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

[Dragonlady]

Wrong Eddie. When free market capitalism failed in Russia, the IMF and the World Bank blamed corruption, and crony capitalism - because the Russians refused to let American multinationals buy up the factories and publically held assets.

When free market reform fail spectacularly, as they have in Russia, it's not because the system doesn't work as advertized, it's because there was some flaw in the conversion - Argentina failed to nationalize the oil industry, Russia blocked foreign investment. But the results are the same everywhere - higher inflation, unemployment and prices, lower wages, no social safety net, increased levels of poverty. And the rich get spectacularly richer.

 

[EdwardBaiamonte]

When free market capitalism failed in Russia, the IMF and the World Bank blamed corruption, and crony capitalism -.

as did I if you read the above again dear!!!! Neither the IMF nor I blamed capitalism!!

Its all way over your liberal head isn't it????

 

[wjmacguffin]

No dear. Otherwise there would be no surpluses,

Ok more Econ 101 for you. In a free market supply equals demand. If there is a surplus it is momentary as the price adjusts to clear the market or eliminate what you are mistakenly calling a surplus.

You can never get past your first sentence!! You have a perfect record!

Edward is less a troll and more an idiot, not for spouting conservative dogma (which is not a mark of more or less education/intelligence) but for spouting inanities like the above.

I would educate him on the differences between theory and reality, or in the lag between shifts of supply and/or demand, but he will either 1) not understand, 2) feign not understanding, or 3) say my evidence is proof that liberals are dumb. Functionally, they are identical and worth the same amount of attention: None.

Speaking to a friend about the OP, he made a good point. For supply side to work, taxes need to be cut for all people, not just the rich. There just aren't enough rich people in the world for rich-only tax cuts to trickle down with any significance. Although tax cuts for the poor and middle class are small, they make up for it by there being so many people affected.

The one flaw to this that I see is government spending is similar to (if not the same as) business spending. See, if taxes are cut then people spend more; businesses have more money; they reinvest it; step 4; profit! But when a government spends, they give money to businesses and it all cycles through the same.

Obviously, these are not completely equal: The gov't gives a chuck to foreign countries, the rich buy luxuries outside of the US, etc. AND ... too many taxes is bad (Laffer curve and all that).

 

[Dorkazoid_Jones]

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???

How complicated can this be? If you and I ran a business and costs went up from various reasons including taxes, we wouldn't make as much profit or hire as many people. When costs went down from various reasons including tax cuts, we would make more profit and hire more people. Is that mysterious??

I will say though that it is debatable whether tax cut on average person is better or worse than small business tax cut. More money in average person's pocket probably will be spent which increases demand and then businesses can hire more people. Either kind of tax cut can be positive.

 

[rdean]

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???

You want an "honest" discussion about "twinkle down"?

 

[joewp]

How complicated can this be? If you and I ran a business and costs went up from various reasons including taxes, we wouldn't make as much profit or hire as many people. When costs went down from various reasons including tax cuts, we would make more profit and hire more people. Is that mysterious??

No, it's stupid. When you run a business, you don't hire or fire people because of costs. You hire and fire people based on the amount of business you expect. Of course, you complain about costs to make those salaried suckers work 10 or 12 hours a day, so you can cut your unit cost of labor in half and pocket the difference. Did you know, a $100,000/year job at 40 hours a week is about $50/hour. If you get the suckers to work up to 80 hours a week, they're only being paid at $25 an hour. Nice deal, huh?

I will say though that it is debatable whether tax cut on average person is better or worse than small business tax cut. More money in average person's pocket probably will be spent which increases demand and then businesses can hire more people. Either kind of tax cut can be positive.

But here you get it right. More demand for business results in increased hiring, and the demand from lower taxes on the average person and/or a minimum wage increase will increase hiring.

But I have one problem. I've never seen anyone demonstrate how lower taxes on business results in more hiring. All I've ever seen is that it results in increased profits. I have the reverse case to prove it. Microsoft, Berkshire Hathaway and several other major corporations are sitting on literally mountains of cash. M$FT and BRK have at least $50 billion that they don't know what to do with. How would giving them more money increase jobs?

