over, many people are discussing the same issues that resurface every few months. One of which, is Trickle-Down Economics:

Don't tax the business owners and the rich (at least to a heavy degree) as they will spend their money and it will trickle-down to the poor.

Personally, I think this is a bunch of bull. It is in my experience that, if you give a wealthy person or a business owner some extra dough...they have no interest in trickling anything. They keep it, or invest it in themselves.

The classic arguement I've heard is- Picture a person with some extra money that wants to start a landscaping business. Alleviate them of their tax burdens. This allows the business to flourish and the owner will buy more leasure items and even hire more landscaping workers. The economy is safe another day. In theory this is all fine and good. In application, I picture something like this: No taxes to the business owner means that owners has a few extra bones to spend. Well why not put that money in a money market account or invest it in Microsoft? By the time retirement rolls around, this adds up and the landscaper is living the good life in the upper valley where he sips martinis and has other people to run his business for him. Sure, he hired a few extra hands to build a larger company; but most of the money he made is put in a trust fund for his son to go to an ivy league school and the only person that can afford to get his yard landscaped is the dean of Dartmoth College. So the business owner and the dean happily trade their money back and forth between tuition and landscaping bills for the entire campus...the poor guy panhandling on the corner can't eat because the largest manual labor company isn't looking for extra hands...and Bill Gates got a new favorite investor to invite to his annual golf outing.

Now, I can't imagine too many right-wingers are actually present on this forum. So I doubt we'll recieve too much of an arguement. But what does everyone think of this? Does Trickle-Down Economics actually have grounds to make this arguement? I think it's funny that you only hear a rich right-wing politician quote the Trickle-Down Effect while the poor tax payer thinks George Bush Sr. said it best when he affectionately named it "Voodoo Economics." Haha, do the rich just want more money? Or is the lower class too short-sighted to see the benefits of the cause?

...discuss.

PegLegHolly · Post by **PegLegHolly** » 03 Nov 2006 06:49

trickle down economics seems to be a lot like communism. in theory and on paper, it sounds good. and if there werent people who would take advantage of the situation, then it would work.

the problem is that the more freedom some people have, the more power they want.

business owners would take advantage of the trickle down thing. sooner or later the people with money would be only giving their money to other highly paid people. nothing will trickle down... and if any thing did, it would only be a trickle.

tax the people with more money and give that money to lower income families.

Iron Clad Ben · Post by **Iron Clad Ben** » 03 Nov 2006 07:08

Caleb, yeah I don't think you will find too many people here who will dissent with you here

IMNSHO Trickle-Down economics is one several clever ruses the right wing plays on the poor people of this country to keep their votes. Voting Republican for poor people goes directly against their economic interests yet they do it anyway because they're swayed by the moral issues like the death penalty and abortion. These people crap their pants in joy over a $300/year taxcut while the very rich save hundreds of thousands of dollars on the same bill, money that could have gone to social programs that would have helped the poor much more than a few hundreds bucks.

It's essentially government sponsored feudalism. It makes the rich richer and the poor doing just well enough to make ends meet.

There are plenty of other ways to give the lower class a help up instead of a hand out besides trying incentivitize rich people who will never give a damn. How about making public higher education more affordable? Teaching personal finance management in schools so these people aren't stuck in debt their whole lives? Lots of other good ideas at www.sinceslicedbread.com

Now you got me all riled up

Rock the Vote next week peoples!!!

BainbridgeShred · Post by **BainbridgeShred** » 03 Nov 2006 09:09

Wow, only three posts, and already so many stupid things said

I'm not even a supply sider.

The classic arguement I've heard is- Picture a person with some extra money that wants to start a landscaping business. Alleviate them of their tax burdens. This allows the business to flourish and the owner will buy more leasure items and even hire more landscaping workers. The economy is safe another day. In theory this is all fine and good. In application, I picture something like this: No taxes to the business owner means that owners has a few extra bones to spend. Well why not put that money in a money market account or invest it in Microsoft? By the time retirement rolls around, this adds up and the landscaper is living the good life in the upper valley where he sips martinis and has other people to run his business for him. Sure, he hired a few extra hands to build a larger company; but most of the money he made is put in a trust fund for his son to go to an ivy league school and the only person that can afford to get his yard landscaped is the dean of Dartmoth College. So the business owner and the dean happily trade their money back and forth between tuition and landscaping bills for the entire campus...the poor guy panhandling on the corner can't eat because the largest manual labor company isn't looking for extra hands...and Bill Gates got a new favorite investor to invite to his annual golf outing.

This analogy is terrible for many reasons, but mainly because in the example of what you think would happen, is actually a pretty good argument for supply siders in how their theory would help the economy. Rich people do invest their money more instead of just using it to open a business (Because rich people presumably already own a business to have money or some other cash cow), and investing it into Microsoft would be a very effective way to help the economy.

tax the people with more money and give that money to lower income families.

We're trying it, and if you think it's working, come to Seattle and walk around any of the lower income communities.

