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What is Trickle down economics?

Discussion in 'U.S. Politics' started by Andy, Nov 20, 2008.

  1. Andy

    Andy Well-Known Member

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    Does everyone know what trickle down economics is? It is not a method of taxation. It was not supposed to be either. Granted Trickle-Down Economics, has become a reference to a supposed tax system, but in reality, it's simply a term describing how the economy works.

    It's the basic idea that economic activity and wealth, flows from those with money, and trickles down all economic levels. This is inherently true in every economy the world over. Like Capitalism, Trickle-Down Economics is merely a way to describe how things naturally work.

    This is very obvious when you ask yourself, who pays my wage? Is it a poor person? How many people here got a job from a homeless bum? The idea is ridiculous. A bum might offer to give you something to do, but he has no way to pay you. Unless you accept empty beer bottles as payment.

    Of course all jobs are created by rich people. Even if you were to consider a self-employed person. The products you sell, or service you provide, are created by rich people. I met a wonderful girl who ran a web page design and service business out of her home. Even in this case, the internet, the computers, even the HTML language, and Foxfire plus other web browsers, all are created by rich people, without whom, her business would not exist.

    This is all ambiguous Andy. How about some specifics?

    Alrighty. Here's a couple of examples of tickle down economics at work.

    In 1878 Henry Ford walked 7 miles to Detroit to look for a job. In 1899, backed by lumber baron William H. Murphy, Ford created Detroit Automobile Company. In 1902, the company was named the Cadillac Motor Company, after Ford left due to a management disputes. Later, Ford founded a new company with backing by the Dodge Brothers. The Dodge brothers later split off to create the Dodge motor car line.

    What's the point? Rich people supplied Ford with the capital to start a car company, that later became Cadillac. Other rich people supplied the Capital to form the Ford Motor company. Rich people supplied the funds for the Dodge brothers to make their cars.

    Then in turn all of those provided jobs for thousands of workers. Then they funded new companies like Autolite, Motorcraft, ACDelco, and so on, that also employ thousands of workers. Then they also supported the creation of dealerships and repair shops nation wide to sell and service these cars, also employing thousands of workers. The trickle down effect can be seen working through dozens of levels via a bunch of industries.

    Or how about KFC, who was backed by rich people. Later Dave Thomas was financially backed after running a KFC, to open his own burger stand, Wendy's. Dave Thomas later backed Tim Hortons. This is trickle down at work. In each case, the rich people, invested into new business, resulting in new jobs and economic growth.

    How about Apple computers, which started in a garage, but was invested in by rich people, who grew the company. Later after a management dispute, Steve Jobs gained backing by Ross Perot, which lead to NeXT Step company. This company was later purchased by Apple, and the resulting new technology from the purchase was used to make Ipods, the ITunes store which was the first widely available online MP3 purchasing system, the IMac, the IPhone, the first razor thin laptop. All of which created hundreds and thousands of jobs. Now to mention, Steve Jobs, with investors, built up Pixar, to create dozens of some of the most brilliantly funny computer animated films to date.

    This is all trickle down economics at work. Today we even have an industry called Venture Capitalism, which specifically exists to find people to give financial backing to make new businesses, technologies and industries. Rich people give money to VC companies, who then back those they think are winners.

    Now whether you agree with a tax structure based on this premise is irrelevant to the fact, it does actually work this way. Again, show me the guy earning a good wage working for a bum, and I will concede I am wrong. Nothing trickles up. It always trickles down.

    Conclusion

    Now, how does this apply to taxes? This does not support a regressive tax. Nor does it support a progressive tax. It support a low tax, or flat tax. Why? Because when you place high taxes on the rich, they can't invest in the economy. When you place high taxes on any other group, they can't buy products. In either case, taxes hinder economic activity. This is economics 101. When you increase the cost of doing X thing, the amount of X thing done, will decrease.

    What would have happened if the rich in Henry Fords day, had been taxed out of having the cash to invest, in the name of being progressive? It's entirely possible the revolution of the affordable average American automobile, may have been delayed for dozens of years.

    What if the public had been taxed out of affording Ford's automobile? The company may have folded and never turned a profit.

    In either case, thousands of jobs would never, or been great delayed in their creation.

    When taxes are specifically directed at the rich, ultimately the middle and lower class lose. The rich don't just accept a lose of income due to taxes. They instead take their earnings in stock options, or other un-taxable benefits. The problem here is, if the money is tied up in stocks, the rich can't invest into new companies, and new products, or new businesses. The result is, jobs that would be created, and new products that would be a benefit, are not.

