Top Down vs. Bottom up economics

[Xavier434]

Originally posted by: Genx87

It is not the government's "job" so to speak, but that doesn't mean that the government cannot help and it doesn't mean that they cannot do a good job helping.

When it comes to the whole giving the money to large corps to invest in small business Reaganomics stuff, I already covered that in a previous post which included a PDF written by a guy who has spent far more time studying this issue than I have.

Giving them handouts sets a bad precedent and not to mention is form of fascism. It really sounds like you are trying to apply Bush's economic policy but on the low end of the scale.

I think you misunderstood me with your last comment. I am not for giving public money to large corps to invest in small corps. I am saying large corps and the wealthy have money and invest in startups they deem potential profit makers. They will do more than anything the govt can do with a handout.

These are not hand outs. They are tax reforms and they are not even that large. There is a huge difference.

Look, understand that I am not trying to say that we should be taking away the burden of taxes from small businesses or cut them to the point of hardly existing. Not even close. I just think that now is a good time to give them a bit of a boost, but the money needs to be replaced somehow and I believe that we should tax the super rich a bit more than we have while Bush was in Office. That's all really. There are more details involved but generally my feelings on this matter are not terribly complex.

We have tried leaving that responsibility up to the corps. While some success has occurred, it has never really worked out as intended and in some cases the result has been nothing short of embarrassing.

 

[Juddog]

Originally posted by: Genx87

It is not the government's "job" so to speak, but that doesn't mean that the government cannot help and it doesn't mean that they cannot do a good job helping.

When it comes to the whole giving the money to large corps to invest in small business Reaganomics stuff, I already covered that in a previous post which included a PDF written by a guy who has spent far more time studying this issue than I have.

Giving them handouts sets a bad precedent and not to mention is form of fascism. It really sounds like you are trying to apply Bush's economic policy but on the low end of the scale.

I think you misunderstood me with your last comment. I am not for giving public money to large corps to invest in small corps. I am saying large corps and the wealthy have money and invest in startups they deem potential profit makers. They will do more than anything the govt can do with a handout.

Do you support large corporations getting handouts like they are now?

 

[Genx87]

Originally posted by: Juddog

Originally posted by: Genx87

It is not the government's "job" so to speak, but that doesn't mean that the government cannot help and it doesn't mean that they cannot do a good job helping.

When it comes to the whole giving the money to large corps to invest in small business Reaganomics stuff, I already covered that in a previous post which included a PDF written by a guy who has spent far more time studying this issue than I have.

Giving them handouts sets a bad precedent and not to mention is form of fascism. It really sounds like you are trying to apply Bush's economic policy but on the low end of the scale.

I think you misunderstood me with your last comment. I am not for giving public money to large corps to invest in small corps. I am saying large corps and the wealthy have money and invest in startups they deem potential profit makers. They will do more than anything the govt can do with a handout.

Do you support large corporations getting handouts like they are now?

Please do a little research. It is just a few posts up.

 

[Gonad the Barbarian]

Here's a pretty good argument against trickle down:
http://wonkroom.thinkprogress..../17/1928-resemblances/

 

[fleshconsumed]

In Trickle Down approach you are cutting taxes on the rich and corporations hoping that businesses will create more jobs, which in turn will put more money in the hands of working class, who in turn will buy more products created by the extra jobs created by the tax cuts.

In Bottom Up approach you give more money to people who are most likely to spend it, thus stimulating demand and therefore job creation by the companies who respond to increased demand by increasing output and hiring more people.


Frankly, you don't need much insight to see that the second approach is a more direct solution to the problem and in all the probability has much more chances of working out the way you want it to. In fact I don't see how the first approach would work in real life at all, and the history shows it never did. Why do you think the most recent economic stimulus was aimed at lower and middle classes? Because they would spend it all helping stimulate the economy through demand. Of all those who believe in trickle down approach, please raise hand if you think the 150B would have been better spent on tax cuts to rich and corporations.

