Trickle Down Economics is Misunderstood and Straw-Manned

[Loren Pechtel]

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

Yeah, when you kill the disabled you free up all the effort that was being directed to their care.

Or are you talking about the economy booming as in falling into the crater a boom leaves behind?

 

[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.

Please, do not argue further until you have read the study. I refuse to go around in circles trading lies with you. I will speak to you about this again not a moment sooner than I have evidence that you are actually interested in a good faith discussion.

 

[Trausti]

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.

Singapore - small with no natural resources - would be the exemplar. But then you'd have to account for human capital, which is icky.

 

[Jarhyn]

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*

It's literally impossible to be taxed into a lower income bracket. Only the income in the new bracket is taxed as that rate. If the bracket divided at 10 and you make 15, you make "whatever the guy who made made net, plus (5 more/x)"

 

[Generation55]

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.

We are not seeing inflation, just supply chain shocks? Did you hear Dollar General raised their prices to $1.25 now? This hurts poor people the most. Rich don't care. Are you saying once the supply chain shock stops, Dollar General and every other store will lower prices again just because they are so nice? I won't hold my breath for this.

I will repeat: Rich people don't care about price increases. The poor and middle class care.

Biden concedes his COVID stimulus checks fueled spike in inflation

President Biden insisted inflation is at a three-decade high because “people have more money now” as a result of his $1.9 trillion COVID-19 stimulus legislation.

nypost.com

"President Biden on Wednesday conceded that inflation is at a three-decade high because “people have more money now” as a result of his $1.9 trillion COVID-19 stimulus legislation, recognizing a central point made by people who are arguing against a nearly $2 trillion sequel."

This is exactly what Republicans predicted would happen. There was an article in the post from a year ago that warned the Middle class that if Biden is elected, inflation will rise. Democrats laughed. Now, they aren't laughing about it. Why does the Post constantly get dismissed as fake news? It's usually spot on.

People need to realize thatback in the 50's we had less money in the economy, so the money was worth more. This is why people were able to afford things easier. But, once the tax and spend policies started coming, government kept printing more money, which pumps more money into the economy, thus making the money more and more worthless. The more money you have circulating, the less it is worth. The less money you have circulating, the more it is worth. This is basic economics 101 but I don't know why the Democrats don't seem to learn this and always yell at the Republicans telling them they hare actually the ones who have no idea what they are doing. If the government gave everyone in America 1 million dollars, the cost of living would skyrocket. Democrats would act like giving everyone a million dollars would be great for the economy, though. It would not. It would tank, and the Democrats would look at me like I had 20 heads if I tried explaining this to them.

Why do they keep pushing for government spending when it doesn't work?

 

[ZiprHead]

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.

Effective Income Tax Rates Have Fallen for The Top One Percent Since World War II

While average effective tax rates barely changed in the US from 1945 to 2015, the average tax rates of high-income households fell sharply—from about 50 percent to 25 percent for the highest income 0.01 percent and from about 40 percent to about 25 percent for the top 1 percent.

 

[Canard DuJour]

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.

I don't see that it does. Such actual data as they adduce show positive correlation of redistribution with economic growth in developing economies. The claim that "redistribution hampers investment" in advanced economies cites Barro, i.e. "Ricardian equivalence" - almost trickledown theory itself - which is contradicted by a ton of evidence in advanced economies.

And the claim that "When net inequality is held constant, public redistribution negatively affects economic growth" should ring alarm bells for anyone who speaks English. Inequality held constant means no redistribution, unless they're implying that "public redistribution" is self-defeating - i.e. trickledown theory again.

 

[SigmatheZeta]

*alights on a vantage point and gestures grandly with her wing* And furthermore, I propose that we fuck the property-owners!

Why Economists Love Property Taxes and You Don't

Rising bills can force homeowners to make some unpleasant decisions.

www.bloomberg.com

*cackles wickedly* Good old Adam Smith was so right. The property tax is still king after all these years.

Unsurprisingly, the so-called "3rd Rail" in California's politics has been the idea of raising the property tax. They have one of the lowest property taxes in the entire country, yet they suffer from rampant homelessness. How very poetic.

 

[funinspace]

"President Biden on Wednesday conceded that inflation is at a three-decade high because “people have more money now” as a result of his $1.9 trillion COVID-19 stimulus legislation, recognizing a central point made by people who are arguing against a nearly $2 trillion sequel."

