Conservative's 'trickle down theory' is dead wrong according to study

[sandorski]

What a complete asshat.

Indeed.

 

[Ventanni]

Yes, because if our economy consisted solely of bread and other low-end consumer products then redistribution might work. Of course if you flip the equation and pay CEOs 2000x as much you know their consumption of things like junk food and lotto tickets wouldn't double as would likely be true for the poor. So maybe we should just admit that *what* people spend their money on actually makes a bigger difference than strictly concerning ourselves with what fraction of the pie someone has at that particular fleeting moment. That the poor spend their limited money on crap is a far bigger reason for their problems than what some 1% guy is doing.

Just so I understand what you're saying correctly, are you saying that some of the current economic problems are due to poor money management on behalf of those who have little?

 

[Ventanni]

**This edited post was for another thread. Please disregard.**

 

[dank69]

Yes, because if our economy consisted solely of bread and other low-end consumer products then redistribution might work. Of course if you flip the equation and pay CEOs 2000x as much you know their consumption of things like junk food and lotto tickets wouldn't double as would likely be true for the poor. So maybe we should just admit that *what* people spend their money on actually makes a bigger difference than strictly concerning ourselves with what fraction of the pie someone has at that particular fleeting moment. That the poor spend their limited money on crap is a far bigger reason for their problems than what some 1% guy is doing.

Pretty sure it is more important that they are spending money. What the money is spent on doesn't matter all that much. On top of that, the really rich are probably stashing most of their excess money offshore.

 

[theeedude]

Yes, because if our economy consisted solely of bread and other low-end consumer products then redistribution might work. Of course if you flip the equation and pay CEOs 2000x as much you know their consumption of things like junk food and lotto tickets wouldn't double as would likely be true for the poor. So maybe we should just admit that *what* people spend their money on actually makes a bigger difference than strictly concerning ourselves with what fraction of the pie someone has at that particular fleeting moment. That the poor spend their limited money on crap is a far bigger reason for their problems than what some 1% guy is doing.

It's not rocket surgery. It's well documented that the well off spend less of their incremental dollar of income than the poor and the middle class. Concentrating income at the top shrinks our economy.

 

[desy]

This isn't new. Many times its been studied, the rich keep what they have and don't really risk much relative to what they earn and the masses have to spend most to live.
The reciprocity of money keeps turning over in peoples hands not sitting in bond funds. . .
If the tax system was equal I wouldn't have a problem with it, however the loopholes game the system that are unattainable for those of lesser means.

 

[Jhhnn]

It's not rocket surgery. It's well documented that the well off spend less of their incremental dollar of income than the poor and the middle class. Concentrating income at the top shrinks our economy.

It also inflates asset prices to unreasonable levels, inviting eventual collapse & panic.

 

[glenn1]

Pretty sure it is more important that they are spending money. What the money is spent on doesn't matter all that much. On top of that, the really rich are probably stashing most of their excess money offshore.

So your ideal stimulus target is the homeless person who will spend any money you give him on booze within seconds of receipt? I for one cannot wait for our glorious future Keynesian utopia whose economy is based on cheese doodles and Malboros.

 

[theeedude]

So your ideal stimulus target is the homeless person who will spend any money you give him on booze within seconds of receipt? I for one cannot wait for our glorious future Keynesian utopia whose economy is based on cheese doodles and Malboros.

If you want to maximize the economic benefit, yes. You can hate homeless people, but they spend extra income immediately, which creates instant demand which is better than that money being parked in a fund by someone who already has more than they can ever spend. Economics is not about punishing the homeless and rewarding the successful.

 

[dullard]

So your ideal stimulus target is the homeless person who will spend any money you give him on booze within seconds of receipt? I for one cannot wait for our glorious future Keynesian utopia whose economy is based on cheese doodles and Malboros.

1) Most homeless don't run out and spend it on booze. Try giving money to a hundred homeless people, and follow them with a hidden camera and come back to us with the results.