 

[EdwardBaiamonte]

How would giving them more money increase jobs?

too stupid but perfectly liberal!! Any company or person wants to do stuff with money!! I want to buy a Porsche TurboS and my company wants to bring out a new product but I don't feel we can afford it just yet. But, get me a little more money, make me feel a little more secure, and I'll take the plunge in both cases.

Moreover, my money is in a bank not in my mattress so pros have to invest it on my behalf anyway!!

Sadly, few , including bankers, want to invest with an anti-business communist in the Whitehouse who sows uncertainty where ever he looks. He voted to the left of Bernie Sanders aftervall.

 

[wjmacguffin]

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???

How complicated can this be? If you and I ran a business and costs went up from various reasons including taxes, we wouldn't make as much profit or hire as many people. When costs went down from various reasons including tax cuts, we would make more profit and hire more people. Is that mysterious??

No, not mysterious--but not entirely correct as another poster pointed out.

But you missed my original question. If the rich are getting richer, and if business profits as a whole are up, why are wages unchanged? Why is the increases of wealth for the upper class incredibly different from the increases in wealth for the lower classes?

(In other words, my question isn't whether tax cuts spur growth. It isn't about the effect of tax cuts on government deficits. It isn't about prime rates. It's solely about this: If trickle down works, why hasn't massive gains by the rich reached the poor? Where is the rich's money if it's not trickling down in terms of wages or benefits?)

 

[EdwardBaiamonte]

If trickle down works, why hasn't massive gains by the rich reached the poor?

to stupid !! it has reached them that is why a poor man today is better off than a rich man 60 years ago.

Ask the poor of Asia and Africa whether American's poor are rich and they will tell you the obvious.

Why do you lack the IQ to see the obvious. Are you a liberal??

 

[Dragonlady]

to stupid !! it has reached them that is why a poor man today is better off than a rich man 60 years ago.

Ask the poor of Asia and Africa whether American's poor are rich and they will tell you the obvious.

Why do you lack the IQ to see the obvious. Are you a liberal??

Why do you keep repeating that the poor today are better off than a rich man in 1953 when this is not true? A poor man today has to worry about keeping a roof over his head, and in 1953, this was not a concern for a rich man. A poor man today has to worry about his job being outsourced or eliminated - also not a concern for a rich man in 1953. A poor man today makes less than a poor man in 1953, but again, not a concern of the rich back then.

So tell me Eddie how the invention of cell phones and flat screen TV's have made the poor wealthy beyond their wildest dreams and ended fear of poverty, disease, homelessness and hunger.

 

[EdwardBaiamonte]

Why do you keep repeating that the poor today are better off than a rich man in 1953 when this is not true?

dear,a poor man today has life saving state of the art medical care invented by the rich that was not available to the rich in 1953. don't need to be an economist to see how rich the poor got by looking at all the new inventions they could suddenly afford in the last 10 years: suddenly we had plasma TV's, LCD TV's, DLP-TV's, iPods, iphones, CD's and CD players, DVDs and DVD players, Blue Ray and Blue Ray players, PCs, desk top PCs, DVRs, color printers, satellite radio, Advantium ovens, HD-TV, Playstations, X-Boxes, X-box live, X-box Konnect, broadband, satellite TV, cell/camera/video phones, digital cameras, OnStar, palm corders, Blackberries, smart phones, home theaters, SUVs, big houses, more houses per capita, TiVo, 3D movies and TV's, built in wine coolers, granite counter tops, $200 sneakers, color matched front loader washing machines, matching washer dryer combinations, McMansions, 6 burner commercial ranges, Sub Zero refridgerators, more cars than drivers, a $1 billion ring tone industry, a pet industry that just doubled to $34 billion, 10's of millions lining up to buy Apple's I-tablet, Wii, Netflix boxes, jet skis, low profile tires, aluminum/titanium rims, Harley Davidson and Japanese motorcycles. $700 Billion spent Christmas 2010, $10.5 billion movies 2010, 10 million ocean crusies, 44 million taking plane flights over 2012 holiday, $500 billion spent on Christmas 2012.

The list goes on and on. I hope that helps you realize you can't just parrot the communist press and expect to make sense? They have other objectives and are merely using you to promote their point of view.

