What exactly is trickle down economics?

Question

So how does trickle down economics compare and contrast from keyneisan economics?

Answer 1

Trickle down economics is the theory that:

If business owners have more money, they will pass that money to the employees in the form of better wages and benefits, thusly helping everyone.

The way, in the governments eyes, to get the business owner to have more money is in tax incentives for business owners, and by incouraging, again by tax incentives, internal investment, reinvestment of profit, deduction of expenses off realized income, etc.

Since the question did not ask opinions of TDE, I will leave my answer at the definition. Good question.

Answer 2

Trickle down is the idea the Republicans have come up with.
The well to do people are given large tax breaks. They use these taxbreaks to invest in companys that hire people. That way the tax break is trickled down to the workers because they have a job.

Answer 3

It was Reagan's idea. You give tax breaks to the rich and upper middle class business owners, then in order to make more $, they would hire more people to expand their business. In my opinion it is not the government's job to support you, it's yourself so I really don't have a problem with trickle down economics. Also the middle class and lower middle class get a break too.

Answer 4

Also known as "voodoo" economics...a George Bush, Sr. and Ronnie Reagan brand of boosting the economy. Simply put, it is a Republican theory that if you give the rich more money by cutting their taxes, they will eventually send more money down (trickle down) the pay scale and into your pocket.

Isn't that funny???? HaHa!

Answer 5

It is a variation of the rising tide raising all boats.

The more money rich people have and keep, the more they spend, the more they spend the more companies hire and the more the wealth trickles down to the lower economic status citizens.

Answer 6

The richest of the nation have a much larger share of the nation's wealth than does the rest of the people. The idea is that those now ridiculously wealthy people will spend lots of money, which will "trickle down" through the poorer citizens.

It's a load of crap, rich people hoard money, the poor just get poorer trying to subsist. It's a loaded game, they can't win.

Answer 7

it works like this. a million. the version between the prosperous and the prosperous is that the prosperous in simple terms have countless money on the same time as the prosperous have earnings producing supplies. for sure the prosperous substitute into prosperous with the help of "making an investment" -- determining to purchase shares of earnings producing supplies. as a results of fact that's believed that A)earnings producing supplies delivers employment, and B)stated employment is for the main area relatives, the earnings from supplies is taxed at a distinctive cost than earnings from hard paintings. 2. as a results of fact the prosperous start to get carry of a larger share of the completed capital, they are able to spend extra for in spite of they purchase. beginning with huge-cost ticket products and working its way down this motives inflation, that's in simple terms yet another be conscious for devaluation of wages for the working guy. 3. Unemployment starts off to strengthen while devalued wages stress workers to seek for extra hours or extra jobs, which by way of furnish and demand starts off a spiral of devaluing hard paintings and melancholy of wages. that's exacerbated to a pair volume with the help of offshoring, which negates assumption B). 4. that's the place the thought C)is on condition that if the prosperous had extra money to spend, they could spend it on determining to purchase extra products and centers that they have got already got sufficient of, or extra relatives workers than they fairly want, 5. provided that production and agriculture are already maxed out, the prosperous take this further money and turn to different investment contraptions including derivatives, CDOs etc. which negate assumption A) 6. After crashing the economic gadget in what in actual words is a good sized counterfeiting operation, the two now fake assumptions A) and B) are trotted out back to assist extra implemenation of thought C). 7 . with the intention to pay for the decreased sales, austerity measures are instituted on the already forced relatives paintings stress, on the same time as the prosperous return to the practices of step 5. 8. previous human beings start up dropping like flies, young human beings are left uneducated, the ill are left untreated, desperate workers are pushed to crime, consequently dropping their place interior the electoral technique. 9. while sufficient human beings die, there will be sufficient jobs to bypass around and actual everyone would be satisfied for a on the same time as.

Answer 8

Cut taxes and allow those who have money to reinvest it in the economy. Only the private sector, not government, can create wealth. Those who have money will have more money to reinvest into the economy. This will create business growth and jobs.

President Bush's tax cuts accomplished the same concept. Put more money into people's hands and they will spend it in the economy. $ into the treasury will go up

Answer 9

At some point in time Trickle Down Theroy blowns up......It becomes to TOP heavy........And falls over.......