Liberals Believe in Trickle Down Economics

[Avorysuds]

I like the progressive Matt's silence when it comes to providing where Public education is part of the constitution....

It's in the 10th amendment.

"...reserved to the States respectively, or to the People."

Yes, the states... Not the federal Government as it is done today. So the Federal Government has no authority over education. Thanks for proving me right. Guess you don't agree with the 20ish billion the federal Government distributes to the states, unconstitutionally>?

 

[Avorysuds]

Hey when all else fails just fall back on "general welfare." I mean, what can't you do with that one... Shit you could argue burning anyone with an std to death under the "general welfare" interpretation. Seriously... make an argument against it.

 

[kaz]

Hey when all else fails just fall back on "general welfare." I mean, what can't you do with that one... Shit you could argue burning anyone with an std to death under the "general welfare" interpretation. Seriously... make an argument against it.

And they don't use "general welfare" correctly. General welfare means it benefits all Americans. You can reasonably argue for things like National Parks as it sets aside land to the "general" benefit of all and the specific benefit of no one.

Welfare programs like social security or need based welfare programs at the Federal level are not "general welfare" and are just blatantly Unconstitutional. That sort of welfare if done by government is to be done at the State or local level.

 

[Erand7899]

Depends.

You do know that the largest employer in the country is the government, right?

Yes, and that is a good share of the problem. Government consumes wealth, it doesn't create any. With the possible exception of the public schools generating an educated work force, and government is even lousy at that.

Really, infrastructure= waste, educating all of our children = waste, best r&d and science programs on this planet = waste. We need reforms in education but your idea's simply aren't as good overall. A parent currently has the ability to send their children to private school! Not everyone can...

Can you now see why I think you people aren't sane?

Really, Mathew, consumption is not all waste, and even us crazy people know that consumption does not create wealth. Infrastructure is consumption because it is the conversion of valuable materials into a non-marketable entity. Education is not all consumption because there is value added in the marketable skills of the students. Waste exists in every child that does not receive a first rate education.

Wealth is only created, when value is added to a marketable product. All other financial transactions are only redistribution of that wealth. Government creates few, if any marketable products, and therefore does not normally generate wealth. It consumes the wealth that other people create.

 

[The T]

How do they get the job to be able to do that?

.

Depends.

You do know that the largest employer in the country is the government, right?

And what does the government create?

The government gets 100% of its operating capital not from producing anything but from shaking down the private sector.

The government could not employ anyone if not for the private sector.

Precisely. And isn't it interesting that Government employees seem to think they're entitled to their jobs, and treat the taxpayer (that they get their money from), like shit?

 

[Boss]

It's obviously less than it could be if the company's PROFITS (outweighing costs like employee wages and benefits) were $15.7 billion in three months. Theoretically, Wal-Mart could take a profit of only $8 or $9 billion in three months (a substantial amount in any economy) and reinvest the rest of those profits into higher wages and better benefits so that Wal-Mart employees don't require as much public assistance.

Why doesn't trickle down theory work in practice?

That's the whole point of this thread. Trickle down theory is the only way any capitalist free market system works. The alternative would be to have authoritarian or totalitarian Marxism, Maoism or Communism, controlling all means of capitalism.

What you are doing with your Walmart example, is taking the data after the fact and determining what is "fair" for Walmart to make as a capitalist. The glorious and beautiful thing about free market and free enterprise capitalism is, if you believe this is a better capitalist model, you are free to go out there and start your own rival company and put Walmart out of business. The employees of Walmart would much rather do the same work for your company and make twice the pay, so you'd have no problem hiring people.

The problem is, you could never catch up to Walmart as they generate twice as much profit as you each year, thus have twice as much to reinvest. Plus, you are going to lose money in the beginning, until you can match the presence and buying power of Walmart nationwide. Your formula would be a major hinderance as you struggled to try and catch them. But... let's say that you had deep pockets and could afford to keep your business afloat long enough to catch Walmart and put them out of business... you show a much more modest $8 billion profit and some jerkwater liberal comes along and arbitrarily decides you are making "too much" profit, and you "don't deserve" more than $2 billion per year. See where this is going?

