Trickle down or trickle up economics?

[prosper]

What do you prefer and is there any hardcore evidence showing the success of either one?

[feh]

You'll have to define "success" first, and for whom.

One thing is clear, however: the Reagan mantra of "cutting taxes on the wealthy and corporations will benefit everyone" is a load of crap. Whether he genuinely believed it would work, or if it was just a confidence game, I do not know. But it's easy to see that the disparity between the wealthy and the poor in this country has exploded over the last 25 years.

The disturbing thing is how many middle class folks still believe trickle-down is a good idea. I suggest reading "What's the Matter with Kansas" for more information.

[Inkstain82]

If I had serious statistical evidence proving either, I'd collect my major economics prizes and become famous and rich

I believe that trickle up works better. The rich get rich by being good at holding onto money, the poor get poor by not being able to hold onto money. To keep money moving through the system, it needs to be continually redistributed to the people who won't hold onto it.

[kork13]

Originally Posted by Inkstain82

I believe that trickle up works better. The rich get rich by being good at holding onto money, the poor get poor by not being able to hold onto money. To keep money moving through the system, it needs to be continually redistributed to the people who won't hold onto it.

I agree with this in theory. However, I have to caveat that with this.... To just give lower-class families/individuals money through tax breaks, free services (medical, food, transportation, advanced education, etc.), and literal hand-outs, I feel that it does negatively impact the productivity, motivation, and ambition of the people receiving those benefits. In the same fashion of kids who receive an allowance whether they do their chores or not, it's very easy for people who are sustained on the government's dime to do little or nothing more to improve their own condition. I grew up around this, and saw too often how it can erode a person's drive and ambition.

The economy doesn't do better based on who gets given more money, or who gets less taken away in taxes. The individual ambition, productivity, and effort is what benefits the economy. It's WORK is what matters... not "distribution" of money.

[zetta]

I agree with this in theory. However, I have to caveat that with this.... To just give lower-class families/individuals money through tax breaks, free services (medical, food, transportation, advanced education, etc.), and literal hand-outs, I feel that it does negatively impact the productivity, motivation, and ambition of the people receiving those benefits

I'm curious what you think about the earned income tax credit. It essentially just gives people more money than they paid in taxes, but you have to be employed to get it. So when people get a big refund due to EITC, does it have any impact on drive and ambition?

[kork13]

Originally Posted by zetta

I'm curious what you think about the earned income tax credit. It essentially just gives people more money than they paid in taxes, but you have to be employed to get it. So when people get a big refund due to EITC, does it have any impact on drive and ambition?

I'm not familiar with tax code, and don't know what the EITC is. However, my position is that when people do not work for what they get/have, it becomes devalued. If you give your kids $20/mo but don't require them to earn it through chores, they come to expect it--they gain a sense of entitlement. This same sense of entitlement is what has crippled so many aspects of our nation, economy, and society. People expect the government to care for them when they cannot do so themselves. Many simply fall on hard times and earnestly work to get back on top of things. Many others fall on hard times, rely on the gov't, and realize that they can get a similar (or better) quality of life that way.

[maat55]

I heard on the radio today, and it makes sense, that this whole bailout theory is based on trickle down economics. The gov keeps pumping money into the big companies.

I'm against trickle up because it is largely tied to socialism. Everyone has the opportunity to achieve, and everyone can become wealthy on what they earn if they use the money wisely. If the poor would borrow less and invest more, they would shift to wealth.

[sweeps]

There's the S-bomb again.

[KGeary]

Originally Posted by feh

You'll have to define "success" first, and for whom.

One thing is clear, however: the Reagan mantra of "cutting taxes on the wealthy and corporations will benefit everyone" is a load of crap. Whether he genuinely believed it would work, or if it was just a confidence game, I do not know. But it's easy to see that the disparity between the wealthy and the poor in this country has exploded over the last 25 years.

The disturbing thing is how many middle class folks still believe trickle-down is a good idea. I suggest reading "What's the Matter with Kansas" for more information.

Not punishing corporations and the wealthy strengthens the economy, which benefits everyone.

The disparity between the poor and the wealthy has nothing to do with economics.

[KGeary]

Originally Posted by Inkstain82

If I had serious statistical evidence proving either, I'd collect my major economics prizes and become famous and rich

I believe that trickle up works better. The rich get rich by being good at holding onto money, the poor get poor by not being able to hold onto money. To keep money moving through the system, it needs to be continually redistributed to the people who won't hold onto it.

That's illogical and completely false.

[Inkstain82]

Originally Posted by KGeary

That's illogical and completely false.

Prove it and collect your prizes.

[maat55]

Originally Posted by sweeps

There's the S-bomb again.

Facts are facts. Redistribution is socialism. You may have no problem with it, I do.

