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Author Topic:   Trickle Down Economics - Does It Work?
crashfrog
Member (Idle past 1466 days)
Posts: 19762
From: Silver Spring, MD
Joined: 03-20-2003


Message 151 of 404 (659812)
04-18-2012 9:17 PM
Reply to: Message 146 by Percy
04-18-2012 8:29 PM


Re: A closer look...
In other words, once you begin providing government services the ranks of those receiving those services will only grow.
Sure, but they spend nearly all of it.
You're simply allowing your moral objections to funding someone else's largesse to blind you to the fact that the largesse ultimately being funded is your own. It's in everybody's interest to spend money on the poor even if the indolent, lazy poor spend it all on cigarrettes and t-bone steaks and lottery tickets. All that spending is stimulative.
When it comes to government, never forget the law of unintended consequences.
Well, don't forget it. One of the unintended "consequences" of government waste is that it is private income.

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Theodoric
Member
Posts: 9076
From: Northwest, WI, USA
Joined: 08-15-2005
Member Rating: 3.7


(2)
Message 152 of 404 (659821)
04-19-2012 12:05 AM
Reply to: Message 146 by Percy
04-18-2012 8:29 PM


Re: A closer look...
Many of the poor don't even work.
Do you have anything to back this statement? Would you like to quantify "many" and "poor". Let us know what you mean statistically by this blatantly wild ass statement.
I can counter that with this statement.
Many of the rich do not work.
Non-participants in the economy cannot benefit from an improving economy, regardless of whether rising or falling tax rates were the cause.
Please show how the poor are non-participants in the economy. This statement is extremely ludicrous and outright offensive. Of course the poor participate in the economy.
Edited by Theodoric, : clarified

Facts don't lie or have an agenda. Facts are just facts

This message is a reply to:
 Message 146 by Percy, posted 04-18-2012 8:29 PM Percy has replied

Replies to this message:
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Dr Adequate
Member (Idle past 284 days)
Posts: 16113
Joined: 07-20-2006


(6)
Message 153 of 404 (659822)
04-19-2012 12:35 AM
Reply to: Message 136 by New Cat's Eye
04-18-2012 5:05 PM


Re: Not sure what you're seeing
Yeah, and then when the top 5% starts taking off, the median goes up along with it. Isn't that Trickle Down Economics working?
Also there is evidence that when rich people feel warm (in July, for example) so do poor people. I can show you a graph if you like. It follows that we can keep the poor warm in winter by heating the rich.

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PaulK
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Posts: 17822
Joined: 01-10-2003
Member Rating: 2.2


(1)
Message 154 of 404 (659829)
04-19-2012 1:37 AM
Reply to: Message 140 by crashfrog
04-18-2012 6:33 PM


Re: Not sure what you're seeing
quote:
No, because the median is the value at the middle of the range. If the incomes at the top 5% increased while everyone else's remained the same, the median would increase because of growth at the top end. But that wouldn't be an example of a rising tide lifting all boats, but merely a statistical artifact of the increase in range of incomes.
That's not right, Crash. A rise in just the top 5% incomes wouldn't raise the median at all. It's the reason for choosing the median rather than the mean (which would show exactly the effect you give, although not for that exact reason).
The median is the 50% point - half of the population have that income or lower. It only changes upwards if people move from being at or below that point to above.
Edited by PaulK, : No reason given.

