Trickle "UP" Economics or "Fountain" Economics

I want to expand a little on m0j0m's thoughts here.

In the U.S. money has been classified as speech. You can basically legally buy votes in favor of your policies, if you have enough money.

Thus, money is power. Not that it wasn't before (a rather strong idea in political science), but it's more overt now.

Money doesn't buy happiness, but it sure makes life easier. More money is sought after (except by idiots who don't understand marginal tax rates) pretty highly - basically a flat demand curve.

Given those two things, and economic thought that people will act in their own self-interest, such people as above (very wealthy) will act to further their income.

Further, while the money supply expands over time, it has a vaguely fixed average during a shorter period. So, people are basically fighting for their share of the economic pie. The bigger dogs with bigger teeth have a bigger say in how much they get - power relative to the distribution of income.

This is how capitalism accumulates wealth at the top.

Please understand this truth:
If employees were fully compensated for their labor, businesses would not profit. Profit goes up the ladder in an organization - never down. Any 'profit sharing' is simply giving a little bit more compensation for labor.

So Far all I have read is a lot of the word "obvious" and its synonyms. That is not an argument and neither is a fountain. I had some pyramid schemers try to get me in telling me that it's like building a pipe to the city instead of carrying water buckets. An analogy may sound good but it's not an argument.
Thus I would like to ask some questions to get clarification on what exactly is be proposed and to understand how far thought out this is.

The OP is advocating a further increase in taxes on the rich to the poor. A direct wage transfer.
1. The rich will leave, How will you keep their wealth in the US, capital controls? Are capital controls a violation of human rights? Or is it alright when we are "robin hooding"?

2. When the poor get this added money either through government policy increasing wages or a direct wage transfer will prices increase?

3. Generally it sounds as though you believe in a keynesian multiplier, the theory which is quite popular, that getting money to those who spend it or even invest it creates a multiplier effect of like 4. Although the crowding out effect contends this notion. Keynes advocated both tax cuts and government debt spending, essentially using the government to push a lot more money into the economy at the expense of it's balance sheet. Are you versed in keynesian economics?

4. disposable income for average joe should have went up in the past 20 years but has not, it has been sucked up by regulations, nimbyism, healthcare, and education. Would it not be better to fix these issues first?

5. What will you advocate when companies will want to offshore instead of paying higher wages?

6. Would you ban corporate profits?

7. could you number your responses? thanks!

originally posted by: jellyrev
The OP is advocating a further increase in taxes on the rich to the poor. A direct wage transfer.

No, the OP isn't advocating anything. However, a tax increase on the rich is one method that could be used in balancing wealth throughout the entire economy which has been discussed.

The OP is simply pointing out an observation which directly opposes the entire idea of Trickle Down Economics or the idea that giving more financial benefits to the wealthiest among us somehow results in helping anyone other than them financially.

1. The rich will leave, How will you keep their wealth in the US, capital controls? Are capital controls a violation of human rights? Or is it alright when we are "robin hooding"?

The rich leave anyway. Or they stay but store their money elsewhere where it doesn't benefit anyone, the system itself or even them in the long run.

It's not a violation of Human Rights unless the only people you consider Human or Having Rights are the Wealthy. The idea is about helping people not hurting them.

2. When the poor get this added money either through government policy increasing wages or a direct wage transfer will prices increase?

Do prices have to increase because more money is shifted from the top to the bottom???

3. Generally it sounds as though you believe in a keynesian multiplier, the theory which is quite popular, that getting money to those who spend it or even invest it creates a multiplier effect of like 4. Although the crowding out effect contends this notion. Keynes advocated both tax cuts and government debt spending, essentially using the government to push a lot more money into the economy at the expense of it's balance sheet. Are you versed in keynesian economics?

Tax cuts for the middle mostly since the poor can't pay what they don't have and the Wealthy find ways to not pay. I would say no to debt spending though but government spending is good especially within it's own economy but not if it's going into debt doing it. Spending what they take in is fine but not borrowing. I'm not versed in keynesian economics but have seen it referenced.

4. disposable income for average joe should have went up in the past 20 years but has not, it has been sucked up by regulations, nimbyism, healthcare, and education. Would it not be better to fix these issues first?

I don't see Health or Education being ill spent money. Why would any nation want an unhealthy and ignorant populace??? Regulation can be either beneficial or not depending what it is. You'd have to explain nimbyism better for me to even answer that.

