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Trickle Down and Tax Cuts

Randolph H. Wrote: Oct 03, 2012 4:57 PM

The term 'Trickle Down' was invented to describe Ronald Reagan's economic policies to stimulate the economy and end the recession he inherited from Jimmy Carter, which worked very well for the next 35 years. Today Obama and the Democrats have made it unpopular by their false claims against it and have instituted economic policies that can be best be described as 'Trickle Up' economic policies, by flooding the poor with money through food stamps, welfare, disability, and other public entitlement monies, in an attempt to stimulate the economy through their spending trickling up to the middle class and thereby ending the recession he inherited from George Bush, which has failed miserably and prolonged the recession.

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3129 Wrote: Oct 03, 2012 5:36 PM

Actually, "trickle down" had been around a long time when I was in high school during the 1960's. Real "trickle down" only happens with communism and Socialism, where workers are paid very little, or as in Red China, are almost literally slaves. Free Market Capitalism results in the workers getting paid reasonably close to what their services are worth. This applies to both the workers on the assembly line and upper management. Paying the workers too little results in poor quality, which does not sell very well. Management is aware of this. A rising tide floats all boats. Viva la revolucion.

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evan43 Wrote: Oct 03, 2012 5:50 PM

Paying the workers too little does not result in poor quality. If the labor supply exceeds demand, the natural price of labor is driven down, meaning the assembly line will keep going even if the workers are not making a living wage. So what do you do when the laws of supply and demand are not providing living wages to the majority of workers?

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FletchforFreedom Wrote: Oct 03, 2012 6:32 PM

Paying workers too little DOES result in poor quality and competitors gain the better workers forcing the underpaying firm out of business. This is not just theory but empirically indisputable. The term "living wage" is without meaning and repeated only by the economically ignorant. The market wage is ALWAYS what is paid in the marketplace. It cannot be too low or competing firms will take the better workers and the firm will fail. It cannot be too high or competors will underprice them and the firm will fail.

It is unrestricted capitalism, consistent with the laws of supply and demand that has steadily and substantially improved wages, working conditions and prosperity since the beginning of the Industrial Revolution.

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soccerman Wrote: Oct 03, 2012 9:31 PM

Finally, a comment from someone who has passed ECON 101 and 102. Congratulations! Now, if some of these lefties would become economically literate.

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Trickle Down and Tax Cuts

Dr. Thomas Sowell's "'Trickle Down Theory' and 'Tax Cuts for the Rich'" has just been published by the Hoover Institution. Having read this short paper, the conclusion you must reach is that the term "trickle down theory" is simply a tool of charlatans and political hustlers.

Sowell states that "no such theory has been found in even the most voluminous and learned histories of economic theories." That's from a scholar who has published extensively in the history of economic thought. Several years ago, Sowell, in his syndicated column, challenged anyone to name an economist from any economic school of...

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