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Straggler
Member
Posts: 10333
From: London England
Joined: 09-30-2006


Message 155 of 404 (659841)
04-19-2012 7:25 AM
Reply to: Message 132 by New Cat's Eye
04-18-2012 3:36 PM


Re: Not sure what you're seeing
CS writes:
The minimum wage has never been decreased.
The value of the minimum wage has decreased in real terms.
CS writes:
The minimum wage is determined by legislation. It cannot be raised from Trickle Down Economics.
The income of those on minimum wage has decreased in real terms. However you look at it trickle down has not worked for these people has it?
Straggler writes:
Each person in the US economy has increased their production level by 100%
CS writes:
What does that mean? What does that mean on an individual basis?
It means that the productivity per person in the US has risen 100%
CS writes:
I'm not so sure... Everything has gotten better for everybody (except for minimum wage which is determined by legislation). That is the prediction of Trickle Down Economics, isn't it?
Over a period of time you increase your productivity by 100%
As a result of this increased productivity you receive < 20% increase in income. Do you:
A) Ask yourself who is benefitting from your increased productivity?
B) Thank the rich for trickling down a 20% increase in your income?
CS writes:
If anything, "The Poor" should be counted along with the median. Which rises with the top 5% as predicted by Trickle Down Economics.
Only if you attribute all (or nearly all) of the increased productivity to the top 5% does it make sense for you to think that wealth is trickling down.
What or who do you think is responsible for that 100% increase in GDP per capita? Entrepreneurism and innovation across the income scale? Small businesses growing? Technological advancements made possible by publicly funded research institutions?
Or do you think that the top 5% are responsible for nearly all that increased productivity and that you should be grateful for trickling down that sub 20% increase in income?
CS writes:
Not from that graph.
The graph tells you that the proceeds of economic growth are not trickling down. They are accumulating at the top.
I am bemused as to how anyone can dispute this.
Edited by Straggler, : No reason given.

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Replies to this message:
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Straggler
Member
Posts: 10333
From: London England
Joined: 09-30-2006


Message 156 of 404 (659843)
04-19-2012 7:48 AM
Reply to: Message 144 by Percy
04-18-2012 7:44 PM


Re: Real Current Example - UK Economic Policy
Percy writes:
"It isn't a question of whether trickle down happens or not. Of course it happens."
Well obviously trickle down happens in the sense that rich people spend money and it ends up in the hands of the less wealthy.
Equally obvious is that trickle up happens because less wealthy people buy things that make the profits that pay the CEO's salaries.
But what does any of this indisputably happening have to do with what works?
Percy writes:
I don't know the details of the economic situation in the UK, but your analysis is flawed.
You don't need to know the details of the economic situation in the UK to recognise the policies I describe as being directly derived from trickle down economic theory. The same sort of policies president Obama was talking about when he said "It doesn't work, it has never worked".
Percy writes:
First, you don't say what you're comparing to. Doing nothing? Raising taxes? Increasing public spending? Lowering VAT? Some combination?
I would suggest that any lowering of taxes done to stimulate the economy should focus on lowering them for the majority in an effort to boost depressed demand. The exact opposite of what my government has done.
Percy writes:
Second, whether it works or not isn't whether you end up with "prosperity for all" or not.
If increased prosperity for all is not the measure of success by which we judge economic policies whose primary claim is that they will benefit all - What is? How do you think we should assess whether trickle down policies work or not?
Percy writes:
It's whether the outcome is better than it would have been had they taken the actions you preferred, whatever those might be, and that's a much tougher question to answer.
If you want to start a thread "Does Keynesian economics work?" I'll gladly take part. I might even start it myself. But the question here is (and despite your multiple attempts to change it - remains) : Does trickle down economics work?
This we can answer based on the available data. Here is some more of that data:
Of every 100 rise in Britain’s national income since 1977, the bottom 50% of the population received 12. Meanwhile, the top 0.1% wealthiest received a 14 share.
If this is the result of "trickle down" economics what the fuck would "accumulate at the top" economics look like?
Edited by Straggler, : No reason given.

