Does everyone now agree that trickle down economics doesn't work?

Question

If not, how wide does the divide between rich and poor have to be?

"In the mid-1990s, the United Nations published a report showing that the U.S. had already become the most class-stratified society among all the advanced industrial countries. Now, wealth in the U.S. is even more concentrated in the hands of a few. "It’s remarkable how little growth has trickled down to ordinary families," Krugman explained. "Median family income has risen only about 0.5 percent per year--and as far as we can tell...just about all of that increase was due to wives working longer hours, with little or no gain in real wages.""

Answer 1

Who was the comedian who said "trickle down economics is like giving all of the oats to the horse, and the sparrows will get some on the other end"?

Answer 2

You're kidding, right? There was (another) landmark study that proved its effectiveness at none other than Harvard just a few years ago. The problem is that most people don't look at the data. Rather, they just look at a few tiny indicators and say it doesn't work. The paper I'm talking about is:

"Fiscal Policy, Profits and Investment" in 18 large economies by Profs. Alesina, Ardagna, Perotti and Schiantarelli. Just search Harvard's website for the link. Notice that the researchers didn't just look at one economy, but 18. The data is really overwhelming.

Here's an excerpt:

Harvard economists once thought cutting government spending was contractionary, something that would shrink the private economy. The Alesina study finds that big cuts in government spending are expansionary, making economies boom. Ireland slashed government spending by more than 7 percent of GDP in 1986-89, and economic growth from 1989 to 2001 averaged 7.2 percent per year. Japan spent hundreds of billions on Keynesian public works schemes after 1991, and economic growth averaged only 1.1 percent.

Part of the explanation is taxes. Ireland now has a 15 percent tax on corporate profits, a 20 percent tax on inflation-indexed capital gains and lower tax rates on labor. Japan imposed new taxes on sales, property and capital gains, while maintaining Asia's most punitive income-tax rates.

Alesina found that "labor taxes have the largest negative impact on profits and investment," partly because private workers "react to tax hikes or more generous transfer payments by decreasing the labor supply or asking for higher pretax real wages." But this study also found that big government spending is inherently bad for economic growth, even aside from taxes. Government hiring and pay raises lure workers from private businesses, which are forced to raise wages even if that means reduced hiring. Higher labor costs per employee depress profits and investment.

Edit: Be wary of UN studies. Try reading several. They are geared towards Socialism. Most of the time, they ignore the actual data and opt for propoganda. Just follow the data and you'll find the truth. "In God We Trust. All Others Bring Data."

Answer 3

The fact that some poor people don't participate in the economy or make efforts to get jobs and improve themselves has nothing to do with trickle down economics. Only people participating in economics will expect to see a result from it.

Or you could just give them money for nothing and call it 'progress'. That works really well, every time as a matter of fact (not).

BTW: the middle class has tended to move up, I would call that a success.

Answer 4

Yes. It's amazing that wealthy business owners don't understand that supply side economics doesn't monetarily benefit them in the long run. The only people who benefit are those who receive large interest bearing inheritances and don't work.

Answer 5

You know screw the poor. Yea I said it. It's there own damn fault. I know plenty of people that weren't rich and WORKED there way up by going to college and making something of themselves. Anybody in America can do it if they just gave it their all. Even if you’re in your forty's you can still take classes at night and better yourself. It not like you’re born poor and that's it. That what makes America great. You can succeed or fail all on your own. So stop blaming the rich for the failures of the poor.

Answer 6

I started with a trickle in the 80's and I'm up to a nice steady creek now.

Of course, I went to college, made sure I had viable job skills, and moved to places that paid me the most money.

I think that's what they had in mind...the right to persue life, liberty and happiness.

Answer 7

Our economy appears to be working. Low unemployment and a lot of jobs. What do you want income redistribution? Do you think my commie Senator gives a dime to the poor. The answer is NO.Not everyone can be a millionaire but all can work and make a living. Peace

Answer 8

Equal opportunity works. That's what we have in the US. A person can go from being dirt poor to being a multimillionaire in a matter of minutes. Example: college basketball players who get drafted.
The so-called poor in the US are better off than most people in the rest of the world.
I think I smell a liberal here.

Answer 9

It's proven that it doesn't work. It only makes things MUCH harder on those who are trying to live out the "American Dream" . Republicans seem to forget that. Bush's tax-breaks are attempt #3 at Reagan-esque economics. They failed then, they're failing now.

Whether NeoCon trash want to agknowledge it or not, the income-gap in America is serious problem...the biggest of which...is THAT IT'S NOT AMERICAN.

Answer 10

Just because everybody doesn't drive a Mercedes and live in a mansion, doesn't mean trickle down doesn't work.

Unemployment is at an all-time low. Stock market is at an all time high (and more people are in the market than ever before because of pension funds and 401k participation).

And Shanahan----what exactly is a left wing capitalist country? I don't think there has ever been one; if so, name it.