If anyone thinks this type of economic policy would work, I'd ask them why after the great society of LBJ the poor are still poor as shit.

If you think supply side economics only sounds good on paper, look at what you are proposing.

It's essentially government sponsored feudalism.

No it isn't. Not at all. You should really think things over before you spew them out.

Voting Republican for poor people goes directly against their economic interests yet they do it anyway because they're swayed by the moral issues like the death penalty and abortion.

Your opinion of poor people makes you sound very elitist. Yes, the poor could only want to vote republican over silly moral issues (I like the usage of the word "swayed"). It isn't like there have been dedaces of broken promises by democrats who manipulate the lower classes vote.

And really, how does voting republican go against a poor mans economic interest when the democrats have controlled congress for the last who knows long and he's still in the fucking projects. I really just hate all the emotionalism that goes into discusions like this, because people like Ben think just because democrats want to give away free shit to the poor that they want to take it with open arms, and should be praising the democrats like Robin Hood. I'm sorry Ben, but get some sense, and a realization that even poor people have pride, and might want to vote republican for any number of issues outside of being swayed by gay marriage or whatever the fuck example you used.

BainbridgeShred · Post by **BainbridgeShred** » 03 Nov 2006 09:11

Also, like I said, I am not a supply sider, I'm flat-taxer. Supply side economics wouldn't work with the current Socialistic policies we already have in place in this country. A flat tax is the only fair solution to our nations problems, and all levels of society would reap the benefits.

Of course, their is probably no chance in the near future of our country smartening up and doign away with the income tax.

Caleb · Post by **Caleb** » 03 Nov 2006 12:20

BainbridgeShred wrote:Wow, only three posts, and already so many stupid things said

Necessary? Wow. How old are you, openning a discussion like that?

BainbridgeShred · Post by **BainbridgeShred** » 03 Nov 2006 12:54

Is my age necessary?

Caleb · Post by **Caleb** » 03 Nov 2006 13:30

Kitty, put the claws away. I'm not trying to pick a fight here. I am just interested in hearing opinions on the above subject.

Take a second.........breathe......and just as I said before:

Discuss.

C-Fan · Post by **C-Fan** » 03 Nov 2006 15:08

BainbridgeShred wrote:
If anyone thinks this type of economic policy would work, I'd ask them why after the great society of LBJ the poor are still poor as shit.

.

And I'd answer: because the Great Society programs had all their funding taken away by the Vietnam War, and it wasn't like Nixon, Ford, or Reagan were looking to help out the poor.

BainbridgeShred · Post by **BainbridgeShred** » 03 Nov 2006 15:10

What are you talking about? The last three posts were clearly very erroneous, and I discussed the points as I saw fit. Then I asked if my age was neceisary to particpate in the discussion.

Kitty? Please just be quiet.

Iron Clad Ben · Post by **Iron Clad Ben** » 03 Nov 2006 15:35

Dan first off, before you even saying anything further, are you for or against Trickle Down economics? Because I don't think you made that very clear. Instead most of your posts were about attacking what other people said and veering off topic.

Fearburger wrote:This analogy is terrible for many reasons, but mainly because in the example of what you think would happen, is actually a pretty good argument for supply siders in how their theory would help the economy. Rich people do invest their money more instead of just using it to open a business (Because rich people presumably already own a business to have money or some other cash cow), and investing it into Microsoft would be a very effective way to help the economy.

Yes of course it would help the economy in general if people invest in Microsoft. But who benefits in general when the economy does better? Rich people. Because they have more money invensted in stocks, bonds and mutuals funds etc. How the heck is some guy who lives paycheck to paycheck, has no little or no savings, presumably a few K in credit card debt and does not own real estate going to benefit when the economy does better? So where is the Trickle-Down for some poor guy when some rich guy is collecting his dividends check from Microsoft?

BainbridgeShred wrote:
Iron Clad Ben (that's me) wrote: It's essentially government sponsored feudalism.
No it isn't. Not at all. You should really think things over before you spew them out.

Yes it is. You are incentivizing a rich person to employ "serfs" at possibly honorable but nevertheless low-paying jobs. The minimum wage is not a living wage, it's a disgrace.

BainbridgeShred wrote:
Iron Clad Ben (that's me) wrote:Voting Republican for poor people goes directly against their economic interests yet they do it anyway because they're swayed by the moral issues like the death penalty and abortion. Yes, the poor could only want to vote republican over silly moral issues (I like the usage of the word "swayed").
Looking back, you're probably right swayed isn't the right word. They are giving moral issues considerably more weight than economic issues. They have the right to vote for whoever they want to in America.
BainbridgeShred wrote:It isn't like there have been dedaces of broken promises by democrats who manipulate the lower classes vote.
All politicians are full of broken promises. That's not news to anyone here. Just so happens that Trickle Down economics is about the biggest broken promise that comes to mind. I'm very tempted to mention some others, but I don't want to go off topic.

