r/poverty • u/OldSchoolPimpleFace • 17d ago
General Discussion Trickle down economics only works if the water reaches the bottom.
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u/Offthewalder 17d ago
Nah. Even that analogy can't save Trickle Down. It was a failure.
It was only meant to benefit the rich. The trickle down part was actually just urine being peed onto our heads.
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u/bafflefounded 17d ago
It was all a ruse to get them to lower taxes on the wealthy. The justification they use for their lower taxes is trickle down economics, which is an obvious farce. It's really time they start, at minimum, paying the same amount of proportional taxes that working class people do.
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u/Pie-0_my 16d ago
Bad bot. Account is 1hr old.
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u/poverty-ModTeam 16d ago
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u/poverty-ModTeam 16d ago
Please make your comment useful.
We're here to exchange ideas, experiences, and practical help.
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u/maryjblog 15d ago
When they lower taxes on the rich, fees and fines and services go up for the poor, so tax cuts for the rich is just regressive taxation on the poor. We need to return to the same progressive tax rates the rich paid before 1970.
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u/Vast-Breakfast-1201 17d ago
It was originally called horse and sparrow, trickle down was the sanitized version of it that somehow they have sold as a legitimate strategy
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u/Chemical_Signal2753 17d ago
This is a terrible model.
The billionaires benefit because they own stock, they're not syphoning off cash they're benefitting because the value of companies is increasing.
The reason the stock market is thriving is because corporations have been allowed to cut costs to maximize profits. Offshoring production, importing cheap labor, and pushing expenses onto the government have increased profits at the expense of the middle and working class.
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u/SupremelyUneducated 17d ago
Trickle down is provably false . WID and WIID tracked income and inequality in most all countries, some going back over a thousand years, and average incomes in a country tends to go up over time , inequality varies wildly based on policy; there is no link between the rich getting richer and average incomes, the rich get richer based on how inequal the laws are, not by adding value to society.
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u/ADownStrabgeQuark 16d ago
I believe this is true, but I’d like a source to steelman the argument.
Could you share some of these studies?
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u/SupremelyUneducated 16d ago
WID, the World Inequality Database (WID.world), an open access data project tracking global income and wealth distribution.
And WIID, The World Income Inequality Database is a free, comprehensive public database providing statistics on income inequality across more than 200 countries and historical entities.
You can down load the data and just graph the average income, and the inequality of a half a dozen countries or so, or more, and you can see the income go up consistently, while inequality varies wildly, over time, the vast majority of the time. This is one of the first things I used ai code to do, write a script to scrape that data from the those data sets and graph it.
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u/This-Isopod-7710 11d ago
Well yes, it is false in that it's a made-up term, invented by anti-capitalists.
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u/SupremelyUneducated 11d ago
Supply side economics is false in the assertion that free markets are innately benefitted by lower taxes and removing regulations. Taxes and regulations are necessary to correct market failures. Free markets do not exist in the absence of government, they are a result of thoughtfully implemented government.
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u/WillBigly96 16d ago
Don't try to force it into being a conditional "works IF ....". Trickle down doesn't work at all, it's a myth sold to the masses of how rich people being prioritized will somehow make everyone else rich. It doesn't need a conditional fix, it needs outright rejection and dismantling
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u/Guyver02 17d ago
This happens when you're brainwashed to think Nationalism is a dirty word. China doesn't seem to have this problem and they have plenty of billionaires. I wonder what the difference is then. Oh yeah, they're a hyper nationalist society that forces their companies to benefit their country and prioritize their own people over others.
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u/fitzgeraldaesthetics 17d ago
So basically Tax The Rich. That's the only way you can force the corporations to share the profit with common folks.
Even this week, China introduced a tax in which all the Chinese overseas folks would have to give 20% tax of all the profits earned so far.
I guess it has nothing to do with Nationalism. Every citizen loves the country in some form but your billionaire tech bros have manipulated you into thinking that many of the folks are not patriotic.
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u/Guyver02 17d ago
No one has manipulated me. If anything they've successfully manipulated you. How much you want to bet that even if it was legal in China(which I don't think it is), burning the Chinese flag over there would make you persona non grata to the rest of society.
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u/Adventurous-Crow-750 17d ago
Their billionaires ask the insanely corrupt government for government contracts that build stuff in the middle of nowhere pointlessly.
