Summations Only

Hi Percy, interesting argument, Problems I have with it are:(1) What is the percentage of the increased wealth of the rich that gets disbursed in such trickle down expenditures, compared to the percentage of disbursement of an equal amount in the hands of the poor? -- if the disbursement is less, then it is a less efficient method of increasing the economy (which is based on transactions not hold wealth).(2) Is this a net increase or just a local disturbance? ie - is this like the energy distribution in thermodynamics. If it is just a local disturbance and doesn't affect the overall picture then this is not an efficient method of increasing the economy (the purported goal of the tax cut)(3) Is there similar trickle down from the first generation beneficiaries, or does the process get sucked up into debt repayments etc (sending money back up instead of further down)? How many "generations" of beneficiaries actually see a significant increase in annual income? If the benefit only extends to a local effect then this is not an efficient means to benefit the general economy. I disagree, so can you show that it does or is this just an assertion? If anything, the people that are locally benefited by trickle down may buy a few more burgers - how does this increase the wages for the flipper?What has been the average wage of a burger flipper before the tax cuts and now and how do you control for other effects on the economy? But should they be taxed at a lower rate than other income groups? Nor should anyone argue that the rich spend more on international economies or open foreign accounts - which doesn't improve the general economy of the US at all. No, the question is that, IF you are going to take $100,000 our of general tax revenues and return it to tax payers, where and how is that money most efficiently distributed to benefit the general economy, as this is the purpose espoused for the tax cut.The evidence against the trickle down theory having any real general effect is the collapse of the housing mortgage market. Mortgages were issued on the basis that things would improve for the mortgagees -- that their personal economies would improve. When it didn't, and the defaults exploded in a vicious feedback of increasing defaults, this shows that trickle up is much more powerful than trickle down. It took just days for the effects of failure at the bottom of the economic pile to be felt at the top.If the government had bailed out the people instead of the banks with the same amount of money there would have been no collapse.The economic failure of piling money into the top of the system in stemming the failure is also evidence of the failure of trickle down.Enjoy. Edited by RAZD, : engls

Hi Straggler As far as I know not one person has suggested a way to measure the result of the various programs proposed, or to in any way determine relative success. This could be intentional, if the real reason is not to stimulate the economy but to line the pockets of the rich (where measurement\determination would be counterproductive).What we can do is compare the programs and experiences of the last few years to a resonance feedback system:If the measured response to a {program} is "very good" then the resonance feedback would result in amplified results much greater than input, a runaway feedback loop that results in the economy growing by leaps and bounds. This would indicate a strong relationship between measurement and {program}.If the measured response to a {program} is "very bad" then the resonance feedback would result in dampened results much less than the input, to the point of barely being noticeable. This would indicate a weak or non-existant relationship between measurement and {program}.A neutral response would have the same output as the input.Here the measurement is the economy, and how it reacts to the {program} (plus or minus).When we compare the mortgage failure of mortgages for people at the bottom of the economic pyramid, the effect was much greater than just the foreclosures of those mortgages, but an amplified feedback that lead to more and bigger failures, and this indicates that there is a very strong relationship between the economy at the bottom of the pyramid to the economy overall.When we compare the bailout program to being able to stall or turn around the failure, there was barely a ripple, and years later has not reached the pre-failure level. This indicates a very poor to non-existant relationship between the economy at the top of the the pyramid to the economy overall.If trickle down does occur to any significant level around the sources of the trickles, it is heavily damped when it comes to the effect on the overall economy, to the point of not being measurable.Enjoy.

Hi again Straggler, Agreed, it is not about whether or not trickle-down actually occurs - evidence shows that there is SOME effect -- but whether it is universally beneficial to all people involved as the theory and promoters claim. As far as I can see, after some 12 years of bush-cuts the lower income people are worse off than before, on every document, graph, etc that has been provided. As far as I am concerned, this is objective evidence that the theory is a falsified failure. But we don't know if lower income people given the same economic opportunities that the very rich inherit would not be as good at developing marketable products that result in increased wealth.In addition, the wealthy do not act in isolation: if nobody else were involved - no makers of actual product, no consumers of actual product - they would be unable to accomplish their money making goals.The people that actually produce and sell marketable products and the people that buy them are the ones that actually "make" the money. The economic environment, which includes the government rules and regulations as well as the supply\demand of various different kinds of products, is a significant part of the equation of productive success.Enjoy.

