Why trickledown economics works!

trickle down economics only works if you believe capitalism works.

if you believe in capitalism then you believe in acceptable levels of poverty and, of course, economic inequality. But since when is equality a good in its own right? all movements about inequality have stressed the irrationality of the distinctions. if there is a rational and beneficial reason for inequality, then that inequality is not neccesarilly an evil. People forget that all great movements against inequality were just as motivated by a revolt against irrationality as they were by 'higher principles.'

So what is the possible defense of the inequality produced by capitalism? That's the first question.

The best defense I've ever heard is the cross generational defense. That is, if you look at a capitalist society in 1900 compared to a socialist society in 1900, the poor may be far worse off in the capitalist country. But technological advances made possible by capitalism, and the mass marketing/cheaper production of goods in the capitalism country means that: in 2000 the poor in the capitalist country will be better off then the socialist citizens in 2000, while still worse off then the rich in 2000.

This seems logical enough. If the long term health and safety of the poor is better advanced by capitalism than socialism then there is a logical reason to tolerate inequality. At the point where you realize that the poor in America during the 80s had airconditioner, color tv, refridgerators, cars, radios, etc, while the citizens of the USSR still considered these things luxuries - then the rage against inequality really sounds more about spite toward rich then beneficence toward the poor. That type of rage in the name of benificence is, of course, irrational.

So back to the original premise. Trickle down economics, even at its most basic level - tax cuts for only the rich/corporations spurs mass marketing/cheaper productions and technological advancement. Those social goods can only come from the top, not the bottom. So if you believe that capitalism works then embracing trickle down economics is the most logical way of expressing your belief.

maybe I am wrong, but if that company decided to go open another branch, or hire another worker, or whatever, wouldn't the money they invested in it go straight from revenue to expense, and thus never be taxed to begin with? and lets not forget about the oh so many grants and tax credits the company will be getting from the state, local, and federal gov't to expand or hire....

yeah!

look at how its made america more prosperous in the past 30 years!

just look at how the top echelons of society continue to gather more and more resources, while the majority of the population gets poorer and poorer.

Your point is flawed by one obvious example. According to you, if we tax business more they won't have money to start new business, and our country won't grow due to that extra 4 percent tax. But if you look back to when we had that tax, or even when they were taxed 90 percent post ww2, businesses still grew and flourished then, as did our middle class.

As to the idea that Americans are lazy and won't work jobs beneath them that's garbage as well. No, Americans won't work jobs for minimum wage, as most of us have families, and we can't afford to settle for jobs that leave us homeless or unable to afford electricity. We can't compete with workers from nations without labor laws that allow sweatshops because we live in a nation where its much more expensive to subsist. To expect americans to work for the same rate as Chinese and to live on the street is unrealistic, and you would have us think we should feel privileged for the opportunity.

We have had trickle down for the past 30 years, and if you want to see what it brings, just look at the results. It has gone hand in hand with the end of Americas golden age, and the collapse of the middle class. You can't argue with the results. Trickle up is much more effective and realistic, and gives the money first to them who most need it and will spend it.

Its pretty funny to me how we have had trickle down economics for the past three decades, and there are these people who absolutely insist that it works, but for some reason we seem to have a strange flaw in our system which makes it work in the EXACT OPPOSITE way that it is supposed to work. I think i'd put this system about as far fetched and rare as a good communism. Would work great in an advanced society where people were motivated by enlightened self interest, unfortunately, all we have here in the good ole US of A is plain old greed.

it DOES work. it is a GREAT mechanism to concentrate wealth in fewer and fewer people's hands, while the vast majority get poorer.

Originally posted by Crakeur
there seems to be some confusion here. Trickle Down Economics involves across the board tax cuts and breaks to BUSINESSES. Not rich people. The concept, as explained in the OP, is simple. Give them a tax break, producing more left over money and that money can (operative word) be used to expand, creating more jobs, and increase production, creating less expensive products (supply goes up, price drops with the demand) and the buyer of those products now pays less, giving him (or her) extra money. Thus, the money has trickled down.


Now, not all businesses will use the extra money to expand because not all businesses need to expand. Not all businesses will automatically be able to produce a cheaper costing product either, simply due to the nature of those businesses.

For those of you that want to argue that it doesn't work, take a peek at how the economy moved after Ronnie put this in action. Did it come down eventually? Of course. Was it because of the trickle down plan? No.

The economy is cyclical and all the white house can do is tweak the cycle, try and spur it to move up slower, or faster or try to shorten the downward portion of said cycle.

Generally, when you tweak something that runs in a cycle, there's going to be a counter balance to it so, if you make the economy move higher, faster, it will, invariably, fall lower and faster as well.

the best thing the white house can do is not panic and try and create a rapid, sharp economic recovery because the opposing cycle could be biblical.

Look at the redistribution of wealth since Ronnie. That is the true measuring stick you should be using and it offers zero basis for your stance. This was true even as we saw economic up and down cycles. Only exceptions were bubbles in stocks and real estate and we all know that they were not real.

Originally posted by Crakeur
reply to post by camaro68ss

 

not always the case. most manufacturing is sent overseas because you can get your widget made in asia for a fraction of the cost, even with the added cost of packaging and shipping it back here. why? because, in Asia, they want to work, they need the money and they have mouths to feed and they are willing to work to feed those mouths.

In the states, we've developed into a nation that feels we're too good for most things, deserve more than we're offered and are unwilling to accept the reality that some of us need to lower our standards, as well as open our eyes to the reality of what our time is actually worth. There was a time when the best of everything came from the United States.

I can't think of one consumer product that is made in the US and is deemed the best in the industry. Hell, I can't even think of any products that I own that are made here.

We outsource everything because it is cheaper which, in turn, is cheaper for you and me.

Cheaper for us? Are you crazy? The price at the store is lower but the goods are certainly not cheaper when you add in all the costs. Trade defecits, unemployment, etc. These cheap goods are the worst thing that has ever happened to this country. And now you bitch because those who have benefitted are asked to give a little more back to help rectify the problems that they created. I scream bs.

And how come despite these cheap goods the cost of living continues to rise every year? Maybe the goods aren't really cheaper but instead the profit margins are larger? All the benefits of outsourcing, increased productivity, etc have gone straight into the pockets of the wealthy and consumers are only worse off because of it.

In a non capitalistic enviroment all these things could indeed be a boost to a countrie's citizens. But when one group is allowed to reap all the benefits it is doomed to become a perversion which is destined to harm a much greater number of people than it helps. All the double talk can't erase the realities of income distribution in America that has come from our trade and tax policies.

And lets not forget another cost of these "cheap" goods. Back in the day, a fridge, TV, Car, washer/dryer, all lasted forever. I had plenty TV's when i was younger that were over 20 years old, the same with washers. Now, all those things have a five year lifetime. Lets further not forget the benefits of our "cheap" mass marketed foods, all processed refined garbage, with almost no nutritional value, and now adding Genetic modification and chemicals to the mix, no wonder our whole country is coming down with massive diabetes, obesity (WITH NUTRITIONAL DEFICIENCIES!!), allergies, cancer, etc.