This is exactly what Republicans predicted would happen. There was an article in the post from a year ago that warned the Middle class that if Biden is elected, inflation will rise. Democrats laughed. Now, they aren't laughing about it. Why does the Post constantly get dismissed as fake news? It's usually spot on.

Whatever inflation that is now present was probably already 90% baked into the economy prior to Biden becoming President. Biden is no more at fault for the current inflation than Trump 'created a great stock market'. The Post is peddling its partisan BS...little else. The multiple stimulus payment packages under Trump, Trump's tariffs, and the rebounding economy are far more responsible for the current inflation than much of anything else. I should hope you prefer a rebounding economy?

And Biden's $1.9 trillion stimulus legislation isn't causing jack, cuz it isn't anything yet...you are blowing partisan smoldering dung incense.

 

[SigmatheZeta]

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.

I don't see that it does. Such actual data as they adduce show positive correlation of redistribution with economic growth in developing economies. The claim that "redistribution hampers investment" in advanced economies seems to be based on Barro - "Ricardian equivalence" - almost trickledown theory itself - which is contradicted by a ton of evidence in advanced economies.

And the claim that "When net inequality is held constant, public redistribution negatively affects economic growth" should ring alarm bells for anyone who speaks English. Inequality held constant means no redistribution, unless they're asserting that "public redistribution" is self-defeating - i.e. trickledown theory.

*covers her face with one wing and rubs her temple with the claw* At least you read it. It's a pretty cool article, though, isn't it?

I understood the research a little bit differently, so if you are not reading it the same way, then please try to help me, here.

However, here is a paragraph from the conclusion that gives me the impression that they are saying that the level of a country's development impacts the consequences of redistribution.

Finally, this paper shows that the growth effects of inequality and redistribution vary with
the development level. A negative impact of inequality prevails in developing and middle-
income countries, where the negative potential of inequality is severe due to capital market
imperfections and an insufficient provision of public goods. In high income countries, where
opportunities are on average distributed more equally, no significant correlation between
inequality and growth occurs. Likewise, the paper reveals that redistribution by taxes and
transfers is beneficial for growth in poor countries, but rather harmful in rich economies.

Am I just misinterpreting what that means?

However, one of the most important conclusions, from that paper, was that it affirmed the role of education in mitigating the negative economic effects of inequality:

For economic policy our results suggest some scope of action: a highly developed public
education system seems to mitigate the negative growth effect of inequality. Hence, govern-
ments should be able to simultaneously promote equity and efficiency by working towards
providing free and high quality education for poorer families.

I am a champion of the idea of making improvements to the education system, especially for people from disadvantaged communities. It damaged me deeply that I did not get treated fairly by the education system where I lived. It was worse if a kid was neurodivergent. My husband used to work for Disability Rights, and he said that the education system where I grew up had gotten famous for the high number of lawsuits they had gotten into over their abuses against neurodivergent kids. He said, "They're HORRIBLE!" and I said, "You mean you are telling ME that?"

I was dealing with that on top of being transgender and queer in an area that was infested with homophobic violence...in the 1990's.

But this is also why I am insistent that there is a dire need for us to make solid investments in the education systems of areas that are suffering economically, especially if there is evidence that this could be due to dysfunctions in their education systems, and this needs to include rural areas. If the kids in an area are distressed throughout their development, then we are fucking insane if we expect them to be able to get their shit together as adults. It's not fair, and it's wrong.

I think that I am being reasonable, from both a personal and scientific standpoint, if I choose to be focused primarily on advocating for improving the education standards of the country's most benighted areas.

 

[Canard DuJour]

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.

I don't see that it does. Such actual data as they adduce show positive correlation of redistribution with economic growth in developing economies. The claim that "redistribution hampers investment" in advanced economies seems to be based on Barro - "Ricardian equivalence" - almost trickledown theory itself - which is contradicted by a ton of evidence in advanced economies.

And the claim that "When net inequality is held constant, public redistribution negatively affects economic growth" should ring alarm bells for anyone who speaks English. Inequality held constant means no redistribution, unless they're asserting that "public redistribution" is self-defeating - i.e. trickledown theory.

*covers her face with one wing and rubs her temple with the claw* At least you read it. It's a pretty cool article, though, isn't it?

I understood the research a little bit differently, so if you are not reading it the same way, then please try to help me, here.

However, here is a paragraph from the conclusion that gives me the impression that they are saying that the level of a country's development impacts the consequences of redistribution.

