Quote:
Originally Posted by spence
There are many factors that have contributed to all of this but the real question is if trickle down doesn't work, why do so many still think it's good policy?
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That is not the real question. That is the real trick. You're either intentionally trying to mislead for political reasons, or you're just plain uninformed.
From Forbes:
"Our language is loaded with phrases that lead people into false beliefs and harmful actions, but the one I would nominate as the worst and most destructive of all is 'trickle-down economics.'
It was devised by Democrats in the 1980s as a way to attack President Reagan’s economic policy combination of tax rate cuts and some relaxation of federal regulations. They needed
a catchy, easy-to-remember zinger to fire at Reagan; a line that would keep their voting base angry."
The full article:
https://www.forbes.com/sites/georgel.../#69a611995891
The whole notion of "trickle down economics" is a myth intended to use the usual political trick of defining an opponent with a dishonest (a lie) characterization. The theory never existed.
From another article:
https://www.nccivitas.org/2014/myth-trickle-economics/
"As economist Thomas Sowell noted in his book Basic Economics, 'Trickle down has been a characterization and rejection of what somebody else supposedly believed.' But 'no recognized economist of any school of thought has ever had any such theory or made any such proposal. It is a straw man. It cannot be found in even the most voluminous and learned histories of economic theories . . .Here the President [Obama] and like-minded progressive statists employ an avoidance tactic to evade confronting the actual arguments presented by those who advocate for lower tax rates and less government interference as ways to grow the economy. Such advocates clearly do not make their case by seeking a transfer of existing wealth to high-income earners and business owners (i.e. “give more to those who have the most”). Rather, they emphasize the creation of additional wealth and jobs when entrepreneurs are not hampered by heavy regulation and discouraged by steep taxes,' Sowell writes."
More to the point: "As almost any entrepreneur – big or small – can tell you, when a business investment is made it is the workers who get paid first. Profits and capital gains only come later. For instance, when a new restaurant opens up, construction workers and interior designers get paid for building or renovating the space. Companies make money providing the furnishings and kitchen equipment. The wait staff, cooks and cleaning crew receive regular paychecks for doing their work. Furthermore, the food and beverage suppliers likewise get paid. Only later, if the restaurant is successful, do the owners see a return on their investment.
Even hugely successful corporations can often take years to break even. For instance, Amazon began in 1995 but didn’t turn its first profit until six years later after sustaining billions in losses. All that time, its workers and suppliers kept collecting checks.
As Sowell put it, 'In short, the sequence of payments is directly opposite of what is assumed by those who talk about a ‘trickle down’ theory. The workers must be paid first and then the profits flow upward later – if at all.'”
So, the good policy is similar to what Trump did.