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

[Fern]

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

That's a stupid statement. It does trickle down.

Did any money trickle down from the wealthy guy that built the railroads? Weren't people employed to build and operate the railroad? Weren't smaller businesses such as farmers able to transport their products to other markets and make more money? Didn't the iron/steel factories that sold their product to the manufacturer of rails and railroad cars employ people? Didn't the factories that made those rails and railroad cars employee people? Didn't all of those employed go out buy products that employed other people?

I could go on about the wealthy that used their wealth to build other industries such as oil company or the banking industry.

Trickle down DOES work. But in this day and age, as opposed to those examples above, we have a global economy and that also means 'trickle away'.

Oh yeah, it IS trickling down, it's just that's it's also trickling away to places like China, Mexico, Asia, South America etc. Our 'trickle down' is what's lifted the Chinese etc. out of poverty.

----------------------

IMO, Liberals arguments about 'trickle down' are bull shit and nothing but a disguised argument for bigger govt. That's where the extra tax money you want goes, right? Yup, you just want more money for govt.

It's just f'ing amazing (at least according to liberal arguments) that we as a nation were able to survive at all before 1913, because we didn't have ANY income tax before then. (See link below to see GDP growth when the tax rate was zero because there were NO f'ing income taxes.)

In fact, researchers found that when the top earners in society make more money, it actually slows down economic growth.

If it hasn't become obvious to people yet that any so-called researcher can find anything they want - well I don't know what to say without being insulting.

Here's some more "research":

Those with a keen eye will note that between 1800 and the 1920s, although there are clear periods of faster and slower growth, the rate of growth is consistent and undiminishing (i.e., an approximately straight line on a log-linear plot such as this). But once the WWII boom wore off, we find a substantial downward curvature in the growth rate after 1960, coinciding with the era of sustained big government without a major war.

http://www.americanthinker.com/arti...er_economic_growth_an_american_history_1.html

Fern

 

[JSt0rm]

That's a stupid statement. It does trickle down.

Did any money trickle down from the wealthy guy that built the railroads? Weren't people employed to build and operate the railroad?

Fern

my god what a stupid example. Slave labor was used to build much of the early railroad.

 

[JSt0rm]

also the gilded age wasnt some great thing...

http://www.shmoop.com/gilded-age/economy.html

Key Points

• America's economy grew by more than 400% between 1860 and 1900
• Technological advances, expanding population, improved transportation, financial innovation, and new business practices combined to fuel this economic growth
• "Titans of Industry" like John D. Rockefeller, Andrew Carnegie, and J.P. Morgan built monopolies and revolutionized business practices
• Laissez faire ideology called for little or no government regulation of economic affairs
• Unskilled urban workers did not share in economic gains, instead enduring great poverty

Understanding the Gilded Age Economy

• New technologies improved industrial and agricultural productivity
• Growing cities provided markets and workers for industrial businesses
• Improved rail transportation allowed products to reach distant markets
• Financial innovations allocated capital more efficiently
• New forms of business organization facilitated rapid growth

Fern... wtf man. You are taking all of that and saying "none of it matters. the reason is because no income tax"


How stupid of you.

 

[werepossum]

I dont hate the 1% but my money comes indirectly from consumers.

All government expenditure doesn't come in the form of welfare. You guys keep focusing on this expense because of ideology and people with "interests" wanting to pound it home.

Why after decades of hating welfare is it still here? Even in red states? The reason is because its not "really" an issue. Its only a way to get you to be a single issue voter (or several single issues wrapped into 1 morsel - gun control, gay, welfare). Much easier to control you when these are the top issues in your mind.

Its a hell of a lot cheaper to pass out government cheese then deal with 50 million starving people and everyone with a brain knows it.

One can be bitterly opposed to something in theory and yet realize that it is necessary, or at least the lesser evil. At least, one can if not blinded by ideology.

To talk about trickle down for a minute. Rich people will create jobs when there is a demand for a job. They wont create a job because they have "extra" money. The best way to get money into the economy to create demand is to give it to poor people. They spend ALL of their money. It all ends up back into the economy and brings the multiplier effect.

Given that virtually everything on which the poor spend extra money is made in China, I suspect the "multiplier effect" is about 0.7.

That's a stupid statement. It does trickle down.