 

[Dragonlady]

dear,a poor man today has life saving state of the art medical care invented by the rich that was not available to the rich in 1953. don't need to be an economist to see how rich the poor got by looking at all the new inventions they could suddenly afford in the last 10 years: suddenly we had plasma TV's, LCD TV's, DLP-TV's, iPods, iphones, CD's and CD players, DVDs and DVD players, Blue Ray and Blue Ray players, PCs, desk top PCs, DVRs, color printers, satellite radio, Advantium ovens, HD-TV, Playstations, X-Boxes, X-box live, X-box Konnect, broadband, satellite TV, cell/camera/video phones, digital cameras, OnStar, palm corders, Blackberries, smart phones, home theaters, SUVs, big houses, more houses per capita, TiVo, 3D movies and TV's, built in wine coolers, granite counter tops, $200 sneakers, color matched front loader washing machines, matching washer dryer combinations, McMansions, 6 burner commercial ranges, Sub Zero refridgerators, more cars than drivers, a $1 billion ring tone industry, a pet industry that just doubled to $34 billion, 10's of millions lining up to buy Apple's I-tablet, Wii, Netflix boxes, jet skis, low profile tires, aluminum/titanium rims, Harley Davidson and Japanese motorcycles. $700 Billion spent Christmas 2010, $10.5 billion movies 2010, 10 million ocean crusies, 44 million taking plane flights over 2012 holiday, $500 billion spent on Christmas 2012.

The poor have no access to any of the above, including state of the art medical care. That care is only available to those with Cadillac health care coverage. A lot of the stuff you've listed, is out of the reach of the middle class, much less the poor

Poor people live from paycheck to paycheck, renting not owning, always one step ahead of eviction, utility cut off or repossession. That is the difference between rich and poor in any generation. Not what kind of stuff they can buy.

 

[EdwardBaiamonte]

dear,a poor man today has life saving state of the art medical care invented by the rich that was not available to the rich in 1953. don't need to be an economist to see how rich the poor got by looking at all the new inventions they could suddenly afford in the last 10 years: suddenly we had plasma TV's, LCD TV's, DLP-TV's, iPods, iphones, CD's and CD players, DVDs and DVD players, Blue Ray and Blue Ray players, PCs, desk top PCs, DVRs, color printers, satellite radio, Advantium ovens, HD-TV, Playstations, X-Boxes, X-box live, X-box Konnect, broadband, satellite TV, cell/camera/video phones, digital cameras, OnStar, palm corders, Blackberries, smart phones, home theaters, SUVs, big houses, more houses per capita, TiVo, 3D movies and TV's, built in wine coolers, granite counter tops, $200 sneakers, color matched front loader washing machines, matching washer dryer combinations, McMansions, 6 burner commercial ranges, Sub Zero refridgerators, more cars than drivers, a $1 billion ring tone industry, a pet industry that just doubled to $34 billion, 10's of millions lining up to buy Apple's I-tablet, Wii, Netflix boxes, jet skis, low profile tires, aluminum/titanium rims, Harley Davidson and Japanese motorcycles. $700 Billion spent Christmas 2010, $10.5 billion movies 2010, 10 million ocean crusies, 44 million taking plane flights over 2012 holiday, $500 billion spent on Christmas 2012.

The poor have no access to any of the above, including state of the art medical care. That care is only available to those with Cadillac health care coverage. A lot of the stuff you've listed, is out of the reach of the middle class, much less the poor

Poor people live from paycheck to paycheck, renting not owning, always one step ahead of eviction, utility cut off or repossession. That is the difference between rich and poor in any generation. Not what kind of stuff they can buy.

dear, you are just not smart enough to be here. Why do you persist??
THere are 75 million smart phone toys in America and the number is growing!!!!The following are facts about persons defined as “poor” by the Census Bureau, taken from a variety of government reports:

46 percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.

80 percent of poor households have air conditioning. By contrast, in 1970, only 36 percent of the entire U.S. population enjoyed air conditioning.

Only six percent of poor households are overcrowded; two thirds have more than two rooms per person.

The typical poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)

Nearly three quarters of poor households own a car; 31 percent own two or more cars.

97 percent of poor households have a color television; over half own two or more color televisions.

78 percent have a VCR or DVD player.

62 percent have cable or satellite TV reception.