 

[eleison]

Originally posted by: Gonad the Barbarian
Here's a pretty good argument against trickle down:
http://wonkroom.thinkprogress..../17/1928-resemblances/

Not really, during the 60's, 70's and early 90's, the US economy wasn't doing that well. Guess when the wealthy were also not doing as well -- yep, during the same time period.

Conversely, according to this chart, guess when the US economy was doing well? it was when the rich was also doing well. See a pattern?

As the wealthy do well and help create jobs, the economy do well.

 

[JS80]

The only reason why top down alone doesn't work is because we live in a democracy. You have to add in bottom up, which is basically a bribe not to extort the top with "democracy."

here's a perfect example why:

Originally posted by: Atomic Playboy
I think trying to use exclusively one or the other is a bad idea; it needs to be a combination of both. However, if I had to lean one way, I'd lean bottom up. My primary reason is selfish; I am not in the wealthy elite, nor employed in a profession where I am likely to ever make huge amounts of money, so it's in my economic best interest to keep my own taxes low. However, for a practical reason, I must say that poor people are much worse at saving money than the wealthy. Wealthy people invest (which is important in driving our economy forward) and save; they hoard money. I have noticed that the poorer people are, the worse they get with money, spending it on countless items they simply do not need. If they were better at hoarding money, they probably wouldn't be as poor, yes? Since customers purchasing items is important for our economy as well, I think we need to have money in the hands of low-income earners, who are so quick to spend that money and get it back in circulation in the economy.

 

[JS80]

Originally posted by: Tarrant64

Originally posted by: Atomic Playboy
I think trying to use exclusively one or the other is a bad idea; it needs to be a combination of both. However, if I had to lean one way, I'd lean bottom up. My primary reason is selfish; I am not in the wealthy elite, nor employed in a profession where I am likely to ever make huge amounts of money, so it's in my economic best interest to keep my own taxes low. However, for a practical reason, I must say that poor people are much worse at saving money than the wealthy. Wealthy people invest (which is important in driving our economy forward) and save; they hoard money. I have noticed that the poorer people are, the worse they get with money, spending it on countless items they simply do not need. If they were better at hoarding money, they probably wouldn't be as poor, yes? Since customers purchasing items is important for our economy as well, I think we need to have money in the hands of low-income earners, who are so quick to spend that money and get it back in circulation in the economy.

We agree about not exclusively using either economic strategy, however I largely disagree with the statements on poor people.

Poor people have no money. Often times it may be because they spend it on things they don't need. However I think most of the time it's because they are underpaid, have no work, or at some point ran into a life crisis that put them out of home and onto the street.

I also believe that poor people just don't have the money to invest. They are too busy trying to stay afloat in this sh!t world that we leave in. People, typically with money, are always saying poor people don't put any money away. I say WTF.

then how the fuck do you explain rags to riches stories? immigrant success stories?

 

[JS80]

Originally posted by: Throckmorton

Originally posted by: ProfJohn
Bottom up can't work.

You can't create and maintain a middle class by giving them hand outs forever. Look at the 'great society' we have had trillions of dollars in wealth transfers from the top to the bottom and yet the poverty line has barely moved in 30+ years.

The only way to help those at the bottom is to create more wealth for everyone. More wealth = more jobs which means more poor people working and supporting themselves as opposed to waiting for a government check each month.

You are assuming a relationship between two unrelated things- working and being able to support yourself. The minimum wage in this country is not a living wage.

you're right, minimum wage is an arbitrary political number at the sacrifice of individuals who are willing to work for less than minimum wage. you are essentially telling unskilled people "you're not allowed to work."

 

[Gonad the Barbarian]

Originally posted by: eleison

Originally posted by: Gonad the Barbarian
Here's a pretty good argument against trickle down:
http://wonkroom.thinkprogress..../17/1928-resemblances/

Not really, during the 60's, 70's and early 90's, the US economy wasn't doing that well. Guess when the wealthy were also not doing as well -- yep, during the same time period.

