Trickle Down Economics Is Real…But Only When Things Are Bad
For years those on the left have been saying that there is no such thing as trickle down economics. Under the theory of trickle down economics, what is good for the wealthy is good for the rest of us since the wealthy invest and spend money which in turn creates jobs and increases the wealth of the nation.
Sounds logical, right? Not to the liberal left. They’ve argued against trickle down economics for decades and its underpinnings which are the workings of the free market, instead insisting on more wealth redistribution.
I saw this article on Yahoo News about the wealthy crimping spending and investing due to uncertainties in the economy to the detriment of everyone else. Yes, that’s right, when average Americans are harmed by less spending by the wealthy, trickle down economics is real. The thesis of the article is that the wealthy are contributing to the economic hardships of everyone by not spending enough of their money.
The rich are sharing your financial pain — and contributing to it.
It may have taken longer and it may not be as acute, but there are early hints that the economic slump is crimping the lifestyles of the wealthy.
They are investing more conservatively, spending less on luxury goods and are being more thrifty with their credit cards.
That news may produce a shrug from many people who have lost their jobs or homes in this economy. The problem is that when the wealthy get stingy, it trickles down to the rest of us.
The 10 percent of households with the highest incomes account for nearly a quarter of all spending…
So, is trickle down economics real? Yes, but only in situations where the wealthy can be vilified and class envy exploited for political gain. It’s real when it comes to harm being done to average Americans, but not real when there is any benefit.
Another thought: if a bad economy leaves the wealthy either with less money to spend or with less comfort in spending it, wouldn’t higher taxes do the same? Yes it would.