Hi Percy, Indeed you may. Actually they correlate with both to equal measure, with peaks and valleys at the same years. What is more interesting to me is the relatively inverse relationship with the lowest income category.The claim of the trickle-down theory is that increased income at the top will result in increased income at the bottom (which was used to sell all those dodgy mortgages to the lower income people), and this graph clearly shows a counter trend to that assertion.Enjoy.

Hi Percy, I'm not contesting that trickle-down does happen, just that the claim that it improves ALL economic strata is patently false. The graph clearly shows that the lower income bracket is not improved by it, and that in fact it changes slopes in opposition to those of the upper bracket/s.Logically there is a point somewhere between mean income and lowest income where it is stagnant. Quite obviously this does not occur for the lower classes. Otherwise there would be nobody in the negative side of the graph.Any program, however it is arranged, that gave a benefit to the lowest classes would also benefit the upper classes, because trickle up ALSO occurs, much more than trickle down does. Not ALL the wealth is created by the top brackets, but it is created by entrepreneurs at ALL levels of the economic system. Wealth that is created that then is used to pay off loans to get going is an obvious means for trickle up to take money from these money makers and send it to the upper brackets without any dampening depreciation effect. This same mechanism of paying off debts does act to dampen and depreciate the effects of trickle-down, so that each lower level gets less effective trickles, spread over more people.You can also see that the economic system as a whole is much more sensitive to trickle-up when you look at the mortgage failures: suddenly those debts at the bottom were not being paid and the whole system virtually collapsed.Enjoy.

Hi Straggler, Well, that doesn't really surprise me, in that I believe our views are very similar on most topics, and that there is only one gray area where we will just have to agree to disagree. I can't say that I am right and you are wrong, rather that there is insufficient evidence to say one way or the other. As I agree with you on this thread as well. Kudos for starting it.Enjoy.

Hi PercyOne minor point Everybody participates in the economy whether they work or not -- they are CONSUMERS or they are DEAD.Enjoy.

Hi Straggler C) Thank the employer (rich) for generously giving you back 20% of your 100% increased productivity?Enjoy

Hi Percy At paying jobs. Stay at home moms and caregivers are certainly working people, even if they are underpaid for their work.Shockingly, in middle and upper class homes there are also people that do not work at paying jobs: children, mothers, care givers, etc. -- the "non-working" portion of the population is not restricted to the poor economic levels.I also spend DAYS when I am not working, or I am working on my house but don't pay myself a salary.These people still contribute to the economy as consumers, especially the children.The economy is made by the spending of money (not by the accumulation of it), so by this measure the "non-working poor" provide vastly more return to the economy per $ earned than the rich can possible aspire to attain (1/0 = ∞ ...).Enjoy.

Hi hooah212002, Would you agree that anyone that lives paycheck to paycheck contributes 100% of their income to the economy?Would you agree that anyone that lives paycheck to paycheck that was given $100 by the government would contribute 100% of that money into the economy?Would you agree that this would tend to stimulate the economy, with more stimulus provided the more people living paycheck to paycheck that were included?Would you also agree that any person that does not show an increase in wealth over a one year period has also contributed 100% of their income to the economy?Would you agree that any person that does not show an increase in wealth over a one year period and also was given $100 by the government would send 100% of that into the economy?Would you agree that this would tend to stimulate the economy, with more stimulus provided the more people that do not show an increase in wealth over a one year period that were included?Would you also agree that any person that does show an increase in wealth over a one year period has contributed less than 100% of their income to the economy?Would you agree that any person that does show an increase in wealth over a one year period and also was given $100 by the government would send less than 100% of that into the economy?Would you agree that -- assuming that stimulating the economy is the purpose of sending out $100 to people -- more stimulus would be achieved by giving $100 per person to the lower income people (those that do not show an increase in wealth over a one year period) than by giving it to upper income people (those that do show an increase in wealth over a one year period)?If the purpose really is to stimulate the economy then it should be obvious that giving money to the top income bracket is a poor method compared to giving the same money to the lower income brackets.Enjoy.

