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Author Topic:   Trickle Down Economics - Does It Work?
Percy
Member
Posts: 22929
From: New Hampshire
Joined: 12-23-2000
Member Rating: 7.2


Message 376 of 404 (660636)
04-27-2012 4:51 PM
Reply to: Message 372 by Straggler
04-27-2012 3:57 PM


Re: Flat?
Straggler writes:
Well the tax burden has shifted onto the middle classes from the top...
In reality the rich pay a greater share of taxes than ever before, see Why the Rich Pay 40% of Taxes. However, their income has grown faster than their taxes, which isn't fair.
...and the middle classes gains from increased productivity have decreased whilst those of the wealthiest have increased.
How do you know what proportion of any group's increased income in real terms is due to productivity gains so that you can make this comparison?
Wealth breeds wealth.
So true, so true. If I had $2 million I would put it into very low-risk bonds and retire. I'd never have to worry about money again.
The question here is why we think concentrating wealth in the hands of the already wealthy as per trickle-down economic policy is a superior method of wealth generation than placing it in the hands of others.
Trickle down economics isn't about concentrating wealth. It's about using tax policy to encourage investment and other productive uses of capital.
You have yet to provide any reason for this to be the case.
That's because you keep asking me to provide reasons for claims I never made.
--Percy

This message is a reply to:
 Message 372 by Straggler, posted 04-27-2012 3:57 PM Straggler has not replied

  
Percy
Member
Posts: 22929
From: New Hampshire
Joined: 12-23-2000
Member Rating: 7.2


Message 377 of 404 (660637)
04-27-2012 5:01 PM
Reply to: Message 367 by dronestar
04-27-2012 3:36 PM


Re: Productivity Gains Vs Productivity Contributions
dronester writes:
If you concede that employees are taxpayers, then are you not already conceding that employees risk their "capital".
How are you thinking about this? Are you imagining that if you have $10,000 in an interest bearing account somewhere that the government can just somehow tax it away? I can see them taxing the interest on the $10,000, but not the capital itself. If you give me the details of the scenario you have in mind I can comment better.
--Percy

This message is a reply to:
 Message 367 by dronestar, posted 04-27-2012 3:36 PM dronestar has not replied

  
Percy
Member
Posts: 22929
From: New Hampshire
Joined: 12-23-2000
Member Rating: 7.2


Message 378 of 404 (660638)
04-27-2012 5:07 PM
Reply to: Message 375 by dronestar
04-27-2012 4:42 PM


Re: Productivity Gains Vs Productivity Contributions
Hi Dronester,
What you called a hypothesis is just definitions from economics 101, though stated informally in my own words. That the rich have the ability to influence legislation, much more so than your average person anyway, doesn't really bear on those definitions at all.
I do agree with you in a sense, though, that trickle-down economics is a misnomer. The Laffer curve is much more relevant if we're talking about the effect of marginal tax rates on economic activity.
--Percy

This message is a reply to:
 Message 375 by dronestar, posted 04-27-2012 4:42 PM dronestar has not replied

  
Rahvin
Member
Posts: 4059
Joined: 07-01-2005
Member Rating: 9.4


Message 379 of 404 (660639)
04-27-2012 6:28 PM
Reply to: Message 373 by Percy
04-27-2012 4:00 PM