2) Lets pretend that your vision of the world is correct and pretend that they spend it instantly on booze and cigarettes. We could stimulate the economy by:

2(a) Giving a tax break to the business owners who pocket it and smile

or,

2(b) Give the same money to the homeless who buy booze / cigarettes from a business owner so the business owner now has the money. But also the homeless man is happy and the booze manufactuerers have profit and the cigarette company employees keep their jobs, and the store employees have a strong reason to keep their job due to the demand, etc.

In your imaginary world, with either option 2(a) or 2(b) the business owner ends up with the cash. But at least in option 2(b) dozens of people benefit along the way.

 

[dank69]

1) Most homeless don't run out and spend it on booze.

2) Lets pretend that your vision of the world is correct and pretend that they spend it instantly on booze and cigarettes. We could stimulate the economy by:
a) Giving a tax break to the business owners who pocket it and smile
or,
b) Give the same money to the homeless who buy booze/cigarettes from a buisness owner so the buisness owner now has the money. But also the homeless man is happy and the booze manufactuerers have profit and the cigarette company employees keep their jobs, etc.

In your imaginary world, with either option 2(a) or 2(b) the business owner ends up with the cash. But at least in option 2(b) dozens of people benefit along the way.

Great. Now we're rewarding cigarette and booze industries? Jesus will NOT be pleased.

 

[BoberFett]

http://money.cnn.com/2015/06/15/news/economy/trickle-down-theory-wrong-imf/index.html?iid=SF_LN

Wealth does not trickle down from the rich to the poor. Period.

That's not Senator Elizabeth Warren talking.
That's the latest conclusion of new research from the International Monetary Fund, which analyzed 150 countries.

In fact, researchers found that when the top earners in society make more money, it actually slows down economic growth.
On the other hand, when poorer people earn more, society as a whole benefits.

The authors explain that high levels of income inequality drag down growth because poor people struggle to pay for health care and education, which hurts society as a whole.


Tax the rich more!

Use that $ to pay for better education/schools in poor neighborhoods.
and for programs that guide males away from a life of crime and jail.

If you believe trickle down from the wealthy doesn't work, why do you believe in trickle down from the wealthiest entity of all time: the US government?

Your notion to spend more money on "eduction in poor neighborhoods" is a joke. The US on average spends more per student than any other country in the world. And that includes "poor" neighborhoods. During the Baltimore riots, some people blamed the problems on education, until it was revealed that the Baltimore school districts already spends more than the national average. It's a popular left wing myth that school performance in poor areas is due to funding.

We don't have a money problem. The US has a culture problem, and raising taxes on the wealthy cannot fix that.

 

[dank69]

If you believe trickle down from the wealthy doesn't work, why do you believe in trickle down from the wealthiest entity of all time: the US government?

Your notion to spend more money on "eduction in poor neighborhoods" is a joke. The US on average spends more per student than any other country in the world. And that includes "poor" neighborhoods. During the Baltimore riots, some people blamed the problems on education, until it was revealed that the Baltimore school districts already spends more than the national average. It's a popular left wing myth that school performance in poor areas is due to funding.

We don't have a money problem. The US has a culture problem, and raising taxes on the wealthy cannot fix that.

By the time kids get to public school it is already too late for many of them.

 

[fskimospy]

If you believe trickle down from the wealthy doesn't work, why do you believe in trickle down from the wealthiest entity of all time: the US government?

Your notion to spend more money on "eduction in poor neighborhoods" is a joke. The US on average spends more per student than any other country in the world. And that includes "poor" neighborhoods. During the Baltimore riots, some people blamed the problems on education, until it was revealed that the Baltimore school districts already spends more than the national average. It's a popular left wing myth that school performance in poor areas is due to funding.

We don't have a money problem. The US has a culture problem, and raising taxes on the wealthy cannot fix that.

If you don't believe the U.S. should provide for its defense through private armies raised by rich people, why would you trust the U.S. to defend itself with an army raised by the richest person, the government!?

