Supply side/Trickle down: Where's the money?

[Dugdale_Jukes]

"Trickle down theory--the idea that cutting taxes for businesses and upper-middle to rich folks, or the "job makers", will lead to economic growth and wealth "trickling down" to the lower class--seems to make sense. If the people who make business decisions have more money, they will be more likely to expand their business, thereby generating more work and wages in general. It's logical!" - header horseshit

Uh, no, it isn't logical.

Demand drives economies. Obama's stimulus is also supply side albeit through state and local government, and look at how badly it failed at doing anything except saving the most worthless jobs in America - government worker jobs.

Gary Johnson wasn't far off when he said "My dog has created more shovel-ready jobs than Obama's stimulus."

Giving money to corporations via tax breaks or actual cash to state and local government does save some jobs and create a few, but only in the most miserably managed organizations. Well run organizations INCLUDING state and local governments plan for ups and downs. Poorly managed organizations don't.

The reason the economy is coming back at retail level is the top third of hired income earners PLUS the wealthy are spending like drunken sailors again. All the bourgeoisie lost in the recession was faith in fictional home value and the hot air in their 401ks. It took their breath away for four years, but now their portfolios are fat again and lost home value isn't a primary concern: they are partying like it's 1999. The recovery has maybe ten percent or so to do with the trillion that moron in the white house pissed down the drain through state and local government in other words.

If in his first few weeks Obama had negotiated a hard fall for banks including breakups, the end of too big to fail, restoration of Glass Steagall and repeal of CFTMA PLUS a tax holiday on individual incomes under $50,000 the bad debt that is freezing the economy today would be gone and Main Street economies would have avoided the worst of the recession (because people making less than about $50,000/a don't save much, they spend about as quick as they get it).

Not to mention social security would be healthier.

Farmers used to assess the quality of mind they were dealing with by asking this question: "If you call a tail a leg, how many legs does a cow have?" Supply siders say "Five". Realists know the answer is "Four" because calling a tail a leg doesn't make it a leg.

Bottom line: demand drives economies. About half the inheritors on earth die broke. People who fill demand efficiently die rich enough to make their children inheritors, half of whom will die broke.

Next.

 

[EdwardBaiamonte]

Bottom line: demand drives economies.

too stupid of course. People demanded a better way to farm for 10,000 years and nothing happened whatsoever until one day after many many centuries a Republican capitalist supplied a plow!!!

The way to create life on this planet is through trickle down (really flood down) supply side economics.

And now ever a liberal can understand it!!

 

[rdean]

I consider you a spammer.

How many times and under how many different topics do you plan to start this exact same thread?

Perhaps if you answered it, they would be satisfied.

 

[rdean]

If supply side is real, money should be trickling down to the workers--but it's not.

This Econ 101, class one, day one!! America has had lower supply side taxes than most of the world and accordingly has been richer than most of the world. So, supply side Republican capitalism is real and it works.

While Supply side capitalism is currently working somewhat well in that most people can now fly in planes and buy smart phones and flat screen TV's, etc., the government is now collecting more in taxes than ever before both in terms of a percentage of GDP and in absolute dollars so it is not working nearly as well as it might if we had more of it.


Does that answer your question??

As a portion of the income of the wealthiest Americans, taxes have been lowest in 60 years.

The wealth of the nation has been moved to the top 5%. If "twinkle down" was going to work, it should have started by now.

Many Republicans insist that taxes are high as a percentage of GDP, but that's not a serious argument in the middle of a recession they caused.

 

[Rshermr]

Bottom line: demand drives economies.

too stupid of course. People demanded a better way to farm for 10,000 years and nothing happened whatsoever until one day after many many centuries a Republican capitalist supplied a plow!!!

The way to create life on this planet is through trickle down (really flood down) supply side economics.

And now ever a liberal can understand it!!

Makes me laugh every time I see ed try this nonsense. Ed, me boy, from an economics point of view, there was no current demand for a plow before it was invented. But there was demand for what a plow could accomplish. And, that demand grew some after the plow existed, And increased when the price of the plow fell. Because, you see, my poor ignorant con tool, economic demand requires two things: The desire for the results that a product or service can provide (want) and the ability to purchase that product or service. Want will exist if the potential buyer is aware of the value that the product or service will provide, That is what is known as cognitive dissonance. But that want is of no use in increasing revenue as a result of purchases until the ability to purchase exists. Wages in the hands of buyers, potentially.

Which is why, ed, me boy, the economy does not get better simply because of a new invention. And, by the way, if you are going to wait for new inventions, then the economy is likely to get worse and worse for a very long time. Because, you see, until buyers buy, even the "job creators" do little in the way of creating new products and services because their revenues are reduced which causes them to spend less on R & D that would lead to those new products.