5. What will you advocate when companies will want to offshore instead of paying higher wages?

They do that now so I'm open to ideas. What do you think about them doing that now anyway??? Free trade and removing Tariffs and similar regulations I think was a bad idea which is what allows for many companies to offshore so easily.

6. Would you ban corporate profits?

No. Profit in a general sense is fine and needed. But massive unbalanced wealth inequality creates an unstable economy, less growth, less opportunity and overall strain on the nation.

7. could you number your responses? thanks!

No, because I'm done answering them now and it's too late for that. But I did quote each one and answer so as to keep it organized. Next time you should put that question first.

Inflation is trickle up economics.

Constantly, as money is being earned it is being devalued by the central political power.

The devaluation is accomplished by

1) government borrowing money that is instantly created

2) fractional reserve banking loans

3) *NEW* Quantitative easing, sort of like deficit spending for non gov plutocrats.

Basically, the central gov and its allies print money and spend it. The average person's money loses value. Trickle up economics.

a reply to: Semicollegiate

That has nothing to do at all with what I was talking about though. I'm not saying you're wrong. I agree that government borrowing money with interest attached is killing us but I was talking about the natural flow of where money and therefore wealth goes as a part of our consumer economy.

More specifically that it doesn't trickle down when the top get's more. It still trickles up because that is where the ownership of the business is. Which is normal and self evident IMO and isn't a problem. The problem comes in when that wealth is then hoarded or removed from our economy. Another problem like you mention is mismanagement and fraud from our own government but that's a different topic than this one as of yet.

a reply to: mOjOm

No, the OP isn't advocating anything. However, a tax increase on the rich is one method that could be used in balancing wealth throughout the entire economy which has been discussed.

The OP is simply pointing out an observation which directly opposes the entire idea of Trickle Down Economics or the idea that giving more financial benefits to the wealthiest among us somehow results in helping anyone other than them financially.

were no suggestions given? There is a whole world of economic theory at our fingertips. I suggest the OP look into these theories learn them and come back. Keynesian, monetarist, classical, neo-classical, austrian.

The rich leave anyway. Or they stay but store their money elsewhere where it doesn't benefit anyone, the system itself or even them in the long run.

If this supposed money is not doing anything, then it has no velocity and thus is not part of the money supply. Bringing this do nothing money into the money supply increases the money supply and hence creates inflation.

Do prices have to increase because more money is shifted from the top to the bottom???

In economics it's called a wage-price spiral. It's a known process. The debate is how extreme is it, and when a drastic policy is put into effect can it be controlled and not spiral out of control.

Tax cuts for the middle mostly since the poor can't pay what they don't have and the Wealthy find ways to not pay.

agreed. who is not for eliminating deductions. 250k+ earners pay nearly 50% of income taxes already. what is a fair amount?

I don't see Health or Education being ill spent money. Why would any nation want an unhealthy and ignorant populace??? Regulation can be either beneficial or not depending what it is. You'd have to explain nimbyism better for me to even answer that.

I was indicating the waste, as in the paper pushing of health care insurance. or the ridiculous cost of university. public schools have made the us population ignorant, that's a different topic though. nimbyism is the use of zoning, ordinances to prevent new developments from being built or raising the cost of them significantly. It's crazy to have some of the zoning laws the US has in some places when the population is still expanding. It is a way for homeowners to prop up their property values and use their houses as an investment. nimbyism=not in my back yard. Some data has shown nimbyism may be the major cause of wealth inequality.

But massive unbalanced wealth inequality creates an unstable economy, less growth, less opportunity and overall strain on the nation.

elaborate. how so?

a reply to: ketsuko

Call me crazy, but I see a distinction between direct government taking from one to give to another, vs. Rewriting regulation to incentivize one behavior over another.

Every regulation incentivizes behavior... why not draw the rules so the folks at the top are incentivized to feed the system in the form of wages and benefits and retraining, vs. Shielding profits off-shore?

The more wages people receive, the more the income tax burden is spread over the population,the more resources available for whatever safety net is desired/required.

a reply to: mOjOm

Trickle "UP" Economics or "Fountain" Economics

Money is like water in concrete, it gravitates upwards.

In order for the "poorest" to benefit, you have to TAKE from someone else. So who?

1) "The Rich"? They pay out the but already as far as tax percentages. A lot of companies have loopholes and great lawyers, but in base taxes they pay a lot. How does one TAKE from them more without force?

