"Trickle-down economics" and "the trickle-down theory" are pejorative terms that refer to the policy of providing across the board tax cuts or benefits to businesses, such as tax breaks, in the belief that this will indirectly benefit the broad population. The term has been attributed to humorist Will Rogers, who said during the Great Depression that "money was all appropriated for the top in hopes that it would trickle down to the needy.
Proponents of these policies claim that if the top income earners invest more into the business infrastructure and equity markets, it will in turn lead to more goods at lower prices, and create more jobs for middle and lower class individuals. Proponents argue that economic growth flows down from the top to the bottom, indirectly benefiting those who do not directly benefit from the policy changes. However, others have argued that "trickle-down" policies generally do not work, and that the trickle-down effect may be very slim, if indeed it even exists at all.
Today, "trickle-down economics" is most closely identified with the economic policies known as Reaganomics or supply-side-economics. Originally, there was a great deal of support for tax reform; there was a dual problem that loopholes and tax shelters create a bureaucracy (private sector and public sector) and that relevant taxes are thus evaded. During Ronald Reagan's presidency, the Democratic Party-controlled House, at the urging of President Reagan, cut the marginal tax rate on the highest-income tax bracket from 70% to 28%.
A major feature of these policies was the reduction of tax rates on capital gains, corporate income, and higher individual incomes, along with the reduction or elimination of various excise taxes. David Stockman, who as Reagan's budget director championed these cuts at first but then became skeptical of them, told journalist William Grieder that the term "supply-side economics" was used to promote a trickle-down idea.
| "It's kind of hard to sell 'trickle down,' so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory." | ||
David Stockman, Ronald Reagan's budget director | ||
Here is a little clip to show you how much Reagan was run by the MONEY GUYS in politics at the time:
http://www.youtube.com/watch?v=QTcL6Xc_eMM
Pay attention... That is Don Regan (Presidents money guy), former head of Merrill Lynch telling the President to speed it up. Notice Reagan talking about letting the Bulls go... Whose symbol on Wall Street is the Bull? HMMM...
OK. Question for all you Conservatives with guts enough to explain your stance.
You complain that a Democrat wants to infuse actual companies that may hire you with "bail out" monies. You complain they want to give you Social Services at a cost to all of us to help out the less fortunate. Even though, economically, you are the next unfortunate one in line. With that said:
How in your right mind can you vote for this policy to continue? I have heard the Tea Baggers all say: the bail outs have brought us nothing (even though it was a Republican who signed the first ones with no oversight at all). All we keep hearing is "where are the jobs?". However, after 30 years of trickle down experimentation in this country, I have a question for you:
Where the hell are the jobs? In the last 30 years we have gone from CEO pay being roughly 40% more than that of the workers to 400% more, and guess what, the average just went up another 20% this year. Yet, I still feel no jobs trickling down on any of us. They just took 1500 jobs from Goldman-Sachs, and shipped them overseas too. So, complain about Obama. However, look in the mirror. All of you who are dumb enough to be led by the nose with a policy that has never worked and will never work are ridiculous. Get a load of you voting against your own interests. It is great. This country was great when the wealthy were forced to pay back the society that allowed them to live an ultra wealthy lifestyle. We had a sustainable middle class, and we could provide for one home with one job in that home. Since the days of Ike who had a 90% tax rate, the country has been on a steady spiral down hill. So, if you can complain about a couple of years of a President trying to help... then I reserve the right to ask: where are all the jobs we were promised if we kept the rich man rich, and allowed him to get richer? Should he not by now have figured out a way to trickle a few jobs down on his US brethren? Or is it better he ships your job overseas so he can collect more cash because they work for $.50 and hour? You have been lied too, and you are being stupid for blindly following an economic experiment that has had 30 years to produce anything but strife and destitution in our nation... oh and an ultra wealthy class.
I look forward to comments.
To quote, "A major feature of these policies was the reduction of tax rates on capital gains, corporate income, and higher individual incomes, along with the reduction or elimination of various excise taxes."
ReplyDeleteAnd what REALLY happened? These businesses and individual investors SEIZED the money and held onto it for themselves. This is what justified CEO's exorbitant salaries, corporate jets, cushy executive conferences. Face it, the money never "trickled down" at all. And once money is in "individual hands" all bets are off. Don't take "MY" money or benefits away to reinvest in the companies infrastructure. Sure as a board member I'll vote to piecemeal out money on various projects as long at it doesn't cut into the shareholder value! I'm going to go as lean as possible even if it means shipping jobs overseas. I'm willing to sacrifice customer satisfaction, quality, error rates, etc. as long as I still get mine!!!! Because we know the government will only charge us a fine for bad product, bad service, broken regulations. But the price of the bad business or fines doesn't outweigh the revenue we will increase by our dirty deeds. We still get ours!
To quote:
http://www.youtube.com/watch?v=QTcL6Xc_eMM
Pay attention... That is Don Regan (Presidents money guy), former head of Merrill Lynch telling the President to speed it up. Notice Reagan talking about letting the Bulls go... Whose symbol on Wall Street is the Bull? HMMM...
Funny it was this man's name that was put on every dollar produced from 1981 - 1987.
I ask this, "How many of those dollars really trickled down Don?"
Quote: "You have been lied too, and you are being stupid for blindly following an economic experiment that has had 30 years to produce anything but strife and destitution in our nation... oh and an ultra wealthy class."
I couldn't agree more Sparky!