Capitalists are not in business to ensure income equality. You don't go to work and earn a paycheck with the motivation and objective of "making everything fair for everybody." A capitalist is trying to make as much profit as possible, and you are trying to earn as much payday as possible. The "good" thing about this is, the more profit the capitalist makes and the more paycheck you earn, the more taxes are paid into the system.

 

[Oldstyle]

It's obviously less than it could be if the company's PROFITS (outweighing costs like employee wages and benefits) were $15.7 billion in three months. Theoretically, Wal-Mart could take a profit of only $8 or $9 billion in three months (a substantial amount in any economy) and reinvest the rest of those profits into higher wages and better benefits so that Wal-Mart employees don't require as much public assistance.

Why doesn't trickle down theory work in practice?

That's the whole point of this thread. Trickle down theory is the only way any capitalist free market system works. The alternative would be to have authoritarian or totalitarian Marxism, Maoism or Communism, controlling all means of capitalism.

What you are doing with your Walmart example, is taking the data after the fact and determining what is "fair" for Walmart to make as a capitalist. The glorious and beautiful thing about free market and free enterprise capitalism is, if you believe this is a better capitalist model, you are free to go out there and start your own rival company and put Walmart out of business. The employees of Walmart would much rather do the same work for your company and make twice the pay, so you'd have no problem hiring people.

The problem is, you could never catch up to Walmart as they generate twice as much profit as you each year, thus have twice as much to reinvest. Plus, you are going to lose money in the beginning, until you can match the presence and buying power of Walmart nationwide. Your formula would be a major hinderance as you struggled to try and catch them. But... let's say that you had deep pockets and could afford to keep your business afloat long enough to catch Walmart and put them out of business... you show a much more modest $8 billion profit and some jerkwater liberal comes along and arbitrarily decides you are making "too much" profit, and you "don't deserve" more than $2 billion per year. See where this is going?

Capitalists are not in business to ensure income equality. You don't go to work and earn a paycheck with the motivation and objective of "making everything fair for everybody." A capitalist is trying to make as much profit as possible, and you are trying to earn as much payday as possible. The "good" thing about this is, the more profit the capitalist makes and the more paycheck you earn, the more taxes are paid into the system.

I'd respectfully point out that the term "trickle down" is a misnomer, Boss. It's actually a "trickle up" concept when it comes to profits. Profits are what are left over AFTER you've paid wages...not something that occurs before. Your average worker gets paid despite whether a profit is ever made or not. They've contracted to work for a certain wage per hour and that is what they will make.

 

[Oldstyle]

Where liberals go astray is they are so concerned about "income inequality" that they demand laws that lower the expectation of profit for those with capital with things like higher taxes on investment profits or higher wages for workers and then seem baffled when those with capital decline to risk it in new businesses or expansions of existing businesses. It's really a rather simple concept...if you lower the expectation that a profit will be earned...capital will stay out of play and jobs will not be created. You have to allow profits to induce investment.

 

[natstew]

Capitalists do not create wealth.......the workers do

Yeah Like they did in the Soviet Union, Cuba,

Actually, most American workers are Capitalists, shock!! shock! it's possible to work and be a Capitalist!!

 

[Boss]

I'd respectfully point out that the term "trickle down" is a misnomer, Boss. It's actually a "trickle up" concept when it comes to profits. Profits are what are left over AFTER you've paid wages...not something that occurs before. Your average worker gets paid despite whether a profit is ever made or not. They've contracted to work for a certain wage per hour and that is what they will make.

I see what you are saying and when it comes to profits I don't disagree, but we are talking about free market capitalist systems as a whole, and they are indeed "trickle down" economics, regardless of who is president. It's how all free market capitalism works.