89 percent own microwave ovens, more than half have a stereo, and a more than a third have an automatic dishwasher.

As a group, America’s poor are far from being chronically undernourished. The average consumption of protein, vitamins, and minerals is virtually the same for poor and middle-class children and, in most cases, is well above recommended norms. Poor children actually consume more meat than do higher-income children and have average protein intakes 100-percent above recommended levels. Most poor children today are, in fact, super-nourished and grow up to be, on average, one inch taller and ten pounds heavier than the GIs who stormed the beaches of Normandy in World War II.

While the poor are generally well-nourished, some poor families do experience temporary food shortages. But, even this condition is relatively rare; 89 percent of the poor report their families have “enough” food to eat, while only two percent say they “often” do not have enough to eat.

Overall, the typical American defined as poor by the government has a car, air conditioning, a refrigerator, a stove, a clothes washer and dryer, and a microwave. He has two color televisions, cable or satellite TV reception, a VCR, or DVD player, and a stereo. He is able to obtain medical care. His home is in good repair and is not overcrowded. By his own report, his family is not hungry, and he had sufficient funds in the past year to meet his family’s essential needs. While this individual’s life is not opulent, it is far from the popular images of dire poverty conveyed by the press, liberal activists, and politicians.

Of course, the living conditions of the average poor American should not be taken as representing all of the nation’s poor: There is a wide range of living conditions among the poor. A third of “poor” households have both cell and land-line telephones. A third also telephone answering machines. At the other extreme, approximately one-tenth of families in poverty have no phone at all. Similarly, while the majority of poor households do not experience significant material problems, roughly a third do experience at least one problem such as overcrowding, temporary hunger, or difficulty getting medical care.

Much official poverty that does exist in the United States can be reduced, particularly among children. There are two main reasons that American children are poor: Their parents don’t work much, and their fathers are absent from the home.

 

[Dragonlady]

A third of “poor” households have both cell and land-line telephones. A third also telephone answering machines. At the other extreme, approximately one-tenth of families in poverty have no phone at all. Similarly, while the majority of poor households do not experience significant material problems, roughly a third do experience at least one problem such as overcrowding, temporary hunger, or difficulty getting medical care.

Much official poverty that does exist in the United States can be reduced, particularly among children. There are two main reasons that American children are poor: Their parents don’t work much, and their fathers are absent from the home.

1/3 of poor households have both land lines and cell lines. Big whoop. That would be the top 1/3. Answering machines cost $30 or less and are essential when looking for work, and having a job. The fact that people can afford a land line (less than $20 a month) and a cell phone (handy for when your land line is cut off is hardly the economic miracle of the age.

1/10th of all poor households would be the 5% of the households - roughly the same number who receive welfare benefits and do not work at all. Guess the Welfare Queen spent so much money on her Cadillac, she can't afford a phone.

1/3 of poor hoomes report overcrowding, hunger, and difficulty getting medical care - and yet these are the people who receive Medicare/Medicaid and who you say have access to state of the art medical care better than a rich man would have received 60 years ago. This is more than 15% of the population, Eddie. At LEAST half these people have jobs and yet they are struggling to provide the basic necessitiies of life for their families in the richest country in the world.

By every measurement on the quality of life indexes around the world, the United States is losing ground: on access to food, shelter, medical care, (the necessities of life), access to a quality education, job stability, social safety net in the event of economic downturn, vacations, maternity leave - everything that makes life so much more liveable for the majority of the population, is missing in the United States.

The first thing I learned in economics is that the value of a country's economy is based on the value of goods produced. Everyone selling "services" is living off the work of the people who produce the goods. A country cannot survive economically if it imports all of its hard goods, and yet over the past 30 years, American corporations have been outsourcing the production of hard goods. All you have left is the low wage service sector, with no manufacturing sector there to feed it.

 

[EdwardBaiamonte]

All you have left is the low wage service sector, with no manufacturing sector there to feed it.

as a liberal do you ever get anything right??? We still do about 21% of the worlds manufacturing, thats down only slightly from 23%thanks to liberal unions and other liberal policies drivng about 20 million jobs off shore!!


Do you want to be a liberal all your life??

