A summary of trickle down economic theory:

[Arrian]

Explain what you mean by "productivity improvements" please.

-Arrian

[Kidlicious]

Originally posted by Arrian


More production = more consumption? Isn't that bassackwards? Isn't it more Demand = more production? If you make a bunch of stuff that people don't want, they aren't going to buy it.

-Arrian

I believe you are correct.

[Kidlicious]

Originally posted by MichaeltheGreat


I didn't say "poor people." I said losers. If you find an equivalence there....

Being poor reflects current economic state. Being a loser reflects attitude. Someone who is both poor and a loser isn't going to become rich, no matter what you throw at him in subsidies. He'll just **** it up, or spend it all like a pimp, because the attitude towards work, money, management, etc. will lead to that result.

Someone who is poor and has the right attitudes, has the opportunity, assuming there are no artificial barriers to opportunity (why I support civil rights, scholarships, improved education both inside and outside the traditional public school systems, etc.), has the chance to substantially improve his or her economic status.

Damn, this is a hard point to make for you. I'm considering equal persons living in two different environments. One has more opportunity than they other. One of those opportunities is to see success all around you, and to have friends who are successfull.

[Kidlicious]

Originally posted by Arrian




Says the communist. Listen, several people with far greater knowledge of economics than I (my understanding is relatively basic, yes, limited to several college courses, watching what my family has done, and my own experience) have flat-out told you that you are sprouting garbage. Yet you insist that I don't have a clue.



-Arrian

Take it up with Adam Smith if you don't believe that savings is determined by the interest rate and that interest rates increase with the demand for investment.

[Arrian]

Increases in productivity will result in higher consumption in the long run.

Explain that, then, in light of your agreement on the More Demand = More Production and not the other way 'round.

I'm considering equal persons living in two different environments. One has more opportunity than they other. One of those opportunities is to see success all around you, and to have friends who are successful

Right - environment. Which, incidentally, is why MtG said he supports better education, civil rights, etc. We have to try and change the environment & the attitude in the poorest areas. Throwing a bit more money at them is likely to do diddly squat, though.

-Arrian

[Japher]

We have to try and change the environment & the attitude in the poorest areas. Throwing a bit more money at them is likely to do diddly squat, though.

Exactly!

[Arrian]

Without government intereference, obviously increased demand for capital (investment) - or a shortage of capital - will drive up interest rates. But you are introducing a counterbalancing factor: your "wealth tax," which will **** everything up.

-Arrian

[Kidlicious]

Originally posted by Arrian


Explain that, then, in light of your agreement on the More Demand = More Production and not the other way 'round.

Scarcity is the mother of productivity improvements. The increase demand will also raise wages, thus creating more scarcity. When there is scarcity and increased demand only the producers who make productivity improvements will get the extra profits. When resources are plentiful productivity does not icrease as much.

Originally posted by Arrian
Right - environment. Which, incidentally, is why MtG said he supports better education, civil rights, etc. We have to try and change the environment & the attitude in the poorest areas. Throwing a bit more money at them is likely to do diddly squat, though.

-Arrian

It's not just throwing money at them. You are creating an economy where there are more jobs for them and they get to keep more of their earnings.

[Japher]

I am wondering if there is a communication barrier here... Symantics. I don't think what Kid is calling savings is actually savings, as I see investments as savings... I see what he is saying as wealth as a net worth.

I think he wants to tax people who hoard large amounts of cash (as cash) forcing them to spend it and/or invest it... Encourage them to invest. Yet, I also see that this already how it is.

[Japher]

You are creating an economy where there are more jobs for them and they get to keep more of their earnings.

Losers don't want jobs.

[Kidlicious]

Originally posted by Arrian
Without government intereference, obviously increased demand for capital (investment) - or a shortage of capital - will drive up interest rates. But you are introducing a counterbalancing factor: your "wealth tax," which will **** everything up.

-Arrian

The market creates the optimal price. Why should I have to explain this to you market loving folks?

[Kidlicious]

Originally posted by Japher
I think he wants to tax people who hoard large amounts of cash (as cash) forcing them to spend it and/or invest it... Encourage them to invest. Yet, I also see that this already how it is.

Again. Investment is dependent on demand for consumer goods and services. People will keep their money on the side lines or accept lower return instead of investing it in business if they don't believe that consumption is going to increase.

[Kidlicious]

Originally posted by Japher
Losers don't want jobs.

No one wants to work Japher. That's why we get paid for it. If there were people who wanted to work we would have to pay our employers. People want to improve their situation though. Even poor people.

[Japher]

So you want to tax people who keep their money on the side lines? You think that would spur the economy?

[DAVOUT]

Originally posted by Kidicious


Right now though money is invested in unproductive areas, because of the supply orientation of the economy. If you increase consumers incomes the scarcity in savings will promote productivity improvements.

Investments projects are ranked by decreasing return. When there is a scarcity in savings, the projects are realized according their rank, and those with the lower ranks (even if profitable) will not be done.

Scarcity in savings results necessarily in less projects, even as far as productivity is concerned.