Conversely, according to this chart, guess when the US economy was doing well? it was when the rich was also doing well. See a pattern?

As the wealthy do well and help create jobs, the economy do well.

The pattern I see is when the wealth is so concentrated at the top 1% such as it is today and the 1920's very bad things happen to the economy.

 

[eleison]

Originally posted by: Gonad the Barbarian

Originally posted by: eleison

Originally posted by: Gonad the Barbarian
Here's a pretty good argument against trickle down:
http://wonkroom.thinkprogress..../17/1928-resemblances/

Not really, during the 60's, 70's and early 90's, the US economy wasn't doing that well. Guess when the wealthy were also not doing as well -- yep, during the same time period.

Conversely, according to this chart, guess when the US economy was doing well? it was when the rich was also doing well. See a pattern?

As the wealthy do well and help create jobs, the economy do well.

The pattern I see is when the wealth is so concentrated at the top 1% such as it is today and the 1920's very bad things happen to the economy.

1920 was called the "roaring 20's" for a reason... and that reason wasn't because the economy was bad ;-)

Notice how during the depression, the wealthy weren't doing very well... guess what, the US economy wasn't doing that well also.

Don't be jealous and focus only on the rich.. it is better to focus on the general population. In this case, when the wealthy are doing good, in general, everyone is doing good.

When society tries to force everyone to be at the "same level", it just hurts the economy. Wealth redistribution does not work.. China has tried to do this before and it has caused millions of people to die of starvation -- same with USSR.

 

[JS80]

Originally posted by: fleshconsumed
In Trickle Down approach you are cutting taxes on the rich and corporations hoping that businesses will create more jobs, which in turn will put more money in the hands of working class, who in turn will buy more products created by the extra jobs created by the tax cuts.

In Bottom Up approach you give more money to people who are most likely to spend it, thus stimulating demand and therefore job creation by the companies who respond to increased demand by increasing output and hiring more people.


Frankly, you don't need much insight to see that the second approach is a more direct solution to the problem and in all the probability has much more chances of working out the way you want it to. In fact I don't see how the first approach would work in real life at all, and the history shows it never did. Why do you think the most recent economic stimulus was aimed at lower and middle classes? Because they would spend it all helping stimulate the economy through demand. Of all those who believe in trickle down approach, please raise hand if you think the 150B would have been better spent on tax cuts to rich and corporations.

No, the second approach creates inflation. Giving money to people who don't produce is never a good idea.

 

[blahblah99]

Originally posted by: Juddog
No article to link here, simply a question for the financially and politically saavy folk amongst the AT crowd. Looking for an honest discussion here.

What are the pros and cons of each method as far as economy is concerned? Top down is otherwise known as Reaganomics or the trickle-down theory. The idea that tax cuts to the wealthiest of the nation has a trickle down effect where they buy more and hire more people. Bottom-up is bringing tax cuts to the lower income bracket, and increasing the tax on the wealthiest of Americans. Idea being that more middle class people having more money and more security allows them to purchase things on a mass scale which in turn drives the economy further.

Which method, in the end, would ultimately benefit the nation more as a whole rather than individually?

Top down economics have been in play for the last 8 years and look at where the country's at currently.

I would have to say bottom up economics is the way to go. Multi-billion dollar businesses didn't make their fortunes from the wealthy - they make their money from low to middle income class people.

This is coming from someone who owns a small business whose customer base is primarily low to middle income class people. If they don't have money to spend, I don't make money. It's that simple.

 

[JS80]

Originally posted by: eleison

Originally posted by: Gonad the Barbarian

Originally posted by: eleison

Originally posted by: Gonad the Barbarian
Here's a pretty good argument against trickle down:
http://wonkroom.thinkprogress..../17/1928-resemblances/

Not really, during the 60's, 70's and early 90's, the US economy wasn't doing that well. Guess when the wealthy were also not doing as well -- yep, during the same time period.