Re: Productivity Gains Vs Productivity Contributions
I don't understand it either,
I understand it quite well. Businesses, on the whole, are short-sighted, concerned with the profits of this year and this quarter at the expense of next year or five years from now. It's as simple as that - they're penny-wise and pound-foolish.
although in the current job market there's not much opportunity.
That depends on your industry and location, and unfortunately, whether you currently have a job. The job market in California for IT Systems Administrators with the right skills is very good, if you currently have a job. If you're unemployed...well, good luck. I have no idea about other industries or areas.
My company doesn't have to worry how badly they treat employees because there's nowhere for us to go (comparatively tiny specialized software market niche), and most of us are just happy to be employed.
And that's a rough spot to be in. It sounds like you could use a union.
But I'd wager your employers wouldn't like that very much. Hell, with what you've said so far in this thread, I wonder if you even support unions. Worker conditions don;t improve on their own, you know.
I get so mad sometimes that I dream about what I'll do when I leave. Maybe I'll just stop showing up and see how long it takes them to stop the paycheck. Or maybe I'll just keep calling in sick day after day and see how long they'll put up with that. Or maybe I'll go about the building after hours on my last day righting all the wrongs. Or maybe I'll wait until I'm in the middle of a critical project, do nothing for months, then just before the deadline announce that I'm quitting with zero days notice. Or maybe I'll walk into the VP's office and tell him off - sometimes I can get a good head of steam going on a rant, and if I'm lucky this would be one of those times.
I'll do none of these things, of course, but it's nice to dream.
See, that's interesting. I don't just get mad...I get my resume updated. And if I'm having trouble distinguishing myself, I look at what skill sets I can expand into that would make me more marketable, and then I start looking for new jobs again.
I don't screw over my previous employers, even when I feel like I;ve been getting screwed over myself. I even always ask my manager if he/she can match what I;m being offered elsewhere. They've always said no, of course. That may be related to the fact that, most of the time when I'm switching jobs, it's for a salary increase of 30% or more...and employers don't want to pay you what you're worth unless you're a new hire, because managers are never allowed to budget for a 30% pay increase for an existing employee.
Anyway, sometimes there's nothing to be done except vote with your feet, and if you can get a 50% salary bump then stop posting messages to me and get crackin'!
I'm getting multiple recruiter calls daily, believe me I'm looking. Now if only I'd get more calls for opportunities in the right area...
(we're trying to move to a different city, and most of the recruiters are calling for jobs in the city I already live in)

The human understanding when it has once adopted an opinion (either as being the received opinion or as being agreeable to itself) draws all things else to support and agree with it.
- Francis Bacon
"There are two novels that can change a bookish fourteen-year old's life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs." - John Rogers
A world that can be explained even with bad reasons is a familiar world. But, on the other hand, in a universe suddenly divested of illusions and lights, man feels an alien, a stranger. His exile is without remedy since he is deprived of the memory of a lost home or the hope of a promised land. This divorce between man and his life, the actor and his setting, is properly the feeling of absurdity. — Albert Camus
"...the pious hope that by combining numerous little turds of
variously tainted data, one can obtain a valuable result; but in fact, the
outcome is merely a larger than average pile of shit." Barash, David 1995.

This message is a reply to:
 Message 373 by Percy, posted 04-27-2012 4:00 PM Percy has seen this message but not replied

  
Rrhain
Member (Idle past 256 days)
Posts: 6351
From: San Diego, CA, USA
Joined: 05-03-2003


(2)
Message 380 of 404 (660645)
04-27-2012 9:43 PM
Reply to: Message 312 by jar
04-25-2012 11:09 AM


jar responds to me:
quote:
Sorry but I see no connection between trickle down and deregulation.
"Trickle down" is the economic theory that by boosting the fortunes of the rich, that boon will "trickle down" to the lower economic strata. It is not merely cutting taxes on the rich. It also involves removal of trade restrictions, the approval of monopolies, and general corporatocracy.
In short, Enron.
And BP.
These are the effects of trickle down economics.
"Too big to fail" is the result of trickle down economics.

Rrhain

Thank you for your submission to Science. Your paper was reviewed by a jury of seventh graders so that they could look for balance and to allow them to make up their own minds. We are sorry to say that they found your paper "bogus," specifically describing the section on the laboratory work "boring." We regret that we will be unable to publish your work at this time.

Minds are like parachutes. Just because you've lost yours doesn't mean you can use mine.

This message is a reply to:
 Message 312 by jar, posted 04-25-2012 11:09 AM jar has replied

Replies to this message:
 Message 382 by jar, posted 04-27-2012 9:56 PM Rrhain has not replied

  
Rrhain
Member (Idle past 256 days)
Posts: 6351
From: San Diego, CA, USA
Joined: 05-03-2003


(1)
Message 381 of 404 (660646)
04-27-2012 9:50 PM
Reply to: Message 306 by Percy
04-25-2012 8:47 AM