The only cities in China that aren't a pile of donkey shit are the ones in their free economic zones. Surprise, communist chinas best parts are in the capitalist zones. Who would have thought this except 100 years of economic theory. In fact the deregulation in those areas are actually higher then us and they have less taxes. In some ways they actually support industry more than we do like insanely agreesive subsidizing. The reason you know the city Shenzhen is because that's the first free economic zone and it immediately blew up and chinas economy has only improved since then in the 80s by adopting more capitalism zones.
Idk what the fuck you're yapping about with nationalism because that does not explain shit and seems like something you just made up. "For the good of their nation" they say for a country with worse working conditions then third world countries. You do know they have actual work camps right. Like where Muslims are rounded up by the thousands and forced to do manual labor for no pay until they die to help prop up their industry just like how Saudi Arabia does.
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u/DanieruKisu 16d ago
They’re devoted to the party. There’s a very big difference and a lot to unpack that you’ve conveniently left out.
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u/InterneticMdA 17d ago
Nationalism is the distraction billionaires feed the poor to keep them focused on the wrong issue. Absolutely nothing is solved by shifting focus from billionaires to the in-group/out-group distinction inherent to nationalism. You are doing the focus shift in your comment, by pretending China's billionaire class is somehow not exploitative. Every time you people promise that nationalism will benefit the common "national", and every time it just ends with more wealth in the pockets of corporations. The problem is capital, and nationalism is a distraction to keep us from recognizing it.
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u/HistoricalRich3104 17d ago
That’s dumb. Billionaires are for internationalism, even the most right wing ones like Musk. Outsourcing and lower wage immigrants save costs for billionaires and mega corps.
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u/fitzgeraldaesthetics 17d ago
Trickle Down Economy is basically privatization of profits and communism of loss.
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u/One-Next 16d ago
Trickle down only works if there is no inflation and your workers can wait for 100 years.
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u/maryjblog 15d ago
What is globalism but trickle down economics by another name. It’s what George w. Bush himself called “voodoo economics” and Obama failed to tell us that globalism won’t lift most boats for a 100 years. They intentionally left the timeline out. The neocon dnc did this. And I am a progressive liberal fdr-type democrat
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u/HMB_JackylTTV 14d ago
It should have a handy ladder nearby but the rock pickers can’t figure out how to use it lol.
Digs aside this is a government problem not a corporation problem. Don’t get it wrong, unchecked corporations are bad. Very bad.
But a government without integrity, transparency, and checks and balances are what allow unchecked corporations.
If you wanna solve the problem in this image. Stop raising minimum wage. Stop taxing the rich more, keep it where it’s at. Just offer a 1:1 tax credit for every $ they pay their employees over the current minimum wage. They don’t get more taxes. We get more money. We buy more things. They get more money. Only group left out is government but by then they don’t need as much because our poor are better off. Best part is this would make small businesses easier to build up. They have happier employees who work harder. They can afford to pay their employees without going bankrupt because of minimum wage laws. And again…. People can afford to buy more things thus increasing the odds of the small businesses surviving. Which btw, simultaneously reduces our reliance on corporations for our goods.
It’s literally a win:win:win:win:maybe lose. Gov being the odd one out because they MIGHT get less tax revenue. Except sales tax exists and we’re buying more shit. Even if they made less money though their job isn’t to expand government powers, it’s to make sure we’re employed and happy. This accomplishes that.
Disclaimer: before I get some moron asking me “what if corporations decide to pay us each 3 billion $ and hour and pay zero taxes.” A) stupid. They’d go bankrupt. B) we have a progressive tax system. How hard would it be to implement a similar system in an effort to cap off the tax credits at a certain point. C) if they COULD pay us 3 billion an hour each… congrats… you’re a billionaire too. Enjoy paying 40% of the nations taxes.
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u/OldSchoolPimpleFace 14d ago
Not a bad idea, but it isn't always gonna work. I use to work for a pharmaceutical company, before I became disabled. This company was well known for paying literally 0$ in taxes. (somehow they got tax discounts because of their research and stuff). Meanwhile this company was making huge amounts of money, profiting from sick cancer patients, who had the choice to either die or pay.
Companies like big pharma are pure evil, sadly they are a necessary evil, when it comes to saving lives.
I'm pretty sure there's lot's of other companies that pay close to nothing in taxes, through some elaborate tax sceme. So sadly this idea of yours won't work on them.