Conversely, according to this chart, guess when the US economy was doing well? it was when the rich was also doing well. See a pattern?

As the wealthy do well and help create jobs, the economy do well.

The pattern I see is when the wealth is so concentrated at the top 1% such as it is today and the 1920's very bad things happen to the economy.

1920 was called the "roaring 20's" for a reason... and that reason wasn't because the economy was bad ;-)

Notice how during the depression, the wealthy weren't doing very well... guess what, the US economy wasn't doing that well also.

Don't be jealous and focus only on the rich.. it is better to focus on the general population. In this case, when the wealthy are doing good, in general, everyone is doing good.

When society tries to force everyone to be at the "same level", it just hurts the economy. Wealth redistribution does not work.. China has tried to do this before and it has caused millions of people to die of starvation -- same with USSR.

But in a democracy people realize that they can act on their envy by voting politicians who promise to tax the top 5% more and give checks with the proceeds to the bottom 95%.

 

[eleison]

Originally posted by: blahblah99

Originally posted by: Juddog
No article to link here, simply a question for the financially and politically saavy folk amongst the AT crowd. Looking for an honest discussion here.

What are the pros and cons of each method as far as economy is concerned? Top down is otherwise known as Reaganomics or the trickle-down theory. The idea that tax cuts to the wealthiest of the nation has a trickle down effect where they buy more and hire more people. Bottom-up is bringing tax cuts to the lower income bracket, and increasing the tax on the wealthiest of Americans. Idea being that more middle class people having more money and more security allows them to purchase things on a mass scale which in turn drives the economy further.

Which method, in the end, would ultimately benefit the nation more as a whole rather than individually?

Top down economics have been in play for the last 8 years and look at where the country's at currently.

I would have to say bottom up economics is the way to go. Multi-billion dollar businesses didn't make their fortunes from the wealthy - they make their money from low to middle income class people.

This is coming from someone who owns a small business whose customer base is primarily low to middle income class people. If they don't have money to spend, I don't make money. It's that simple.

Currently, I presume, you still have a job. You are still making money off of low to middle income class people.

If so, why are you willing to risk your job, for a "spread the wealth" ideology that has shown time after time to cause more unemployment? Do you hate your job that much Just kidding. I feel that the bottom up economics will kill us economically. We can agree to disagree.

However, I feel we cannot give "free money" to unproductive members of society. Instead, we need to create jobs for them. Jobs are created by companies. We need to help companies create jobs... obviously, indirectly, helping you make money

 

[Gonad the Barbarian]

Originally posted by: JS80

Originally posted by: eleison

Originally posted by: Gonad the Barbarian

Originally posted by: eleison

Originally posted by: Gonad the Barbarian
Here's a pretty good argument against trickle down:
http://wonkroom.thinkprogress..../17/1928-resemblances/

Not really, during the 60's, 70's and early 90's, the US economy wasn't doing that well. Guess when the wealthy were also not doing as well -- yep, during the same time period.

Conversely, according to this chart, guess when the US economy was doing well? it was when the rich was also doing well. See a pattern?

As the wealthy do well and help create jobs, the economy do well.

The pattern I see is when the wealth is so concentrated at the top 1% such as it is today and the 1920's very bad things happen to the economy.

1920 was called the "roaring 20's" for a reason... and that reason wasn't because the economy was bad ;-)

Notice how during the depression, the wealthy weren't doing very well... guess what, the US economy wasn't doing that well also.

Don't be jealous and focus only on the rich.. it is better to focus on the general population. In this case, when the wealthy are doing good, in general, everyone is doing good.

When society tries to force everyone to be at the "same level", it just hurts the economy. Wealth redistribution does not work.. China has tried to do this before and it has caused millions of people to die of starvation -- same with USSR.

But in a democracy people realize that they can act on their envy by voting politicians who promise to tax the top 5% more and give checks with the proceeds to the bottom 95%.

