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Thread: Trickle up vs. Tickle Down

  1. #1
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    Trickle up vs. Tickle Down

    Hey this thread is a little late in arriving but obviously it's been a hot campaign issue since Joe the Plumber came into the spotlight. Intuitively I understand how both systems work and they both make sense.

    What I hear a lot though from people on the right/conservative side of things is how important Trickle down is to the functioning of the economy but I've never seen a legit economic criticism of Trickle up outside of the principled argument (why punish success, ruin incentive etc..)

    As noted, I understand how both work in theory, but can someone tell me why Trickle up doesn't work as well as Trickle down, from a purely economic sense? (I'm not an economist) Won't rich people still in turn make more money if the poorer folks have more money to buy goods and services from the businesses they own?

  2. #2
    [quote=CTM;2841452]Hey this thread is a little late in arriving but obviously it's been a hot campaign issue since Joe the Plumber came into the spotlight. Intuitively I understand how both systems work and they both make sense.

    What I hear a lot though from people on the right/conservative side of things is how important Trickle down is to the functioning of the economy but I've never seen a legit economic criticism of Trickle up outside of the principled argument (why punish success, ruin incentive etc..)

    As noted, I understand how both work in theory, but can someone tell me why Trickle up doesn't work as well as Trickle down, from a purely economic sense? (I'm not an economist) Won't rich people still in turn make more money if the poorer folks have more money to buy goods and services from the businesses they own?[/quote]


    Yes - in fact, that was (one of) Henry Ford's insight(s); to be successful, he had to pay people enough that they could afford to buy his cars.

  3. #3
    Trickle up only works if you don't reduce the job market by doubling taxes in an already struggling economy.

  4. #4
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    [QUOTE=49ersJetsfan;2841495]Trickle up only works if you don't reduce the job market by doubling taxes in an already struggling economy.[/QUOTE]

    and trickle down never works, so I wonder what our approach should be

  5. #5
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    It doesn't matter which trickle you believe in. Both are socialist concepts that fail.

    The only system that will save this country is a 100% income-tax free tax system.

    [url]www.FairTax.org[/url]

  6. #6
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    [QUOTE=49ersJetsfan;2841495]Trickle up only works if you don't reduce the job market by doubling taxes in an already struggling economy.[/QUOTE]

    What if there was no net effect? Say you taxed those making over 500k an extra percent or two and in return gave back an extra percent or two to those making under?

    Would that still hurt the struggling economy?

    Imo, It would hurt moreso in the short term because people are likely to use that money to pay down debt given what's going one. I see potential positives and negatives to the longer term view..

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    Nobody has ever advocated anything called Trickle Down Economics. That is an unserious, and perjorative term used by statists and redistributionists, and it has simply been repeated often by political opponents of supply side economics in an attempt to distort what it is people are actually saying about that economic theory - in effect, it is a strawman.

    Sowell shatters this myth:

    [url]http://www.capmag.com/article.asp?ID=4183[/url]

  8. #8
    [QUOTE=Guido Monzino;2841507]It doesn't matter which trickle you believe in. Both are socialist concepts that fail.

    The only system that will save this country is a 100% income-tax free tax system.

    [url]www.FairTax.org[/url][/QUOTE]
    Flat tax > Fair tax

  9. #9
    [QUOTE=jets5ever;2841836]Nobody has ever advocated anything called Trickle Down Economics. That is an unserious, and perjorative term used by statists and redistributionists, and it has simply been repeated often by political opponents of supply side economics in an attempt to distort what it is people are actually saying about that economic theory - in effect, it is a strawman.

    Sowell shatters this myth:

    [url]http://www.capmag.com/article.asp?ID=4183[/url][/QUOTE]

    he's baaaaack

  10. #10
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    It can't trickle anywhere if the government has it.

    By the way, was "Tickle" in the title done on purpose? Kinda funny....not sure why...but funny.

  11. #11
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    [QUOTE=BrooklynBound;2841841]Flat tax > Fair tax[/QUOTE]

    Tell me why

  12. #12
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    [QUOTE=jetstream23;2841851]It can't trickle anywhere if the government has it.

    By the way, was "Tickle" in the title done on purpose? Kinda funny....not sure why...but funny.[/QUOTE]

    Completely accidental

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    [QUOTE=jets5ever;2841836]Nobody has ever advocated anything called Trickle Down Economics. That is an unserious, and perjorative term used by statists and redistributionists, and it has simply been repeated often by political opponents of supply side economics in an attempt to distort what it is people are actually saying about that economic theory - in effect, it is a strawman.

    Sowell shatters this myth:

    [url]http://www.capmag.com/article.asp?ID=4183[/url][/QUOTE]
    I'm familiar with supply side economics as well. This thread is a question to those who have attacked Obama's tax plan by explaining how less money in the wealthiest pockets mean less money trickling down to the rest of us..

    Whether it's a technically accurate term isn't really an issue when many are invoking the theory behind it to attack the proposed increases on those making more the 250k.

  14. #14
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    [QUOTE=CTM;2842131]I'm familiar with supply side economics as well. This thread is a question to those who have attacked Obama's tax plan by explaining how less money in the wealthiest pockets mean less money trickling down to the rest of us..

    Whether it's a technically accurate term isn't really an issue when many are invoking the theory behind it to attack the proposed increases on those making more the 250k.[/QUOTE]

    Oh, that's it? Just read this guy:

    [url]http://gregmankiw.blogspot.com/2007/04/frank-needs-to-read-more-widely.html[/url]

    [url]http://gregmankiw.blogspot.com/2007/04/teachable-moment.html[/url]

    Disclaimer: he's a former Bush and Romney econ advisor...but he's a brilliant economist and he called for reform of Fannie and Freddie 5 years ago. Here's an article from 4 years ago:

    [url]http://www.economics.harvard.edu/faculty/mankiw/files/fanfred_ft.pdf[/url]

  15. #15
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    [QUOTE=jets5ever;2842208]Oh, that's it? Just read this guy:

    [url]http://gregmankiw.blogspot.com/2007/04/frank-needs-to-read-more-widely.html[/url]

    [url]http://gregmankiw.blogspot.com/2007/04/teachable-moment.html[/url]

    Disclaimer: he's a former Bush and Romney econ advisor...but he's a brilliant economist and he called for reform of Fannie and Freddie 5 years ago. Here's an article from 4 years ago:

    [url]http://www.economics.harvard.edu/faculty/mankiw/files/fanfred_ft.pdf[/url][/QUOTE]

    Haven't lost your edge huh? Good.

    I'm not an Obama guy and don't believe in disproportionate taxation. This was merely meant to be a learning experience as the typical arguments you here for one side have equally meritable POVs on the other... Thanks for the links, I'll review later tonight.

    And I still don't think Fannie and Freddie are the root problem of this whole mess. Besides, I'm a computer programmer with minimal econ training and[I] I[/I] was calling for a reform of the mortgage industry and rates hikes years ago.

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