BainbridgeShred wrote:I really just hate all the emotionalism that goes into discusions like this, because people like Ben think just because democrats want to give away free shit to the poor that they want to take it with open arms, and should be praising the democrats like Robin Hood.
You are right I may have been a little emotional when I said "swayed" but I think you jumped to conclusions about my stance on some of the finer points. I'm not proposing a Robin Hood solution of just giving hand outs to the poor, though some democrats seem to like that idea. I'm talking about using the money for social programs like subsidizing college tuition so more people can get educated and find higher paying jobs, teaching personal finance in schools so people are not in a cycle of debt that they can't break, another stuff to give the poor a hand up instead of a hand out (please excuse cheesy colloquialism, but there is a big difference).

BainbridgeShred wrote:I'm sorry Ben, but get some sense, and a realization that even poor people have pride, and might want to vote republican for any number of issues outside of being swayed by gay marriage or whatever the fuck example you used.

I'm sure poor people have their reasons for voting the way that they do and in America and they have that right. I'm not calling it stupid, and I'm not saying that poor people are stupid, but when they are voting Republican they are voting against their own economic interest. I realize they have pride, and I don't mean to belittle it, but I doubt that means they are so proud that they would rather look the other way they're screwed out of every opportunity they have to climb the economic ladder. They're choosing their personal moral values before their economic interests and makes perfect sense. As long as they realize that they are consciously voting against their economic interests then I can respect the decision. But for politicians to come up with some farce like "Trickle Down Economics" and trick the lower and middle classes into thinking they're getting some sort of good deal and voting in favor of their economic interests is a disgrace.

BainbridgeShred · Post by **BainbridgeShred** » 03 Nov 2006 16:03

I'm against supply side economics in the same way that I am against socialistic economic policies, which the US seems to want and try to balance. Like I said, I'm in favor of a flat tax, which would be used to provide a small police force, a small military, and also certainly some economic benefits for things you mentioned like helping out with college tuition ect.

but I doubt that means they are so proud that they would rather look the other way they're screwed out of every opportunity they have to climb the economic ladder. They're choosing their personal moral values before their economic interests and makes perfect sense. As long as they realize that they are consciously voting against their economic interests then I can respect the decision.

I fail to see how voting Republican is going against the lower classes economic interest, and I don't think this has been established in any way.

I have to leave, I'll respond to some of the other points later.

Scott · Post by **Scott** » 03 Nov 2006 16:43

I don't really know what exactly the trickle-down economics proposal is but I would probably agree with Dan that a flat tax is the best option.

I certainly don't agree with taxing the rich and business' more.

I think the reasoning behind lower taxes on business and the rich is that they generally invest the money and money invested is beneficial to the economy, i.e. it can create jobs. Whereas if you give more money to the poor they will probably just increase their credit card limit and send the country into more debt (I know thats a pretty extreme generalisation but thats what you use in macroeconomics).

To respond to a couple of points:

who benefits in general when the economy does better?

How the heck is some guy who lives paycheck to paycheck, has no little or no savings, presumably a few K in credit card debt and does not own real estate going to benefit when the economy does better?

When the economy does better everyone benefits in proportion to their claim on the national produce, of course the rich proportionally do better than the poor but everyone still benefits.

How everyone benefits

1. Unemployment rates drop as business expand
2. Wages rise as labour becomes harder to find
3. Total tax revenue increases

trickle down economics seems to be a lot like communism

Not really, communism is a perscriptive theory based on idealism not reality, whereas trickle-down economics is descriptive theory based on observation.

PegLegHolly · Post by **PegLegHolly** » 03 Nov 2006 18:47

Scott wrote:[quote="PegLegHolly]trickle down economics seems to be a lot like communism

Not really, communism is a perscriptive theory based on idealism not reality, whereas trickle-down economics is descriptive theory based on observation.[/quote][/quote]

I wasn't saying they were the same... i was saying that they are both theories but neither one of them will work due to people wanting power. on paper trickle down economics sounds awesome. but people have corrupt minds, whether they are rich or poor.

HighDemonslayer · Post by **HighDemonslayer** » 04 Nov 2006 10:51

I love threads that start out by somebody patting everybody on the back, saying that consensus has been reached, and the debate is over.

And to also set up any dissent as only extreme, crystal meth using, gay prostitute frequenting, right-wingers....

Trickle down econ. may have been bastardized into something else.

Taxation is power, and placing most of the tax burden at the top could have bad consequences (that I see starting to occur now).

More later....

-n

HighDemonslayer · Post by **HighDemonslayer** » 09 Nov 2006 20:09

You know, think about drug dealers, they don't pay taxes, and they spend money on booze and cigarettes , for example.

So they contribute to other business people, and their money trickles down to others.

Tax money, in contrast, is absorbed by the fatcat bureaucrats, at a rate of about 72% , give or take.

So for every dollar taxed , only 28 cents trickles down to actually build a road, or pay for healthcare, or go to the welfare bum.

-n

james_dean · Post by **james_dean** » 09 Nov 2006 23:23

you want to back that up, or just throw it out there?