Did any money trickle down from the wealthy guy that built the railroads? Weren't people employed to build and operate the railroad? Weren't smaller businesses such as farmers able to transport their products to other markets and make more money? Didn't the iron/steel factories that sold their product to the manufacturer of rails and railroad cars employ people? Didn't the factories that made those rails and railroad cars employee people? Didn't all of those employed go out buy products that employed other people?

I could go on about the wealthy that used their wealth to build other industries such as oil company or the banking industry.

Trickle down DOES work. But in this day and age, as opposed to those examples above, we have a global economy and that also means 'trickle away'.

Oh yeah, it IS trickling down, it's just that's it's also trickling away to places like China, Mexico, Asia, South America etc. Our 'trickle down' is what's lifted the Chinese etc. out of poverty.

----------------------

IMO, Liberals arguments about 'trickle down' are bull shit and nothing but a disguised argument for bigger govt. That's where the extra tax money you want goes, right? Yup, you just want more money for govt.

It's just f'ing amazing (at least according to liberal arguments) that we as a nation were able to survive at all before 1913, because we didn't have ANY income tax before then. (See link below to see GDP growth when the tax rate was zero because there were NO f'ing income taxes.)




If it hasn't become obvious to people yet that any so-called researcher can find anything they want - well I don't know what to say without being insulting.

Here's some more "research":



http://www.americanthinker.com/arti...er_economic_growth_an_american_history_1.html

Fern

Agreed. For trickle down to work requires two things, for resource owners to invest in America and for that to materially increase demand for labor and materials. Both of those things are severely broken. Even though the capital gains rate is still historically low, the economy is still not that hot or stable AND America is a very bad place to invest in new production for anything that can be manufactured elsewhere. So even if the wealthy feel froggy, that additional production isn't going to be an investment in America. Same with the stock market - the major growth mechanism is companies growing their worth and then selling off stock to build more production (or distribution, or research, or sales, etc.) For that to directly help the nation as a whole, that production needs to be in America. (I say directly because there is a benefit to getting goods more cheaply, unless and until one becomes a casualty of that.) Our benefit from investment tends to be competing retail and distribution; these tend to be fairly evenly distributed in + & - (if Walmart sells 10,000 more widgets, it's likely that comes from other retailers losing sales, for little net effect; if a new baseball stadium is built, its income tends to come from losses in other entertainment sectors' spending) and far too often is financed at least in part by tax breaks from cities competing for jobs.

Same with labor - we have a glut of it, so increased investment isn't going to greatly lift all boats, just the particular boats that get hired. And that's best case - probably more investment today for automation to reduce labor costs than for things that result in higher labor cost. On top of that we have the stock market that treats mass layoffs like printing money, so companies concerned with maximizing stock prices in the near term (i.e. the vast majority of corporations) have more incentive to lay off than to hire in America.

So while I'm all on board with tax breaks and trickle down in theory, neither are going to have much effect in our current off-shoring economy. Shit, it's hard enough to even get the majority of government spending to make one loop through our economy before heading east, never mind discretionary income at any level. One caveat to that - if working poor people not in government or government-subsidized housing had reliable, permanent increases in income, probably a significant portion would be spent on better cars and better housing, two areas still significantly made in America.

 

[Jhhnn]

One can be bitterly opposed to something in theory and yet realize that it is necessary, or at least the lesser evil. At least, one can if not blinded by ideology.


Given that virtually everything on which the poor spend extra money is made in China, I suspect the "multiplier effect" is about 0.7.


Agreed. For trickle down to work requires two things, for resource owners to invest in America and for that to materially increase demand for labor and materials. Both of those things are severely broken. Even though the capital gains rate is still historically low, the economy is still not that hot or stable AND America is a very bad place to invest in new production for anything that can be manufactured elsewhere. So even if the wealthy feel froggy, that additional production isn't going to be an investment in America. Same with the stock market - the major growth mechanism is companies growing their worth and then selling off stock to build more production (or distribution, or research, or sales, etc.) For that to directly help the nation as a whole, that production needs to be in America. (I say directly because there is a benefit to getting goods more cheaply, unless and until one becomes a casualty of that.) Our benefit from investment tends to be competing retail and distribution; these tend to be fairly evenly distributed in + & - (if Walmart sells 10,000 more widgets, it's likely that comes from other retailers losing sales, for little net effect; if a new baseball stadium is built, its income tends to come from losses in other entertainment sectors' spending) and far too often is financed at least in part by tax breaks from cities competing for jobs.

