What was that. And whats the criticism of that. It apparently was made by Reagan. Only thing i got out of it was this video review by Onion News. Argument is it made middle class workers poor or something
Trickle down economics.
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Trickle down economics, also called Supply Side Economics, is the idea that if the wealthy is given more money (or have less taken for taxes, effectively the same thing) then the wealthy will be able to spend more, creating more work for everyone else and spreading wealth around the nation.
It's heavily criticized because in America whenever the idea has been adopted (1880's, 1920's, 1980's, today) two phenomena develop: radical boom-bust cycles (large spurts of growth followed by large recession/depression and wealthy people buying up wealth of those that can't afford the bust), and large accumulation of wealth for the very rich, which strips the country of any social mobility. There is plenty of evidence that behind the flowery words of the wealthy promising jobs and spreading wealth, they instead horde wealth when they're given unregulated tax cuts or large sums of money.
One item in particular that puts a nail in the coffin for that idea is that it assumes that if the rich are taxed then however the government would spend the money would not be recirculated into the economy, when in fact tax spending (government projects, welfare, governemnt jobs, etc.) recirculates into the economy far better than any private corporation can, due to the lack of any profit motive. One can take this idea too far, of course, but a rejection of trickle down economics isn't a push for absolute government redistribution - effective hybrid systems do exist.
Reagon made the term "Trickle-Down Economics" stick, but it's been around long enough for any economist worth their salt to say it doesn't work at all like it promises to.
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Here's some old dude speculating about where we're at with that
Think of TD economics as a sugar rush.
Trickle down/supply side economics could be a viable economic system in theory. Unfortunately, the problem lies with the elite classes who end up pocketing the tax breaks over providing more job opportunities to the lower classes, and essentially creates an ever growing equality gap.
At the end of the day, TD economics is often viewed with considerable scorn, more so with the lack of incentives (or even enforcement, which is hard to do) on part of the rich than anything else.
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At 2/3/19 02:13 PM, orangebomb wrote: At the end of the day, TD economics is often viewed with considerable scorn, more so with the lack of incentives (or even enforcement, which is hard to do) on part of the rich than anything else.
I'm not sure it's lack of incentives to induce the rich to trickle down, rather it's a fundamental misunderstanding of what causes the rich and business to invest and spend. When money is the end goal, handing out money doesn't cause people to spend it. When you present opportunity to make more money THAT is what causes the wealthy and businesses to spend.