What trickles up will inevitably trickle back down. Liberals will often argue this point. What about the greedy SOBs making these insane profits and hoarding them all to themselves? Well, what purpose does wealth serve if it is never spent? If I make a bunch of money and bury it in a hole, how am I any better off than someone who made no money? So wealth that never gets spent is academic, it doesn't help or hurt anyone, it means nothing. Those who do obtain wealth, generally do something with it. They may invest in securities, they may reinvest in whatever made them wealthy, or they may spend it lavishly on luxury items. Anything they choose to do besides rendering it irrelative by burying it in a hole, is "trickle down" economics.

 

[Boss]

Where liberals go astray is they are so concerned about "income inequality" that they demand laws that lower the expectation of profit for those with capital with things like higher taxes on investment profits or higher wages for workers and then seem baffled when those with capital decline to risk it in new businesses or expansions of existing businesses. It's really a rather simple concept...if you lower the expectation that a profit will be earned...capital will stay out of play and jobs will not be created. You have to allow profits to induce investment.

Any liberal who has ever uttered the phrase "income inequality" or made an argument on this basis, should honestly go study the history of Mao in China and the People's Revolution. This was his exact same argument and he makes the exact same point liberals make today. The "greedy capitalists" are hoarding all the wealth, and the "little guy" is left with crumbs. It is the identical "1% vs. 99%" argument, almost word for word, which sparked the People's Revolution and swept Mao into power.

Now, what Mao did would make any Occutard cream their panties! He stopped ALL capitalism in China, outlawed capitalist trade completely. Rounded up and killed all the wealthy capitalists. This was so they could start with a fresh slate and operate a pure socialist-communist system where everyone had an equal piece of the pie. Several key problems emerged as a result of this. First, all the capitalist wealth was confiscated by the ruling class, who curiously did not feel compelled to share it with everyone as planned. Secondly, all the people who knew how to generate wealth through capitalist venture were dead. As anti-capitalist trade policies were implemented, China became plunged into economic darkness. They would remain there essentially until Mao died.

Over 70 million people ultimately died as a result of this failed economic experiment. Yet we have young mush brains today in this country, many of whom have probably never cracked open a history book, making the same exact arguments again.

 

[Nyvin]

"trickle down economics" usually doesn't refer to corporations or businesses making money and then paying employees...it refers to government policies that lower taxes (and minimum wages) for wealthy people and businesses and then "supposedly" the businesses and wealthy people charge less for their products and are able to hire more employees and pay them more.

...only...what really happens is the wealthy people and corporations just pay less taxes and keep charging the same amounts and paying their employees the same amounts...they just have higher profits for CEO bonuses.

 

[Boss]

"trickle down economics" usually doesn't refer to corporations or businesses making money and then paying employees...it refers to government policies that lower taxes (and minimum wages) for wealthy people and businesses and then "supposedly" the businesses and wealthy people charge less for their products and are able to hire more employees and pay them more.

...only...what really happens is the wealthy people and corporations just pay less taxes and keep charging the same amounts and paying their employees the same amounts...they just have higher profits for CEO bonuses.

No, trickle down economics as articulated by Ronald Reagan, was the idea that increasing economic prosperity at the top, produces a "trickle down" of resources to everyone else. There is no promise that prices will be lower or employees will have better pay, or that more jobs will be created. Those things are all dependent upon different factors. Prices are based on supply vs. demand, employee pay is based on value, more jobs are based on need. Lower taxes are one way to stimulate economic prosperity at the top, as well as reducing regulatory burdens (deregulation).

My argument is that ALL free market capitalism is "trickle down" because that is what happens in a free market economy. The more economic prosperity, the more there is to trickle down, and it does. Take this theory out of a national economy level and into a personal economics level... Would you say your spending habits are the same whenever you have lots of expendable income as opposed to less? Most people wouldn't. We tend to spend more when we have more and become more frugal the less we have to spend.

If the economy is roaring, economic prosperity abounds, and people have generally more money in their pockets with reasonable certainty there will be even more money to come soon, it doesn't matter if they are at the top or elsewhere, their spending habits follow the same pattern. As they spend, these resources "trickle down" to all those who are on the receiving end. New capitalist opportunities emerge as a result and even more economic prosperity happens, in turn, producing more revenue to trickle down.

