Why "Trickle Down" doesn't work

[rdean]

Why "Trickle Down" doesn't work

A right winger inadvertently explained this to me. If you took every bit of capital and money from the top 5% and used it to run the government, the money would be burned through in less than a couple of days.

See? If the richest Americans don't have enough money to fuel the government then what good would the even tinier amount that comes from "trickle down"?

The same people talk about "using capitalism". Let's take a look at what "capitalism" really is.

Definition of CAPITALISM

: an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market

Capitalism - Definition and More from the Free Merriam-Webster Dictionary

Investments - you have to put money in to make money.

Competition in a free market - Republicans think this means no rules or regulations. That's why, in their mind, it's called a "free" market. And that is where "trickle down" falls completely apart. Free market is actually following the rules of "supply and demand". Regulation plays a very small part.

The first TV my family had as a kid was black and white and had a round screen. In the 60's, color TVs came out, but they were very expensive. Why? Because everyone wanted one and there weren't that many. Why? Because they just came on the market. Over the years, as more and more were available, the price dropped. Classic "supply and demand". When the demand is high and the supply is low, the cost is high. As the supply increases, the cost drops.

How this can be manipulated. Oil companies are masters at "supply and demand" manipulation. When the price begins to drop, the oil companies hold back product to force countries to "pay more". The recent rise in cost isn't because production is less, that hasn't changed noticeably. This price increase is from "speculation". Speculation is another thread. Speculation comes from "de-regulation".

 

[sparky]

for your perusal>
The 30-Year Growth of Income Inequality |

http://en.wikipedia.org/wiki/Oligarchy
Oligarchy (from Greek ὀλιγαρχία, oligarkhía[1]) is a form of power structure in which power effectively rests with a small number of people. These people could be distinguished by royalty, wealth, family ties, corporate, or military control. The word oligarchy is from the Greek words "ὀλίγος" (olígos), "a few"[2] and the verb "ἄρχω" (archo), "to rule, to govern, to command".[3] Such states are often controlled by a few prominent families who pass their influence from one generation to the next.

 

[Mad Scientist]

If you took every bit of capital and money from the top 5% and used it to run the government, the money would be burned through in less than a couple of days.

If you weren't just a mindless hack, you'd see that massive government is the problem.

Let's see, GDP is 14 trillion. National debt, 14 trillion.

Trickle down would work even better if there were no income tax.

 

[Mr. H.]

The first color TVs were expensive because of the expensive R&D and technology that went into their development. The relatively few units that were initially produced were the costliest.
Nothing's changed there.

 

[Liability]

rdunce being oh so very topical and timely:

if this were the 1980's.

 

[percysunshine]

It is a lie of liberals that 'trickle down' was ever an actual policy.

Hayek has always been the economic policy of conservatives. Keynes was an idiot.

 

[editec]

Trickle down economic policies work in those economic circumstances when the supply side is lacking in funding to expand to meet growing demand.

That economic theory worked beautifully, for example, when in the 19th century, money was flowing from European investors to American industry that needed capital to exploit the potential of our amazing natural resource base and meet our and Europe's rapidly growing markets.

When the supply siders are awash with dough and demand side is lacking it (as is the case in this current economy) all supply side policies do are is create MISALLOCATIONS of CAPITAL.

And this is EXACTLY what Bush II's and Obama's policies are still doing.

We are PUSHING THE STRING instead of pulling it.

 

[rdean]

It is a lie of liberals that 'trickle down' was ever an actual policy.

Hayek has always been the economic policy of conservatives. Keynes was an idiot.

And a couple of thread above you another right wingers says, "Trickle down would work even better if there were no income tax."

The truth is Republicans have no viable policy. They call me names and offer nothing of substance. How can they? They don't know anything.

 

[Norman]

Trickle down economic policies work in those economic circumstances when the supply side is lacking in funding to expand to meet growing demand.

That economic theory worked beautifully, for example, when in the 19th century, money was flowing from European investors to American industry that needed capital to exploit the potential of our amazing natural resource base and meet our and Europe's rapidly growing markets.

When the supply siders are awash with dough and demand side is lacking it (as is the case in this current economy) all supply side policies do are is create MISALLOCATIONS of CAPITAL.

And this is EXACTLY what Bush II's and Obama's policies are still doing.

We are PUSHING THE STRING instead of pulling it.

By what standard is USA a supply side economy?

IMO both of these fail because market already determinate the supply and demand. You don't need any further demand or supply. Sure Keynes has his paradox of thrift but TBH that is nonsense.

 

[rdean]

Trickle down economic policies work in those economic circumstances when the supply side is lacking in funding to expand to meet growing demand.

