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Trickle Down economics is daft, here's Why.


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Get ready to be angry, but hear me out

The rich spend less money as a percentage than the poor do. Insert your own reasoning here as to why, but they do. That means that to pump a certain amount of money into the economy, it would be wiser and more efficient to give to the poor, since a lot smaller amount of the money ends up sitting in a bank, and a greater chunk ends up fueling the economy through purchases, leading to the money working it's way from the poor, to local stores, to suppliers, to manufacturers, making everyone richer along the way, before ending up in greater profits for the top, who will be driven to invest by the greater demand, and will then employ more workers, hauling people out of poverty.

 

A tax break for the rich means a greater profit that they will not invest, as demand for their products has not grown, and will rot away in a bank. The rich get richer, the poor stay poor.

 

If the government wants a certain economic benefit, it is significantly more costly to move supply than it is to move demand, either directly (Government purchase of tanks in WWII) or indirectly (The government boosting welfare to those who will spend it). So why does the theory of supply side economics persist, despite going contrary to all logic of capitalism?

1. Perhaps evidence backs it up?

No.

Reagan embraced it. Forget that Hoover, Ford and Nixon also did and saw the economy flop, Reagan embraced so it must be right. Ignore that Reagan saw higher unemployment than Carter (7.5% vs. 6.4%) https://data.bls.gov/timeseries/LNS14000000

He also faced slower growth than Clinton, who embraced Demand side economics, and Obama outpaced both Bushes on Growth (Sorry Trump fans). Eisenhower was firmly on the side of Demand economics, as were JFK and LBJ. Nixon was not, and the Economy tanked under him and Ford. Carter was on the side of Demand, and the economy grew from '79 to '80, for the first time since 1971. This was far too late for his reelection chances, but proves a point. (Reagan wasn't an economic god, but that's a fight for another day).

2. Perhaps wealthy donors favor it?

I can't be bothered to pull up Opensecrets and find out. Maybe.

3. Perhaps it is easier to sell to the people than the fact that welfare helps the economy? Tax cuts, even if they don't help blue collar workers, will always be more popular than spending, despite the fact that almost none of that money reaches them?

I can't say. What I can say is that if you really look at it, Trickle down economics goes against the basic logic of Capitalism, yet is hailed by the right as a truth when it is clearly not.

 

Constructively discuss.

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10 minutes ago, LokiLoki22 said:

Additional proof, note the citations on the page https://commons.wikimedia.org/wiki/File:Job_Growth_by_U.S._President_-_v1.png

This is something I've been saying for a while, but I always get drowned out (often without thought or reason in the rebuttal, just recited regurgitation of Reaganomics and Thatcherite tropes), especially by fiscal conservatives and staunch pro-business-uber-al types (like my brother-in-law, in fact).

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Just now, Patine said:

This is something I've been saying for a while, but I always get drowned out (often without thought or reason in the rebuttal, just recited regurgitation of Reaganomics and Thatcherite tropes), especially by fiscal conservatives and staunch pro-business-uber-al types (like my brother-in-law, in fact).

I am bracing and gathering my resources for the inevitable sh**Storm that this'll bring, but it, like alligators in New York sewers, is a myth, or at least an unproven theory that is accepted as fact to many.

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1 minute ago, LokiLoki22 said:

I am bracing and gathering my resources for the inevitable sh**Storm that this'll bring, but it, like alligators in New York sewers, is a myth, or at least an unproven theory that is accepted as fact to many.

I encourage folks not to get into this argument as I won't be.

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Just now, Reagan04 said:

I encourage folks not to get into this argument as I won't be.

Interesting, I had you figured as a serious opponent to me here, as you (like me) are very much the political drunken Irishmen: always up for a fight in good fun.

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Just now, LokiLoki22 said:

Interesting, I had you figured as a serious opponent to me here, as you (like me) are very much the political drunken Irishmen: always up for a fight in good fun.

I deplore internet debate, I have a few counterpoints, but behind the keyboard, the passion and human connection of good debate is lost to the drone of machine.

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I agree and also OMG President Greene is back!!!

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Just now, President Garrett Walker said:

I agree and also OMG President Greene is back!!!