Same with labor - we have a glut of it, so increased investment isn't going to greatly lift all boats, just the particular boats that get hired. And that's best case - probably more investment today for automation to reduce labor costs than for things that result in higher labor cost. On top of that we have the stock market that treats mass layoffs like printing money, so companies concerned with maximizing stock prices in the near term (i.e. the vast majority of corporations) have more incentive to lay off than to hire in America.

So while I'm all on board with tax breaks and trickle down in theory, neither are going to have much effect in our current off-shoring economy. Shit, it's hard enough to even get the majority of government spending to make one loop through our economy before heading east, never mind discretionary income at any level. One caveat to that - if working poor people not in government or government-subsidized housing had reliable, permanent increases in income, probably a significant portion would be spent on better cars and better housing, two areas still significantly made in America.

You surprise me. The way that the little guy gets a piece of the pie is through growth but there's little growth. Even then, what Bernie Sanders offers is true- the benefits of growth increasingly go to the tippy top.

It's not just about poor people, but about all of us who aren't among the financial elite. Even as globalization lifts other people out of poverty it has diminished the fortunes of the American middle & working class in no small way. That's just the truth.

We have the right to demand more from our financial elite. They still need us, just not for as many good paying jobs as we need. They need our legal system, our infrastructure, our military & the safe haven of our currency system. They need our peace & stability. They need our market. They probably need a lot more than that.

Any other country remotely comparable in those respects will demand more of them. More in taxes & more say in corporate governance wrt goals & obligations. They need to understand that they are of us, & that we all sink or swim together.

When lower income folks make more money, they don't just buy more stuff. They spend their money in more ways than that. They buy more prepared food, as do many of us. They go to the movies & eat out once in awhile. They go to the salon. They pay for music lessons. They go to the dentist & take the kids, too. They get checkups. They take family vacations in the car. They spend money on home improvements & on a lot of things that aren't imported at all.

 

[werepossum]

You surprise me. The way that the little guy gets a piece of the pie is through growth but there's little growth. Even then, what Bernie Sanders offers is true- the benefits of growth increasingly go to the tippy top.

It's not just about poor people, but about all of us who aren't among the financial elite. Even as globalization lifts other people out of poverty it has diminished the fortunes of the American middle & working class in no small way. That's just the truth.

We have the right to demand more from our financial elite. They still need us, just not for as many good paying jobs as we need. They need our legal system, our infrastructure, our military & the safe haven of our currency system. They need our peace & stability. They need our market. They probably need a lot more than that.

Any other country remotely comparable in those respects will demand more of them. More in taxes & more say in corporate governance wrt goals & obligations. They need to understand that they are of us, & that we all sink or swim together.

When lower income folks make more money, they don't just buy more stuff. They spend their money in more ways than that. They buy more prepared food, as do many of us. They go to the movies & eat out once in awhile. They go to the salon. They pay for music lessons. They go to the dentist & take the kids, too. They get checkups. They take family vacations in the car. They spend money on home improvements & on a lot of things that aren't imported at all.

Agreed, and well said.

 

[theeedude]

Our financial elites can't sustain this economy without zero interest loans, and even then they needed quantitative easing just to keep the economy afloat. For this "service" the financial sector expects close to 10% of US GDP. That's like someone coming to you with a business plan that relies on interest free loans just to break even, and demanding 10% of the revenue as a reward for such "ingenuity."

 

[OverVolt]

Our financial elites can't sustain this economy without zero interest loans, and even then they needed quantitative easing just to keep the economy afloat. For this "service" the financial sector expects close to 10% of US GDP. That's like someone coming to you with a business plan that relies on interest free loans just to break even, and demanding 10% of the revenue as a reward for such "ingenuity."

More like charging 10% so we don't have to go back to trying to build a life when you had to barter at a bazaar.

 

[werepossum]

More like charging 10% so we don't have to go back to trying to build a life when you had to barter at a bazaar.

Surely there's something between a barter economy and a put-and-take fiat money hatchery.

 

[dank69]

...

The Democrooks:

1: Tax and spend to the point we have no financial legs to stand on, QE that just inflates our money into toilet paper and interest rates that make a savings account useless to have.
...

