Republican economic policy

[Wiseacre]

The multiplier effect can work both ways, even if you paint it as the villain and one context and the savior in another. You're suggesting that an extra dollar in the pocket of a rich man is worth more to the economy than an extra dollar in the pocket of a poor man. But that theory has never been proven either way.

The way I see it that extra dollar in the rich mans pocket leads to productivity down the chain, thus keeping the economy moving at multiple levels.

The extra dollar in the poor mans pocket nets you no return productivity.

And what happens when the poor man uses that dollar to purchase goods and services from the rich man? Does it not lead to productivity down the chain as well?

What happens when the poor man doesn't spend that dollar to purchase goods and services, but instead saves it or pays his mortgage or other debts?

 

[manifold]

The way I see it that extra dollar in the rich mans pocket leads to productivity down the chain, thus keeping the economy moving at multiple levels.

The extra dollar in the poor mans pocket nets you no return productivity.

And what happens when the poor man uses that dollar to purchase goods and services from the rich man? Does it not lead to productivity down the chain as well?

What happens when the poor man doesn't spend that dollar to purchase goods and services, but instead saves it or pays his mortgage or other debts?

Same as when the rich man does that I suspect.

 

[jasonnfree]

I once owned a laundromat and most of my customers were on some type of subsistence. I knew them well and most were not poor for lack of willing to work. Very wealty people have excess wealth which may not even be spent in this country to stimulate economy.

Indirectly. Poor people buy necessities of life. Food stamps are a subsidy for big agriculture which hires many people.

Fact or fiction...

Republican economic policy always prioritizes (favors) the wealthy over the poor and middle-class.

Please discuss with real world examples, and keep it clean.

Did you ever get a job from a poor person?

 

[martybegan]

The multiplier effect can work both ways, even if you paint it as the villain and one context and the savior in another. You're suggesting that an extra dollar in the pocket of a rich man is worth more to the economy than an extra dollar in the pocket of a poor man. But that theory has never been proven either way.

The way I see it that extra dollar in the rich mans pocket leads to productivity down the chain, thus keeping the economy moving at multiple levels.

The extra dollar in the poor mans pocket nets you no return productivity.

And what happens when the poor man uses that dollar to purchase goods and services from the rich man? Does it not lead to productivity down the chain as well?

Yes, but it skips all those other layers down the chain, and still results in no productivity at the level it is dispensed. To be fair, it does create government productivity in the form of progam oversight, but this productivity is basically overhead, which to me all government functions consist of.

 

[jasonnfree]

Your statement that employment numbers were pretty good isn't any proof.

Any proof that Bush tax cuts increased jobs? Obama extended tax cuts going on two years ago. total of going on ten years and fewer jobs..

Republican economic policy favors everybody because it promotes more economic growth and more jobs. It enables more upward mobility and a more opportunistic environment where people have a better chance to improved their lot in life. Which leads to greater personal and societal stability for everybody.

The Bush tax cuts mentioned above lead to increased well-being for everybody from 2003 until the recession hit. As did the Reagan tax cuts back in the early 80s. The republican economic policy's main objective is to foster and improve the business climate; if that is not done, the current economic mess cannot improve to any appreciable degree.

The employment numbers from 2003-2008 were pretty good, comparable to Cinton's numbers in the 90s. It's true IMHO that extending those tax cuts didn't appreciably improve the jobs picture, but had we not extended them then it's very likely that the UE situation would have been a lot worse.

 

[Wiseacre]

And what happens when the poor man uses that dollar to purchase goods and services from the rich man? Does it not lead to productivity down the chain as well?

What happens when the poor man doesn't spend that dollar to purchase goods and services, but instead saves it or pays his mortgage or other debts?

Same as when the rich man does that I suspect.

Not exactly. Take enough dollars from a rich man, he'll decide to put the rest of his money or his business offshore. Or he puts it in a tax shelter, or somewhere that does us no good. Instead of starting a new business or investing in one, or in expanding an existing one, he invests somewhere else where the ROI is better.

 

[TomasG]

The multiplier effect can work both ways, even if you paint it as the villain and one context and the savior in another. You're suggesting that an extra dollar in the pocket of a rich man is worth more to the economy than an extra dollar in the pocket of a poor man. But that theory has never been proven either way.

The way I see it that extra dollar in the rich mans pocket leads to productivity down the chain, thus keeping the economy moving at multiple levels.

The extra dollar in the poor mans pocket nets you no return productivity.

And what happens when the poor man uses that dollar to purchase goods and services from the rich man? Does it not lead to productivity down the chain as well?

I believe that the middle and poor outnumber the wealthy in numbers, their buying strength supports a level of demand and productivity that allows for wealth to be extracted by a small number of individuals (business owners, corporate heads, etc). Thus to my mind the bottom feeds the top.

I have searched but not found yet research that proves or disproves this idea, can anyone help to pointing me to some credible research on this point?

