Trickle Down Economics is Misunderstood and Straw-Manned

[SigmatheZeta]

Look at this yeen go, people. His rhetoric sounds like, "Stick with me, and you'll never go hungry again!"

But then the speech goes,

"Of course, quid pro quo, you're expected
To take certain duties on board
The future is littered with prizes
And though I'm the main addressee
The point that I must emphasize is
You won't get a sniff without me!"

I mean Disney really did try to warn us about men with big egos that make people a lot of promises.

We ignored the warning, and when the yeens were going like...

"Oooooo, la-la-la!
We'll have food!
Lots of food
We repeat
Endless meat"

...we thought it was a joke. It did not register in our minds that it was real until we literally saw the yeens goose-stepping through Charlottesville, Virginia. Those were the yeens. It was news from the future, people.

People, read the UCLA study that I posted above, please. Read at least the abstract, which I quoted in its entirety.

The research clearly demonstrates that the most economically disadvantaged regions of the country would actually benefit from targeted stimulus, especially with a focus mostly on education. See the UCLA study. It is imperative that all of you to understand that so-called "supply-side economics" sometimes work, but they only work under certain types of economic conditions.

For example, it is basically impossible to actually go hungry or without shelter in New York City unless you are just not trying to take advantage of the opportunities that you have, but only a very small number of people there are actually going to become billionaires. The shelters there actually tend to be well-funded, whether they receive the funding from the local government or NGOs. New York City takes care of its own. They have abundant resources. They are deservedly proud of their city. If New York City is not taking care of its own, it's not for lacking the ability. If that single city declared national independence, they would be too populous to qualify as a "micronation." That dragon can fly on its own wingspan. Congratulations to them.

On the other hand, I came from an economically disadvantaged area, and I did not see any so-called "trickle-down," there. I saw a corrupted power class and a society that was just not going to grow anytime soon. There were literal drive-by shootings in a town with only slightly more than 1,000 people living in it. The corruption there is actually pretty unbelievable. The town that I came from actually had a contraction in the local population since I left. The education system was basically a warehouse with human bodies in it, and while I tested as gifted, I ended up becoming an autodidact with lopsided academic development and relatively few of the skills and habits that were needed to survive in the higher education system.

Read the UCLA study, please. It really does a lot to demystify the reasons why there is such conflicting evidence regarding supply-side economics. The reason why is that mega-billionaires are not really something to worry about in an extremely advanced economy. It is actually a good thing if an economy has successfully attracted the world's most gifted individuals. We should not really be disappointed if not all of us are able to do the same things that only a uniquely talented handful of individuals in the world are able to do. On the other hand, areas like the one that I lived in are in a malaise that they need to be jogged out of in order to recover their capacity for developing on their own. The social and political dysfunctions of those cultures tend to hinder the development of people that could otherwise act as their leaders. They need investment, especially in their education systems.

Trickle Down Economics is Misunderstood and Straw-Manned

Billionaires do not really benefit from the most disadvantages Americans continuously failing to fully get their shit together. It is not a win/lose scenario to fight back against inequality. If a large percent of people are living on meager wages, it is probable that they are not really making...

iidb.org

^My initial discussion on it is located there.

We need regionally targeted spending on developing those areas that are not yet able to provide fully for their own people's health. I would never counsel to give medicine to a healthy child, but a town with barely more than 1,000 people living in it that has drive-by shootings at the local gas station is not the healthy child. They are socioeconomic train-wrecks. I saw what was going on myself. It was a nightmare.

The current research really supports my case for targeted regional investment, especially focused on the education system. Rural areas that have been cultural laggards in spite of an abundance of natural resources need comprehensive reform.

 

[Patooka]

Trump cut food stamps and this resulted in the lowest unemployment rate for black people in history. Why?

You're implying causation when there is only correlation but I'm sure that's not what you mean,

Turns out paying people to stay home and not work leads to fewer people going out and looking for jobs.