Your a liberal, i'm a conservative, and the wheel goes round and round.

[Inkstain82]

Originally Posted by maat55

Facts are facts. Redistribution is socialism. You may have no problem with it, I do.

Your a liberal, i'm a conservative, and the wheel goes round and round.

It's so much more complicated than that, and I wish people would stop trying to simplify it as such.

Redistribution is not inherently socialist. All forms of government redistribute.

In a libertarian-ideal government, taxes are still collected to support a standing army for national defense, and the poor will inevitably get more benefit from that than they pay for, i.e. redistribution.

The *degree* of redistribution is what defines the spectrum that runs from communalism to socialism to capitalism to laissez-faire. And it *is* a spectrum, not a simple binary "socialist/capitalist" choice.

[LivingAlmostLarge]

I agree redistribution occurs through any government. So government is inherently socialistic.

[maat55]

Originally Posted by Inkstain82

It's so much more complicated than that, and I wish people would stop trying to simplify it as such.

Redistribution is not inherently socialist. All forms of government redistribute.

In a libertarian-ideal government, taxes are still collected to support a standing army for national defense, and the poor will inevitably get more benefit from that than they pay for, i.e. redistribution.

The *degree* of redistribution is what defines the spectrum that runs from communalism to socialism to capitalism to laissez-faire. And it *is* a spectrum, not a simple binary "socialist/capitalist" choice.

I'm talking about the redistribution from a high achiever to a low achiever. I see things as black and white with a little bit of gray. IMO, liberals want to blend all the black and white into gray.

[Inkstain82]

Originally Posted by maat55

I'm talking about the redistribution from a high achiever to a low achiever. I see things as black and white with a little bit of gray. IMO, liberals want to blend all the black and white into gray.

And what else is a standing army but redistribution of the ability to protect yourself from foreign invasion from the rich (who could pay for their own armies) to the low-achieving poor (who could not)?

Again, I think you are being too restrictive trying to paint everything as "conservative" vs. "liberal."

I'm a filthy liberal because I believe the government should be in "socialized" health care, but am I a deep conservative because I believe it should step out of higher education, which has become a jumbled, wasteful mess?

[Inkstain82]

Originally Posted by LivingAlmostLarge

I agree redistribution occurs through any government. So government is inherently socialistic.

Since "socialism" is a subset of "government", that statement is logically false. It's just an attempt to redefine terms, which is always pointless.

Socialism is a form of government that relies on heavy redistribution. But not all redistribution is socialist.

[KGeary]

Originally Posted by Inkstain82

And what else is a standing army but redistribution of the ability to protect yourself from foreign invasion from the rich (who could pay for their own armies) to the low-achieving poor (who could not)?

Again, I think you are being too restrictive trying to paint everything as "conservative" vs. "liberal."

I'm a filthy liberal because I believe the government should be in "socialized" health care, but am I a deep conservative because I believe it should step out of higher education, which has become a jumbled, wasteful mess?

That's not redistribution, it's a legitimate function of government.

And it's illogical to say they should run healthcare even though they've screwed up education when they've also screwed up every other program they've tried to run. They've already failed at the healthcare; have you seen a VA hospital lately?

[Inkstain82]

Originally Posted by KGeary

That's not redistribution, it's a legitimate function of government.

As someone who seems to love to throw around phrases such as "logical fallacy" and "illogic" with abandon, you've thrown out quite a doozy.

The fact that it is a legitimate function of government does not preclude it from being a redistribution. Nowhere in the definition of either term is there something that excludes the two from intersecting.

(edit to add: I can already see where this is going to end up: a discussion on the meaning of logic and fallacies. I can honestly say that nothing you've said in any of our discussions convinces me that you've ever actually studied logic in any way, and you appear to think that fallacy just means "something that doesn't make sense according to my opinion of the facts." I'm sure you have an equally dim view of my grasp of logic, and that's cool. So just be forewarned that I'm not going to get sucked into that discussion this time in the interest of keeping the board somewhat uncluttered and keeping the tone reasonably friendly ).

And it's illogical to say they should run healthcare even though they've screwed up education when they've also screwed up every other program they've tried to run. They've already failed at the healthcare; have you seen a VA hospital lately?

I'd say they've done a perfectly adequate job with national defense, lower education and the postal service, to name a few.

[kork13]

In an attempt to move back toward the original topic, I think there are ways to effectively use "trickle up" methods while encouraging personal responsibility. Giving individuals the support they need while requiring work in return. For example, contracts for sweeping infrastructure projects (such as I've heard proposed off and on), I think are a great idea. Construction and such are jobs that can be filled by people with minimal specialized training. They get a job with which they can support their families; society gets new roads and water mains. At the same time, it's also possible to do the whole "trickle down" thing very poorly.