Ever since the days of Reagan, the Republican Party has been trotting out this tired-old work-horse of a “Theory”, to justify their Windfall Tax Cuts to the Rich.
Trickle-down economics, also referred to as trickle-down theory, is an economic principle that advocates reducing taxes on businesses and the wealthy in society as a means to stimulate business investment in the short term and benefit society at large in the long term.
One gigantic problem though, Trickle-down doesn’t work, not in the Real World — where the Rich tend to stash their extra cash, and NOT run out and spend it, as middle and lower income brackets tend to do. It is this extra spending that “spurs” the economy (not burying it in a lockbox). Economists refer to this as the “Multiplier Effect” — the economic growth, that comes from spending “unexpected” money — and it is explained quite well by Im a frayed knot.
Giving $32K in “found money” to Millionaires — does not spur the Economy, at least according to the overwhelming majority of top Economists, surveyed by the University of Chicago’s Booth School of Business:
Out of 42 top economists, only 1 believes the GOP tax bills would help the economy
But all of them think it will increase the debt.
The first question was straightforward. Would they agree that if the US passed a tax bill “similar to those currently moving through the House and Senate,” GDP would be “substantially higher a decade from now”? Of the 42 economists polled, only one thought the Republican bill would boost the economy.
The second question asked whether passage of the Republican tax bills would mean “the US debt-to-GDP ratio will be substantially higher a decade from now than under the status quo.” Here, too, the news was grim from Republicans. In this case, all but one economist agreed that the bills would blow up the deficit, and the outlier, Stanford’s Liran Einav, turned out to have misread the question — he later clarified that he also agrees the bill would add to the debt.
42 out of 42 Top Economists Agree — The current GOP Tax Plan, if passed, would “blow up the deficit”.
And we can all predict what that means in a year or two, when these “so-called” Deficit Hawks get their second wind:
The term trickle-down originated as a joke by humorist Will Rogers and today is often used to criticize economic policies which favor the wealthy or privileged, while being framed as good for the average citizen.
So much for the “very sound under-pinnings” of the GOP’s self-serving Trickle-Down claims:
Origins of the term:
The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover didn’t know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night, anyhow. But it will at least have passed through the poor fellows hands.
— Will Rogers, humorist, satirist
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