...
...
If what you are saying is true (and you have provided no measurable tangible proof of that), then Donald Trump is the greatest world leader in history because literally no one else has been able to implement economic policy and see effects as a direct result of that policy so quickly. In fact, a lot of evidence suggest that Trump simply skirted on Obama's efforts and is stealing the credit for himself.

FYI, your, "Trump created more jobs for blacks", has already been discussed by some other fuckwit who wouldn't show his receipts. And it was debunked then as well.

Apologies for reminding everyone of Half-life's idiotic bullshit.

You cut a majority of welfare (not saying all of it) and the economy will boom like never before. (emphasis mine)

Is this when you proclaim nobody knows economics better than you? Any reason why you still haven't supplied any data and are still living in make believe land?

 

[ZiprHead]

This thread leads to many important but difficult questions. For examples:

(1) How hard would it be to institute a "fair" nation-wide real estate tax? This would be a clean way for the government to raise revenue and set priorities but the details would be fraught with peril. If the thread turns to this question I may have nothing to contribute; my response would be "Wise in principle perhaps, but implementation would be too chaotic to contemplate."

(2) How about a wealth tax imposed on the super-rich? Wise in principle perhaps, but as the super-rich themselves point out, they'll convert their wealth into untaxed real estate, paintings, private businesses. Again I have no simple answer.

Why do Democrats always seem to want to constantly tax the the people into oblivion? This isn't good. Do you realize taxes on estates are paid multiple times throughout a person's life? If a person has a house and has been taxed on it all their life and wants to give it to their kids, why should the government tax it again? This is way too authoritarian.

I feel like both parties are bad, but I feel like the Republicans at least care about the average worker and the middle class. The Democrats keep taxing, which makes the middle class and poor suffer. Look at how the Democrats policies led to inflation and the average middle class family is spending $175 more a month compared to when trump was in office. Gas has also risen over $1 a gallon since Trump. Do the rich care about gas price increases? No, but the middle class and poor people care about it, and that's who it affects the most. Do Democrats care? Not much. Jen Psaki was laughing at a reporter who asked her what the administration plans to do about inflation crushing the middle class and poor. Who gets hurt the most when prices go up by a few dollars? Not the rich, that's for sure.

Republicans want to tax less so people keep more of their money. Do you realize we have spent 22 trillion dollars (almost the price of our national debt) just to combat poverty since the 1960's? It's not working. People are still stealing from stores all over, despite the fact that we have one of the most generous welfare systems in the world. There's people who have $2,000 balance on their food stamp cards and people are still saying that we can't feed the poor? Ridiculous. If we brought any poor person here from another third world country, they would be in shock and awe and say that the poor live like kings in this country. We need to get everyone back to reality. Taxing the people and putting the incompetent government in charge of the money has done absolutely nothing to help the poor and middle class. The only time they get relief is when a Republican is in office. Why do you think so many Biden voters disapprove of him now and he's at an all-time low? Republicans warned of massive inflation if Biden got in office. Democrats laughed. Now, here we are. Do you think this inflatiion would've happened under Trump? All those ships stuck in ports, he wol've been on TV every day screaming at them to unload and lighting a fire under them to mvoe quickly. What does Biden do? Nothing. Tells us to, "wait it out." Say what you want about Trump, but he held people accountable. If you weren't doing your job, he fired you. That's it. Done.

I need to be convinced that the very authoritarian government rule via crushing taxation does anything to help the people. If you look up corporate donations, Democrats take more dark money than Republicans do by a long shot. Democrats are the party of big government and they also have corporate America in their pockets. Corporate America hates Republicans.

That's a lot of straw you're burning there. I hope you keep a fire extiguisher at the ready.

 

[Jimmy Higgins]

This thread leads to many important but difficult questions. For examples:

(1) How hard would it be to institute a "fair" nation-wide real estate tax? This would be a clean way for the government to raise revenue and set priorities but the details would be fraught with peril. If the thread turns to this question I may have nothing to contribute; my response would be "Wise in principle perhaps, but implementation would be too chaotic to contemplate."

(2) How about a wealth tax imposed on the super-rich? Wise in principle perhaps, but as the super-rich themselves point out, they'll convert their wealth into untaxed real estate, paintings, private businesses. Again I have no simple answer.

