Poll of the Day > Why did trickle down economics not work?

(+) Yeah! (+)

How come the people on the supply lines for the private jets did not see more money?

Why would it work? What possible reason could anyone ever have for thinking it would do anything other than give more money to the rich?

They do, it's just that the supply lines for luxury private planes and luxury boats are already hilariously expensive so it's just another thing.

It works as a scam, a league or two more elaborate than a pyramid scheme. The people up top earn more with regressing restrictions, and the people at the bottom only receive an initial payout during the 80s to hook them and future generations in.

Because the people who were given the power to decide how much wealth would trickle down like watching their own numbers go up more than watching other people's.

It did work as it intended to

Ogurisama posted...

It did work as it intended to

That too. It didn't work as advertised, but it worked exactly how those pushing it wanted.

Because it was never supposed to work as advertised. The only debate is if Reagan knew this, and was in on it, or that dumb and gullible that he actually though "jerb creators" would do the right thing.

It was never supposed to work. Only a moron would think "If we give all our money to the richest people in the nation they will use it wisely instead of just hoarding it"

Trickle down economics always has been and always will be a scam. Without making requirements of this money there is no reason it won't be hoarded or used to fund shipping more of our jobs overseas.

The reason it doesn't work is because billionaires aren't buying enough new things every paycheck.

Ok, lets say you buy 1 tshirt and jeans every week for whatever reasons. a billionaire isn't buying a pair of textile factories every week.

Well , it was nice of you to provide numbers to back up your point.

So, here's a few to mull over.

Under Reagan , the economy set a new record for consecutive monthly growth, which was broken during the Clinton administration.

So, let's compare their administrations.

Taking the year after their inauguration and ending with the year they left office.

Comparing 82 to 89 under the Reagan administration:
Federal individual income tax revenues increased 49.7%
Corporate income tax revenues increased 110%
Payroll tax revenues increased 78.4%

Comparing 94 to 2001 under the Clinton administration:
Federal income tax revenues increased 83%
Corporate income tax revenues increased 7.5%
Payroll tax revenues increased 50.4%

Now , there was an pronounced unusual drop in corporate revenue from 2000 to 2001.
Using the 2000 number , the increase would come in at 47.6% , still less than half of Reagan's increase.

Reagan stans are dumb.

robbobmur posted...

Well , it was nice of you to provide numbers to back up your point.

So, here's a few to mull over.

Under Reagan , the economy set a new record for consecutive monthly growth, which was broken during the Clinton administration.

So, let's compare their administrations.

Taking the year after their inauguration and ending with the year they left office.

Comparing 82 to 89 under the Reagan administration:
Federal individual income tax revenues increased 49.7%
Corporate income tax revenues increased 110%
Payroll tax revenues increased 78.4%

Comparing 94 to 2001 under the Clinton administration:
Federal income tax revenues increased 83%
Corporate income tax revenues increased 7.5%
Payroll tax revenues increased 50.4%

Now , there was an pronounced unusual drop in corporate revenue from 2000 to 2001.
Using the 2000 number , the increase would come in at 47.6% , still less than half of Reagan's increase.

suggests to me that a much larger tax burden was a result of federal income tax, something that disproportionately affects poor people

robbobmur posted...

Well , it was nice of you to provide numbers to back up your point.

https://www.businessinsider.com/how-bad-is-inequality-trickle-down-economics-thomas-piketty-economists-2021-12
https://wir2022.wid.world/

A huge study of 20 years of global wealth demolishes the myth of 'trickle-down' and shows the rich are taking most of the gains for themselves
...
For instance, when it comes to wealth, which accounts for the values of assets people hold, researchers found that the "poorest half of the global population barely owns any wealth at all." That bottom half owns just 2% of total wealth. That means that the top half of the world holds 98% of the world's wealth, and that gets even more concentrated the wealthier you get.