 

[Oldstyle]

I'd respectfully point out that the term "trickle down" is a misnomer, Boss. It's actually a "trickle up" concept when it comes to profits. Profits are what are left over AFTER you've paid wages...not something that occurs before. Your average worker gets paid despite whether a profit is ever made or not. They've contracted to work for a certain wage per hour and that is what they will make.

I see what you are saying and when it comes to profits I don't disagree, but we are talking about free market capitalist systems as a whole, and they are indeed "trickle down" economics, regardless of who is president. It's how all free market capitalism works.

What trickles up will inevitably trickle back down. Liberals will often argue this point. What about the greedy SOBs making these insane profits and hoarding them all to themselves? Well, what purpose does wealth serve if it is never spent? If I make a bunch of money and bury it in a hole, how am I any better off than someone who made no money? So wealth that never gets spent is academic, it doesn't help or hurt anyone, it means nothing. Those who do obtain wealth, generally do something with it. They may invest in securities, they may reinvest in whatever made them wealthy, or they may spend it lavishly on luxury items. Anything they choose to do besides rendering it irrelative by burying it in a hole, is "trickle down" economics.

You're 100% correct. The wealthy's "job" as it were, is the preservation and growth of capital. They don't as a rule "bury it in a hole" because they want it to work for them and create more capital. What we've done with non-stop quantitative easing for the past five years is provide a risk free method for the rich to increase their wealth. They can borrow essentially free money which they can then put into extremely safe investments which in many cases have been nothing but tax exempt bonds. The return might be small but the risk they are taking is even smaller. It's a sure thing. It's also a sure way to keep investment capital from being spent on risky start ups that would create jobs...hence, our "jobless recovery".

If you want a REAL example of "trickle down" theory, one only has to look as far as the Big Government nanny state we've become. We as citizens pay in vast amounts of our money in the form of taxes which an inefficient government then pretends to give back to us in services. Unfortunately, our Federal Government is SO inefficient much of our money is simply squandered and the services we receive become less and less.

 

[Boss]

If you want a REAL example of "trickle down" theory, one only has to look as far as the Big Government nanny state we've become. We as citizens pay in vast amounts of our money in the form of taxes which an inefficient government then pretends to give back to us in services. Unfortunately, our Federal Government is SO inefficient much of our money is simply squandered and the services we receive become less and less.

It's like a trickle down theory of pouring your money through a giant sponge. It may eventually trickle down, but it is terribly inefficient and wasteful. Excessive "tax the rich" schemes are like trickle down with an umbrella, the umbrella serves to divert the trickling down to China and elsewhere.

 

[Oldstyle]

Trying to squeeze the ultra rich into giving up their capital is easier said than done. They have the means to move to whatever locale won't hit them with steep taxes. If liberals WERE able to pass stiff new taxes on the wealthy, I guarantee you that before the new taxes went into effect massive amounts of capital would be moved out of this country and new investments here would nosedive. I know it drives the far left crazy...but in order to create jobs...you have to let people with capital to invest make a big enough profit to make it worth their while. If you don't, they will go elsewhere.

 

[Nyvin]

No, trickle down economics as articulated by Ronald Reagan, was the idea that increasing economic prosperity at the top, produces a "trickle down" of resources to everyone else.

You say "no" but then the following statement pretty much lines up exactly to what I posted.

 

[Boss]

No, trickle down economics as articulated by Ronald Reagan, was the idea that increasing economic prosperity at the top, produces a "trickle down" of resources to everyone else.

You say "no" but then the following statement pretty much lines up exactly to what I posted.

Except that what you said was not correct: ...it refers to government policies that lower taxes (and minimum wages) for wealthy people and businesses and then "supposedly" the businesses and wealthy people charge less for their products and are able to hire more employees and pay them more.

This is what I said "NO" to. That's why I quoted you in my reply. Increasing economic prosperity at the top is more than just lowering taxes. The minimum wage has never been lowered to my knowledge, so not sure where that came from. Decreasing regulation encourages more economic prosperity at the top, and tax incentives to certain types of business investment, lowering prime interest rates, etc. But the reason is not so that capitalists can "supposedly" do any of the things you indicated. All of those things are dependent upon a bunch of other factors which are not necessarily related to economic prosperity at the top.