That economic theory worked beautifully, for example, when in the 19th century, money was flowing from European investors to American industry that needed capital to exploit the potential of our amazing natural resource base and meet our and Europe's rapidly growing markets.

When the supply siders are awash with dough and demand side is lacking it (as is the case in this current economy) all supply side policies do are is create MISALLOCATIONS of CAPITAL.

And this is EXACTLY what Bush II's and Obama's policies are still doing.

We are PUSHING THE STRING instead of pulling it.

You've confused "investment" with "trickle down".

 

[Mad Scientist]

It is a lie of liberals that 'trickle down' was ever an actual policy.

Hayek has always been the economic policy of conservatives. Keynes was an idiot.

And a couple of thread above you another right wingers says, "Trickle down would work even better if there were no income tax."

The truth is Republicans have no viable policy. They call me names and offer nothing of substance. How can they? They don't know anything.

Hows that non trickle down Obama economy going?

 

[percysunshine]

It is a lie of liberals that 'trickle down' was ever an actual policy.

Hayek has always been the economic policy of conservatives. Keynes was an idiot.

And a couple of thread above you another right wingers says, "Trickle down would work even better if there were no income tax."

The truth is Republicans have no viable policy. They call me names and offer nothing of substance. How can they? They don't know anything.

Name calling is juvenile. Economics is not. Economies work in predictable patterns. Peoples needs are most efficiently met with a supply of goods independent of central control.

.

 

[rdean]

It is a lie of liberals that 'trickle down' was ever an actual policy.

Hayek has always been the economic policy of conservatives. Keynes was an idiot.

And a couple of thread above you another right wingers says, "Trickle down would work even better if there were no income tax."

The truth is Republicans have no viable policy. They call me names and offer nothing of substance. How can they? They don't know anything.

Name calling is juvenile. Economics is not. Economies work in predictable patterns. Peoples needs are most efficiently met with a supply of goods independent of central control.

.

Regulations to ensure public safety and a level playing field are NOT "central control". But thinking it is is pretty hilarious.

 

[CrusaderFrank]

Why "Trickle Down" doesn't work

A right winger inadvertently explained this to me. If you took every bit of capital and money from the top 5% and used it to run the government, the money would be burned through in less than a couple of days.

See? If the richest Americans don't have enough money to fuel the government then what good would the even tinier amount that comes from "trickle down"?

The same people talk about "using capitalism". Let's take a look at what "capitalism" really is.

Definition of CAPITALISM

: an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market

Capitalism - Definition and More from the Free Merriam-Webster Dictionary

Investments - you have to put money in to make money.

Competition in a free market - Republicans think this means no rules or regulations. That's why, in their mind, it's called a "free" market. And that is where "trickle down" falls completely apart. Free market is actually following the rules of "supply and demand". Regulation plays a very small part.

The first TV my family had as a kid was black and white and had a round screen. In the 60's, color TVs came out, but they were very expensive. Why? Because everyone wanted one and there weren't that many. Why? Because they just came on the market. Over the years, as more and more were available, the price dropped. Classic "supply and demand". When the demand is high and the supply is low, the cost is high. As the supply increases, the cost drops.

How this can be manipulated. Oil companies are masters at "supply and demand" manipulation. When the price begins to drop, the oil companies hold back product to force countries to "pay more". The recent rise in cost isn't because production is less, that hasn't changed noticeably. This price increase is from "speculation". Speculation is another thread. Speculation comes from "de-regulation".

I can't discuss economics with anybody who believes that the Federal government is the US economy

 

[Baruch Menachem]

Rdean once again carries on a terrific assault on straw. the straw man is shown to be ridiculous and stupid. Not so silly as the person who uses the straw, but the straw is defeated.
[ame="http://www.youtube.com/watch?v=8RjXY_-PUbo"]Rdean is jealous of Ray Bolger[/ame]

 

[Flopper]

If you give a rich man a tax cut, he may elect to invest it. And that investment may be in a company that creates American jobs. And those jobs just might pay a living wage. Or... He might just put it into foreign investments, gold, silver, or just put it in the bank.

 

[Baruch Menachem]

Not just a rich guy.

the reason economists aim targeted tax cuts toward the poor is that is assumed that poor folks have a consumption function >1. Rich folks, who save money, have lower consumption functions the more they have. The assumption is that rich folks have a consumption function approaching zero. Which is why this is such a stupid straw argument. Giving breaks to people who demonstrably don't spend very hard is the definition of bad policy.

The argument for Reagan style tax cuts is not that we should give money to folks who won't spend it. Instead we should increase the returns on investments, so that people do more profitable investments. No matter how much money anyone has, they always want more. If you increase the return on a dollar, there is more chance that folks will put that dollar to work.