Why do Democrats always seem to want to constantly tax the the people into oblivion?

And now a comprehensive list of wealthy people taxed into poverty (or even a lower income bracket).

*start list*
*end list*

 

[marc]

I feel like the Republicans at least care about the average worker and the middle class.

Republican tax cuts so people can 'keep their money' is a huge scam. They cut taxes where the average person may get an extra couple hundred, while the rich can get hundreds of thousand, or even millions. But then there is paying for that tax cut. They will just let the deficit balloon up, like how Reagan tripled the national debt, and W doubled it again. (and won't complain about it until a Dem is in office) then the solution to the debt is to cut funding of programs that actually help people. Education, health care, infrastructure, etc.. And that doesn't just mean the federal budget is cut, those cuts mean less money going to the states for those things. The state then either cuts that spending, so you pay for those tax cuts that way, or they increase revenue to compensate, by increasing property tax, sales tax, licensing fees, sewage fees, utilities, car tax, fines, and so on. You are paying for that tax cut, one way or another.

 

[Trausti]

Is there any relationship between taxation and poverty? California, the state with the highest tax burden, is ranked 26th for poverty. New Hampshire, with no personal income tax, has the lowest poverty rate. It seems the push for higher taxes on other people is just malice.

 

[Jimmy Higgins]

Is there any relationship between taxation and poverty? California, the state with the highest tax burden, is ranked 26th for poverty. New Hampshire, with no personal income tax, has the lowest poverty rate. It seems the push for higher taxes on other people is just malice.

So, you compare the highest tax burden verses New Hampshire, which has no income tax... but not their total tax burden.

According to this site, California is actually ranked 10th for total tax burden, not 1st. To make matters worse, Vermont is ranked 3rd and New Hampshire 46th in tax burden. In 2014, the poverty rates were about the same in both states, indicating a relationship between overall taxation on individuals and poverty isn't apparent. To muddle things more, New York and New Jersey are both high tax wise, but in poverty, New Jersey is ranked with lower poverty better than New York.

 

[Trausti]

indicating a relationship between overall taxation on individuals and poverty isn't apparent.

No shit. So what is the point of the government taking more of our income? Why is it better for the government to have my money and not me? Just so much waste in government.

 

[SigmatheZeta]

indicating a relationship between overall taxation on individuals and poverty isn't apparent.

No shit. So what is the point of the government taking more of our income? Why is it better for the government to have my money and not me? Just so much waste in government.

Read the UCLA study, please.

 

[Jimmy Higgins]

indicating a relationship between overall taxation on individuals and poverty isn't apparent.

No shit. So what is the point of the government taking more of our income? Why is it better for the government to have my money and not me? Just so much waste in government.

Taxation doesn't end poverty, therefore no more taxes? I forgot taxation was exclusively about poverty.

 

[laughing dog]

indicating a relationship between overall taxation on individuals and poverty isn't apparent.

No shit. So what is the point of the government taking more of our income? Why is it better for the government to have my money and not me? Just so much waste in government.

Do you have an actual point? After all, what constitutes "waste" is often a matter of opinion, not fact. There are plenty of people who have the opinion there is plenty of "waste" in the private sector.

 

[Loren Pechtel]

Cool. But space should not be monetized and that's exactly what Musk, Bezos and Branson have in mind.

The market needed a private player to shake it up. When government is doing it they're far too sensitive to optics.

Look at how SpaceX has developed it's stuff. There's a video around of boom after boom as they tried to land the booster. Had that been NASA there would have been congressional investigations after the second boom. SpaceX expected booms, their first landing attempts (for which I do not believe there is video) were guaranteed to fail. Only when they were satisfied they could land the booster on the ocean did they put the barge under it and we started getting videos of boosters not making it. Since then they have continued to on occasion land boosters on the ocean when they wanted to try something that they deemed too risky to put the barge under it. (Deeming the certain loss of the booster to be less than the risk of damaging the barge.)

