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The trouble with "trickle down" economics is that in the 40 years since its invention nothing has trickled down. While we wait for the trickle to start the rich just keep getting richer because there are no limits to their bank accounts, salaries, investment earnings, etc. As Pope Francis recently pointed out, the only way anything will trickle down is if the container holding it fills to overflowing.
The tax code needs to be revised so that there is a great incentive to reinvest capital in businesses and not hoard it. Sooner or later, when all the stock available has been bought back and all the capital improvements to the business have been made then some of the profits will surely end up in pockets of the workers. This money which will have trickled down will go immediately back into circulation, excecutives will buy second homes, managers will send their kids to college and hopefully, some of the workers will be able to get off welfare and food stamps.

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Comment Preferences

  •  That's not correct. The trickle refers to the (5+ / 0-)

    rate at which the dollar circulates through the economy after it's distribution by the federal treasury. That rate of flow has, indeed, been reduced to a trickle of its original in the 1950s and, if the sequester crowd in Congress had their way, it would be reduced even further to a drip.

    Why would one want to reduce the flow of the dollar to a drip? Because putting the squeeze on people forces them to work for next to nothing -- just lunch and nothing much else. Why would one want that? 'Cause people slaving for bare subsistence is a sure sign of power. Always has been. It's what the country was founded on.

    A friend of mine used to call it wage slavery. But, I don't think that's right. Compensating people with wages for their work is the core of egalitarian enterprise. It's not wages that deprive people of their rights; it's the practice of compensating them with less than they require to sustain themselves and the next generation.

    http://hannah.smith-family.com

    by hannah on Fri Feb 07, 2014 at 05:14:40 AM PST

    •  I set out to refute your statement,"It's what the (4+ / 0-)
      Recommended by:
      NYFM, commonmass, mwm341, hannah

      country was founded on".
      As I did so, I ran into slavery, then indentured servitude, the State of Georgia, Tammany Hall,the firefighting gangs, Teapot Dome, the Robber Barons, Reservations, the draft and I could continue.
      Hmmmm!

      "If you tell the truth, you won't have to remember anything", Mark Twain

      by Cruzankenny on Fri Feb 07, 2014 at 05:39:45 AM PST

      [ Parent ]

    •  Not quite, free labor of farm owners and town (0+ / 0-)

      boosters was Free Soil model, who fought for Lincoln. Wage slavery, like slavery, expropriates free labor like a closing of the commons. Privatized wage compensation is not egalitarian, assumes labor is a commodity, tends to waive human and citizenship rights. Compensation as stakeholders, like CEO's, movie stars, pro atheletes, investors get now, might be egalitarian, if from each according to their contribution, to each according to their roughly equal needs, national product reinvested in the commons. There also would be a balancing of the books, about 4 trillion dollars from the slave states to heirs of slaves at 1 million in today's dollars per 1865 claim. Probably a similar amount in arrearages to heirs of Jim Crow victims and currently  living undercompensated wage slaves. This is a battle line in the class war, reparations justly imposed would bankrupt the nation and put it in the receivership of the citizens.

      •  Since the nation can issue as much currency as (1+ / 0-)
        Recommended by:
        Musial

        is necessary, the nation cannot go bankrupt. If there is not enough currency, it is because it is being artificially rationed by Congress and their lackeys, the banks.

        If there is one thing we should learn from the collapse of 2008 it's that the "loss" of $40 trillion is a clear sign that the quantity is insignificant.

        http://hannah.smith-family.com

        by hannah on Fri Feb 07, 2014 at 01:03:55 PM PST

        [ Parent ]

  •  Oh something's trickling down, all right. (3+ / 0-)
    Recommended by:
    NYFM, commonmass, mwm341

    "Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity." --M. L. King "You can't fix stupid" --Ron White -6.00, -5.18

    by zenbassoon on Fri Feb 07, 2014 at 05:40:44 AM PST

  •  The problem IS that it's a trickle (1+ / 0-)
    Recommended by:
    commonmass

    and we need a gusher!

  •  The grand irony of it is that back in the 80's (0+ / 0-)

    Reagan's voodoo economics, in hind sight, may have been the correct economic answer to the problems of the time.  The problem is that this created some sort of cult, whose members call themselves Republicans, who claim this is the snake oil, er, cure for all economic woes.

    "It's not surveillance, it's data collection to keep you safe"

    by blackhand on Fri Feb 07, 2014 at 05:57:59 AM PST

    •  Sorry, but bullshit. (0+ / 0-)

      There was no reason for "voodoo economics" in 1981 or any other time.

      Pope Francis: the Thumb of Christ in the eyes of the Pharisees.

      by commonmass on Fri Feb 07, 2014 at 06:02:37 AM PST

      [ Parent ]

      •  Don't entirely agree (1+ / 0-)
        Recommended by:
        commonmass

        It depends on whether the economic constipation is from a supply side or demand side problem.  In order for there to be economic growth and activity, the two must be in balance.  If the slow economy is caused by the costs to grow being too high or money and credit being too tight, supply side easing can address the problem.  Where I disagree with you is unilaterally declaring the concept bullshit.

        The problems we have today is not a supply side problem, but rather a demand side problem.  This was well acknowledged even at the beginning of the depression (recession) in 2007-2008.   There is little to no demand and the consumer has little appetite for debt at any price.  By the same token, companies do not need debt to expand.  Hence lowering borrowing costs (interest rates), bond buying, etc, all ways of injecting supply side money are not having a stimulating effect.  It is, however, creating inflation.  Stagflation 2.0 perhaps?

        Whats more is that the global aspects of the economy have severely changed the dynamic.  No longer is domestic growth, productivity, and spending required for US producer profit.   I think that this is a unique condition that may challenge hitherto economic theory.

        Personally, I am not a strong believer in supply side economic theory.  I accept that surplus supply will create some demand, but the effect is very muted compared to demand side easing.  To put it another way, inject $1 at the top and 10 cents may trickle down.  Inject $1 at the bottom and 100 cents of it will work its way up, multiplied several fold over its course.  

        For the most part, I agree that supply side "voodoo" economics is bullshit, but it does have it's place.  I have also heard and read many times how the conditions in the 70's and 80's were different and that supply side easing help the economy.  It may have also created a lot worse problems today.

        "It's not surveillance, it's data collection to keep you safe"

        by blackhand on Fri Feb 07, 2014 at 08:16:36 AM PST

        [ Parent ]

        •  While stimulating the supply side may work (0+ / 0-)

          at certain times, it is very (as we are witnessing) difficult to undo. No elected official wants to be the one accused of raising a tax or closing a loophole, enhancing revenue, etc.
          Also, there is now more opportunity for money to make money for the rich without resorting to the old fashioned method of actually producing goods. Once banks discovered they could make huge profits facilitating leveraged buyouts and selling derivatives in an unregulated market, the thought of holding onto notes for 30+ years lost its allure and the casino doors were pushed wide open.

  •  I wouldn't wait (0+ / 0-)

    That stuff trickling down is NOT wealth....

    ObamaCare! Sign-up by phone: 1-800-318-2596

    by mwm341 on Fri Feb 07, 2014 at 06:05:21 AM PST

  •  History shows it WILL trickle down (0+ / 0-)

    If the wealthy don't do it voluntarily then it becomes the responsibility of the government.  If the government is owned by the wealthy and don't listen to the 99% then the majority take it into their own hands.

    Happens every time.

    Republican tax policies have led to financial conditions which have caused Republicans to demand cuts to programs they have always opposed.

    by AppleP on Fri Feb 07, 2014 at 10:07:55 AM PST

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