Indeed, the richest 10% of the world's population hold 76%, or two-thirds of all wealth. That means the 517 million people who make up the top hold vastly more than the 2.5 billion who make up the bottom. The world's policy choices have led to wealth trickling up rather than down.
...
Billionaires now hold a 3% share of global wealth, up from 1% in 1995

The report notes that "2020 marked the steepest increase in global billionaires' share of wealth on record." Broadly, the number of billionaires rose to a record-number in 2020, with Wealth-X finding that there are now over 3,000 members of the three-comma club.

Lokarin posted...

suggests to me that a much larger tax burden was a result of federal income tax, something that disproportionately affects poor people

The lowest earners pay no federal income tax at the end of the tax year , with the standard deduction and EIC they actually get more than they pay in.

Blue_Thunder posted...

https://www.businessinsider.com/how-bad-is-inequality-trickle-down-economics-thomas-piketty-economists-2021-12
https://wir2022.wid.world/

And how does taxing the wealthy more , create wealth at the bottom?

Are you advocating taking over the decision making of the poor's spending habits to ensure they create their own wealth?

What policy change is going to get the poor to invest in and practice wealth creating actions instead of spending their funds on necessities and luxuries?

And if the government is full of the wealthy and has shown they're corrupted by the wealthy, why would you want that entity to have more control over the wealth?

The real metric is income inequality, which has skyrocketed since Reagan.

robbobmur posted...

And how does taxing the wealthy more , create wealth at the bottom?

By alleviating tax burdens on the poorest, such as infrastructure and public services.

robbobmur posted...

Are you advocating taking over the decision making of the poor's spending habits to ensure they create their own wealth?

What policy change is going to get the poor to invest in and practice wealth creating actions instead of spending their funds on necessities and luxuries?

People on the bottom do not have investment capital - I mean, around 97% of my spending is just on not dying, but I only make about $19k a year.

robbobmur posted...

And if the government is full of the wealthy and has shown they're corrupted by the wealthy, why would you want that entity to have more control over the wealth?

Democratically choosing to tax the rich more is a democratic action, y'know, from da people.

Lokarin posted...

By alleviating tax burdens on the poorest, such as infrastructure and public services.

People on the bottom do not have investment capital - I mean, around 97% of my spending is just on not dying, but I only make about $19k a year.

Right , they don't or can't use funds for wealth creation.

If you want them to do so , you'll need a better plan than just take away the wealth from others so there isn't as big of a disparity.

Democratically choosing to tax the rich more is a democratic action, y'know, from da people.

So was slavery , or Japanese internment during WW2, or any other transgression committed by the government of da people.

Just because it's legal by democratic vote ; doesn't mean it's moral, fair , or just.

Wow comparing equitable taxation to slavery and concentration camps. Gotta love the internet.

robbobmur posted...

And how does taxing the wealthy more , create wealth at the bottom?

Well, for one, if I didn't have to pay out of pocket for health insurance that'd save me some money every paycheck. And if college was paid for by taxpayers, it could foster a system where higher education (and by extension higher paying jobs) weren't gate-kept by the wealthy

Tax the rich and corporations more.
Then give tax breaks if they meet certain requirements. Such as if all employees are getting at least double minimum wage.

robbobmur posted...

What policy change is going to get the poor to invest in and practice wealth creating actions instead of spending their funds on necessities and luxuries?

How did you write this sentence and not realize the answer of "paying for necessities"? Like, even acknowledging that there's a lot of economic nuance to consider in order to actually execute that idea optimally, and there may be more effective ways to do it than just throwing money at people, that question just straight-up answers itself. If people's necessities are taken care of, that provides more opportunities to spend their time and the money they make on decisions that can increase their wealth. That's just obvious.

The problem with wealth disparity is not "some people have a lot of money and some people don't." It's "some people have an ever-increasing share of the money, leaving an ever-increasing number of people barely able to survive." There will (and I might even say should) always be people with more money than others, who are able to live in greater luxury than others as a result of their wealth. That's not inherently a bad thing. What's bad is when that spirals out of control to such a point that basic subsistence is beyond many people's reach.

robbobmur posted...