Now that they have done it the world is moving to copy because they have no choice. Before that it was nobody gets fired for buying IBM.

 

[Loren Pechtel]

Give them time to prove themselves in the final frontier. My first impression is Bezos and Branson want only to monetize space by sending bored wealthy people on space junkets while Musk is trying to “get humanity to Mars to preserve the light of consciousness” so he says.
While I do believe in the corrupting power of money, not all billionaires are necessarily bad billionaires.
Musk has tackled problems no one else would with Tesla, SpaceX, and Starlink and is arguably changing the world for the better.
Maybe he’s a good billionaire. Maybe he’ll just take his friends to Mars and they’ll watch us all perish like some reality TV show. I don’t know. But no one else seems to be doing duck all aside from having endless meetings about what needs to be done.

I believe all are trying to open up space. It's just that only SpaceX has a reusable orbital-class booster. The other guys are moving a lot slower, while they can get into space they don't have anything like the delta-v to reach orbit and thus the only business model at present is tourism. Bezos is working on an orbital-class booster but they're barely out of the starting gate while SpaceX has run the track and well on their way to doing it again.

 

[Loren Pechtel]

A lot of the French aristocracy believed that in 1789 as well. Your attitude can be quite problematic when you play it out to its logical conclusion.
Also, you are looking at it extremely wrong. Funninspace hit the nail on its head with their response but I would add how much of the tax burden you provide is nowhere near as important as how much of your disposable income is going to the government. And going by your answer here, I'm pretty certain you understand that.

And note that the French revolution set France back 30 years.

A repeat would come close to making us a third world nation.

Incidentally, the greatest period of economic growth and prosperity for most Americans was during the 50s and 60s. Take a wild guess what the tax brackets for the richest 5% was like during those times. I'll give you a hint; they were counter intuitive to your fantasy of piss down economics.

Take a wild guess as to the economic situation at that point:

1) We had a huge backlog of demand left over from WWII. All that war economy now showed up in the civilian market.

2) Every other industrial power in the world had been pretty heavily trashed and had to rebuild. No meaningful damage had been done to US industry. That means we were in the position of importing raw materials and exporting finished goods with little competition. We could export the bad jobs.

3) We also could export the bad jobs to the blacks and women. It was good times for white males, not for everyone.

4) The tax rates had loopholes you could drive an 18-wheeler through. They didn't mean much.

Putting the tax rates back to the levels they were then would do nothing about the real factors driving the boom times.

Not to mention that much of it was a matter of expectations--conditions were good by the standards of the times, but the standards have gone way, way up since then.

 

[Loren Pechtel]

Pretty much this.
I fully expect WWIII during this century. I used to think that the flash point would be Israel. Now I think the USA more likely.

The Family of Humanity doesn't have the margins for survival that we had as recently as WWII. From the economy to the biosphere, we're already teetering on the brink of disaster.

I'm glad I'm old. I feel bad for the kids.
Tom

The place that worries me the most is India/Pakistan. Pakistan keeps teetering on the edge of falling under fundie control. Their fundies keep trying to egg on war with India. If Pakistan falls to the fundies the best outcome I see is Pakistan basically destroyed and India severely damaged but it doesn't spread beyond that.

 

[Loren Pechtel]

This thread leads to many important but difficult questions. For examples:

(1) How hard would it be to institute a "fair" nation-wide real estate tax? This would be a clean way for the government to raise revenue and set priorities but the details would be fraught with peril. If the thread turns to this question I may have nothing to contribute; my response would be "Wise in principle perhaps, but implementation would be too chaotic to contemplate."

What is the problem with local control of real estate tax? Each state gets the government it votes for.

(2) How about a wealth tax imposed on the super-rich? Wise in principle perhaps, but as the super-rich themselves point out, they'll convert their wealth into untaxed real estate, paintings, private businesses. Again I have no simple answer.

It's a horrible idea.

(3) Corporate taxes should be increased. The recent international agreement on corporate income taxes was a good step in the right direction. (Are small businesses exempt from those mandatory taxes?)