 

[manifold]

What happens when the poor man doesn't spend that dollar to purchase goods and services, but instead saves it or pays his mortgage or other debts?

Same as when the rich man does that I suspect.

Not exactly. Take enough dollars from a rich man, he'll decide to put the rest of his money or his business offshore. Or he puts it in a tax shelter, or somewhere that does us no good. Instead of starting a new business or investing in one, or in expanding an existing one, he invests somewhere else where the ROI is better.

I'm not sure I follow your logic here. Are you suggesting that economic policy decisions should always favor the wealthy because if they don't the wealthy will defect?

 

[Wiseacre]

When it comes to economic policies, there's no such thing as proof. Too many factors, too many variables, nobody can ever definitively prove anything with respect to economics. It comes down to theory, what makes the most sense given the current situation. Sometimes that could mean a tax cut, sometimes a tax hike.

 

[Truthmatters]

The way I see it that extra dollar in the rich mans pocket leads to productivity down the chain, thus keeping the economy moving at multiple levels.

The extra dollar in the poor mans pocket nets you no return productivity.

And what happens when the poor man uses that dollar to purchase goods and services from the rich man? Does it not lead to productivity down the chain as well?

I believe that the middle and poor outnumber the wealthy in numbers, their buying strength supports a level of demand and productivity that allows for wealth to be extracted by a small number of individuals (business owners, corporate heads, etc). Thus to my mind the bottom feeds the top.

I have searched but not found yet research that proves or disproves this idea, can anyone help to pointing me to some credible research on this point?

its all over the economists sites and called a consumer driven economy.

The only people that are supply siders are the Austrian school of economics and they are considered the short bus side of economics

 

[jasonnfree]

Has there always been this concern on the part of many working class Americans that the wealthy and corporations were being overtaxed? I say no. Being close to 70 I say it's been fairly recent. I remember when the rich and corporations paid much higher taxes and we didn't have the working class apologists we have today. I attribute it the the wealthy controlling the media, newspapers, tv and radio. How many hours of right wing vs left wing talk radio for example? There are only a few owners of all the media. This used to be illegal until Clinton signed telecommunications act.

 

[manifold]

When it comes to economic policies, there's no such thing as proof. Too many factors, too many variables, nobody can ever definitively prove anything with respect to economics. It comes down to theory, what makes the most sense given the current situation. Sometimes that could mean a tax cut, sometimes a tax hike.

I agree wholeheartedly.

And... when was the last time you supported a tax hike?

 

[Ravi]

I would see it as boiling down to which pathway does the money take, and which one brings about the greater good. The progressive model is to take the money through the government and distrbute it to those on the lower end, either directly or indirectly. What this creates is a larger buracracy (they have to have someone run it) and in the cases of direct welfare or tax credits at the low end, zero productivity for the money spent.

Now lets look at a supply side model. Say that you tax a person 200k less and they go out and buy a mercedes. Now the salesman makes money, the dealers owner makes money, the car manufacter and thier employees make money. Those people in turn now go out and spend money as well, the government gets a cut anyway via taxes at each level.

The main difference is now the rich person has a mercedes, and to me, evny over that is a big part of why people want to "Tax the Rich"

The multiplier effect can work both ways, even if you paint it as the villain and one context and the savior in another. You're suggesting that an extra dollar in the pocket of a rich man is worth more to the economy than an extra dollar in the pocket of a poor man. But that theory has never been proven either way.

The way I see it that extra dollar in the rich mans pocket leads to productivity down the chain, thus keeping the economy moving at multiple levels.

The extra dollar in the poor mans pocket nets you no return productivity.

Not really. Quite often the rich will just put their money into savings. Or go to Europe and spend it. But each dollar a poor person has gets spent on a good or service in the US.

The "trickle-down" model has been a failure as the last decade has shown us.

 

[Wiseacre]

Same as when the rich man does that I suspect.

Not exactly. Take enough dollars from a rich man, he'll decide to put the rest of his money or his business offshore. Or he puts it in a tax shelter, or somewhere that does us no good. Instead of starting a new business or investing in one, or in expanding an existing one, he invests somewhere else where the ROI is better.

I'm not sure I follow your logic here. Are you suggesting that economic policy decisions should always favor the wealthy because if they don't the wealthy will defect?

No, but I am saying we need to be pragmatic about it. If you implement a policy that fosters economic growth and job creation, there is no way to avoid the result that the rich guys will profit the most by whatever action is taken. You can call that favoring the wealthy, that seems to be the liberal mindest. But I don't see it as favoring the rich, I see it as growing the economy which helps everybody.

 

[manifold]

Not exactly. Take enough dollars from a rich man, he'll decide to put the rest of his money or his business offshore. Or he puts it in a tax shelter, or somewhere that does us no good. Instead of starting a new business or investing in one, or in expanding an existing one, he invests somewhere else where the ROI is better.