Finally, this paper shows that the growth effects of inequality and redistribution vary with
the development level. A negative impact of inequality prevails in developing and middle-
income countries, where the negative potential of inequality is severe due to capital market
imperfections and an insufficient provision of public goods. In high income countries, where
opportunities are on average distributed more equally, no significant correlation between
inequality and growth occurs. Likewise, the paper reveals that redistribution by taxes and
transfers is beneficial for growth in poor countries, but rather harmful in rich economies.

Am I just misinterpreting what that means?

No, you're just repeating it. But I don't see where the "rather harmful in rich economies" bit is supported except by reference to Barro (a supply-side theorist contradicted by a ton of evidence).

 

[Derec]

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

Why exactly do you think space should not be monetized?
Going to space costs a lot of money. That's the reason manned space exploration has pretty much stalled since the 70s. After the Sputnik/Gagarin scare, the US government showed USSR who's the boss by landing on the Moon a few times and then largely lost interest.
To open up space to more than major governments, you need the profit motive.

 

[Derec]

Just wanted to say, as a reminder: NASA is us: you, me, all Americans abs to some extend, the entire world’s contribution.

NASA is first and foremost a government agency. Yes, they have and are doing much good, but that does not mean that space should be a government monopoly, no matter how much you hate billionaires who start space companies. And by the way, SpaceX is providing NASA with a lower cost option to actually launch stuff into space.

Both public and private sectors have their place in space.

 

[laughing dog]

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

Why exactly do you think space should not be monetized?
Going to space costs a lot of money. That's the reason manned space exploration has pretty much stalled since the 70s. After the Sputnik/Gagarin scare, the US government showed USSR who's the boss by landing on the Moon a few times and then largely lost interest.
To open up space to more than major governments, you need the profit motive.

No you don't need a profit motive. It is helpful but it is neither necessary nor sufficient.

 

[Derec]

(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."

Nigh impossible, I would say. Just like with federal income tax, you would not be able to have a federal property taxes without a constitutional amendment. Shy of that, given that property taxes are a local issue, coordinating among all those locales would be practically impossible.

(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.

Fraught with problems, including constitutional ones. Most developed countries who tried to go that route in the past have abandoned it.

(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?)

Note that before the 2017 tax cuts, US had highest corporate tax rate in OECD. And today they are middle of the road.

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?

Do you think Internet would be what it is today if not for the profit motive? From semiconductor manufacturers to content providers, there is a lot of profit being sought. And sure, something like the HTTP protocol and a lot of software can be open, but nobody is going to invest in say a chip factory or lay down megamiles of fiberoptic cable without looking to make money in the deal.

Mr. Generation overlooked that there are taxes other than personal income taxes, but funinspace dealt with that. Another error by Mr. Generation is more interesting, where he asserts something about Musk's $250,000,000,000.00 wealth not being "real." I'd like to ask him — just for starters so we can get a good handle on his confusion — whether Musk's wealth would be "real" if it were all in the form of $100 banknotes or gold bullion.

Cash is more liquid than gold, and both are more liquid than stocks. If he tried to sell all his Tesla stock, he would not be able to get anything like face value for it because the price would drop.

Just as shares of TESLA do not equal a super-yacht — you'd first call up broker and say "Sell" — so the banknotes or gold wouldn't provide a super-yacht directly either: The banknotes would got soggy, and a boat built from gold would sink. In what sense is one form of wealth "real" and another form not?

Liquidity, at least for cash. You have cash in your account and you can directly pay the boat builder and any other contractors (like interior customizers). You'd have to sell the stock first.
Also, you could certainly build a boat out of gold (steel does not float either). You probably could build a helium balloon out of gold foil as well, if you really wanted to.

It's possible Mr. Generation referred to the fact that suddenly liquidating a large portion of TESLA stock would cause that bubble to burst. Sure. And for that reason Mr. Musk may only be able to afford a dozen new palaces or super-yachts per month. Poor Elon?

So you got the reason why. What were the charades about soggy banknotes in aid of then?

... But by the way, does anybody still use "long" billions and trillions? (Merriam-Webster shows the long billion as "British"; Cambridge dictionary shows it as "UK Old-fashioned." But Larousse.fr shows ONLY the long billion!)

It is very common in non-English speaking countries. It's one of the thing one has to be careful with when translating.

 

[Derec]

No you don't need a profit motive. It is helpful but it is neither necessary nor sufficient.

Travelling to space is not like writing an internet protocol and a markup language. Or writing open source software.
It requires billions in investment. It's either private business with a profit motive or else government spending. Government spending on space travel has stalled, so private investment is certainly a welcome development.

