Do trickle-down economic theories work?

[Ridgerunner]

You have got to be kidding!

He who owns the land, the resources, the money, owns the people. That is “trickle down economics” in a nut-shell. It is the “let’s give them one less piece of bread and make em work two extra hours” mind set in action.

This is ideological, not fact-based. The people are not “owned” by the owners of capital. Capital and labor are both necessary requisites for an economy, and it is impossible for either to be very productive without the other.

As I mentioned earlier, there is a nearly stable relationship between the percentage of national income going to labor and going to capital. Now, understanding that some people who basically depend on their labor may also have some capital and that some who have a lot of capital also labor, that percentage relationship has never varied by much since 1929 when the government first started keeping statistics on it. Labor’s share of national income is always at its highest during periods of full employment. But the two move up and down together, it’s just that the relationship changes somewhat as employment moves up and down, or as capital is generated or destroyed.

Therefore, the best thing for labor is high employment. That’s not emotional or ideological, it’s just a fact that has been demonstrated empirically for nearly eighty years. Likely it was true before that as well, it’s just that there are no statistics prior to 1929.

People who don’t like a system such as our own often are tempted to alter the relationship by fiat; that is, to attempt to reduce inequalities by redistributing wealth forcibly. There is no evidence to suggest that it improves the lot of labor, and significant evidence that it doesn’t. As Solzhenitsyn said of the Soviet Union, it’s where “…capital is dear and labor cheap, unlike in the west where it’s the other way around.”

Nor, it appears, do attempts to redistribute wealth forcibly to the already wealthy work well for anyone. Oligarchic economies like that of Russia today or various banana republics at any time, does sharpen the differences between social classes, but the whole thing achieves a state in which “the rich” are a deservedly nervous threadbare aristocracy and “the poor” are hopelessly poor.

Better if government makes no attempt to redistribute income or wealth except to the extent that it provides decently for those who cannot help themselves; to-wit the disabled poor.

I don’t think anybody believes in “trickle down economics” other than people who resent the fact that some people have more income or wealth than others. Fundamentally, the concept is derivative of belief that economies are a “zero sum game” in which the wealth of some necessarily comes out of the pockets of others; a long-discredited ideological notion.

 

[JSSD]

We need to stop acting like getting a “higher education” makes us more worthy of higher pay. That is rubbish and egotistical.

I don’t think it is “higher education” at all. $0.02 Labor is a resource like any other, and therefore subject to the laws of supply and demand.

There are a lot more “laborers out there who put your house up, pave your streets, pick up your trash” than there are neurosurgeons willing to cut your spine or investment advisors who can manage your wealth. The rate of pay is going to be what the market can bear. Those are certainly higher educated examples, but they are also folks who were willing to endure a lot of personal sacrifice to get where they are. Lesser educated examples might be a unique musician, artist, or athlete. Supply and demand.

 

[JSSD]

I guess another question I have for the folks who are saying that “the rich” are not overtaxed is, “How do you respond to the Laffer Curve?”

(I fully realize I’ve responded to a normative statement with a positive question).

Over the past two decades or so, we’ve teetered around the apex of the curve. To demand higher taxes knowing it’ll result in lower revenues isn’t “giving unto Caesar” anymore, it is punishment or social engineering or whatever, and again, I just cannot understand the greed and envy to want to do that despite understanding the consequences.

 

[Captain_America]

Free-market capitalism and free enterprise work. It incentivizes the rich to risk their money.

If the rich are overtaxed, like they are in the United States, they have to spend time and money to work around those rules.

Actually, the wealthy are more risk-averse investors, and thus less entrepreneurial with the cash.

 

[Zoltan_Cobalt]

The alternative to trickle-down…
Attached Thumbnails
Click image for larger version Name: trickle-up-poverty-lg.jpg Views: 1 Size: 34.2 KB ID: 19878

 

[CatholicHockey7]

Free-market capitalism and free enterprise work. It incentivizes the rich to risk their money.

If the rich are overtaxed, like they are in the United States, they have to spend time and money to work around those rules.

If the United States is “overtaxed,” what does that make the rest of the world?

Taxes for members of the Organization of Economic Co-Operation and Development (OECD) average 36.2 percent of Gross Domestic Product. The United States, an OECD member, averages only 27.3 percent. Of all OECD members, only Turkey, Chile and Mexico have lower taxes. (Source: Tax Policy Center)

I’m not saying the US should raise our taxes. I actually am sick of the “fair share” argument.

As of 2007, the top 5 percent of Americans earn 33 percent of income, but pay 57 percent in taxes.

The bottom 50 percent earn 13 percent of income, and pay just 3 percent of taxes.

Nobody asks the poor to pay their “fair share,” but we expect the rich to continue to pay more?

 

[JSSD]

If the United States is “overtaxed,” what does that make the rest of the world?