I'm not trying to force everyone to the same level nor am i necessarily advocating wealth redistribution. The latter is my real sticking point though because in a "free and open" economy there shouldn't be such a wide disparity between "have's" and "have not's". There's something funky going on, something that is indeed tilting the playing field, and distributing the wealth to the top.

There's some more, related info here for anyone that might be interested:
http://sociology.ucsc.edu/whor...rica/power/wealth.html

 

[sandorski]

Bottom Up is clearly the better system at Benefitting the greatest amount of People in a Society. Every Economic Strata benefits, as those on the Bottom Spends, the Cash naturally flows Upwards. Large Masses of Spenders provides the Cash and Reward to the Innovators in Society, who make the Investment/Improvements that the Top Down model addresses.


Top Down doesn't work near as well for 2 main reasons:

1) Far fewer People spending. Sure, they can spend large amounts of Money, but they do so in a very focussed manner that only benefits a small group

2) There is no gaurantee that the fewer People spending will actually spend within their Nation.
----------
Of course, these 2 are not really descriptive of what actually exists. It's not an Either/Or, but a mixture with a leaning to one side or another.

It is also more accurately a conflict between Demand Side(Bottom Up) and Supply Side(Top Down) Economics.

 

[Craig234]

Originally posted by: eleison

Originally posted by: OrByte
top down doesnt work.

the data shows that the wealthy get wealthier, the poorer get poorer and the middle class treads water.

the middle class won't be waiting for checks every month like some suggest. The middle class is simply looking to loosen up its own wallets (much like the banks are looking to loosen up its own credit lines) in order to spend.

There are no middle class "handouts."

name a country where bottom UP works... I can name a country where top DOWN works -- the USA. Yea, we got problems, but compared to other country's with bottom up, the USA is paradise - most people forget that.

Would you rather live in a top down economy where the poor lives better than 80% of the world population or in a bottom up economy where the poor is only concern about the "next meal"? In the USA, even if you are "poor" you don't worry about starving to death.

As I understand the OP question, it isn't the question about a naiton being a 'bottom up or top down economy', but about which economic approaches work better for specific policies.

IMO bottom up works a lot better.

We have a lot of ideological righties who IMO don't understand much about economics beyone not liking communism and wanting to pay less in taxes.

# of posts I've seen in thousands from righties indicating any awareness of the role of excessive conventration of wealth as a factor in the great depression: zero.

They just don't seem to understand the basic economic system's working parts of how money keeps the system working by keeping people producing wealth with incentives and how each incentive has an efficient and inefficient level. They understand vaguely why you don't pay McDonald's people $1000 an hour, but they can't begin to say anything about why $1 million, $10 million, $100 million or $1 billion a year is the 'efficient' incentive for a big corporation's CEO. They just blindly attack any comment about reducing it.

They show little if any awareness of the problems when the money, like water, which is like a river for most people flowing in and out but like a lake for the wealthy, pooling up, becomes too concentrated, too pooled, among a few, and is not as available for incenting others, only increasing the ownership of assets by the most wealthy.

If you put $100 billion in the hands of the rich, they'll simply own more of the wealth in society. They'll raise the price of things like top real estate and companies as they pay more for them, further leaving others unable to afford them. If you put $100 billion in the hands of the poor and middle class, they will spend basically all (poor) or most (middle class) which creates economic activity that employs people, that even makes the wealthy wealthier with their cut.

Top down was a propaganda phrase to trick people to let the wealthy get far more than their share. It worked. Bottom up works better.

For examples, if you do try to label a nation, look at the many third world nations with 'top down' ecoomies of wealthy elites and how the masses are bad off. For bottom up look at the 'Democratic Socialist' nations like in Scandanavia and to an extent in Europe which have more generous safety nets, providing the basics, more generous welfare and time off.

France's workers get a lot more benefits but are just as productive as US workers. Their CEOs make a lot less but are just as good running their companies.

No one's saying pay the CEO the same as any other worker, or don't legitimately compete for the best CEO's by paying more. That's different than the culture of corruption.

