Quote:
Originally posted by Mojo_PeiPei
The Rich are the ones who spend the most money. Giving Joe Sixpack a taxbreak or credit won't do dick. The idea was that giving money back to the rich (remember the ones who actually spend money) would help the economy because they would invest it. Investing it would cause economic growth and generate jobs. More jobs means more competition, more money being paid out, more money being paid out more taxes collected, more money put into the system. It's really a sound economic idea, just how it plays out is what matters.
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MY GOD!! someone still believes in trickle down economics!!! please tell me that this was a sarcasm post, please please please.
Try this as an alternative: rich people have all of their basic necessity's taken care of, and are using the majority of their wealth to try to make more money. Sometimes this means that they invest it locally (which is what the trickle down theory is based on) but often it means that they invest it elsewhere (overseas) which does not help the economy. Whats worse if the economy is bad, they will feel skittish, and keep it in low risk areas.. bonds, banks, very stable companies which do nothing to stimulate economic growth.
On the other hand if you give the money to poor people, people who are living hand to mouth they will spend it immediately. This money is all spent locally because poor people don't make off shore investments. The money doesn't go to the bank because the people who get it have things they still need to buy. It directly stimulates the economy. Further the companies (which is who we wanted the rich people to give there money too) end up with the money after they sell their product to the poor people. They make a profit, because thats what companies do, and they have a larger pool of customers so they make *more* money.
I'm not going to touch the morality of giving people money or tax cuts. Thats no the point, I'm just talking about economics and game theory. Trickle down economics works very poorly, Trickle up is a much more accurate description of how it works... after all why do you think the rich people are rich, and continue to get wealthier?
[EDIT]
For anyone who would like to see some numbers rather than people just shooting off:
http://www.ufenet.org/research/TrickleDown.html