Percy writes:
quote:
Because, just as Rrhain does in the very next message and just as you do at the end of this message, some here deny that any such thing as money tricking down from the rich to the rest of the economy even happens.
Incorrect. Please show me specifically what I said that even remotely hints at such a thing.
It appears you are engaging in equivocation and/or cherry-picking.
Indeed, there are rich people who spend money. Nobody ever denies that. What is being argued is whether or not economic policy that favors the wealthy actually causes an increase in the economic standards of the entire population.
After 30 years of trial, we have not seen any results. In fact, economic disparity is at its greatest levels since just before the Great Depression. And wages for the working class have been flat.
So yes, you can find a millionaire out there who built a house. And the building of that house resulted in employment for a fair number of workers.
That millionaire didn't keep building houses, though. Thus, the economic gains made by giving the millionaire money to do so were not actually of much help to the economy. The builders are now out of a job.
You are confusing the spending of money with "trickle down."
Can we please stop playing dumb?

Rrhain

Thank you for your submission to Science. Your paper was reviewed by a jury of seventh graders so that they could look for balance and to allow them to make up their own minds. We are sorry to say that they found your paper "bogus," specifically describing the section on the laboratory work "boring." We regret that we will be unable to publish your work at this time.

Minds are like parachutes. Just because you've lost yours doesn't mean you can use mine.

This message is a reply to:
 Message 306 by Percy, posted 04-25-2012 8:47 AM Percy has seen this message but not replied

  
jar
Member
Posts: 34140
From: Texas!!
Joined: 04-20-2004


Message 382 of 404 (660647)
04-27-2012 9:56 PM
Reply to: Message 380 by Rrhain
04-27-2012 9:43 PM


Sorry but I still see no connection between "Trickle Down" and deregulation.
Thank you for trying though.

Anyone so limited that they can only spell a word one way is severely handicapped!

This message is a reply to:
 Message 380 by Rrhain, posted 04-27-2012 9:43 PM Rrhain has not replied

Replies to this message:
 Message 383 by Dr Adequate, posted 04-28-2012 3:20 AM jar has replied

  
Dr Adequate
Member
Posts: 16113
Joined: 07-20-2006


(2)
Message 383 of 404 (660648)
04-28-2012 3:20 AM
Reply to: Message 382 by jar
04-27-2012 9:56 PM


From the Online Free Dictionary:
"Trickle-down: Of or relating to the economic theory that financial benefits accorded to big businesses and wealthy investors will pass down to profit smaller businesses and consumers.
"Trickle-down: of or concerning the theory that granting concessions such as tax cuts to the rich will benefit all levels of society by stimulating the economy"
From Merriam Webster:
"Trickle-down theory: a theory that financial benefits given to big business will in turn pass down to smaller businesses and consumers."
From the Oxford English Dictionary:
"Trickle-down, of or based on the theory that economic benefits to particular groups will inevitably be passed on to those less well off."
From the American Heritage Dictionary:
"Trickle-down: Of or relating to the economic theory that financial benefits accorded to big businesses and wealthy investors will pass down to profit smaller businesses and consumers."
From Wikipedia:
""Trickle-down economics" and "the trickle-down theory" are terms in United States politics often used by the American right to refer to the idea that tax breaks or other economic benefits provided by government to businesses and the wealthy will benefit poorer members of society by improving the economy as a whole."
---
It is hard to deny that deregulation is a "financial benefit", an "economic benefit" or a "concession" offered to "big business" ... 'cos that's exactly what it is.
Edited by Dr Adequate, : No reason given.

This message is a reply to:
 Message 382 by jar, posted 04-27-2012 9:56 PM jar has replied

Replies to this message:
 Message 392 by Percy, posted 04-28-2012 8:53 AM Dr Adequate has not replied
 Message 394 by jar, posted 04-28-2012 10:20 AM Dr Adequate has not replied

  
Chuck77
Inactive Member


(2)
Message 384 of 404 (660650)
04-28-2012 4:43 AM


Let's just spread the wealth around to everyone throughout the whole country. Then, for a few months, everyone will be ok. After a while, the wealth will be tranfered back over to the rich, because they know how to spread it around, feed and stimulate the economy, while the not so rich, will squander it.
Trickle down isn't just material. It's a mentality also. Socialism isn't the answer to spreading the wealth. Learning how to handle finances and making it work for you (like the rich do) will stimulate the economy more than trying to even the field in regards to taxing the rich more IMO.
Is there anyone here that agrees that there is a certain mentality involved here?