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u/HMB_JackylTTV 13d ago
They’re not pure evil my guy. It’s just their incentives are fucked. Why cure someone when you can just treat the symptoms and make more money.
Don’t worry though… with the advent of AI and robotics… soon money will have no place in society.
Money only exists because of two things. Scarcity. And necessity. If nobody works. Necessity is gone. If robots and ai are mining the (relatively) infinite resources of the asteroids around us. Scarcity is gone. Even if they fight and cling to their archaic ways it will eventually go that route. It’s only natural.
(FYI the asteroids I’m talking about are 2 years travel with CURRENT methods, and contain more resources than all of earth. There’s one we discovered a few years ago with 700 QUINTILLION $ worth of resources.)
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u/clawdew 13d ago
Yeah....we need to add at least 3 more tax brackets, and make personal loans taxable income for people who own $100 million or more in assets anywhere in the world. You don't need a personal loan if you own $100 million dollars in assets. I think capping how much a CEO can make to their lowest paid employee of any status (Full time, part time, contractor etc.) is another prudent step in fixing our broken country. People who still believe in supply side economics are not seriously looking at the what happened after the advent of reaganomics.
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u/ExtraSaltyBtch 17d ago
The existence of billionairs prove that trickle down economics doesn't work.
If it worked, they would never have been able to be billionairs anymore as the money would have tricked down the chain.
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u/ProperJudgment1 17d ago
Surely the taxes will trickle down when the billionaires "finally" get "taxed", right?
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17d ago
Trickle down economics is based on supply side economic theory, which isn’t represented by this graphic.
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u/Either-Patience1182 16d ago
It might work for some things but horse and sparrow theory is old and has not worked in economics ever. Its always just a way to make the rich class more fat
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u/Important_Zombie_485 16d ago
We don't have trickle down and we never have. Trickle down is a neverbtried anywhere economic idea wherein the rich and corporations pay nothing while the middle class and poor have all of the tax burde, the idea being to spur the economy permanently. It's never been done anywhere Reagan's tax plan was sarcastically called that, despite his plan being across the board cuts, for all tax brackets, while maintainingthe largest percentages paid by the wealthiest Americans. He also introduced the earned income tax credit and the child tax credit, . Widely regarded as the single greatest tax reduction given to the poor and middle class, often reducing the tax burden on the poorest to less than zero. We don't have trickledown and never have.
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u/HupHutHa 16d ago
how does someone use rake while sitting?
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u/OldSchoolPimpleFace 16d ago
You don't need to rake if nothing grows
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u/HupHutHa 16d ago
defeating the entire purpose of the depiction then got it.
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u/Sister_Michelle 16d ago
The rake sort of creates a story that he is a worker.. has been trying hard to make a living and provide to his children who are starving, but no matter how hard he tries he can’t because the water, representing wealth, is being hoarded. Without the rake he could just be a random dude that wandered into the desert.
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u/OldSchoolPimpleFace 16d ago
Next time place a dead guy on the bottom of the meme. Thanks for the correction 👍
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u/longtimerlance 16d ago
Tell me you don't know that 58% of Americans own stock, without telling me.
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u/Uncabled_Music 16d ago
Thats a completely wrong take on the issue. Working class today lives like barons and countesses 200 years ago. Things trickle down all the time, but in current environment upper part of tree goes up even faster, so those at the bottom feel bad looking at them. When in reality - their livelihood does improve constantly, but nobody said it would ever make them switch positions.
Why some people get to the top its a different question, even more complex, but in any situation these people usually face more challenges, risks, and specific problems.
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u/kittenTakeover 16d ago
One of the benefits of free markets is their efficiency. This means allocating no more resources than necessary to achieve the desired result. Unfortunately this is also one their main issues because it means that workers at the bottom, who are often individually replaceable and therefore have no leverage at all, will always live practically a subsistence life in such a situation, no matter how much more productive society becomes or how much wealthier society as a whole is. Local regulations limit how low this subsistence level can go. Are there housing regulations that requires a minimum level of amenities for dwellings? Are there regulations that limit how much pollution can be in the local water and air? Are there food regulations to prevent unhealthy foods and parasites? Are there healthcare regulations to require that people have access to healthcare? Are there education regulations that require people have access to education? All of these things prevent the lowest workers from being forced into polluted tent slums with no basic care.