 

[jackace]

Originally posted by: eleison

Originally posted by: blahblah99

Originally posted by: Juddog
No article to link here, simply a question for the financially and politically saavy folk amongst the AT crowd. Looking for an honest discussion here.

What are the pros and cons of each method as far as economy is concerned? Top down is otherwise known as Reaganomics or the trickle-down theory. The idea that tax cuts to the wealthiest of the nation has a trickle down effect where they buy more and hire more people. Bottom-up is bringing tax cuts to the lower income bracket, and increasing the tax on the wealthiest of Americans. Idea being that more middle class people having more money and more security allows them to purchase things on a mass scale which in turn drives the economy further.

Which method, in the end, would ultimately benefit the nation more as a whole rather than individually?

Top down economics have been in play for the last 8 years and look at where the country's at currently.

I would have to say bottom up economics is the way to go. Multi-billion dollar businesses didn't make their fortunes from the wealthy - they make their money from low to middle income class people.

This is coming from someone who owns a small business whose customer base is primarily low to middle income class people. If they don't have money to spend, I don't make money. It's that simple.

Currently, I presume, you still have a job. You are still making money off of low to middle income class people.

If so, why are you willing to risk your job, for a "spread the wealth" ideology that has shown time after time to cause more unemployment? Do you hate your job that much Just kidding. I feel that the bottom up economics will kill us economically. We can agree to disagree.

However, I feel we cannot give "free money" to unproductive members of society. Instead, we need to create jobs for them. Jobs are created by companies. We need to help companies create jobs... obviously, indirectly, helping you make money

So why are these companies going to create more jobs? If demand has not increased for their products they are better off putting any "extra" money into a savings account rather than create jobs which are not needed. The quickest and easiest way to increase demand is put more money in the hands of the poor and middle class. It would have to be balanced of course so inflation does not get out of hand. As demand increases companies will create more jobs because they have reached maximum capacity with their current operations. If they do not increase capacity then an opening is available for another business to offer similar products. This other business could possibly be a new small business.

Another point I would like to make is just because a person is poor or middle class doesn't mean they are an "unproductive member of society". If everyone was rich who would work at the restaurants, gas stations, and other general labor jobs in society? We need these people and they are not unproductive.

There is also no reason why a person who works a full-time job (40 hours a week) should not be compensated with enough money to live and adequate health care. Health care can either be provided or pay the person enough so they can go purchase their own health care. Minimum wage is not enough to live. I live in a fairly inexpensive state (Idaho) and a recent study found that in order for a person to live on their own with no government assistance of any kind they need to make ~$13 an hour and with 2 kids that goes up to ~$18. $6.50 an hour with no medical benefits just does not cut it for a person to live on their own and afford health care. These people making minimum wage or just slightly above rely on the government to survive.

So IMO companies who hire people and pay them less than a living wage are receiving a subsidy from the government because the government is forced to pick up the tab and help this person survive and the company gets the benefit of a full time worker.

 

[digiram]

Originally posted by: fleshconsumed
In Trickle Down approach you are cutting taxes on the rich and corporations hoping that businesses will create more jobs, which in turn will put more money in the hands of working class, who in turn will buy more products created by the extra jobs created by the tax cuts.

In Bottom Up approach you give more money to people who are most likely to spend it, thus stimulating demand and therefore job creation by the companies who respond to increased demand by increasing output and hiring more people.


Frankly, you don't need much insight to see that the second approach is a more direct solution to the problem and in all the probability has much more chances of working out the way you want it to. In fact I don't see how the first approach would work in real life at all, and the history shows it never did. Why do you think the most recent economic stimulus was aimed at lower and middle classes? Because they would spend it all helping stimulate the economy through demand. Of all those who believe in trickle down approach, please raise hand if you think the 150B would have been better spent on tax cuts to rich and corporations.

Exactly. Trickle down defies supply and demand. It's dependent on the goodness of human nature. LOL.