Replies to this message:
 Message 385 by Dr Adequate, posted 04-28-2012 4:50 AM Chuck77 has replied
 Message 389 by Theodoric, posted 04-28-2012 8:16 AM Chuck77 has not replied

  
Dr Adequate
Member
Posts: 16113
Joined: 07-20-2006


(1)
Message 385 of 404 (660651)
04-28-2012 4:50 AM
Reply to: Message 384 by Chuck77
04-28-2012 4:43 AM


Let's just spread the wealth around to everyone throughout the whole country. Then, for a few months, everyone will be ok. After a while, the wealth will be tranfered back over to the rich, because they know how to spread it around, feed and stimulate the economy, while the not so rich, will squander it.
Blessed are the rich, for they shall inherit the Earth. As someone nearly said.
Trickle down isn't just material. It's a mentality also. Socialism isn't the answer to spreading the wealth. Learning how to handle finances and making it work for you (like the rich do) will stimulate the economy more than trying to even the field in regards to taxing the rich more IMO.
Is there anyone here that agrees that there is a certain mentality involved here?
It does sound a little familiar, yes.
Jesus said unto him, If thou wilt be perfect, go and sell that thou hast, and give to the poor.
Tell us more about this mentality.
Edited by Dr Adequate, : No reason given.

This message is a reply to:
 Message 384 by Chuck77, posted 04-28-2012 4:43 AM Chuck77 has replied

Replies to this message:
 Message 386 by Chuck77, posted 04-28-2012 5:16 AM Dr Adequate has replied

  
Chuck77
Inactive Member


(2)
Message 386 of 404 (660654)
04-28-2012 5:16 AM
Reply to: Message 385 by Dr Adequate
04-28-2012 4:50 AM


Hi Dr Adequate. Please see my "Top Ten signs your a foolish atheist" thread will you. I think you'll like it. You may be able to even see yourself in some of the top ten. If you have a hard time recognizing which one's let me know, and i'll point them out to you.
Other than that, do you have anything in relation to my post to comment on?

This message is a reply to:
 Message 385 by Dr Adequate, posted 04-28-2012 4:50 AM Dr Adequate has replied

Replies to this message:
 Message 387 by Dr Adequate, posted 04-28-2012 5:39 AM Chuck77 has not replied

  
Dr Adequate
Member
Posts: 16113
Joined: 07-20-2006


(4)
Message 387 of 404 (660656)
04-28-2012 5:39 AM
Reply to: Message 386 by Chuck77
04-28-2012 5:16 AM


Hi Dr Adequate. Please see my "Top Ten signs your a foolish atheist" thread will you.
I did see that thread, remember? --- and pointed out its incredible fatuity at some length.
Other than that, do you have anything in relation to my post to comment on?
Well, there were my comments on your post. Perhaps you could reply to them instead of wittering on about another thread entirely.
Come on, now. You can hardly expect to post comments about how we should be more like the rich and how we shouldn't give money to the poor next to a picture of Jesus and have no-one notice the irony.
Edited by Dr Adequate, : No reason given.

This message is a reply to:
 Message 386 by Chuck77, posted 04-28-2012 5:16 AM Chuck77 has not replied

  
Dr Jack
Member (Idle past 123 days)
Posts: 3514
From: Immigrant in the land of Deutsch
Joined: 07-14-2003


(3)
Message 388 of 404 (660659)
04-28-2012 6:37 AM
Reply to: Message 356 by Percy
04-27-2012 1:39 PM