2) The Middle Class is almost non existent. How is more taxation going to help them CREATE more jobs, if the STATE is constantly tripping them up at every turn?

3) We're over 20 Million in Federal debt and many states are barely holding on to their economies. How can the "State" be trusted to distribute money efficiently when the evidence shows the exact opposite?

4) If the "Poor" getting more money is the solution, what becomes of the so-called "Middle Class"? Do they become poorer too? Do they not REPLACE the Lower Class in a zero net gain scenario?

5) Wouldn't an answer be to solve how the GOVERNMENT intervenes by way of taxation, the tax code, Payroll taxes, costs and fees for services and living?

We're also not in the industrial age anymore. We're POST era.

Our food is grown on huge subsidized farms, many counties and cities discourage home gardening and farming. So food is no longer a self sustaining field.

Clothing is cheap, mostly made in India, China, Taiwan, etc. So that industry is flooded.

Crafts and Toys are cheap, CHINA again. So that is gone.

Manual labor is sold to the lowest bidder, many Illegal Immigrants and those in lower brackets...so that's gone

Rent is over HALF of many people's take home pay, and if you can't afford a decent place, you live in the hood where you get shot, stabbed, beat up, robbed.

Education is flooded with graduates and no jobs

Healthcare is treated like a MILL.

We're running out of STUFF to do and a flood of "Educated' people

a reply to: Greven

All your example proves is that Jobs was an intelligent jerk who didn't have much compunction about breaking commitments he made. It doesn't illustrate anything about whether being a jerk is necessary to prosper in general.

originally posted by: jellyrev

were no suggestions given? There is a whole world of economic theory at our fingertips. I suggest the OP look into these theories learn them and come back. Keynesian, monetarist, classical, neo-classical, austrian.

The OP intends to learn more about them. But also mentioned he hadn't yet but wanted to make a post straight from his recent thinking of it.

If this supposed money is not doing anything, then it has no velocity and thus is not part of the money supply. Bringing this do nothing money into the money supply increases the money supply and hence creates inflation.

It's not new money being introduced though. It's already been introduced only now it's sheltered where it cannot be accounted for.

In economics it's called a wage-price spiral. It's a known process. The debate is how extreme is it, and when a drastic policy is put into effect can it be controlled and not spiral out of control.

Is there also some kind of spiral that accounts for wealth being hoarded by the very few until we spiral out of control from that as well???

agreed. who is not for eliminating deductions. 250k+ earners pay nearly 50% of income taxes already. what is a fair amount?

Individual earners yes but Corporations of different types exist and some very major ones actually get away paying nothing with their teams of lawyers and buying of politicians. BTW, the Top I'm talking about isn't anyone making 250k a year either. I'm talking about the .01%, some 16,000 or so families who have wealth equaling 100's of millions of people.

I was indicating the waste, as in the paper pushing of health care insurance. or the ridiculous cost of university. public schools have made the us population ignorant, that's a different topic though. nimbyism is the use of zoning, ordinances to prevent new developments from being built or raising the cost of them significantly. It's crazy to have some of the zoning laws the US has in some places when the population is still expanding. It is a way for homeowners to prop up their property values and use their houses as an investment. nimbyism=not in my back yard. Some data has shown nimbyism may be the major cause of wealth inequality.

I agree. Buracratic BS, corruption, wasted spending, etc. are all part of the issue as well. The fact that Gov. takes in so much and does so little for it's people is a huge problem. My first suggestion for that would be to stop trying to rule the world with the military and stop sending our money to countries who turn around and use it against us. This should be obvious and yet it happens more and more all the time.

elaborate. how so?

This isn't much of an elaboration per say but IMO Despotism will always be the outcome from an unequal or unbalanced economic structure within society because with wealth comes power, privilege and control over others lives and society itself. Unless of course those with all the power and money are also wonderful and benevolent and care for those who don't. But we might as well just dream of being taken care of by angels from heaven or lovely ladies from fairy land if we're going to imagine that ever happening.

Power Corrupts. People are too weak to fight such a influence.

originally posted by: Azureblue

Trickle "UP" Economics or "Fountain" Economics

Money is like water in concrete, it gravitates upwards.

That's the first example that works!! Good for you!!!

I couldn't think of one without having to modify some other natural function in the process.

a reply to: CantStandIt

There ya go!! Now that is the kind of thing I'm talking about.

