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ADVOCATES of trickle-down economics argue that, when the rich get extra income, they invest it and create more jobs – and a higher income – for others. Those people, in turn, spend their extra money. Eventually the effect trickles down the whole system, making everyone better off, in absolute terms.
So, what seems like a moral outrage – giving more to people who already have more – is in theory a socially benign action.
The trouble is it hasn't worked. In the past three decades, states with pro-rich policies have seen economic growth slow, except in countries like China and Vietnam that needed to jump-start socialist economies.
In the UK, upward income redistribution since 1980 has seen the share of the top 1 per cent rise from 5 per cent of national income to over 10 per cent. Yet the annual growth rate of income per person has fallen from 2.5 per cent between 1960 and 1980 to 1.8 per cent between 1980 and 2013.
One reason is that the rich have not kept their end of the bargain – they didn't invest more; and inequality, linked to poorer health and societal damage, worsened. Investment as a share of GDP used to be 18 to 22 per cent in the 1960s and 1970s but since then has been 14 to 18 per cent, except for a few years at the end of the 1980s.
It is well established that a less equal society has lower social mobility. When talented people from less privileged backgrounds cannot move up the social ladder, the economy's long-term dynamism suffers. An increasing number of studies show that, above a certain level, higher inequality harms growth. Some are by the International Monetary Fund and Organization for Economic Cooperation and Development, which didn't use to be concerned about inequality.
The 35-year experiment with trickle-down economics has failed for most people. Unfortunately, there is too much money and power at stake for its true beneficiaries to accept this reality and end this approach.
originally posted by: redhorse
a reply to: Maxmars
I think that this is a very good rundown of, well, how we got into this mess. I guess there is one thing I don't understand though. Are you saying that they are only putting on a "show" of acknowledging inequality? If so, to what purpose? Just to continue to placate the public...? Or are you saying that they (those wealthy super citizens) are beginning to realize that the gravy-train has to stop, or at least put the breaks on, somewhere or the whole thing will derail?
originally posted by: seasoul
As history repeats itself in broad patterns, it's important to remember that the purpose of Abraham Lincoln’s U.S. Civil War, which resulted in a wholesale slaughter of some 750,000 Americans leaving untold wounded, widows and orphans in its wake, "was to save the empire, not to abolish slavery."
"Everywhere in the West monstrous lies stand unchallenged. The lies are institutionalized in history books, course curriculum, policy statements, movements and causes, and in historical memory."
(4) No bill of attainder, ex post facto law, or law denying or impairing the right of property in negro slaves shall be passed.
Sec. 2. (I) The citizens of each State shall be entitled to all the privileges and immunities of citizens in the several States; and shall have the right of transit and sojourn in any State of this Confederacy, with their slaves and other property; and the right of property in said slaves shall not be thereby impaired.
originally posted by: MOMof3
a reply to: Maxmars
I am 64. I worked for 40years with three children in tow. My husband is disabled. I vote, send emails, voice an opinion, and debates on ATS. My real fight was started 30 years ago. It takes all of us accepting what we see, not just the activists and lobbyists. Now I am tired. I gladly pass the torch.