Corporate taxes are regressive. In an ideal world (which I don't think we can get with tax haven nations out there) there would be no corporate income tax, but rather high personal income tax on the profits they get from those corporations.

Profit motives are Good. But absolute generalizations which are FALSE are annoying.
Tim Berners-Lee invented the "World Wide Web" and deliberately forwent any patent rights. Jonas Salk did the same thing with his vaccine for polio. How many examples do I need?

"Some inventors would not invent if there were no profit motive." Sure; I'll vote for that. "Nobody would invent"? This sort of over-generalization is an obstacle to intelligent debate.

For basically small things that can work. A person's labor for some years, sometimes you'll see that given away for the greater good. It's utterly impractical at large scale, though. What's the R&D budget for SpaceX? (Hint: the turbopumps on the Falcon 9 are $3 million a pop. Probably more on the Starship. They've blown up a lot of them in their testing and a lot more to go--now they're looking at a full-up flight verification--but with no recovery system. That's upwards of $100 million in pumps alone.) You don't fund that sort of thing without an expectation of profit.

 

[Loren Pechtel]

As a matter of fact, there are actually less developed regions, in the United States, that have seen relatively poor progress for centuries, and the inequality in those regions of the United States can be largely attributed to a lack of adequate opportunities and insurmountable social and political barriers to advancement.

What you are missing here is that over the long run how an economy fares is a matter of culture and government, not wealth. Wealth is a result, not a cause.

If they quit fucking up their system they rapidly catch up. Redistribution isn't going to do much about them fucking up their system and in practice it's always redistribution to the cronies of those in power, the stuff that's taken never goes to the people in meaningful amounts. Places that go for large-scale redistribution fuck themselves up. Poster children: Zimbabwe, Venezuela. Places that simply get rid of much of the government problem do well. Poster children: Asian tigers.

 

[Loren Pechtel]

Why do Democrats always seem to want to constantly tax the the people into oblivion? This isn't good. Do you realize taxes on estates are paid multiple times throughout a person's life? If a person has a house and has been taxed on it all their life and wants to give it to their kids, why should the government tax it again? This is way too authoritarian.

In the long run what counts is spending, not the tax rate. Look at what each side spends.

I feel like both parties are bad, but I feel like the Republicans at least care about the average worker and the middle class. The Democrats keep taxing, which makes the middle class and poor suffer. Look at how the Democrats policies led to inflation and the average middle class family is spending $175 more a month compared to when trump was in office. Gas has also risen over $1 a gallon since Trump. Do the rich care about gas price increases? No, but the middle class and poor people care about it, and that's who it affects the most. Do Democrats care? Not much. Jen Psaki was laughing at a reporter who asked her what the administration plans to do about inflation crushing the middle class and poor. Who gets hurt the most when prices go up by a few dollars? Not the rich, that's for sure.

Hardly. The average worker fares a lot better under Democratic control than Republican. The Republicans make a big issue out of supposed tax cuts--never mind that the cuts for the average worker are going away, only the cuts for the rich will remain. Never mind that the Republicans are gutting worker protections. Never mind they are gutting consumer protections.

And I'm not at all sure we are truly seeing inflation. Rather, we are seeing supply chain shocks. Gas was ridiculously cheap in the pandemic because people weren't buying as much--I saw it below $2/gallon. It's just rebounded to normal.

Republicans want to tax less so people keep more of their money. Do you realize we have spent 22 trillion dollars (almost the price of our national debt) just to combat poverty since the 1960's? It's not working. People are still stealing from stores all over, despite the fact that we have one of the most generous welfare systems in the world. There's people who have $2,000 balance on their food stamp cards and people are still saying that we can't feed the poor? Ridiculous. If we brought any poor person here from another third world country, they would be in shock and awe and say that the poor live like kings in this country. We need to get everyone back to reality. Taxing the people and putting the incompetent government in charge of the money has done absolutely nothing to help the poor and middle class. The only time they get relief is when a Republican is in office. Why do you think so many Biden voters disapprove of him now and he's at an all-time low? Republicans warned of massive inflation if Biden got in office. Democrats laughed. Now, here we are. Do you think this inflatiion would've happened under Trump? All those ships stuck in ports, he wol've been on TV every day screaming at them to unload and lighting a fire under them to mvoe quickly. What does Biden do? Nothing. Tells us to, "wait it out." Say what you want about Trump, but he held people accountable. If you weren't doing your job, he fired you. That's it. Done.