Recently I saw an article that said that the time is approaching when we will need to pay people to consume to keep the economy growing. This is due to (a) increased population and (b) increased productivity per person.This is like the programs already in place where farmers are paid to NOT produce certain crops in order to keep prices up (and thus support the economy). Presumably these programs work because the net benefit is an improved farming economy, the money paid out is less than the increase in wealth generated by the rest of the agricultural industry.Does it not make sense then, that some minimum level of benefits be paid to people that allows them to be productive consumers?Enjoy.Edited by RAZD, : saw not say

Hi again hooah212002 Just trying to relate personal experience back to the topic issue of stimulating the economy via trickle-down and whether it (t-d) is an effective use of funds designed to stimulate the economy.Enjoy.

Hi Percy Decreasing someone's taxes while not giving equal decreases to others is the same as giving them money. What trickle-down theory actually proposes is an increase in taxes on lower incomes to finance a stimulus program that is supposed to improve the overall economy. It is a poor choice of stimulus because the return is less that doing the opposite. And I'm pointing out that trickle-down theory is a poor method of stimulating the economy versus providing the exact same stimulus to the lower income brackets. Dollar for dollar there will be more return from those that contribute 100% of their annual earnings back into the economy (ie their real accumulated wealth does not increase) than you would get from people that do not contribute 100% of their annual earnings back into the economy (ie their real accumulated wealth does increase). In return for interest, dividends and other charges that take back more than was invested, thus putting less than 100% of that investment into the economy. Jobs are created by entrepreneurs at all levels of the economy, and more jobs are created by people that hire workers than by people investing. We have had trickle-down tax cuts for years and there has yet to be a single piece of evidence that it has actually done anything.We had trickle up mortgage failure that caused massive additional failures from the bottom to the top of the economic system.One can say with no small amount of irony that this failure of the mortgage system is due to the failure of the trickle-down tax cuts to benefit the lower income brackets: proof that it is a failure imnsho.One of the measures of cause and effect is the sensitivity of the system to respond to input:(1) trickle-down tax cuts: negligible effect, if any, after a decade of use.
(2) trickle-up mortgage failure: immediate pervasive effect across all levels of the economy.Conclusion: better to feed the bottom than the top.If the same money that was thrown away with the trickle-down tax cuts had been provided to those people with the mortgages, then failure would not have happened. Sounds a lot like "the devil can cite scripture for his purpose" rather than scientific evaluation of the available evidence. I repeat:(1) trickle-down tax cuts: negligible effect, if any, after a decade of use.
(2) trickle-up mortgage failure: immediate pervasive effect across all levels of the economy.Conclusion: better to feed the bottom than the top.If the purpose of disbursing funds - whatever propaganda label you apply - is to stimulate the economy, then the virtually self-evident conclusion is that it is best given to the lower income brackets."A rising tide lifts all ships" only works if you raise the water level for everyone. ... to pay their fair and just share to the government that regulates the economy that allow the market to work the way it does.Consider it a user fee: you benefit, you pay back to the system that allows you to benefit. The more you benefit, the more you pay back.Enjoy.

Hi Percy,In addition to what dronester said: When I look at the pre 1970 slopes versus the post 1970 slopes it is readily apparent that all groups but the top one grow at a slower rate post 1970 than pre 1970, thus demonstrating that the trickle down concept is actually adversely affecting these groups of the economy. Exactly. Other than what you just provided?How would you go about establishing that this is not a causal relationship? By showing some other factor was involved that started at the same time and continues to this day.Enjoy.Edited by RAZD, : ingEdited by RAZD, : added

Hi dronester Personal opinion: consumerism is not viable today as a stand alone program, but then neither is 100% socialism\communism. Rather there needs to be a mixture arrived at by consensus to maximize "the pursuit of happiness" for all.If that means taxing all income at 50% but also giving everyone $50 per day ... (The 50-50-50-50-50 tax and economic plan.), then that is what we should work towards.Enjoy.