Ah, hell. Trying to explain this to ed is futile. Just like a lack of demand slows economic growth, or reverses it, Ed's lack of a brain causes him to be unable to understand what I just said.

 

[Dugdale_Jukes]

Bottom line: demand drives economies.

too stupid of course. People demanded a better way to farm for 10,000 years and nothing happened whatsoever until one day after many many centuries a Republican capitalist supplied a plow!!!

The way to create life on this planet is through trickle down (really flood down) supply side economics.

And now ever a liberal can understand it!!

Farmers used to assess the quality of mind they were dealing with by asking this question: "If you call a tail a leg, how many legs does a cow have?" Supply siders say "Five". Realists know the answer is "Four" because calling a tail a leg doesn't make it a leg.

You failed that test some time ago, Edmund - by not risking an answer. That you refused to venture a guess in two opportunities tells us the level of intellect you bring to the playground, Mr Belamounted.

But I digress...

If trickle down worked, nutballs would rule the world.

De'any a' you nutballs ken that?

Didn't think so.

 

[Flopper]

DISCLAIMER: Yes, I consider myself a liberal. But I also consider myself independent and this post is an honest quest for understanding. Trolls need not apply.

Trickle down theory--the idea that cutting taxes for businesses and upper-middle to rich folks, or the "job makers", will lead to economic growth and wealth "trickling down" to the lower class--seems to make sense. If the people who make business decisions have more money, they will be more likely to expand their business, thereby generating more work and wages in general. It's logical!

Today, there's plenty of signs that the job makers are doing significantly better: Dow is at record highs, business profits are up, etc. Yet wages for the average worker are stagnant. The Bush II tax cuts didn't improve the economy, at least not in the short run, and helped spur record deficits. (Not cause, but help.) The gap between the poor and the rich has widened.

So here's my question: Where is the money?

Again, I mean that sincerely. If supply side is real, money should be trickling down to the workers--but it's not. That said, the money has to be somewhere! Are the job makers hording cash in banks? Overseas investments? What???

Trickle down and consumer driven spending both provide incentives to expand business. However, I think increased consumer spending is much more reliable.

In the trickle down theory, when taxes are cut for the wealthy, business will expand because the wealthy will invest more. Here's the problem. A businesses will not expand if the economy is contracting. Only a fool would expand his business when faced with falling sales or low expectations. A windfall such as a tax cut is likely to go into liquid assets such as treasury bills to be invested once sales are rising again.

If we put money in the hands of the poor and middle class, they will spend the money increasing sales because unlike the wealth they have no other alternative. Increasing sales is a far better incentive to expand than just having funds available to expand. The only time trickle down works is when business can't raise money for expansion and the economy outlook is reasonably good.

Trickle down economics works about as well as pouring a bucket of water on the top of a sandy hill. The water is quickly absorbed long before it reaches the bottom.

 

[Rshermr]

Bottom line: demand drives economies.

too stupid of course. People demanded a better way to farm for 10,000 years and nothing happened whatsoever until one day after many many centuries a Republican capitalist supplied a plow!!!

The way to create life on this planet is through trickle down (really flood down) supply side economics.

And now ever a liberal can understand it!!

Farmers used to assess the quality of mind they were dealing with by asking this question: "If you call a tail a leg, how many legs does a cow have?" Supply siders say "Five". Realists know the answer is "Four" because calling a tail a leg doesn't make it a leg.

You failed that test some time ago, Edmund - by not risking an answer. That you refused to venture a guess in two opportunities tells us the level of intellect you bring to the playground, Mr Belamounted.

But I digress...

If trickle down worked, nutballs would rule the world.

De'any a' you nutballs ken that?

Didn't think so.

You have to understand that ed is incapable of rational discussion. He simply posts conservative propoganda. Which is what they pay him to do. It is simple for ed that way. He just goes to a couple of bat shit crazy con web sites and acts like a good con tool. Never, never, ever expect ed to have a rational discussion.
For instance, he never tries to explain the decrease in the middle class. He just pretends it does not exist. Because that is what he is supposed to do.

 

[kiwiman127]

The US economy is driven by 70% by consumer spending, demand drives the economy.
Is it a coincidence that since the 1980's worker wages have been flat in Real Dollars and economic downturns have taken longer and longer to recover from since wages went flat?

 

[Toddsterpatriot]

The US economy is driven by 70% by consumer spending, demand drives the economy.
Is it a coincidence that since the 1980's worker wages have been flat in Real Dollars and economic downturns have taken longer and longer to recover from since wages went flat?

Lower taxes can do all that?