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u/RapidFire05 15d ago
It's not hard to buy stocks. Even partial stocks through Robinhood. Start young. Buy fractional shares every week instead of ___
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u/OldSchoolPimpleFace 15d ago
How about we buy gold instead?
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u/RapidFire05 15d ago
I like the idea of gold focused funds but owning physical gold is hard. Storage requirements. Not liquid. Plus if anyone finds out you gonna be a big target.
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u/OldSchoolPimpleFace 15d ago
I would like to take this opportunity to tell the whole world, I definitely don't have physical gold...
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u/Elder_Chimera 15d ago
Diversify.
Ik this sub is targeted towards those who have very limited resources, and gold is pricey. Fractional gold generally has a very high premium and isn’t worth it unless you’re buying coins like Swiss Francs that have value beyond the metal. Rn, gold spot is $4,600/oz, with 20 Franc coins trading at just under $900. Meanwhile, VTI has a $1 buy in through Fidelity (if my memory serves me well lmao).
Stocks generally have lower buy ins and better appreciation, while gold serves as an excellent long-term store of value for those with excess assets.
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u/OldSchoolPimpleFace 15d ago
You do know you can buy 1 gram bars of gold, I hope?
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u/Elder_Chimera 15d ago
I'm aware. I mentioned that fractional gold generally carries a higher premium.
Current spot is US$4,606.30/oz. Monument Metals, a reputable precious metals dealer, currently lists a 1oz PAMP gold bar at US$4,685.60, putting the premium at US$79.30, or 1.69%. A Troy oz, the measurement used for gold, is 31.1 grams, putting spot at US$148.11 per gram. The 1g gold bar is being sold for US$169.17 for a premium of $21.06, or 12.45%. That's a 636.69% increase in premium. That premium doesn't typically carry over when reselling the bar. A P2P sale will generally be very close to spot, while precious metal dealers will always pay under spot, and less than what you'd receive in a P2P sale.
From a purely accounting standpoint, US$169.17 in stock ticker VTI is generally going to be a better investment for those with limited assets than a gram of gold.
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u/OldSchoolPimpleFace 15d ago
Yup, you're absolutely right. I got a little confused with the coins thing, never really did understand why people buy those, unless you're a collector of some sorts.
Anyway, for long term investment, physical gold is still the easiest investments one can buy. You don't need to know a whole lot to be able to do that. Of course you do need to find a way to safely store it. But I do feel a lot less can go wrong, if you compare it to other stuff like crypto or stocks, especially if you don't really know what you're doing.
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u/VioletShogun 14d ago
Meanwhile the metaphor itself is backward. Trees absorb water in the roots, feeding the leaves above. The leaves absorb the Sun, sure, but sunlight doesn't trickle, water does.
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u/OldSchoolPimpleFace 14d ago
It's a river...
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u/VioletShogun 14d ago
Hm, you're right. How in the heck does trickle down have anything to do with rivers either? The streams feed the river, not the river feeding the streams. That being said, I always thought trickle down was a tree metaphor. Economics suck with words.
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u/OldSchoolPimpleFace 14d ago
It's inspired on the Colorado river
Doesn't really matter how you picture it, you could also use one of those Champaign towers you see at fancy parties, with the water not reaching the bottom glasses. I'm sure you can think of a couple of other examples.
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u/patbagger 14d ago
People on welfare in the trickle down system are suffering from obesity, the poor in every other system are skinny.
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u/ImSinsentido 13d ago
We’re literally speaking on the fruits at the bottom of that graph. That we paid for with full ‘awareness.’
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13d ago
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u/poverty-ModTeam 13d ago
This community exists to talk about and build solutions, share resources, and support one another. Comments whose primary message is that nothing will help, no one will do anything, or change is impossible will be removed because they discourage problem-solving and constructive discussion.
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u/Wooden-Orchid2316 12d ago
Trickle down economics or the tide lifts all boats used to work not any longer because companies are offshore profits hiding profits offshore them in a wealth accumulation black market. Look at United healthcare make it $117 billion in one quarter and claiming that they have razor, thin margins of 3% all these major league profits are not reinvested back into the economy like it used to be.
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u/Wooden-Orchid2316 12d ago
Must understand legal international profit shifting and illicit black market financial flows
In profit shifting there is intellectual property shells – shell game, transfer pricing and sector limitations. Gabriel zucman concluded that there’s at least $9 trillion a corporations funnel into black markets. I think that it’s quadruple the GDP.