So was slavery , or Japanese internment during WW2, or any other transgression committed by the government of da people.

Just because it's legal by democratic vote ; doesn't mean it's moral, fair , or just.

Did you really just compare the mass imprisonment of thousands of innocent people to "maybe billionaires don't need to be quite so billionairey"?

OhhhJa posted...

Well, for one, if I didn't have to pay out of pocket for health insurance that'd save me some money every paycheck.

This one doesn't even need tax reform. The US already pays significantly more tax dollars per capita on health care than any other country in the world. That it gets such terrible results is purely a consequence of how much the current private insurance system inflates costs, not anything more tax dollars are needed to fix (aside from an initial investment to overhaul it).

robbobmur posted...

Right , they don't or can't use funds for wealth creation.

If you want them to do so , you'll need a better plan than just take away the wealth from others so there isn't as big of a disparity.

After taking a fraction of the wealth of the richest the money should be invested in public services in a way such that normal people have a better QoL and more money to spend and invest.

https://neweconomics.org/2019/05/investment-in-public-services-is-an-investment-in-social-infrastructure

public services have been found to reduce income inequality by an average of 20%

https://www.researchgate.net/publication/329051565_State_government_public_goods_spending_and_citizens'_quality_of_life

Moreover, the statistical relationship between public goods spending and happiness is substantively large and invariant across income, education, gender, and race/ethnicity lines indicating that spending has broad benefits across society. These findings suggest that public goods spending can have important implications for the well-being of Americans and, more broadly, contribute to the growing literature on how government policy decisions concretely impact the quality of life that citizens experience.

Additionally, there should be more public education about managing money in general. It is among the practical skills that are largely neglected by schools.

robbobmur posted...

And if the government is full of the wealthy and has shown they're corrupted by the wealthy, why would you want that entity to have more control over the wealth?

Because the wealthy generally don't care and have little reason to. However, the government is shaped in part by the people.

No one is expecting change overnight. If we want change we need to educate the general populous on why the change is good and support organizations and vote in politicians who support the change. Over time, we can change society as a whole, but we have to start somewhere.

We are doing our small part by educating you here.

adjl posted...

Did you really just compare the mass imprisonment of thousands of innocent people to "maybe billionaires don't need to be quite so billionairey"?

No, I was quite clear, why are you misinterpreting what I said?

Just because the majority say so , doesn't mean a policy is moral , fair , or just.

There are countless examples in human history of those in power abusing the powerless simply because the "state" dictated it was legal.

I'm hesitant to give an entity that already misuses the wealth of this country, more control of the wealth.

robbobmur posted...

No, I was quite clear, why are you misinterpreting what I said?

You felt it was an appropriately comparable example to bring it up. That's something you have an onus to justify.

robbobmur posted...

Just because the majority say so , doesn't mean a policy is moral , fair , or just.

If it's not, you can make that point by explaining out how it's immoral, unfair, or unjust to enough of a degree to supersede the will of the people. Saying "lots of people liked slavery" doesn't actually make a point that has any value in this context.

robbobmur posted...

No, I was quite clear, why are you misinterpreting what I said?

Just because the majority say so , doesn't mean a policy is moral , fair , or just.

There are countless examples in human history of those in power abusing the powerless simply because the "state" dictated it was legal.

I'm hesitant to give an entity that already misuses the wealth of this country, more control of the wealth.

They want more people like you. They get to spend the taxpayer money on their bs and then they have people like you excusing them from the responsibility of allocating funds to healthcare and education

robbobmur posted...

So was slavery , or Japanese internment during WW2, or any other transgression committed by the government of da people.

Just because it's legal by democratic vote ; doesn't mean it's moral, fair , or just.

Fucking yikes

robbobmur posted...