 

[EdwardBaiamonte]

[ the economy does not get better simply because of a new invention.

dear, its called Says Law: supply creates its own demand. Its not an invention in a meaningful sense unless people can afford to buy it. Republicans like to invent what they can sell!!!! Sorry!!Its how we got from the stone age to here: Republican supply side inventions.

Republican inventions are 100% responsible for 100% of the employment in the world today. Every ounce of betterment from the stone age to here was caused by Republican inventions, and every setback was caused by liberal soviet interference.

 

[EdwardBaiamonte]

The US economy is driven by 70% by consumer spending,

of course thats stupid since consumers have demanded food clothing shelter air water etc. etc for 1 million years.

Things obviously don't change for the better until Republican supply siders invent things!!

Now you know how Republicans got us from the stone age to here!!

 

[EdwardBaiamonte]

he never tries to explain the decrease in the middle class.

1) liberal unions shipped 30 millions jobs offshore

2) liberal illegals took another 20 million jobs

3) liberal welfare programs attacked the American family creating millions of poor single parent households that would have been middle class with two adults

4) liberals ruined the public school system making our kids among the dumbest in the world and thus incapable of holding middle class jobs

5) liberal tax laws encourage companies to move off shore and stay off shore thus taking more middle class jobs.

6) liberal budget deficits enable China and Japan to buy our debt rather than our products

 

[kiwiman127]

The US economy is driven by 70% by consumer spending,

of course thats stupid since consumers have demanded food clothing shelter air water etc. etc for 1 million years.

Things obviously don't change for the better until Republican supply siders invent things!!

Now you know how Republicans got us from the stone age to here!!

 

[joewp]

Dear, if you want to earn $one billion you must sell $100 billion to lower and middle class. That is unbalanced just not in the assbackwards liberal sense of the word.

Wow, you make idiotic statements all over the place.

What idiot CEO or shareholders would put up with a 1% net margin?

Where the hell do you get these stupid ideas?

 

[joewp]

Giving $1 more to the upper class does not mean $1 reaches the poor,

this is true its more like $500 reaches the poor. Remember, Henry Ford only got $1.49 per car while the poor or middle class person who bought it got a $500 car.

You got a source for that $1.49 whopper? Or did you just dream it up?

So far, the only source I could find claims his lowest profit margin per car was $99
Henry Ford and the Model T: A Case Study in Productivity (Part 3) | EconEdLink

So please, I like to learn and admit my mistakes. Where's your source? I want to learn things that are factual and true, not learn things that sprout in your fantasy world.

 

[Rshermr]

Giving $1 more to the upper class does not mean $1 reaches the poor,

this is true its more like $500 reaches the poor. Remember, Henry Ford only got $1.49 per car while the poor or middle class person who bought it got a $500 car.

You got a source for that $1.49 whopper? Or did you just dream it up?

So far, the only source I could find claims his lowest profit margin per car was $99
Henry Ford and the Model T: A Case Study in Productivity (Part 3) | EconEdLink

So please, I like to learn and admit my mistakes. Where's your source? I want to learn things that are factual and true, not learn things that sprout in your fantasy world.

Ed has his own source. It is super secret. Actually, it happens to be the same source that pays him to post drivel.
But then, Ed is a libertarian. Which is an odd thing to be, since there has never, ever been a successful libertarian economy. So, when you back a looser, as ed does, you have to make things up. Which ed does.
Net result is that most take ed off of their radar. Then he simply talks to himself. Poor guy. He is, after all, mentally ill. So, it is not his fault. Just plain bad luck.

 

[editec]

How well did this latest round of Trickle down economic policies work?

Well?

How's our economy doing?

Is it thriving?

 

[waltky]

Like Granny says...

... "It don't work...

... ain't never worked out inna past...

... ain't never gonna work inna future...

... was just some o' Reagan's voodoo economics B.S."

 

[Flopper]

The problem with the supply driven theory is that it's so unreliable. Just because you give tax cuts to the wealthy doesn't mean it's gong to trickle down. If the wealthy get a tax break, they may invest in expanding US businesses but they also may invest abroad, in gold, in treasuries, or just put it in bank waiting for a stronger economy.

If sales are rising and economic forecasts are improving, business will expand if funds are available, but if consumers sales are lackluster, and forecasts are very mixed, businesses will sit on cash as will investors, just as was done over the last few years.

However, on the demand side, money put in the hands of the poor or middle class when times are hard will be spent creating an incentive for business to expand.

IMHO, the best way to simulate the economy is to push money to the poor and middle class when sales are contracting, then as sales pick up introduce tax cuts, and maintain low interest rates. However, it tax rates are already very low, the deficit is high, and interest rates are rock bottom when we enter a recession as was the case in 2009, then we're screwed. Any stimulus we apply will have negative long term effects.