 

[Derec]

it's really not similar to the other debts with which we may be familiar in any important way.

You still have to pay it back, with interest. US spends $300G per year just on interest.

 

[Derec]

Whatever inflation that is now present was probably already 90% baked into the economy prior to Biden becoming President. Biden is no more at fault for the current inflation than Trump 'created a great stock market'.

No he is not for the most part, you are right. The pandemic has been a major shock to the system that disrupted the whole economy. He should have ended the expanded unemployment and eviction moratorium sooner, and that last stimulus check was probably unnecessary though.

What Biden does from now on is on him though. And he wanted to spend $3.5T in new entitlements. It has been whittled down somewhat, but mostly through accounting gimmicks of having the bill funded over the full 10 years but pricing most of the spending over a shorter timeframes.

And Biden's $1.9 trillion stimulus legislation isn't causing jack, cuz it isn't anything yet...you are blowing partisan smoldering dung incense.

But why pour fuel on the fire of an already inflationary economy though?

 

[Swammerdami]

(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.

I'd make it an alternate tax, to be applied ONLY if it exceeded, and in lieu of, personal income tax. And fair value of non-stock wealth would be included. The idea still has severe drawbacks but at least it's progressive (some other possible taxes I mentioned were regressive).

(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.

The QOP frequently whines that producers will leaved the USA if "over-taxed." That's why I thought an international agreement on corporate income tax was a good idea. A few hold-out countries don't matter: they can be tariffed or otherwise sanctioned into submission!

We have other threads discussing how super-shareholder wealth can persist, be spent by, and perhaps even passed on to grandchildren without ever being taxed as income.


I was thinking of "invention" as individual creative genius, but big development projects have also been funded without private profit motive:

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.

In the 1960's the U.S. Government placed a man on the Moon, and brought him safely back to Earth. In the 2020's a super-billionaire placed a man into sub-orbit. Compare the dates and difficulties of those achievements. And you use this as an example of how profit motive is needed for big projects? Pull the other one!

Apollo Project is not an isolated example. The Panama Canal, Hoover Dam, Golden Gate Bridge are just a few examples of big successful projects with no direct corporate profit motive. The Manhattan Project, the Interstate Highway System; do I have to go on?

And I'm not at all sure we are truly seeing inflation. Rather, we are seeing supply chain shocks.

Yes, a brief past episode of price hikes is of less concern. On-going future inflation would be a problem. QOPAnon seizes on price hikes, anything on Biden's watch, to say "Teh communist DemonRats is teh bad" but of course QOP commentary is worthless except for use as a contrarian indicator.

 

[SigmatheZeta]

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.

I don't see that it does. Such actual data as they adduce show positive correlation of redistribution with economic growth in developing economies. The claim that "redistribution hampers investment" in advanced economies seems to be based on Barro - "Ricardian equivalence" - almost trickledown theory itself - which is contradicted by a ton of evidence in advanced economies.

And the claim that "When net inequality is held constant, public redistribution negatively affects economic growth" should ring alarm bells for anyone who speaks English. Inequality held constant means no redistribution, unless they're asserting that "public redistribution" is self-defeating - i.e. trickledown theory.

*covers her face with one wing and rubs her temple with the claw* At least you read it. It's a pretty cool article, though, isn't it?

I understood the research a little bit differently, so if you are not reading it the same way, then please try to help me, here.

However, here is a paragraph from the conclusion that gives me the impression that they are saying that the level of a country's development impacts the consequences of redistribution.

Finally, this paper shows that the growth effects of inequality and redistribution vary with
the development level. A negative impact of inequality prevails in developing and middle-
income countries, where the negative potential of inequality is severe due to capital market
imperfections and an insufficient provision of public goods. In high income countries, where
opportunities are on average distributed more equally, no significant correlation between
inequality and growth occurs. Likewise, the paper reveals that redistribution by taxes and
transfers is beneficial for growth in poor countries, but rather harmful in rich economies.

Am I just misinterpreting what that means?

No, you're just repeating it. But I don't see where the "rather harmful in rich economies" bit is supported except by reference to Barro (a supply-side theorist contradicted by a ton of evidence).

*wing-shrugs* Ah, I understand, now. So there is a reference to Barro that you disagree with. You might have mentioned that in your last post to me, and I might have failed to understand. When you have time, I would like to see the primary studies to which you are referring. I can do some research of my own over the long weekend.

Thank you.