Right , they don't or can't use funds for wealth creation.

If you want them to do so , you'll need a better plan than just take away the wealth from others so there isn't as big of a disparity.

So was slavery , or Japanese internment during WW2, or any other transgression committed by the government of da people.

Just because it's legal by democratic vote ; doesn't mean it's moral, fair , or just.

https://gamefaqs.gamespot.com/a/forum/e/e2015bd8.jpg

"If we tax them less, they'll probably want to thank society by paying me more!"

robbobmur posted...

Right , they don't or can't use funds for wealth creation.

If you want them to do so , you'll need a better plan than just take away the wealth from others so there isn't as big of a disparity.

So was slavery , or Japanese internment during WW2, or any other transgression committed by the government of da people.

Just because it's legal by democratic vote ; doesn't mean it's moral, fair , or just.

Just imagine there do actually exist people who can post things like this and believe what they have said is perfectly reasonable and rational. How the fuck do these kinds of people exist?

Don't worry guys. It wasn't true trickle-down economics. With someone like me in charge, a paragon of virtue and benevolence, I'll be sure to implement the perfect economic policies that shall usher in the capitalist utopia that all past capitalist societies failed to achieve.

Technically, the concept works in multiple senses.

Broadly, though, "trickle-down" is handled as a meaningless talking point. And the idea of letting private citizens accumulate wealth has led to the success of every wealthy nation on the planet because, pragmatically speaking, the accumulation of wealth has traditionally been an incredible motivator. Likewise, wealth is needed to pursue greater wealth, which leads to investments. However, as with anything else, not everything is going to be productive -- which is why even when wealth is taken by the government to redistribute (minus what winds up in government's pockets, on the book or off it), it doesn't always lead to spending that benefits society.

Private enterprise will generally always outpace government development in most areas, mostly because you have a larger pool of people working on problems with a greater degree of autonomy. However, thanks to government creating perverse incentives, it's not a pure system.

But, broadly, private enterprise works first to the benefit of private enterprise while government works first to the benefit of government. Everybody else is, at best, a secondary consideration. That's even true in the case of non-profits, where very little money actually goes to benefit a cause... unless the objective is "raising awareness" which can be justified any number of ways.

Yellow posted...

The real metric is income inequality, which has skyrocketed since Reagan.

Income inequality is a questionable measure at best, meaningless at worst. The closer you get to perfect income/financial equality, the poorer societies tend to be. Likewise, as nations grow wealthier, inequality tends to increase.

That said, a large part of the rise in inequality has been owed to societal band-aids that've allowed us to avoid confronting actual issues. Credit/loans in particular have largely obfuscated what the real prices for things should be, stopping systems from adjusting so that products would be more affordable.

BlackScythe0 posted...

It was never supposed to work. Only a moron would think "If we give all our money to the richest people in the nation they will use it wisely instead of just hoarding it"

Says the guy who thinks all rich people have a Scrooge McDuck money pit.

https://www.youtube.com/watch?v=xLJrzfWTu9E

While the richest people don't necessarily use their money wisely, that money is often in use which is why the claims are about "wealth" instead of just "money." If you look at a list of the wealthiest people, you'll quickly see that wealth is either in ownership of companies, stocks, and other possessions rather than just cash. In fact, some of the "wealthiest" individuals have historically been cash-poor at times.

Count_Drachma posted...

In fact, some of the "wealthiest" individuals have historically been cash-poor at times.

This is currently true about Trump; he cannot raise bail or even get a loan because all his money is in real estate... and no one will take the real estate for collateral since the reason he needs the bail is cuz his case for for overvaluating said real estate.

Count_Drachma posted...

Says the guy who thinks all rich people have a Scrooge McDuck money pit.
While the richest people don't necessarily use their money wisely, that money is often in use which is why the claims are about "wealth" instead of just "money." If you look at a list of the wealthiest people, you'll quickly see that wealth is either in ownership of companies, stocks, and other possessions rather than just cash. In fact, some of the "wealthiest" individuals have historically been cash-poor at times.