This first point just show how divorced from reality you are. Even after all that QE inflation remains too low.

 

[sm625]

Who would have thought that printing trillions and giving it to the rich would result in widespread economic expansion and growing incomes for all classes? Oh, a bunch of dumbed down idiots who cant discern what is obvious propaganda. The top 0.1% are laughing their butts off at how gullible people are for buying into that crap. Printing trillions and giving it to the rich results in $200 million picassos and little else.

 

[TheSlamma]

This first point just show how divorced from reality you are. Even after all that QE inflation remains too low.

Sigh, so much fail, his question was what is the the fear I have of where they are taking us, not current/past events.

IMO the Dems will QE after QE after QE and go Zimbabwe dollar if given the chance. If at 4th you don't succeed fail fail again.



The following link will be of help to you

http://dictionary.reference.com/browse/context Please read carefully for the test.

 

[fskimospy]

That's a stupid statement. It does trickle down.

Did any money trickle down from the wealthy guy that built the railroads? Weren't people employed to build and operate the railroad? Weren't smaller businesses such as farmers able to transport their products to other markets and make more money? Didn't the iron/steel factories that sold their product to the manufacturer of rails and railroad cars employ people? Didn't the factories that made those rails and railroad cars employee people? Didn't all of those employed go out buy products that employed other people?

I could go on about the wealthy that used their wealth to build other industries such as oil company or the banking industry.

Trickle down DOES work. But in this day and age, as opposed to those examples above, we have a global economy and that also means 'trickle away'.

Oh yeah, it IS trickling down, it's just that's it's also trickling away to places like China, Mexico, Asia, South America etc. Our 'trickle down' is what's lifted the Chinese etc. out of poverty.

----------------------

IMO, Liberals arguments about 'trickle down' are bull shit and nothing but a disguised argument for bigger govt. That's where the extra tax money you want goes, right? Yup, you just want more money for govt.

It's just f'ing amazing (at least according to liberal arguments) that we as a nation were able to survive at all before 1913, because we didn't have ANY income tax before then. (See link below to see GDP growth when the tax rate was zero because there were NO f'ing income taxes.)


If it hasn't become obvious to people yet that any so-called researcher can find anything they want - well I don't know what to say without being insulting.

Here's some more "research":

http://www.americanthinker.com/arti...er_economic_growth_an_american_history_1.html

Fern

There is zero correlation between the top marginal tax rate and economic growth. None.

Trickle down is fundamentally based on reducing that tax rate, and therefore, doesn't work. This is not even controversial in economics anymore, it's just obvious bullshit. I didn't realize anyone was still trying to argue for that nonsense.

Regardless, it seems odd to be talking shit about other people having stupid ideas while saying things like that.

 

[Atomic Playboy]

Printing trillions and giving it to the rich results in $200 million picassos and little else.

No, it creates jobs. Someone has to forge all those Picassos.

 

[TheSlamma]

No, it creates Chinese slave wage children jobs. Someone has to forge all those Picassos.

fify

 

[dank69]

Sigh, so much fail, his question was what is the the fear I have of where they are taking us, not current/past events.

IMO the Dems will QE after QE after QE and go Zimbabwe dollar if given the chance. If at 4th you don't succeed fail fail again.



The following link will be of help to you

http://dictionary.reference.com/browse/context Please read carefully for the test.

I see, so all the QE we have had didn't cause rampant inflation but when we do additional QE, that we have no plans for doing but you are so certain that we will, THEN we will finally see that inflation.

Context isn't helping you, it's just moving you square into the definition of insanity: doing the same thing but expecting different results. On top of that, your biggest criticism of Democrats is against something that they haven't done yet and haven't said they plan on doing. Tell me again whose post has so much fail?

 

[WHAMPOM]

That's a stupid statement. It does trickle down.

Did any money trickle down from the wealthy guy that built the railroads? Weren't people employed to build and operate the railroad? Weren't smaller businesses such as farmers able to transport their products to other markets and make more money? Didn't the iron/steel factories that sold their product to the manufacturer of rails and railroad cars employ people? Didn't the factories that made those rails and railroad cars employee people? Didn't all of those employed go out buy products that employed other people?

I could go on about the wealthy that used their wealth to build other industries such as oil company or the banking industry.

