Trickle Down - How's That Working For You

[daty/o]

Thank you. I stand corrected. I don't know what I was thinking. What's the saying? "The road to hell..."

[joe bloe]

Originally Posted by Ducbutter

Blow me!
My three semesters of college econ (2 A's and a B) doesn't make me Milton Friedman but it means I don't need schooling from Wikipedia. You however should try reading your own links 'cause nowhere in the link on "Trickle down" does it say it's an economic theory. It's a pejorative description of supply side theory used by it's detractors. But thanks for making my point. Dipshit.

Trickle down is a pejorative invented by Will Rogers to ridicule FDR's critics.

[Ducbutter]

Originally Posted by joe bloe

Trickle down is a pejorative invented by Will Rogers to ridicule FDR's critics.

I saw that but didn't know it before that. Interesting!

[Dawgs]

For those that think trickle down economics work....try trickle up. If somebody is not spending the money, most of us are out of work.....unless of course. You are a government employee.

[LovingKayla]

I don't think anyone here LIKES the republican platform. I also don't think anyone here is actually racist.

You guys don't see what's plainly in front of your computer screens. We hate what Obama and his inner circle and the folks he's connected too, has done to just about everything they touch.

We are embarrassed of a great many things the rebublicans stand for. Why does it have to be so one side or the other? Can ANYONE tell me?

And dato I did not see the apology before I posted. Another example of my imperfection.

[CuteOldGuy]

I don't know why either, Kayla. There is plenty of imperfection to go around. Many Romney supporters on here seem to understand that their candidate is flawed. The Obama supporters appear to feel obligated to defend EVERYTHING Obama does, as if admitting imperfection would shatter their illusion of him. I've even mentioned on here that it is ok to admit that Obama did something stupid or wrong, and still support him. They just won't. It's bizarre.

He's not perfect. Neither is Romney. Neither is Gary Johnson. This election is going to suck, regardless of who wins.

And your imperfections only make you more perfect, Kayla!

[Submodo]

Originally Posted by Dawgs

For those that think trickle down economics work....try trickle up. If somebody is not spending the money, most of us are out of work.....unless of course. You are a government employee.

Those that think trickle down economics work want most of "us" out of work.

They have no interest in any other ideology. The one they have in place now is working juuuuuust fine.

[Texas Contrarian]

Originally Posted by BigLouie

The message intended to be conveyed by that chart conflates a couple of disparate issues.

The term "trickle-down" economics is generally understood to revolve around arguments that cutting taxes on the very affluent encourages capital formation and business investment, thereby increasing production and employment. Leaving aside arguments concerning whether under certain sets of circumstances that may or may not be true, tax cuts have little to do with the rapidly rising levels of income and wealth disparity over the last forty years. That resulted primarily from other factors. In fact, summing up all the tax code and rate changes from 1981-2003, taxes have been cut far more for the middle class than for the top one percent.

The difference between total taxes currently paid by the top one percent and what they would be under the tax code of 1979 is a fraction of 1% of GDP. On the other hand, the total amount paid by all the rest is several percentage points of GDP lower relative to what it would be under the 1979 code and bracket structure.

Therefore, you can easily see that the net result of tax policy over the last 30 years should be expected to have primarily provided "demand-side" stimulus, not "supply-side" effects. In fact, it does not differ significantly from the typical neo-Keynesian prescription of putting more money into the hands of non-affluent consumers so that aggregate demand is boosted.

But that obviously is not working well. I have long maintained that the problem arises from structural issues which are not being addressed. In the generation following World War II, we produced almost everything we consumed. We were a manufacturing and exporting colossus. In fact, the U.S. had pretty much of a free ride for about a quarter-century prior to the early 1970s, since so much of what would have been the industrial capacity of our global competitors had been bombed away.

But in recent years, a growing share of the "demand" we created has leaked right out of the country. One might reasonably ask, "Demand for what? More crap imported from Asia and sold at Walmart?"

If we continue to run huge fiscal deficits that have to be eventually financed with endless rounds of money-printing, and if we compound the problem by continuing to run massive trade and balance-of-payments deficits, our economy will never return to the robust levels of growth we enjoyed in the past.

[joe bloe]

Originally Posted by Submodo

Those that think trickle down economics work want most of "us" out of work.

They have no interest in any other ideology. The one they have in place now is working juuuuuust fine.

Those who support supply side economics, want full employment. They want a strong middle class and they want to reduce poverty by providing an opportunity to get a job. Reagan's tax reforms produced the longest period of economic growth in American history. To say that supply siders want most people to be out of work is silly.

