My wife and I were driving back from Tetonia the other day and I asked her what was the term for rain that never reaches the earth? “ Virga,” she replied, looking toward the Tetons and pointing. There was a medium-sized cloud with dark streaks falling from it which disappeared before making it to the ground. It was pretty but of no substance. I think that is nature's example of how the trickle-down economic theory works.
Trickle-down economics, also known as supply-side economics, states that when corporations and the wealthy are given enough incentives through tax breaks and deregulation, so much wealth will be generated that it will overflow to the working people below. Over the years it hasn't worked out very well. It was thought it might be working when our main asset, our homes, increased dramatically in value. Real estate values soared and we didn't let it bother us that wages weren't increasing because house and land values were soaring and the country was cruising economically. Then the bubble burst and our main asset had suddenly lost half its value. The cry went from the Bush administration “save the banks and they'll save Main Street.” We did save them and nothing trickled down. Small businesses could not get money from banks because bankers felt the economy was fragile and, therefore, investment in a small business was not a good risk. This response from those same bankers whose practices undermined the economy and made it fragile. And so the story goes . . ..
We keep seeding the clouds with tax breaks, subsidies to profitable corporations, and tax subsidies for off-shoring jobs. We do dances, burn our worthless mortgages on altars, do homage to the wealthy and do not commit the blasphemy of trying to tax them. We lose jobs, have our wages cut, lose our pensions, slash school budgets, and have our kids move back in with us. After all this sacrifice you would think the skies would open and an economic shower would rain down on us. But no, we are told that we face even more austerity. There is more loss of jobs and wages even though Wall Street is back making money and big corporations are making record profits. The resources that could have gone to producing jobs will now go to reducing the debt. That great raging forest fire of national debt fueled by unfunded wars, no-bid contracts to war profiteers--all those things it was okay to ignore in the past must now be fought with all the resources not needed to maintain the upper-class. Maybe, after the debt monster is reduced to a controlled burn, we who are left of the middle-class and the poor will finally be blessed with a little economic relief. Or maybe not.
For an economy to work, money has to circulate. To get a stalled economy going you put money into the hands of people who will spend it. U.S. corporations are sitting on an estimated two trillion dollars in cash and it does the economy no good because they aren't investing in this country. If they are not going to invest here then why are we so nice to them? Nothing is trickling down where I live.
After World War II we climbed out of the depression through massive government investment. Whether it was because of FDR's recovery program or military material production for the troops. We faced a Gross Public Debt that was over one hundred and twenty percent of the Gross Domestic Product, much greater than now. Once the war ended, the economy was energized and got moving. The deficit to GDP ratio was paid down to prewar levels in about ten years. We grew our way out of debt. Revenue grew because people were working. Jobs were and are the answer to both the deficit and a stalled economy. If the private sector won't step up to investing then the government can as it did in the past. Strangling the economy with cuts to spending and high unemployment will drag out the process and the country will continue to suffer.
We have waited years for the promise of economic prosperity to rain down on us from above. The promise never quite gets fulfilled. What for homeowners looked like prosperity turned out to be an illusion. We, the working people, get only the promise, only virga.
They will treat you like this until you refuse to take it.