Trickle down DOES work. But in this day and age, as opposed to those examples above, we have a global economy and that also means 'trickle away'.

Oh yeah, it IS trickling down, it's just that's it's also trickling away to places like China, Mexico, Asia, South America etc. Our 'trickle down' is what's lifted the Chinese etc. out of poverty.

----------------------

IMO, Liberals arguments about 'trickle down' are bull shit and nothing but a disguised argument for bigger govt. That's where the extra tax money you want goes, right? Yup, you just want more money for govt.

It's just f'ing amazing (at least according to liberal arguments) that we as a nation were able to survive at all before 1913, because we didn't have ANY income tax before then. (See link below to see GDP growth when the tax rate was zero because there were NO f'ing income taxes.)




If it hasn't become obvious to people yet that any so-called researcher can find anything they want - well I don't know what to say without being insulting.

Here's some more "research":



http://www.americanthinker.com/arti...er_economic_growth_an_american_history_1.html

Fern

So you have no idea what the "Trickle Down Theory" is and your post proves it.

 

[TheSlamma]

I see, so all the QE we have had didn't cause rampant inflation but when we do additional QE, that we have no plans for doing but you are so certain that we will, THEN we will finally see that inflation.

Context isn't helping you, it's just moving you square into the definition of insanity: doing the same thing but expecting different results. Tell me again whose post has so much fail?

Yours does. You are acting like I'm making a prophecy that it will happen when what I stated is the fear I have with Dems in control. When I say I don't want useless wars with the republicans does that mean we will automatically have wars every time they are in office? No it means they are far more inclined to engage in that behavior.

Seriously dude, lick your wounds and get back under your rock. No matter what words you TRY to put into my mouth it just simply won't happen.

 

[WHAMPOM]

There is zero correlation between the top marginal tax rate and economic growth. None.

Trickle down is fundamentally based on reducing that tax rate, and therefore, doesn't work. This is not even controversial in economics anymore, it's just obvious bullshit. I didn't realize anyone was still trying to argue for that nonsense.

Regardless, it seems odd to be talking shit about other people having stupid ideas while saying things like that.

Tax breaks that allow the rich to accumulate money does nothing to trickle down those riches. High tax rates with breaks/business expenses encourage reinvestment and does trickle down.

 

[dank69]

Yours does. You are acting like I'm making a prophecy that it will happen when what I stated is the fear I have with Dems in control. When I say I don't want useless wars with the republicans does that mean we will automatically have wars every time they are in office? No it means they are far more inclined to engage in that behavior.

Seriously dude, lick your wounds and get back under your rock. No matter what words you TRY to put into my mouth it just simply won't happen.

You haven't addressed the fact that you stated that more QE would lead to inflation. :whiste:

 

[TheSlamma]

You haven't addressed the fact that you stated that more QE would lead to inflation. :whiste:

Is the intention of QE to create inflation?

 

[dank69]

Is the intention of QE to create inflation?

As far as I know, yes. That doesn't mean it will cause hyperinflation which is what you claimed.

 

[JSt0rm]

theslamma thinks inflation is bad. Must be on a fixed income.

 

[TheSlamma]

theslamma thinks inflation is bad. Must be on a fixed income.

He thinks it can be overdone, "Moderate" as in MODERATION. But again it's a nice try by you again to discredit and try to place me at an extreme cause that is the limit of your brain power that you have to be "with us or against us" mentality.

I know you and Dank only think in extremes (left and right), but some of us are stuck in the middle of the plane while both wings are pointing us at the ground.


Since you are probably convinced there is no top end limit to inflation ever reaching a "bad" state I think you should read some history about the US Continental and the Zimbabwe dollar. My goal is for the dollar not to be deflated or hyper-inflated.

Edit: and no I'm not on a fixed income, the economy can go 3 times as bad as it did in 2008 and I would be perfectly fine. I'm not a grasshopper like yourself.

 

[dank69]

He thinks it can be overdone, "Moderate" as in MODERATION. But again it's a nice try by you again to discredit and try to place me at an extreme cause that is the limit of your brain power that you have to be "with us or against us" mentality.

I know you and Dank only think in extremes (left and right), but some of us are stuck in the middle of the plane while both wings are pointing us at the ground.

So when you said more QE would cause our currency to be like toilet paper you were being moderate and when I pointed out that isn't likely to be true given past evidence I was being extreme?