Supply side economics, or trickle down, works by stimulating economic growth. The principal is that a lower tax rate can generate an increase in revenue, provided the stimulative effect on the economy is sufficient.

Reagan substantially reduced income tax rates. At the same time, he DOUBLED TAX REVENUE.

A one percent income tax rate would not produce enough revenue to run the government. A ninety nine percent income tax rate would also not produce enough revenue, because no one would agree to pay it. The Laffer Curve principal, which is the heart of supply side economics, simply contends that there is an optimal rate that produces the maximum revenue to the government; that optimal rate is the proper rate.

In a way, Wal-Mart's incredible success illustrates the principal of supply side economics. Wal-Mart has become the most successful retail store in the world, by selling at a very low profit magin. Sam Walton knew that in the long run, he could make more money by selling a large amount merchandise at a very small profit margin, than by selling a small amount of merchandise at a large profit margin. That's principal of supply side economics. Grow a huge economy by taxing at a low rate.

It's foolish to raise the tax rate, if the higher rate actually produces less revenue. That's a lose-lose. It lowers the standard of living for the tax payer, while at the same time reducing revenue to the government.

[HoustonMilfDebbie]

Excuse me for interrupting, but when Bush took office the country was running in the Green, no debt, and I believe America had a surplus. When Obama got elected, we were on the brink of another great depression. So, here is the great question: Should we keep the administration Bush followed when it is clear his way didn't work?

Insanity: doing the same thing over and over again and expecting different results. Albert Einstein, (attributed) US (German-born) physicist (1879 - 1955)

I think Romney has done a fantastic job of helping himself lose the election.

[joe bloe]

Originally Posted by HoustonMilfDebbie

Excuse me for interrupting, but when Bush took office the country was running in the Green, no debt, and I believe America had a surplus. When Obama got elected, we were on the brink of another great depression. So, here is the great question: Should we keep the administration Bush followed when it is clear his way didn't work?

Insanity: doing the same thing over and over again and expecting different results. Albert Einstein, (attributed) US (German-born) physicist (1879 - 1955)

I think Romney has done a fantastic job of helping himself lose the election.

No, when George W Bush took office we were in a recession. The national debt was 5.7 trillion. There never was a surplus in the nineties. By looting Social Security, it was made to appear that we were in surplus, but we never were.

Bush didn't cause the economic collapse; a lot of things did. Policies put in place in Clinton's administration, actually ran their course and caused the collapse; mainly, lending money to unqualified home buyers. Clinton greaty expanded the Community Reinvestment Act which encouraged mortgage lenders to lend to essentially anyone who wanted to buy a house, whether they were qualified or not. For a while, easy mortgage money caused an economic boom. The housing bubble burst when Bush was in office, but it was not a problem of his making.

[CJ7]

got a link that shows clinton loaned $ to unqualified home buyers ?

in 02 Bush gave a speech asking Fannie to laon money to 5.5 million minority (poetntial) homebuyers ... and it wasnt of his making?

http://www.youtube.com/watch?v=QYvtvcBKgIQ

either youre a bad liar or an uninformed idiot ..

which is it?

[joe bloe]

COMMUNITY REINVESTMENT ACT

The Clinton Treasury Department also applied great pressure on financial institutions to abide by CRA's mandates. In 1995, for example, Treasury regulations made it much more difficult for a bank to get a satisfactory CRA rating from the government. As City Journal reports:

"The new regulations de-emphasized subjective assessment measures in favor of strictly numerical ones. Bank examiners would use federal home-loan data, broken down by neighborhood, income group, and race, to rate banks on performance. There would be no more A's for effort. Only results—specific loans, specific levels of service—would count. Where and to whom have home loans been made? Have banks invested in all neighborhoods within their assessment area? Do they operate branches in those neighborhoods?

http://www.discoverthenetworks.org/v...ory.asp?id=809

http://www.cato.org/pubs/regulation/...4/vmck4-94.pdf

25 People to Blame for the Financial Crisis

The good intentions, bad managers and greed behind the meltdown

In 1995 Clinton loosened housing rules by rewriting the Community Reinvestment Act, which put added pressure on banks to lend in low-income neighborhoods. It is the subject of heated political and scholarly debate whether any of these moves are to blame for our troubles, but they certainly played a role in creating a permissive lending environment


http://www.time.com/time/specials/pa...877322,00.html

[CJ7]

it took clinton 12 years to break the housing market?

youre laughable at best joe

[Guest040616]

Originally Posted by CJ7

either youre a bad liar or an uninformed idiot ..

which is it?

I vote for both!