Re: Productivity Gains Vs Productivity Contributions
Hi Percy,
Like most in this thread I agree that the concentration of wealth at the top is a very serious problem, but blaming convenient scapegoats while ignoring simple, even foundational, economic principles won't lead to rational discussions or the exploration of practical solutions.
I don't have any great interest in blaming scapegoats. I want to introduce straight-forward policies to pull down inequality. German-style worker involvement in company management, Australian-style sector based minimum wages, and the deminishment of big money in politics would all be a good start.
Probably the most serious misunderstanding I see in this thread is that workers should share in the wealth created by the companies they work for. The misunderstanding is even worse than this, for many appear to believe that the wealth created by companies is actually created by their workers.
The reason the wealth a company creates belongs to the company and not to workers is because the company takes on all the risk to capital. It would be nice if the workers' wealth increased at a company on its way up, but the flip side to this is that their wealth would decrease at a company on its way down. Workers risk only their jobs and salary, not their wealth.
This is just nonsense, Percy. Capital never does anything. You've mistaken ownership for work.
Let's say I make a chair. That creates wealth because I've taken something of little use and value - some wood - and created something that is of use and value, because you can sit upon it and it looks nice. People want chairs in their homes.
According to you, if I perform the same work for a company, I've no longer created any wealth. This is rubbish. If I make a chair for Percy's Tables and Chairs, it's still my work created the wealth; it's just the ownership of that work that's different.
Now, in a good situation this is a perfectly equitable and reasonable arrangement. My chair making skills and effort creates wealth; wealth now owned by Percy's Tables and Chairs. The company takes that created wealth, and uses it for various things, but one part of it is paying me for my labours. Returning some of the created wealth to me.
This works for me because I like having a regular salary, topped up by a few perks, rather than having to worry about getting my chairs to customers, managing wood orders, advertising my chairs to potential customers, and so on. The people doing these things, of course, are also creating wealth - although more indirectly. And the company also owns their created wealth and returns some of that wealth creation to them.
The idea that owning the created wealth is the same thing has having created that wealth is just plain wrong. The wealth is created by the chair being made - the thing I did - not the movement of capital.
Edited by Mr Jack, : Missed a word out

This message is a reply to:
 Message 356 by Percy, posted 04-27-2012 1:39 PM Percy has replied

Replies to this message:
 Message 390 by Percy, posted 04-28-2012 8:27 AM Dr Jack has replied

  
Theodoric
Member
Posts: 9489
From: Northwest, WI, USA
Joined: 08-15-2005
Member Rating: 6.5


(1)
Message 389 of 404 (660668)
04-28-2012 8:16 AM
Reply to: Message 384 by Chuck77
04-28-2012 4:43 AM


will squander it
You have no clue how the economic system works do you? The non-rich spending money is much more stimulative than the rich saving money.
If you studied the subjects you try to "discuss" a little before you said something maybe , just maybe, someone would take one of your posts seriously.
BTW
That is not an insult. It is an observation made after careful analysis of your posts.
ABE
Not-rich does not equal poor.
Edited by Theodoric, : No reason given.

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

This message is a reply to:
 Message 384 by Chuck77, posted 04-28-2012 4:43 AM Chuck77 has not replied

  
Percy
Member
Posts: 22929
From: New Hampshire
Joined: 12-23-2000
Member Rating: 7.2


(1)
Message 390 of 404 (660669)
04-28-2012 8:27 AM
Reply to: Message 388 by Dr Jack
04-28-2012 6:37 AM


Re: Productivity Gains Vs Productivity Contributions
Mr Jack writes:
Let's say I make a chair. That creates wealth because I've taken something of little use and value - some wood - and created something that is of use and value, because you can sit upon it and it looks nice. People want chairs in their homes.
According to you, if I perform the same work for a company, I've no longer created any wealth.
Probably you wrote this before reading my later messages where I go into more detail. People receive compensation equal to the wealth they create. If you create a chair in your workshop and then sell it at a flea market for $50 then you've created wealth equal to $50. If you create a chair at your place of employment for which you receive $50 in compensation, then you've created wealth equal to $50.
But if the company sells the chair for $100, that additional $50 is not wealth that you created. That is wealth that the company created, and it does not belong to you. It belongs to the company, or more accurately, to the company's owners, usually the shareholders.
--Percy

This message is a reply to:
 Message 388 by Dr Jack, posted 04-28-2012 6:37 AM Dr Jack has replied

Replies to this message:
 Message 391 by Dr Jack, posted 04-28-2012 8:32 AM Percy has seen this message but not replied
 Message 393 by Dr Jack, posted 04-28-2012 9:01 AM Percy has seen this message but not replied

  
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