Trickle down economics doesn't work. Every Republican President since Ronald Reagan has tried to boost the economy by cutting taxes on the wealthy, only to drive the country into a recession. Check for yourself. Cross reference the list of US Presidents with the list of recessions in the US and see where the economy was at the end of each Republican Presidency since Ronald Reagan.
So, if cutting taxes on the wealthy doesn't create more jobs and a stronger economy, what will?
How about trickle UP economics? Would that work?
Poor people do not take money out of the economy because they spend everything they get. They don't have enough to save or hoard. All of their money goes right back into the economy. Social programs that put more money in the pockets of the poor, put more in our economy.
The middle class, that can afford to save some, do take some of the money out of the economy, but only temporarily. The money they put away for retirement gets spent when they reach retirement age, back into the economy. And if there is anything left over, it goes to their heirs, who will spend it soon after getting it...right back into the economy.
The wealthy, their money keeps growing out of control. They can't spend it fast enough. It is not possible for them to spend the wealth they have accumulated within their own lifetime. They pass it on to their children, who can't spend it all during their lifetime either, so it gets passed on, and on, and on, growing and growing with each generation. And every one of those dollars is not part of our economy any more, can't be unless it gets spent, which will never happen unless it is forced to be spent.
And that is one of the purposes of taxes. High taxes on the rich keep the nations money supply moving around as part of our economy, instead of pooling in huge masses at the top and removed from the economy.
Keep the money moving and everyone keeps working. Take it out of the economy and people stop working.
This is why we used to be a prosperous nation when we taxed the wealthy more heavily and spent more on social programs for the poor, and why our prosperity went out the window when trickle down economics took over and we started punishing the poor. It doesn't trickle down because it can't.
Taking some of that money from the top and putting it at the bottom, in other words giving it to the poor, is the fastest way to jumpstart the economy. Taking from the top and giving to the bottom, where it then goes right into the hands of the middle class as soon as the poor spend it, then right back to the wealthy, where you take it again and give to the bottom again -- lather, rinse, repeat -- strong economy. The money keeps moving.
I said it when Bush was handing out stimulus money to the middle class, who then used it to pay down credit card debt instead of spending it on goods, which sent that money right to the top, taken right back out of our economy; that the best use of that money would probably have been to hand every poor person in the US a gift card and double their food stamps for a month. That would have worked so much better. They would have bought more of what they need to survive, not just hand it over to the wealthy and have nothing to show for it.
I consider wealth to be anything left over after taxes, after paying for all your necessities, food, housing, utilities, medicine, etc. Wealth is what you have left over to do with as you please, especially the money you can afford to save.
The poor don't have that, the middle class saves some for later, the wealthy save for never, because they have too much to ever be able to spend in their lifetime.
This leads to them becoming reckless with their money, investing becomes a game to which the goal isn't really making money to have more to spend. It's making money for the sake of making money, at whatever cost, in order to win a numbers game that win or lose has no effect on their lives. But these risky behaviors do have an effect on the entire economy, which this last recession was the result.
Now before you jump all over me and say that it isn't right to take from the wealthy who earned it and give it to the poor who haven't worked for it, that it's somehow unfair, understand this: it's not really a matter of taking from the rich and giving to the poor, it's more taking from the stagnant pool before it grows into toxic cesspool and investing it where it will do the most good, for all.
It's not good for any of us to have so many people living in poverty, to have the middle class slip into poverty themselves. It is not good to have high crime rates because the poor can't find jobs or lack the skills needed to earn a living. Investing in them is investing in all of us. Teach them some skills, like building and fixing roads, then fund the road repairs, then set them loose to do the job. The result will be that we will all have smooth roads to drive on, including the wealthy, and the poor that built those roads will have the money they need to buy the basic necessities of life...and they will have earned it. It's not a hand out; it's a hand up. Things like this will raise the quality of life for everyone.
President Clinton helped boost the economy through Welfare reform, which poured money into job training programs to get people off of Welfare and into jobs, and not low paying McJobs, either...real jobs. He handed over a prosperous country on the right track to George Bush, who then proceeded to undo everything good that was done, in favor of more tax cuts for the wealthy, more deregulation (which triggered more reckless investing), and more unpaid for wars.
Investing in job training for the poor and unemployed, and funding projects for those newly trained people to work on, is one of the things that helped our country come out of the Great Depression of the 1930's. Franklin Roosevelt's New Deal invested in our infrastructure and gave jobs to some of the poorest people in our country. That infrastructure is still used today, but is aging and in bad need of repairs. Why not help fix our economy by repairing that infrastructure, and even modernizing it?
This idea that war is good for the economy has to stop, too. All it can hope to do is decrease the demand for jobs by decreasing the population that is left to need jobs. And the more recent wars the US has been involved in, didn't even do that. It just racked up more debt for the whole nation, making the problem even worse.
Use the environment as a good example of how it should work. Consider the oceans to be the wealthy and the mountain tops to be the poor, and the rivers, streams, lakes, and ponds to be the middle class. Unless enough evaporation takes place, mostly from the oceans, no heavy snows will fall on the mountain tops, no snow means nothing to melt and feed the rivers, nothing in the rivers to flow to lakes and ponds, nothing to flow back to the ocean. It has to keep moving and at a rate to sustain it, or it all dries up and turns to desert, surrounded by ocean.
Trickle down economics doesn't work unless you flip it over and put the poor at the mountain tops and tax the heck out of the rich's ocean to feed the whole system. Let it trickle from the poor back to the wealthy, creating prosperity as it moves along.
If you don't, then it all ends up in the hands of the rich, nothing in the hands of the poor and middle class, and then even the rich won't make any more money. Then the entire economy completely collapses because the money stopped moving, there is nowhere for it to move to. And when that happens, even the rich will starve because their money will be worthless when there is nothing more to invest in.
Yes, that might seem a bit far fetched. We will most likely never get to that point, but how much closer do we need to get to it? How much worse does our economy have to get before this trickle down lie goes away? How much worse does it have to get before we force the wealthy to invest where it is the most needed, through taxes, and not on reckless Wall Street games? How many more have to fall from the middle class into poverty? How much worse does the life of the poor have to become before we change direction, before we all get it and flip it over so the cash can flow freely again?
I don't want to punish the wealthy. I want them to keep earning, keep enjoying the lifestyle they have. I want them all to be happy, today and tomorrow. The only way to do it is to tax them more.
It worked before and it can work again. We can level the playing field a little, invest in the lowest classes of this country, put them to work, and make the American dream a reality, once more.
- Money Giveth, Money Taketh Away:The Dual Effect of Wealth on Happiness
- Consequences of Unequal Distribution of Wealth: The Rich Get Richer...
- Higher Taxes Help the Richest, Too
- The Wealth Effect: It Ain’t Pretty
- The New Company Store: The Final Step in the Corporate Takeover of America
- What Romney doesn’t understand about personal responsibility
- Does cutting taxes create jobs?
- Supply-Side Economics, R.I.P.
- Taxes Shrugged
- How Supply-Side Economics Trickled Down
- Keynesian economics
- Fiscal multiplier
- The Blitz of Empty Anti-Wall Street Rhetoric