 

[Toddsterpatriot]

A third of “poor” households have both cell and land-line telephones. A third also telephone answering machines. At the other extreme, approximately one-tenth of families in poverty have no phone at all. Similarly, while the majority of poor households do not experience significant material problems, roughly a third do experience at least one problem such as overcrowding, temporary hunger, or difficulty getting medical care.

Much official poverty that does exist in the United States can be reduced, particularly among children. There are two main reasons that American children are poor: Their parents don’t work much, and their fathers are absent from the home.

1/3 of poor households have both land lines and cell lines. Big whoop. That would be the top 1/3. Answering machines cost $30 or less and are essential when looking for work, and having a job. The fact that people can afford a land line (less than $20 a month) and a cell phone (handy for when your land line is cut off is hardly the economic miracle of the age.

1/10th of all poor households would be the 5% of the households - roughly the same number who receive welfare benefits and do not work at all. Guess the Welfare Queen spent so much money on her Cadillac, she can't afford a phone.

1/3 of poor hoomes report overcrowding, hunger, and difficulty getting medical care - and yet these are the people who receive Medicare/Medicaid and who you say have access to state of the art medical care better than a rich man would have received 60 years ago. This is more than 15% of the population, Eddie. At LEAST half these people have jobs and yet they are struggling to provide the basic necessitiies of life for their families in the richest country in the world.

By every measurement on the quality of life indexes around the world, the United States is losing ground: on access to food, shelter, medical care, (the necessities of life), access to a quality education, job stability, social safety net in the event of economic downturn, vacations, maternity leave - everything that makes life so much more liveable for the majority of the population, is missing in the United States.

The first thing I learned in economics is that the value of a country's economy is based on the value of goods produced. Everyone selling "services" is living off the work of the people who produce the goods. A country cannot survive economically if it imports all of its hard goods, and yet over the past 30 years, American corporations have been outsourcing the production of hard goods. All you have left is the low wage service sector, with no manufacturing sector there to feed it.

Can you prove this silly claim?

 

[EdwardBaiamonte]

with no manufacturing sector there to feed it.

"The U.S. share of total world manufacturing output has fallen from about a quarter in 1970 to about 20 percent in 2009 (a sizable decline, but certainly not precipitous)."

20% of world manufacturing is no manufacturing???????? and thats with liberal unions driving 20 million jobs off shore, the highest liberal corporate taxes in the world driving whole companies off shore, and huge liberal deficits that enable the Chinese and Japanese to buy our debt rather than our products!!

Dragonlady is proud to be a blind liberal brainwashed parrot who can't learn!!

Now we can see how millions becames Nazis and Communists!! The truth does not matter one wit when the brain washing is thorough!!

 

[Dragonlady]

All you have left is the low wage service sector, with no manufacturing sector there to feed it.

as a liberal do you ever get anything right??? We still do about 21% of the worlds manufacturing, thats down only slightly from 23%thanks to liberal unions and other liberal policies drivng about 20 million jobs off shore!!


Do you want to be a liberal all your life??

That number is 19.4% of the world's manufacturing in 2011:

China became world?s top manufacturing nation, ending 110 year US leadership ? MercoPress

Furthermore, the US is #2 in the world, and most of the US manufacturing is stuff like military hardware, airline passenger jets - high end technology with military applications. China has been the source for clothing, consumer goods and technology for American companies and these entire sections of manufacturing have disappeared in the US.

Reports I read said that the US lost over 2 million jobs to outsourcing mostly in manufacturing and IT. These are good paying jobs that aren't coming back. If Ralph Lauren and Apple were reducing their prices to reflect lower costs, it would be one thing, but these are very expensive labels who are simply pocketing the cost savings and booking record profits.

So Ralph makes more money, which he doesn't spend at home, and the seamstresses on 7th Avenue have no work. Yeah, that's good for the economy. Right.

 

[EdwardBaiamonte]

with no manufacturing sector there to feed it.

That number is 19.4% of the world's manufacturing in 2011:

.[/QUOTE]

dear, is 20% of world manufacturing no manufacturing????????????

Do you have any character at all??????? IS liberalism pupre force and violence, and no regard for facts and logic?? Are you proud of yourself?? Do you think you represent liberalism well??

 

[Wyatt earp]

I consider you a spammer.

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

Till he gets an answer and this comes from a republican voter