And giving money to poor folks does not really mean they will spend it. They are more likely to use the windfall to improve their financial position as well, by paying down debt. Which is mostly what happend to the stimulus bills passed during the Bush administration. People were given $600 and the money went right to the credit card banks as folks paid down their balances and reduced spending, as people began to batten down for the perceived coming storm

 

[Norman]

Not just a rich guy.

the reason economists aim targeted tax cuts toward the poor is that is assumed that poor folks have a consumption function >1. Rich folks, who save money, have lower consumption functions the more they have. The assumption is that rich folks have a consumption function approaching zero. Which is why this is such a stupid straw argument. Giving breaks to people who demonstrably don't spend very hard is the definition of bad policy.

The argument for Reagan style tax cuts is not that we should give money to folks who won't spend it. Instead we should increase the returns on investments, so that people do more profitable investments. No matter how much money anyone has, they always want more. If you increase the return on a dollar, there is more chance that folks will put that dollar to work.

And giving money to poor folks does not really mean they will spend it. They are more likely to use the windfall to improve their financial position as well, by paying down debt. Which is mostly what happend to the stimulus bills passed during the Bush administration. People were given $600 and the money went right to the credit card banks as folks paid down their balances and reduced spending, as people began to batten down for the perceived coming storm

Replace economists with "keynesian" economists.

 

[rdean]

Not just a rich guy.

the reason economists aim targeted tax cuts toward the poor is that is assumed that poor folks have a consumption function >1. Rich folks, who save money, have lower consumption functions the more they have. The assumption is that rich folks have a consumption function approaching zero. Which is why this is such a stupid straw argument. Giving breaks to people who demonstrably don't spend very hard is the definition of bad policy.

The argument for Reagan style tax cuts is not that we should give money to folks who won't spend it. Instead we should increase the returns on investments, so that people do more profitable investments. No matter how much money anyone has, they always want more. If you increase the return on a dollar, there is more chance that folks will put that dollar to work.

And giving money to poor folks does not really mean they will spend it. They are more likely to use the windfall to improve their financial position as well, by paying down debt. Which is mostly what happend to the stimulus bills passed during the Bush administration. People were given $600 and the money went right to the credit card banks as folks paid down their balances and reduced spending, as people began to batten down for the perceived coming storm

Rich folks "save" money?

I thought they used it to "create" jobs?

Which is it?

 

[Quantum Windbag]

Why "Trickle Down" doesn't work

A right winger inadvertently explained this to me. If you took every bit of capital and money from the top 5% and used it to run the government, the money would be burned through in less than a couple of days.

See? If the richest Americans don't have enough money to fuel the government then what good would the even tinier amount that comes from "trickle down"?

The same people talk about "using capitalism". Let's take a look at what "capitalism" really is.

Definition of CAPITALISM

: an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market

Capitalism - Definition and More from the Free Merriam-Webster Dictionary

Investments - you have to put money in to make money.

Competition in a free market - Republicans think this means no rules or regulations. That's why, in their mind, it's called a "free" market. And that is where "trickle down" falls completely apart. Free market is actually following the rules of "supply and demand". Regulation plays a very small part.

The first TV my family had as a kid was black and white and had a round screen. In the 60's, color TVs came out, but they were very expensive. Why? Because everyone wanted one and there weren't that many. Why? Because they just came on the market. Over the years, as more and more were available, the price dropped. Classic "supply and demand". When the demand is high and the supply is low, the cost is high. As the supply increases, the cost drops.

How this can be manipulated. Oil companies are masters at "supply and demand" manipulation. When the price begins to drop, the oil companies hold back product to force countries to "pay more". The recent rise in cost isn't because production is less, that hasn't changed noticeably. This price increase is from "speculation". Speculation is another thread. Speculation comes from "de-regulation".

Your stupidity is mind boggling.

Literally.

Since there is not enough money to run the government your solutions is to make everyone poor? How will that help?

Let me explain why eliminating the wealthy class will never be possible. If you take all the money from the top 5% and spread it around evenly you will end up with a new group that is in the top 5%. You then take away their money, and end up with a new group that is richer than anyone else.

No matter how long you do this you will always have someone who is richer, and someone who is poorer. Jesus recognized this 2000 years ago and told his followers that they would always have the poor.

By the way, the reason color TVs became less expensive was not simply because the supply of TVs increased beyond the demand, it was because we found new ways to manufacture them that drove down the cost of making them, even though labor costs went up. Reducing that to supply and demand just indicates you paid attention in grade school, not that you understand economics.