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Replies to this message:
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RAZD
Member (Idle past 1404 days)
Posts: 20714
From: the other end of the sidewalk
Joined: 03-14-2004


(1)
Message 157 of 404 (659845)
04-19-2012 8:01 AM
Reply to: Message 155 by Straggler
04-19-2012 7:25 AM


Re: Not sure what you're seeing
Hi Straggler
A) Ask yourself who is benefitting from your increased productivity?
B) Thank the rich for trickling down a 20% increase in your income?
C) Thank the employer (rich) for generously giving you back 20% of your 100% increased productivity?
Enjoy

we are limited in our ability to understand
by our ability to understand
Rebel American Zen Deist
... to learn ... to think ... to live ... to laugh ...
to share.


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Straggler
Member
Posts: 10333
From: London England
Joined: 09-30-2006


(3)
Message 158 of 404 (659848)
04-19-2012 8:16 AM
Reply to: Message 157 by RAZD
04-19-2012 8:01 AM


Re: Not sure what you're seeing
Exactly.
Advocacy of trickle down economics only makes sense if one thinks that all of this increased productivity can be attributed to the richest and that the rest of us are simply lucky to see any of it.
The whole thing rests on the ridiculous notion that the wealthiest constitute some sort of innovative, entrepreneurial elite without whom the rest of us would simply be unable to produce any growth at all. We should be grateful we get a 20% income rise no matter how much more productive we apparently are.
And in recent times it is many of the the wealthiest (the top financiers) that have destroyed wealth rather than created it.
If the data available shows wealth trickling down then what on Earth would the results of "accumulate at the top economics" look like?

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Percy
Member
Posts: 22391
From: New Hampshire
Joined: 12-23-2000
Member Rating: 5.2


Message 159 of 404 (659850)
04-19-2012 9:13 AM
Reply to: Message 152 by Theodoric
04-19-2012 12:05 AM


Re: A closer look...
Theodoric writes:
Many of the poor don't even work.
Do you have anything to back this statement? Would you like to quantify "many" and "poor". Let us know what you mean statistically by this blatantly wild ass statement.
It's not an exaggeration when you realize that many of the poor are children - I think someone in this thread already noted this fact. Anyway, this is from the opening paragraph of A Profile of the Working Poor, 2009 from the U.S. Bureau of Labor Statistics:
BLS writes:
In 2009, according to the Census Bureau, about 43.6 million people, or 14.3 percent of the Nation’s population, lived at or below the official poverty level.1 Although the poor were primarily children and adults who had not participated in the labor force during the year, 10.4 million individuals were among the working poor, 1.5 million more than in 2008.
10.4 million individuals working out of 43.6 million total means that about 3/4 of those classified as poor in the United States are not working.
--Percy

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Percy
Member
Posts: 22391
From: New Hampshire
Joined: 12-23-2000
Member Rating: 5.2


Message 160 of 404 (659851)
04-19-2012 9:17 AM
Reply to: Message 150 by hooah212002
04-18-2012 9:14 PM


Re: A closer look...
hooah212002 writes:
There is a different word for poor people who don't work: destitute or perhaps homeless, just not simply poor.
I'm open to reaching a general consensus on a definition of the poor, but the definition I had in mind was anyone living below the poverty level.
--Percy

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Straggler
Member
Posts: 10333
From: London England
Joined: 09-30-2006


(1)
Message 161 of 404 (659852)
04-19-2012 9:23 AM
Reply to: Message 159 by Percy
04-19-2012 9:13 AM


Re: A closer look...
Everyone who ever buys things pays taxes.
Sales taxes on goods and services. Even children.

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RAZD
Member (Idle past 1404 days)
Posts: 20714
From: the other end of the sidewalk
Joined: 03-14-2004


(1)
Message 162 of 404 (659853)
04-19-2012 9:32 AM
Reply to: Message 159 by Percy
04-19-2012 9:13 AM


Re: A closer look...
Hi Percy
10.4 million individuals working out of 43.6 million total means that about 3/4 of those classified as poor in the United States are not working.
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.

we are limited in our ability to understand
by our ability to understand
Rebel American Zen Deist
... to learn ... to think ... to live ... to laugh ...
to share.