Again, not dead, resting. Also going to reboot the RP, dunno if we should restart it or go another way with it (Like a US Government one rather than a US Election one, really interested).

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Hoover had many things not related to the economic system that caused the depression like high tariffs. Ford had the economic unpredictability coming from his pardon to deal with and Nixon also had terrible policies which harmed him like ending the gold standard.

Many of these things are not invested because of all the rules governing them for example the employer mandate discouraged expansion of hiring more employees.

I've always favored a proportional tax myself instead of our current mess.

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This took awhile to type on my phone.

Just now, NYrepublican said:

Hoover had many things not related to the economic system that caused the depression like high tariffs. Ford had the economic unpredictability coming from his pardon to deal with and Nixon also had terrible policies which harmed him like ending the gold standard.

Many of these things are not invested because of all the rules governing them for example the employer mandate discouraged expansion of hiring more employees.

I've always favored a proportional tax myself instead of our current mess.

 

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Just now, NYrepublican said:

The gauntlet is picked up, good friend.

So the effective argument here is that the rich won't produce product that, to their knowledge nobody will buy, is that the government won't let them. No. Businesses only produce what they can sell, if they produce more (See: GM and it's financial issues). Reagan endured an economic crash (Black Wednesday) in 1987, Bush I in 89 with The Savings and Loan crisis, so deregulation wasn't the end all decision, indeed it seems that every time we try to deregulate, we get a large crash at the end (Nixon, nuff said, Reagan Black Wednesday, Bush I S&L Crisis, Bush II, 2008 Housing bubble.) Deregulation won't force business to produce more, Getting people to buy will. Who buys things? the poor spends the greatest portion of their income. It is worth noting that for the majority of businesses, healthcare for employees is <1% of costs, and they can charge for it (I know, I worked at a Meijers, they charge for insurance). Your argument about Obamacare would work post 2009, but our economy grew through the 2009-2016 Period, so it's a tough arguement to ship. Before you make the fiscal argument, Obama ran a deficit. So did Bush II, Reagan, Nixon, Carter, Bush I, and Ford. The deficit has been decreasing since 2010, though at a pace I find unacceptable. Tax credits for the middle class are one thing, but huge cuts for the wealthy are idiotic, bordering on catastrophic (Our highes tax rat in 1955 was 91%). Our economy was fine. Ball in your court.

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39 minutes ago, LokiLoki22 said:

Again, not dead, resting. Also going to reboot the RP, dunno if we should restart it or go another way with it (Like a US Government one rather than a US Election one, really interested).

I'd be interesting in a Government one.

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Just now, LokiLoki22 said:

Cool, I'm really interested in the thought of one, Tomorrow, I'll make a post.

Get ready for some Tea Party action.

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Just now, Reagan04 said:

Get ready for some Tea Party action.

Okay, but keep it realistic (That means no Vermont and Oregon Tea Party senators). Also: Original, small government, cut it all ones, or enforce Christian Morals, and raise military spending ones?

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Just now, LokiLoki22 said:

Okay, but keep it realistic (That means no Vermont and Oregon Tea Party senators). Also: Original, small government, cut it all ones, or enforce Christian Morals, and raise military spending ones?

Oh yeah, trust me, I hate it when folks do this and it's unrealistic. And as for that, yes to all but the last one. I'm planning on being a Puritanical Paleoconservative Constitutionalist.

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Just now, Reagan04 said:

Oh yeah, trust me, I hate it when folks do this and it's unrealistic. And as for that, yes to all but the last one. I'm planning on being a Puritanical Paleoconservative Constitutionalist.

What-a What-a What-a? I know what you are saying, but it sounds like you've been planning for this. Happy hunting, Alabama.

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1 minute ago, LokiLoki22 said:

What-a What-a What-a? I know what you are saying, but it sounds like you've been planning for this. Happy hunting, Alabama.

You have no idea, I am a member of a few online sims, I'm ready, also this: 

https://www.youtube.com/watch?v=ORyzsMZPPUg&index=97&list=PLo9KTJiT3f92co2-dt3nW7wEf3zSANYxs

 

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14 hours ago, LokiLoki22 said:

Cool, I'm really interested in the thought of one, Tomorrow, I'll make a post.

Looking forward to it.

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