I'm not sure I follow your logic here. Are you suggesting that economic policy decisions should always favor the wealthy because if they don't the wealthy will defect?

No, but I am saying we need to be pragmatic about it. If you implement a policy that fosters economic growth and job creation, there is no way to avoid the result that the rich guys will profit the most by whatever action is taken. You can call that favoring the wealthy, that seems to be the liberal mindest. But I don't see it as favoring the rich, I see it as growing the economy which helps everybody.

If you look back throughout our history, there have been marked examples where the economy grew like gang busters, but it surely did NOT help everybody. The idea that a growing GDP necessarily helps everyone, is naive at best, and sinister at worst.

 

[jasonnfree]

The very wealthy and corporations don't have tax lawyers for nothing. Look at the Cayman Islands . Halliburton offshored to Dubai for tax purposes. When a corporation commits a crime, often no one goes to jail, they pay a fine. The supreme court a couple years ago decided that a corporation was a person. Imagine that. Money buys power

Same as when the rich man does that I suspect.

Not exactly. Take enough dollars from a rich man, he'll decide to put the rest of his money or his business offshore. Or he puts it in a tax shelter, or somewhere that does us no good. Instead of starting a new business or investing in one, or in expanding an existing one, he invests somewhere else where the ROI is better.

I'm not sure I follow your logic here. Are you suggesting that economic policy decisions should always favor the wealthy because if they don't the wealthy will defect?

 

[Truthmatters]

Telecommunications Act of 1996 - Wikipedia, the free encyclopedia


helped to grow the internet though

 

[TomasG]

Not exactly. Take enough dollars from a rich man, he'll decide to put the rest of his money or his business offshore. Or he puts it in a tax shelter, or somewhere that does us no good. Instead of starting a new business or investing in one, or in expanding an existing one, he invests somewhere else where the ROI is better.

I'm not sure I follow your logic here. Are you suggesting that economic policy decisions should always favor the wealthy because if they don't the wealthy will defect?

No, but I am saying we need to be pragmatic about it. If you implement a policy that fosters economic growth and job creation, there is no way to avoid the result that the rich guys will profit the most by whatever action is taken. You can call that favoring the wealthy, that seems to be the liberal mindest. But I don't see it as favoring the rich, I see it as growing the economy which helps everybody.

This idea is scary - since the 1980's there has been increasing shift of wealth to the top.

Is there a market incentive that will over time "share the profits" to the middle and lower end of the economy? I don't think there is. I compare it to China, the vast numbers of Chinese citizens can't actually purchase products they produce - fortunately for them outside markets support their industries for the most part, nevertheless, there is no incentive for Chinese business owners to pay their workforce more given the large employee pool available.

If the US is a consumer driven economy (70% of GDP) at what point does the wealth gap create a top heavy system where there isn't sufficient consumer spending to support the economy with market demand.

 

[martybegan]

The multiplier effect can work both ways, even if you paint it as the villain and one context and the savior in another. You're suggesting that an extra dollar in the pocket of a rich man is worth more to the economy than an extra dollar in the pocket of a poor man. But that theory has never been proven either way.

The way I see it that extra dollar in the rich mans pocket leads to productivity down the chain, thus keeping the economy moving at multiple levels.

The extra dollar in the poor mans pocket nets you no return productivity.

Not really. Quite often the rich will just put their money into savings. Or go to Europe and spend it. But each dollar a poor person has gets spent on a good or service in the US.

The "trickle-down" model has been a failure as the last decade has shown us.

Savings used to be the way banks loaned money for houses, and thus leading to productivity in the housing industry.

Also most rich people dont save, they invest. and money invested typically is used to do things, like expanding businesses, which leads to further productivity.

While poor people do spend money on things, it is often low value items, and not enough to sustain a national economy.

 

[TomasG]

The way I see it that extra dollar in the rich mans pocket leads to productivity down the chain, thus keeping the economy moving at multiple levels.

The extra dollar in the poor mans pocket nets you no return productivity.

Not really. Quite often the rich will just put their money into savings. Or go to Europe and spend it. But each dollar a poor person has gets spent on a good or service in the US.

The "trickle-down" model has been a failure as the last decade has shown us.

Savings used to be the way banks loaned money for houses, and thus leading to productivity in the housing industry.

Also most rich people dont save, they invest. and money invested typically is used to do things, like expanding businesses, which leads to further productivity.

While poor people do spend money on things, it is often low value items, and not enough to sustain a national economy.

It would be interesting to sort out, what % the rich, middle, and poor make up as part of the consumer spending in the United States.

Hmm well interesting; According to a Moody's report as of 2010; Top 5% make up 37% of consumer spending while bottom 80% make up 39.5% consumer spending.

I have to say that shakes my thoughts on how much the middle and poor make up the base of consumer spending towards the US economy. Nevertheless, more of the nations income goes to the top % every year for the last 30 years - I would suppose that if the trend were opposite that the bottom 80% of income earners would account for a larger portion of US consumer spending.