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Theodoric
Member
Posts: 9076
From: Northwest, WI, USA
Joined: 08-15-2005
Member Rating: 3.7


(1)
Message 163 of 404 (659854)
04-19-2012 9:52 AM
Reply to: Message 159 by Percy
04-19-2012 9:13 AM


Re: A closer look...
So poor children as you say are
Percy writes:
Non-participants in the economy cannot benefit from an improving economy, regardless of whether rising or falling tax rates were the cause.
The benefits their parents receive from an improving economy cannot benefit them?
Your argument is getting even more ludicrous. Lets look at other people you would lump into this.
Retirees, stay at home parents, non-working college students.
Do you think the children of the wealthy are "non-participants in the economy cannot benefit from an improving economy, regardless of whether rising or falling tax rates were the cause"?
The benefits their parents receive from an improving economy cannot benefit them?
ABE
Oh yeah you failed to address the rest of my post.
Many of the rich do not work.
Please show how many of the poor are non-participants in the economy.
Edited by Theodoric, : No reason given.

Facts don't lie or have an agenda. Facts are just facts

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New Cat's Eye
Inactive Member


Message 164 of 404 (659872)
04-19-2012 12:18 PM
Reply to: Message 140 by crashfrog
04-18-2012 6:33 PM


No, because the median is the value at the middle of the range. If the incomes at the top 5% increased while everyone else's remained the same, the median would increase because of growth at the top end. But that wouldn't be an example of a rising tide lifting all boats, but merely a statistical artifact of the increase in range of incomes.
Wait a minute... here's some data:
Person | Money
A 10
B 100
C 1,000
Doesn't the median = 100?
If the data changes to this:
A 10
B 100
C 10,000
Then even tho the top got more, doesn't the median still equal 100?
If the data had changed to this:
A 10
B 120
C 2,000
Then the median has risen by 20%, while the top has risen by 100%, right? Is that how I'm supposed to be reading this graph?
ABE:
I just noticed something. The top 5% is only going to be 5% of the data no matter what, right? The median wouldn't be affected by an increase in their magnitude at all, would it?
Well, hrm, is it measured by the top 5% of the income, and then figure out what households that represents or is it the top 5% of households that make the most money, and then figure out how much they got?
If the incomes at the top 5% increased while everyone else's remained the same, the median would increase because of growth at the top end.
Wouldn't you have to increase the number of people who are in the top 5% to have the median increase because of growth at the top end? Just increasing the magnitude of those already there wouldn't do that, would it?
The fact that the median income has increased along with the top 5% tells me that the wealth *IS* trickling down.
It hasn't, though. The income of the top 5% has increased by more than 100%; the median income increased only by 30% over the same period.
But they've both increased... We shouldn't expect it to be by the same amount.
That's almost exactly what we should expect based on the model that the spending of the rich is income for everybody else, which for the most part it is; the problem is that the economy (and wage levels) are based on the spending of the middle class, not the rich. There's simply not enough rich people to base an economy on.
How does that mean that we should expect them to rise by the same relative amount?
Edited by Catholic Scientist, : see ABE

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New Cat's Eye
Inactive Member


Message 165 of 404 (659873)
04-19-2012 12:22 PM
Reply to: Message 142 by NoNukes
04-18-2012 7:10 PM


Re: A closer look...
First, nobody is saying that the rich are getting richer at the expense of the poor.
A quick glance at the graph seems to suggest that it is trying to say exactly that: the top 5% are going up while the minimum wage is going down.
People are saying that giving more money to rich people does not help the poor. People are also complaining about trickle down policies that include tax cuts for the reach funded by cuts in social services under a theory that such is the way to help out the poor and middle class.
None of that is comming from this graph tho, right?
The graphs do not say anything about social services provide to help the poor funded by taxes. It appears that if we benefit the rich by cutting social services to give the rich money, as best as I can tell, the poor never see any benefit and are worse off.
Just what the hell *is* the point of this graph!?

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