Taxes for members of the Organization of Economic Co-Operation and Development (OECD) average 36.2 percent of Gross Domestic Product. The United States, an OECD member, averages only 27.3 percent. Of all OECD members, only Turkey, Chile and Mexico have lower taxes. (Source: Tax Policy Center)

I’m not sure taxes as a percent of GDP is how I’d look at this, myself. You’ve obviously spent some time looking at this, but I’d say evaluate the US’s corporate tax rate, highest marginal [individual] rate, and cap gains rates, comparatively speaking. These are the ones that “the rich” are facing, and we’re quite high.

I like the rest of your post that I deleted, though. “Fair share” is anything but and “fair” is about the most subjective term in politics. It is all fair as long as it happens to the other guy.

 

[John_Novotny]

AFAIK Trickle down doesn’t work for the middle class and the poor in an endlessly expanding money supply because any gains are wiped out by inflation by the time it hits the bottom.

youtu.be/5fbvquHSPJU?t=48m24s

The best explanation I heard is in the link above at about 48:24 in the “Four Horsemen” documentary. It’s worth watching the whole documentary.

 

[Mickey_Finn]

“Money is like blood. If it pools, rather than circulates, disease ensues, then gangrene, and excision. Looking at the fact that any of the four richest families on the planet could feed and shelter the entire world a few times over, one might well wonder if there is an actual pathology going on. Medically, in assessing burn trauma, parts of the body, torso, head, arms, legs, each are assigned percentages. The genitals constitute 1%. By that analogy, by far the greatest portion of the world’s “blood” is astonishingly pooled in that 1%. In the US, the “genitals” contain 47% of the blood. The neck, say, has another 27%. Skipping a bit, we end with 80% of the body having 7% of what’s needed to keep the body alive. Perhaps the genitals are happy with their condition at the moment, but this erection has lasted far more than four hours, and other business necessary for the survival and advancement of life is at stake. So how about we let a bit of flow get moving, so that the body, including those wonderful genitals, may live to enjoy another day?”

This is an excellent analogy of our present condition. We’ll either take steps to correct this condition or we’ll be sorry. Much like the fellow who’s 4+hour erection went untreated.

For those who wish to champion the “Trickle Down” theory. Can you present an example of a success story?

ATB

 

[CatholicHockey7]

For those who wish to champion the “Trickle Down” theory. Can you present an example of a success story?

ATB

Well, Pres. Bush (the second one) cut taxes and it led to one of the greatest periods of economic growth in US History. The rich invested more, and because of that investment jobs were created. Those jobs paid reasonable wages which allowed the middle class to invest a little bit, and that created more jobs filled by the lower class. I’d say that was a success.

There is also a great example of “trickle up” economics. There was once a time when people would not invest in the market. It had just crashed. We called this time period, The Great Depression. Along came FDR, who invested tax dollars in public works projects and got the poorest people back to making a living wage. This stimulated the economy because the projects he invested in required raw materials owned by the wealthy who had avoided major damages from the crash. With the demand being created for supplies, those corporations had to invest in workers who could produce the coal, steel, concrete, and other materials required for construction of dams, roads, etc. This generated more jobs, investments, etc. As we stabilized, we were able to export more goods, especially oil.

The key issue is timing. When the rich are afraid to invest because of market instability, trickle down economics will fail. If the market is stable, trickle up economics are likely to fail because people won’t want to invest in government bonds yielding only 2 percent when they could put that money into the market and gain 7 percent. As a result, the government turns to higher taxes which often stifle investment.

 

[Mickey_Finn]

Well, Pres. Bush (the second one) cut taxes and it led to one of the greatest periods of economic growth in US History. The rich invested more, and because of that investment jobs were created. Those jobs paid reasonable wages which allowed the middle class to invest a little bit, and that created more jobs filled by the lower class. I’d say that was a success. What you are speaking of is generally attributed to Bill Clintons actions including the removal of Glass-Steagall protections. We all know how that played out don’t we.

There is also a great example of “trickle up” economics. There was once a time when people would not invest in the market. It had just crashed. We called this time period, The Great Depression. Along came FDR, who invested tax dollars in public works projects and got the poorest people back to making a living wage. This stimulated the economy because the projects he invested in required raw materials owned by the wealthy who had avoided major damages from the crash. With the demand being created for supplies, those corporations had to invest in workers who could produce the coal, steel, concrete, and other materials required for construction of dams, roads, etc. This generated more jobs, investments, etc. As we stabilized, we were able to export more goods, especially oil.

The key issue is timing. When the rich are afraid to invest because of market instability, trickle down economics will fail. If the market is stable, trickle up economics are likely to fail because people won’t want to invest in government bonds yielding only 2 percent when they could put that money into the market and gain 7 percent. As a result, the government turns to higher taxes which often stifle investment.Timing is certainly important. But you have to look at things in long rather than short periods. Overall, trickle down has been an failure.

ATB

 

[Brendan]

http://forums.catholic-questions.org/attachment.php?attachmentid=19863&stc=1&d=1398604051

Pope Francis has his doubts.

