A summary of trickle down economic theory:

[The Templar]

Originally posted by Kidicious
People keep assuming that trickle down economics is going to work, and it keeps failing. The least we should do is try the opposite one time.

Right on!

And whatever happened to that much vaunted conservative virtue of pragmatism and trying something new when the same old thing keeps failing?

[The Templar]

Originally posted by Boddington's
Why would the opposite work, and trickle down not?

Please explain without reference to labour.

Already explained. More people spending more money means more money to be made by business. Duh!

[Solly]

"More people spending more money means more money to be made by business"

The same would happen in trickle down. What's the difference?

[Kidlicious]

Originally posted by Boddington's
Why would the opposite work, and trickle down not?

Please explain without reference to labour.

Why do you think wealthy people hate tax on savings? Because they save money. It's just the way it is. Why should we argue about it?

[Solly]

So if you gave a rich man £10 he would save it, while give a poor man £10 and he would spend it?

[Kidlicious]

Originally posted by Boddington's
"More people spending more money means more money to be made by business"

The same would happen in trickle down. What's the difference?

No, the theory says the opposite. It says that rich people will save their money and that business investment will increase.

[Kidlicious]

Originally posted by Boddington's
So if you gave a rich man £10 he would save it, while give a poor man £10 and he would spend it?

On average, overwhelmingly yes.

[Solly]

Show me the theory, Kiddy.

[Kidlicious]

First, do you agree now that your savings rate depends on your income, and that a higher savings rate corresponds with higher income?

[The Templar]

Originally posted by Boddington's
So if you gave a rich man £10 he would save it, while give a poor man £10 and he would spend it?

A rich man can only buy so many dinners, haircuts, and non-durable goods. Give a rich man $10 and that $10 is not going to have an impact if the rich man has already taken in his share. The rich man will save it (effectively taking it out of the marketplace for awhile) or invest it. But the rich man has alreadly very likely engaged in heavy investment, so this $10 is not adding anything there. Moreover, there is no guarantee that the investment will help out the poor man. In fact, if that money goes oversees to increase production at a sweatshop, both the domestic poor man and the oversees poor man are hurt.

Give it to a poor man and he will likely buy something he needs or something he wants but could not afford before getting the money. Money in motion in the marketplace is what creates jobs.

[Solly]

Originally posted by Kidicious
First, do you agree now that your savings rate depends on your income, and that a higher savings rate corresponds with higher income?

Depends on the time-frame.

[Kidlicious]

Originally posted by Boddington's


Depends on the time-frame.

Oh please. What could be more obvious?

[Kidlicious]

Originally posted by Boddington's
Show me the theory, Kiddy.

The origin of the theory is during the presidency of Calvin Coolidge. US Secretary of the Treasury Andrew Mellon was the 'brains' behind it, if you want to call him that. They cut tax on the wealthy because they believed that it would improve business investment. Remember Coolidge was famous for saying, "The Business of America is Business."

[Solly]

You seem to be implying Keynesian C function, am I right?

[Solly]

Well trickle down is a joke, I'll agree to that. For the same, so is "trickle up".