I need to be convinced that the very authoritarian government rule via crushing taxation does anything to help the people. If you look up corporate donations, Democrats take more dark money than Republicans do by a long shot. Democrats are the party of big government and they also have corporate America in their pockets. Corporate America hates Republicans.

There would have been more "inflation" under His Flatulence because he would have been exploiting it for profit rather than trying to fix the supply chain problems.

And the really authoritarian government would be from the Republicans. You have all the freedom to do exactly what they want you to do, nothing else.

 

[SigmatheZeta]

As a matter of fact, there are actually less developed regions, in the United States, that have seen relatively poor progress for centuries, and the inequality in those regions of the United States can be largely attributed to a lack of adequate opportunities and insurmountable social and political barriers to advancement.

What you are missing here

What a lovely way to start out a post. Don't do it again.

is that over the long run how an economy fares is a matter of culture and government, not wealth. Wealth is a result, not a cause.

If they quit fucking up their system they rapidly catch up. Redistribution isn't going to do much about them fucking up their system and in practice it's always redistribution to the cronies of those in power, the stuff that's taken never goes to the people in meaningful amounts. Places that go for large-scale redistribution fuck themselves up. Poster children: Zimbabwe, Venezuela. Places that simply get rid of much of the government problem do well. Poster children: Asian tigers.

Read the University of Würzburg study. Here is the abstract, citation, and link:

Evidence from a current panel of harmonized worldwide data highlights a robust
negative effect of income inequality on economic growth that we trace back to its
transmission channels. Less equal societies tend to have less educated populations
and higher fertility rates, but not necessarily lower investment shares. The first two
effects are harmful for growth and reinforced by limited credit availability. Higher
public spending on education attenuates the negative effects of inequality. In addi-
tion to the inequality-growth relationship, we examine the direct influence of effective
redistribution. When net inequality is held constant, public redistribution negatively
affects economic growth. Redistribution hampers investment and raises fertility rates.
Combining the negative direct growth effect and the indirect positive effect operat-
ing through lower net inequality, the overall impact of redistribution is insignificant.
Whereas this result stems mainly from advanced economies, redistribution is beneficial
for growth in low and middle-income countries.

Klaus; Scheuermeyer, Philipp (2015) : Income inequality,
economic growth, and the effect of redistribution, W.E.P. - Würzburg Economic Papers, No. 95,
University of Würzburg, Department of Economics, Würzburg

^https://www.econstor.eu/bitstream/10419/114736/1/833477102.pdf

Read and understand at least the abstract, and do not speak to me again until you have done so.

I have handled horses for a living at one time in my life. Do you know how far you can drag a horse by pure force? The answer is "not very far at all." That experience broke me of the habit of attempting to force people to change their opinions. You are not going to change your opinion just because I shouted facts at you. I get that.

However, I am justified in refusing to engage with you until you have demonstrated evidence that you are going to take the discussion seriously instead of spraying canned rhetoric at me. The University of Würzburg study was performed recently enough to be relevant.

The University of Würzburg study demonstrates why there is such conflicting evidence regarding supply-side economics, and furthermore, the study also demonstrates that supply-side economics actually do work but only in advanced economies.

In relatively benighted economies, you see the same effects that I q.

 

[Trausti]

indicating a relationship between overall taxation on individuals and poverty isn't apparent.

No shit. So what is the point of the government taking more of our income? Why is it better for the government to have my money and not me? Just so much waste in government.

Do you have an actual point? After all, what constitutes "waste" is often a matter of opinion, not fact. There are plenty of people who have the opinion there is plenty of "waste" in the private sector.

Malicious Envy.

Predictors of support for economic redistribution