I hope this shows how trying to compare government to private actions is almost always a bad idea.

 

[Atomic Playboy]

If you believe trickle down from the wealthy doesn't work, why do you believe in trickle down from the wealthiest entity of all time: the US government?

Why does it have to be taxes? Why can't it be minimum wage or labor laws that drive up wages at the lower end without the government trying to act as the redistributor?

 

[theeedude]

If you believe trickle down from the wealthy doesn't work, why do you believe in trickle down from the wealthiest entity of all time: the US government?

Are you stupid or what? IMF scientist just told you trickle down doesn't work. Kansas just tried trickle down, it didn't work. US has been trying trickle down for 30 years, it hasn't worked. Are you completely isolated from the reality around you?

 

[BoberFett]

If you don't believe the U.S. should provide for its defense through private armies raised by rich people, why would you trust the U.S. to defend itself with an army raised by the richest person, the government!?

I hope this shows how trying to compare government to private actions is almost always a bad idea.

You weren't even close on that analogy. Try again.

 

[BoberFett]

Are you stupid or what? IMF scientist just told you trickle down doesn't work. Kansas just tried trickle down, it didn't work. US has been trying trickle down for 30 years, it hasn't worked. Are you completely isolated from the reality around you?

Are you retarded? Seriously, I'm asking you point blank if you're mentally disabled, lettuceboy.

I didn't say trickle down worked. I'm asking why liberals like trickle down from the government, where we give all our money to one entity and then hope that some of it gets to where we want.

 

[fskimospy]

You weren't even close on that analogy. Try again.

Why?

 

[fskimospy]

I didn't say trickle down worked. I'm asking why liberals like trickle down from the government, where we give all our money to one entity and then hope that some of it gets to where we want.

Basically this is why:

http://www.amazon.com/Logic-Political-Survival-Bruce-Mesquita/dp/0262524406

EDIT: To explain it briefly, leadership in systems where the selectorate is dispersed like in modern electoral democracy, leaders secure power best by creating policies that are broadly beneficial to society as a whole as they lack sufficient resources to buy off all the selectors individually.

 

[BoberFett]

Why does it have to be taxes? Why can't it be minimum wage or labor laws that drive up wages at the lower end without the government trying to act as the redistributor?

Are you going to ban automation at the same time?

For every action there is an equal and opposite reaction. That's as true in society as it is in physics.

 

[theeedude]

Are you retarded? Seriously, I'm asking you point blank if you're mentally disabled, lettuceboy.

I didn't say trickle down worked. I'm asking why liberals like trickle down from the government, where we give all our money to one entity and then hope that some of it gets to where we want.

Does it not bother you that the fundamental cornerstone of conservative economic policy for 35 years and counting, supply-side trickle-down, hasn't worked? It is still the Republican economic platform, and it doesn't work. Are you OK with it? It took Russia 70 years to recognize Communism wasn't working, do Republicans need another 35 years to recognize trickle-down isn't working?

 

[Fanatical Meat]

For every action there is an equal and opposite reaction. That's as true in society as it is in physics.

Go tap a guy who looks like this in the balls and see if you get a equal reaction.

 

[Atomic Playboy]

Are you going to ban automation at the same time?

For every action there is an equal and opposite reaction. That's as true in society as it is in physics.

If automation is making workers more productive, then maybe we should move away from a 40 hour work week. Spread the efficiency around rather than requiring one worker to do the work of two people and laying the other person off. Increases in efficiency shouldn't solely benefit the owners of a company. And with that additional free time, people can focus on spending more time raising their children, which is an additional boost to the economy.

 

[BoberFett]

Basically this is why:

http://www.amazon.com/Logic-Political-Survival-Bruce-Mesquita/dp/0262524406

EDIT: To explain it briefly, leadership in systems where the selectorate is dispersed like in modern electoral democracy, leaders secure power best by creating policies that are broadly beneficial to society as a whole as they lack sufficient resources to buy off all the selectors individually.

Thanks for the reference, I'll take a look when I have time.