The reason for increasing economic prosperity at the top is because this will inevitably trickle down to everything below the top. Money is being made so money is being spent. In a capitalist system, if money is being spent, money is being earned. The more it is earned, the more prosperity for those who earn it. The more earned income, the more tax revenue.

Now, if you increase prosperity long enough, demand for 'stuff' increases. If the supply of 'stuff' is not sufficient, this can create new jobs to produce more 'stuff' to meet the demand. Produce enough new jobs and the demand for labor increases, this raises the value of labor to make the 'stuff' that is needed to meet demand. That's how you get better paying jobs. It can happen as a result of long-term economic prosperity, but 'trickle down' is simply the nature of all capitalism.

 

[Nyvin]

No, trickle down economics as articulated by Ronald Reagan, was the idea that increasing economic prosperity at the top, produces a "trickle down" of resources to everyone else.

You say "no" but then the following statement pretty much lines up exactly to what I posted.

Except that what you said was not correct: ...it refers to government policies that lower taxes (and minimum wages) for wealthy people and businesses and then "supposedly" the businesses and wealthy people charge less for their products and are able to hire more employees and pay them more.

This is what I said "NO" to. That's why I quoted you in my reply. Increasing economic prosperity at the top is more than just lowering taxes. The minimum wage has never been lowered to my knowledge, so not sure where that came from. Decreasing regulation encourages more economic prosperity at the top, and tax incentives to certain types of business investment, lowering prime interest rates, etc. But the reason is not so that capitalists can "supposedly" do any of the things you indicated. All of those things are dependent upon a bunch of other factors which are not necessarily related to economic prosperity at the top.

The reason for increasing economic prosperity at the top is because this will inevitably trickle down to everything below the top. Money is being made so money is being spent. In a capitalist system, if money is being spent, money is being earned. The more it is earned, the more prosperity for those who earn it. The more earned income, the more tax revenue.

Now, if you increase prosperity long enough, demand for 'stuff' increases. If the supply of 'stuff' is not sufficient, this can create new jobs to produce more 'stuff' to meet the demand. Produce enough new jobs and the demand for labor increases, this raises the value of labor to make the 'stuff' that is needed to meet demand. That's how you get better paying jobs. It can happen as a result of long-term economic prosperity, but 'trickle down' is simply the nature of all capitalism.

Trickle down is not the nature of all capitalism, the nature of all capitalism is having a free market economy in which people, through the private sector, can facilitate trade, industry, and means of production. Nothing about this sets any precedent to enabling wealthy people to become as wealthy as possible. Nothing about it sets any precedent to lower regulation so rivers in West Virginia become contaminated or there's BT Toxins in corn from Monsanto.

A good amount money circulation is needed in pretty much ANY economy, capitalist or not. "More money being spent more money being earned" is true irregardless of capitalism, socialism, or any other system with a fiat currency. You're cooking up a loosely tied together economic phrases that sell to the uneducated but don't stand up to real life data, like the stagnant wages we've experience since Reagan and the hollowing out of the middle class since the Bush years.

The minimum wage is never directly lowered, but through inflation and not raising it, it's artificially lowered.

 

[KNB]

Trying to squeeze the ultra rich into giving up their capital is easier said than done. They have the means to move to whatever locale won't hit them with steep taxes. If liberals WERE able to pass stiff new taxes on the wealthy, I guarantee you that before the new taxes went into effect massive amounts of capital would be moved out of this country and new investments here would nosedive. I know it drives the far left crazy...but in order to create jobs...you have to let people with capital to invest make a big enough profit to make it worth their while. If you don't, they will go elsewhere.

There are currently record corporate profits. The 1% have been allowed to make a big enough profit to make it worth their while. Cutting taxes to the money class just allows them to keep more of their money. There haven't been any signs that lowering corporate tax rates spurs economic development. It only increases corporate savings. The wealth does not trickle down.

Record corporate profits + high unemployment = trickle down economics does not work.