The idea of taking or forcing wealth from one to another isn't a good thing, but I'm not looking at it from what is nice or proper to do. I'm simply looking at the mechanics of it. If no other ideas work and all else fails, it comes down to basically having to take from those who have everything and spreading it around. That's just how it is.

Since that isn't in the best interest of people then we should figure out another way if we can then. That's what I'm getting at. It should and does benefit the wealthy to put back into the system and they do. But there is another more destructive side to major wealth that seems to think it's better to just hoard as much as possible even if it means in the end only a few thousand people are left while billions starve or fight endlessly for survival. That is just sick minded and massively shortsighted and pointless. It doesn't have to be that way.

There has to be some more creative ways of fixing this rather than just Taxing or Taking from one and giving to another. I like where you're going with your ideas. We need more people like you who think in different approaches and methods.

originally posted by: jellyrev

If this supposed money is not doing anything, then it has no velocity and thus is not part of the money supply. Bringing this do nothing money into the money supply increases the money supply and hence creates inflation.

I am confused as to whether you are countering or supporting the OPs position here... the Velocity of Money is currently lower than it was in the Great Depression, and the trend is still downward. here is one of the threads on the topic.

www.abovetopsecret.com...

Ideally, shouldn't there be some kind of balance to the system, such that there is little risk of either runaway inflation or runaway deflation?

Isn't the risk of deflation greater when Velocity of Money is low?

Oops! Double post.

a reply to: BatheInTheFountain

Again, you don't have to do it that way but if nothing else is done at a certain point that is the only thing left to do. Pretty much everything you just said I agree with. You see what I see. But I also see that on the scale from the poorest person to the most wealthy there is an massive divide that is crippling the entire system. That divide is near the end of the scale on the Wealthy side and it doesn't change gradual or even acceptable, it literally just shoots off the chart into some other entire thing altogether.

It's not like we're all in this crisis together. Most of us are. Even some very rich people too. But there is a difference between rich and Old Money Wealthy. Even Trump for example who is obviously rich and powerful is kind of New Money Rich. Believe it or not there is another kind of Old Money Rich that laugh at new money Rich. To them there is Old Money Wealthy and everyone else and they hardly even consider everyone else to be the same species as them.

Then there is Corporate Dynasty Wealth and Power which is another issue. Those are monsters of our own creation which we have lost control over and are serving a purpose they were never supposed to be used for. In fact when they were first created there were conditions and regulations to stop what we see happening today but over time have been removed.

originally posted by: mOjOm
a reply to: Semicollegiate

That has nothing to do at all with what I was talking about though. I'm not saying you're wrong. I agree that government borrowing money with interest attached is killing us but I was talking about the natural flow of where money and therefore wealth goes as a part of our consumer economy.

More specifically that it doesn't trickle down when the top get's more. It still trickles up because that is where the ownership of the business is. Which is normal and self evident IMO and isn't a problem. The problem comes in when that wealth is then hoarded or removed from our economy. Another problem like you mention is mismanagement and fraud from our own government but that's a different topic than this one as of yet.

Wealth is made by labor applied to land. Every laborer makes wealth in the form of wages. He trades that in the form of money but keeps the wealth in the form of what he has bought.

The only trickle up possible is by reducing the value of his labor between the time he earns it and the time he spends it.

a reply to: Bluntone22

Very blunt

I don't think OP is advocating switching the poles bottom to top. Just adjusting the flow so it makes less sense to keep money out of circulation.

a reply to: Bluntone22

As opposed to keeping money out of circulation, which adds deflationary pressure. Which keeps people from spending because the chance is they will get a better deal in future on that product. Which keeps companies from hiring because of slowing demand. Which keeps wages for existing workers from rising. Which further reduces money supply...

How is that better?

... ever notice how some seem to think that as long as that stock market is doing great, the economy must be great also?

Yes, I have noticed that, and it grates on my nerves! The Dow Jones Industrial Average particularly irritates me... there are only ever 30 companies in that index! How could that possibly accurately reflect the economy as a whole!?!

And you are completely correct, the large majority of companies aren't traded on the stock market at all. They finance themselves in ways that are totally opaque to the public at large. That doesn't necessarily mean evil things are happening... just that their stats aren't considered at all in the indicators that get reported on. That whole sector could be crashing and burning and the economic indicators coul d theoretically not flinch.