 

[Genx87]

Originally posted by: blahblah99

Originally posted by: Juddog
No article to link here, simply a question for the financially and politically saavy folk amongst the AT crowd. Looking for an honest discussion here.

What are the pros and cons of each method as far as economy is concerned? Top down is otherwise known as Reaganomics or the trickle-down theory. The idea that tax cuts to the wealthiest of the nation has a trickle down effect where they buy more and hire more people. Bottom-up is bringing tax cuts to the lower income bracket, and increasing the tax on the wealthiest of Americans. Idea being that more middle class people having more money and more security allows them to purchase things on a mass scale which in turn drives the economy further.

Which method, in the end, would ultimately benefit the nation more as a whole rather than individually?

Top down economics have been in play for the last 8 years and look at where the country's at currently.

I would have to say bottom up economics is the way to go. Multi-billion dollar businesses didn't make their fortunes from the wealthy - they make their money from low to middle income class people.

This is coming from someone who owns a small business whose customer base is primarily low to middle income class people. If they don't have money to spend, I don't make money. It's that simple.

Top down came in under Reagan nearly 30 years ago. yes top down was even in play under Clinton. I think there is room enough for it in our economy as well as other policies.

 

[eleison]

Originally posted by: jackace

So why are these companies going to create more jobs? If demand has not increased for their products they are better off putting any "extra" money into a savings account rather than create jobs which are not needed. The quickest and easiest way to increase demand is put more money in the hands of the poor and middle class. It would have to be balanced of course so inflation does not get out of hand. As demand increases companies will create more jobs because they have reached maximum capacity with their current operations. If they do not increase capacity then an opening is available for another business to offer similar products. This other business could possibly be a new small business.

Demand is created by advertising and having a good product. Before Apple created the ipod/iphone, there was no demand for mp3 players like we see now. Giving free money to people, in itself did not create the iphone. It took a company with capital to do the R&D and marketing. Marketing causes demand.

Giving people money is great, but without focusing on the health of the company, users just buy the "subpar" product, i.e., an regular mp3. however, once bought and the money spent, the economy doesn't really get any boost. Without focusing on the company that creates new, better products (and markets them slickly) causing people to buy season after season, the economy gets hurts.

Desire of new products help motive people to work. Companies that have new/and or "desirable" products to sell, create jobs which people can work at. Its a cycle that helps employed get employed, not just sitting by waiting to "share the wealth"...

Originally posted by: jackace
Another point I would like to make is just because a person is poor or middle class doesn't mean they are an "unproductive member of society". If everyone was rich who would work at the restaurants, gas stations, and other general labor jobs in society? We need these people and they are not unproductive.

Agreed we need productive people who have jobs. I'm just against giving out free handouts to people who don't deserve them.

Originally posted by: jackace
There is also no reason why a person who works a full-time job (40 hours a week) should not be compensated with enough money to live and adequate health care. Health care can either be provided or pay the person enough so they can go purchase their own health care. Minimum wage is not enough to live. I live in a fairly inexpensive state (Idaho) and a recent study found that in order for a person to live on their own with no government assistance of any kind they need to make ~$13 an hour and with 2 kids that goes up to ~$18. $6.50 an hour with no medical benefits just does not cut it for a person to live on their own and afford health care. These people making minimum wage or just slightly above rely on the government to survive.

So IMO companies who hire people and pay them less than a living wage are receiving a subsidy from the government because the government is forced to pick up the tab and help this person survive and the company gets the benefit of a full time worker.

 

[Genx87]

Originally posted by: digiram

Originally posted by: fleshconsumed
In Trickle Down approach you are cutting taxes on the rich and corporations hoping that businesses will create more jobs, which in turn will put more money in the hands of working class, who in turn will buy more products created by the extra jobs created by the tax cuts.

In Bottom Up approach you give more money to people who are most likely to spend it, thus stimulating demand and therefore job creation by the companies who respond to increased demand by increasing output and hiring more people.