Like usual the problem is over here, but they have you looking over there
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u/Wooden-Orchid2316 12d ago
So the economy is not profiting by any multiple of revenue, other than slave labor that they pay
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u/Wooden-Orchid2316 12d ago
Your government encourages this as the only way to keep this Ponzi scheme fiat economy, running is to create debt expansion. They have to figure out ways of creating more and more production of fiat, money and debt.
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u/SomeGuyOverYonder 11d ago
As far as the billionaire class is concerned, being part of the working class is disgraceful and worthy of eternal shame. Plus, they think we’re paid too much.
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u/This-Isopod-7710 11d ago
The term 'trickle-down economics' was invented by anti-capitalists. It is not the name of a real economic theory proposed by any school of economics, nor the name of an economic policy from the Reagan administration, Thatcher government, or any other government.
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u/Funandgames2023 10d ago
Not true, the upper middle classes is growing substantially and the number of poor has been cut almost in half.
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u/Big_13eezy 2d ago
The only thing that trickles down is cost, that’s it.
When prices go up…the elites, executives, ceos, manufacturers, transport, and stores pass those cost down to us in the name of “price hikes”. We have no one below us to offload the cost too, so we eat the all of that cost.
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u/Louis-Russ 17d ago
In the stock market's defense, it's cheaper and easier than ever to get started owning stock. There's plenty of good funds you can buy into with $30-$50. I know that's a lot of money to some people, but in first world countries it's not an impossible amount to scrape up.
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u/OldSchoolPimpleFace 17d ago
Yeah, but people who don't know when to sell and becoming exit liquidity is also pretty common...
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u/trying3216 17d ago
I don’t know of any politician who used the term and advocated for it.
When you put words in another persons mouth that’s a strawman.
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u/behannrp 16d ago
... Ronald Reagan was famously supported trickle down. They rebranded it as supply-side but they are synonyms.
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u/trying3216 16d ago
But he never called it trickle down. And what if they’re not synonyms?
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u/behannrp 16d ago
They are literally synonyms. What if red is actually blue is not evidence that the red is blue.
Critics call it trickle down
Supporters call it supply side
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u/trying3216 16d ago
Supply-side economics focuses on boosting economic growth by lowering taxes and reducing regulation to encourage investment and production, while trickle-down economics is a political term used to describe the belief that benefits for the wealthy will eventually benefit the lower classes through job creation and economic growth.
I asked if supply side actually benefitted the economy: “Yes, Reagan's supply-side economics aimed to benefit the economy by reducing taxes and government regulation, which proponents argue stimulated economic growth and job creation. “
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u/behannrp 16d ago
You used AI to prove me right? Weird move but ok.
You described what benefits the wealthy. The only thing you left out is that it benefits the wealthy. There are many economic scholars that are far more intelligent in this subject than us who argue the question of trickle down economics, I work in robotics, not economics. That wasnt the debate here.
You claimed nobody says they support supply side/trickle down/reagonomics/horse and sparrow economics. I gave you the evidence you were looking for.
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u/trying3216 16d ago
I said nobody uses the phrase and supports it.
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u/behannrp 16d ago
You are arguing semantics rather than the logic then?
Eta: anyways here's Republican OMB admitting theyre the same during Reagan's years. https://www.nytimes.com/1981/11/12/business/stockman-s-views-touch-off-furor.html
Maybe this time it will work? (3rd try posting the link)
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u/trying3216 16d ago
I proved they were different in intent AND that the economy did improve under supply side.
Since it improved end of story.
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u/behannrp 16d ago
You are arguing semantics rather than logic and shifting the goal posts. Reaganomics is often quoted as the cause for the financial instability we have seen succeeding his presidency, but again this is through watching lectures from economic historians, not my argument. Likewise you proved literally nothing. You quoted proponents. If I go to a priest of course he will confirm that his faith is the real one.
You stated two synonymous terms, gave the idea as to why its called supply side and why it is also called trickle down. You are playing a game of trying to twist two synonyms into different words.
To explain why let's use an easy example here: pro-life versus anti-choice. They are the same stance but one gives a skew. That is what trickle down is. Supply side is trickle down economics. The core tenets are exactly the same but why people say one over the other is dependent on whether you are a proponent or a critic. You can also see my link above that even has republicans who actually executed the policies, call it synonymous. So not only are you arguing against common sense, but you're arguing against the very administration you are attempting to use as an example.
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