Ah Zeus ignoring the point and fabricating an argument he wishes to respond to. I don't know how my comment can lead someone to a discussion of what liquid assets a person possess vs what is tied up in investments.

Count_Drachma posted...

The closer you get to perfect income/financial equality, the poorer societies tend to be. Likewise, as nations grow wealthier, inequality tends to increase.

Other way round, dude. If you're measuring a nation's wealth by its GDP, that's looking primarily at the performance of its wealthiest people and companies. That inherently means that as wealth inequality increases and more and more wealth gets tied up in the hands of billionaires who don't keep it liquid, GDP will go up. Conversely, GDP goes down when wealth inequality is lower and more regular people that keep a greater proportion of their assets liquid have a greater share of the pie.

"Wealth inequality is correlated with GDP" ignores the simple reality that GDP pretty much is wealth inequality. Focusing on GDP instead of personal purchasing power and other metrics that measure the economy in terms of everyone's quality of life only makes sense if you're looking for an opportunity to fellate a billionaire.

BlackScythe0 posted...

Ah Zeus ignoring the point and fabricating an argument he wishes to respond to. I don't know how my comment can lead someone to a discussion of what liquid assets a person possess vs what is tied up in investments.

Wait! Is Count Zeus's alt?

Obvs

EchoBaz posted...

Wait! Is Count Zeus's alt?

Yep.

Alwayshasbeen.jpeg

There is only one field where trickle down is working, if people want a legit example...and that's advertising.

Advertising is the only industry that is actively paying downward as part of their business model.

adjl posted...

Yep.

Thanks, don't wanna deal with Zeus.

At best it was a gross misunderstanding of human behavior. When people who have indicated an ability to earn and maintain extreme wealth get more of it they protect it, they don't throw it all over the place because suddenly they have more than they need. They always had more than they needed. There is some amount of investment, but think about how small the group of non rich people that investment impacts is versus nation wide tax funded programs.

At worst it was an outright scam. The richest people hired the most influential lobbiests to all but live in congress and shower conservative politicians with donations under the agreement "you'll stay in power indefinitely if you cut my taxes." A political taking point was agreed upon and to this day, despite all the evidence showing it not only doesn't work but hurts the middle and lower class, we still have to hear about it and how liberals are socialist pirates because they dare not support it.

EchoBaz posted...

Wait! Is Count Zeus's alt?

yeah

for some reason he refuses to actually use the zeus account now

i think it's because he got scared of getting it banned

Simple. If you own a business and lets keep numbers small and say you made $100,000 profit a month for all 12 months. So you just made 1.2 million dollars. Lets say you have two employees and they are unskilled labor meaning you can hire anyone and train them to do the job in a week or less. How much of that 1.2 million dollar pie are you going to give them? Most people who don't own a business would say $100,000 a year each easy. You would still have a million dollars and paying them 100K a year is a livable wage for the vast majority of the US, fair enough, and you know the two people you hired would be loyal and would not quit unless they had no choice. Business owners think the opposite. They want to pay you as little as possible to get the job done so they would say $30,000 a year and if they can pay you less they would because that business owner wants to keep as much money for themselves as possible even though they can afford to pay more. That compounds since they are unskilled labor and they can get anyone off the street to do their job.

No one opens a business to make other people rich. They open it to make themselves and only themselves, maybe a few others if they have partners or close family, rich and they care little for the people who work for them if at all. Some businesses do take care of their employees well like Buc-ee's but they are the exception, not the rule.

In short employees are seen as a cost like rent for the building and not as actual people. If they could replace you with a machine/computer, they will do it in a heart beat. You are a resource, nothing more nothing less and that is why the department that deals with you and hires/fires people is called human resources.

You are as expendable as the pens in the office supply cabinet.