Frankly, you don't need much insight to see that the second approach is a more direct solution to the problem and in all the probability has much more chances of working out the way you want it to. In fact I don't see how the first approach would work in real life at all, and the history shows it never did. Why do you think the most recent economic stimulus was aimed at lower and middle classes? Because they would spend it all helping stimulate the economy through demand. Of all those who believe in trickle down approach, please raise hand if you think the 150B would have been better spent on tax cuts to rich and corporations.

Exactly. Trickle down defies supply and demand. It's dependent on the goodness of human nature. LOL.

Where do you get that from? It assumes when the top has money they will invest in their business. Investing in their business creates jobs. It doesnt rely on the goodness of human nature, it relies on the greed of the investor to create wealth. In the process it creates jobs and the wealth is passed down via an income for the new worker.

 

[Craig234]

Originally posted by: digiram

Originally posted by: fleshconsumed
In Trickle Down approach you are cutting taxes on the rich and corporations hoping that businesses will create more jobs, which in turn will put more money in the hands of working class, who in turn will buy more products created by the extra jobs created by the tax cuts.

In Bottom Up approach you give more money to people who are most likely to spend it, thus stimulating demand and therefore job creation by the companies who respond to increased demand by increasing output and hiring more people.


Frankly, you don't need much insight to see that the second approach is a more direct solution to the problem and in all the probability has much more chances of working out the way you want it to. In fact I don't see how the first approach would work in real life at all, and the history shows it never did. Why do you think the most recent economic stimulus was aimed at lower and middle classes? Because they would spend it all helping stimulate the economy through demand. Of all those who believe in trickle down approach, please raise hand if you think the 150B would have been better spent on tax cuts to rich and corporations.

I think the reason the stimulus was aimed at the bottom which you correctly say provides more benefit to the economy, is because Democrats controlled Congress.

Exactly. Trickle down defies supply and demand. It's dependent on the goodness of human nature. LOL.

Trickle Down, and Supply and Demand, are two completely different things.

Supply and Demand refers to the setting of value or price on something by the balance between the supply and demand (as opposed to artificial setting of price).

Trickle Down refers to the propaganda claim that having policies put more dollars in the hands of the wealthy is the best place for them because they 'trickle down' to everyone else from the increased productivity, the employment, the higher taxes paid for government programs for the poor, etc.

Many right-wingers have tried to argue that reducing taxes actually increases revenue from the benefits - the stuidies I've seen say the government gets back 21 cents on the dollar.

 

[jackace]

Originally posted by: eleison
Demand is created by advertising and having a good product. Before Apple created the ipod/iphone, there was no demand for mp3 players like we see now. Giving free money to people, in itself did not create the iphone. It took a company with capital to do the R&D and marketing. Marketing causes demand.

Giving people money is great, but without focusing on the health of the company, users just buy the "subpar" product, i.e., an regular mp3. however, once bought and the money spent, the economy doesn't really get any boost. Without focusing on the company that creates new, better products (and markets them slickly) causing people to buy season after season, the economy gets hurts.

Desire of new products help motive people to work. Companies that have new/and or "desirable" products to sell, create jobs which people can work at. Its a cycle that helps employed get employed, not just sitting by waiting to "share the wealth"...

So how do these people afford these products if they have no jobs or are making minimum wage? All the marketing in the world is not going to put $300 into my bank account so I can afford to buy an Ipod or Iphone.

You are so fixed on this giving free money to people. That is not even close to what we are saying. We are saying that first people who work full-time jobs are paid a fair and living wage. Second, the poorest of the people are not taxed much if at all to encourage them to better themselves and spend. The higher the earnings the more people are taxed. It doesn't take away their ability to make money and even more money. It is used to keep a balance of wealth between the rich, middle class, and the poor. The theory is rich people benefit the most from society (i.e. roads for their companies to ship goods and stable, skilled, and educated work force with which to build products and/or perform services) so they should pay the most to maintain the society.