    This is exactly what JFK meant by his "Rising tide lifts all boats" speech.

    This is Trickle-Down Economics. It's the way the world works, whether you agree to it or not. Be all means go work for a homeless guy, and prove me wrong. Good luck on that.
     
  2. Mr. Shaman

    Mr. Shaman New Member

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    Here's MY cut-'n-paste.....especially since your's was (obviously) from some "conservative" recreating-History site. :rolleyes:

     
  3. Sihouette

    Sihouette Active Member

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    Yes, trickle-down only works in a system where morality and accountability are present.

    Trickle down would've worked beautifully if monopolies, via lobbying and political pressure, of health coverage and oil didn't sully the waters. The workers supply everything. We could turn your argument around about where do rich people get the goods they enjoy from being rich? Always always always from the working stiffs. And then they seek to make the gap between themselves and those working stiffs wider and wider and more apparent. It always ends up that way. Look at the French Revolution. The seed of most wars on earth are from rich people looking to hold onto absurd amounts of wealth even they admit they have no need for, or to gain more wealth even they admit they have no need for. It's an addiction...money and the chasing of money. And that addiction has nearly bankrupt our country through the inevitable irresponsibilities of addicts.

    Some solutions to that problem are in order. We need to attend to the issues of where all wealth stems from, the working stiffs (Ford did not manufacture all those vehicles by himself), and forget about the money-addicts for awhile.
     
  4. Mr. Shaman

    Mr. Shaman New Member

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    We'll see.....15-to-20-years, from now....if anyone remembers that Greed isn't (necessarily) Good....when Republicans re-run the ol' Goverment-Is-The-Problem-scam......again!
     
  5. Andy

    Andy Well-Known Member

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    That is strangest thing you've said yet. I rarely if ever cut and past. Further, if I do, I supply the source so I don't have to bicker with people about where the information came from. Finely, everything I wrote, came from me. I would not have stayed up till 2 AM writing it, if it was a simple cut and paste job.

    Btw, I love your claim that Bush spending and tax cuts were designed to bankrupt the government. That's good Shammy. Let's look at your guy.


    Obama's Trillion-Dollar increase in spending
    Obama promotes a tax cut
    Obama says more troops for Afghanistan
    Obama says deficits are ok

    So Shammy boy, Obama says tax cuts good, deficits are fine, more military ok, and let's increase spending by a trillion!

    It looks like YOUR guy is going to bankrupt the government! :D Oh this is so much fun slapping your crap back in your face! I can't wait to do this to you for the next four to eight years! This is going to be BLAST :D
     
  6. Andy

    Andy Well-Known Member

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    It is. The perpetrators in Enron and Worldcom, both were tried and convicted. The only people who have been able to do illegal things and have no consequences, were democrats in Fannie Mae and Freddie Mac.

    If you have a job, then it works beautifully. I have a job due to rich people. It does work, and works perfectly fine.

    No, you can't turn the argument around. In order to turn the argument around, you have to conclude that the rich would spontaneously appear everywhere. Go to the average homeless shelter, or nearest overpass crawling with bums, and show me how trickle-up worked? Shouldn't one of them spontaneously become rich from trickle up?

    Here's another example. In Mugabe's Zimbabwe, all the wealthy rich were expelled. What happened? Did more wealth people pop into existence and the economy move on? No, it went bankrupt. The economy collapsed. The people became even more impoverished, and food became scarce. A country removing the trickle-down effect, by removing the wealthy... end up starving.

    But wait! There were millions of "working stiffs"! How could this happen under your reversed trickle-up effect?? Oh wait, without rich people to create jobs, the "working stiffs" were um.... not "working" anymore.

    Isn't it interesting that under socialized system, where there are no "rich & wealth" the population is broke and starving. However, under the evil greedy, capitalist rich and wealthy system, the people have higher standards of living, and are much better off? China and Hong Kong? North and South Korea? East and West Berlin? India past and present?

    See, you just have political greed motivated talking points. The real results of the opposing views, is the very reverse of what you claim.

    The person most worried about what others do with their own money, are in fact the money addicts. The person sitting around complain about 'The Richâ„¢' all day, is far more greedy and money minded, than the wealthy people who just want to make a living, and happen to become wealthy in the process.

    Ford didn't make all the cars himself. That doesn't change the fact that if not for this wealthy rich guy, hundreds of thousands would not have had jobs, or at least it wouldn't have happened for years until someone else did it.
     
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