LOVE!

Don’t know, no one that I am aware of has ever tried them

 

[Zoltan_Cobalt]

“Money is like blood. If it pools, rather than circulates, disease ensues, then gangrene, and excision. Looking at the fact that any of the four richest families on the planet could feed and shelter the entire world a few times over, one might well wonder if there is an actual pathology going on. Medically, in assessing burn trauma, parts of the body, torso, head, arms, legs, each are assigned percentages. The genitals constitute 1%. By that analogy, by far the greatest portion of the world’s “blood” is astonishingly pooled in that 1%. In the US, the “genitals” contain 47% of the blood. The neck, say, has another 27%. Skipping a bit, we end with 80% of the body having 7% of what’s needed to keep the body alive. Perhaps the genitals are happy with their condition at the moment, but this erection has lasted far more than four hours, and other business necessary for the survival and advancement of life is at stake. So how about we let a bit of flow get moving, so that the body, including those wonderful genitals, may live to enjoy another day?”

This is an excellent analogy of our present condition. We’ll either take steps to correct this condition or we’ll be sorry. Much like the fellow who’s 4+hour erection went untreated.

That is a great analogy and steps need to be taken, but first understand WHY our present condition exists.

Business is sitting on loads of cash that could be invested and get things rolling again in no time. BUT without any idea of future tax policies and the fear of over-regulation looming…it would be INSANE for Business to invest in anything productive with the current political atmosphere.

There are steps that can be taken, but the right ones are not within the agenda of our current administration.

 

[thechef]

I’d like to correct your statements in this article.

Re: Do trickle-down economic theories work?

---

You state:

1. The message of the Gospel is an emphasis on individual giving, not running around trying to find excuses to use shadowy forces to take from the rich like Robin Hood, especially when the motives are selfish.

Rebuttal:
A quote from Pope Francis:
“…Trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world … has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power…Meanwhile, the excluded are still waiting.”

You state:

1. The Catholic Church has specifically rejected socialism, communism and has a dim view on central planning.

Rebuttal:
The Catholic Cathecism and Social Justice:
1936 On coming into the world, man is not equipped with everything he needs for developing his bodily and spiritual life. He needs others. Differences appear tied to age, physical abilities, intellectual or moral aptitudes, the benefits derived from social commerce, and the distribution of wealth.41 The “talents” are not distributed equally.42
1937 These differences belong to God’s plan, who wills that each receive what he needs from others, and that those endowed with particular “talents” share the benefits with those who need them. These differences encourage and often oblige persons to practice generosity, kindness, and sharing of goods; they foster the mutual enrichment of cultures:
I distribute the virtues quite diversely; I do not give all of them to each person, but some to one, some to others. . . . I shall give principally charity to one; justice to another; humility to this one, a living faith to that one. . . . And so I have given many gifts and graces, both spiritual and temporal, with such diversity that I have not given everything to one single person, so that you may be constrained to practice charity towards one another. . . . I have willed that one should need another and that all should be my ministers in distributing the graces and gifts they have received from me.43
1938 There exist also sinful inequalities that affect millions of men and women. These are in open contradiction of the Gospel:
Their equal dignity as persons demands that we strive for fairer and more humane conditions. Excessive economic and social disparity between individuals and peoples of the one human race is a source of scandal and militates against social justice, equity, human dignity, as well as social and international peace.44

You state:

1. The Catholic Church states explicitly that all persons have a right to private property.

Rebuttal from Catholic Cathecism:
I. THE UNIVERSAL DESTINATION AND THE PRIVATE OWNERSHIP OF GOODS
2402 In the beginning God entrusted the earth and its resources to the common stewardship of mankind to take care of them, master them by labor, and enjoy their fruits.187 The goods of creation are destined for the whole human race. However, the earth is divided up among men to assure the security of their lives, endangered by poverty and threatened by violence. The appropriation of property is legitimate for guaranteeing the freedom and dignity of persons and for helping each of them to meet his basic needs and the needs of those in his charge. It should allow for a natural solidarity to develop between men.
2403 The right to private property, acquired or received in a just way, does not do away with the original gift of the earth to the whole of mankind. The universal destination of goods remains primordial, even if the promotion of the common good requires respect for the right to private property and its exercise.
2404 "In his use of things man should regard the external goods he legitimately owns not merely as exclusive to himself but common to others also, in the sense that they can benefit others as well as himself."188 The ownership of any property makes its holder a steward of Providence, with the task of making it fruitful and communicating its benefits to others, first of all his family.
2405 Goods of production - material or immaterial - such as land, factories, practical or artistic skills, oblige their possessors to employ them in ways that will benefit the greatest number. Those who hold goods for use and consumption should use them with moderation, reserving the better part for guests, for the sick and the poor.
2406 Political authority has the right and duty to regulate the legitimate exercise of the right to ownership for the sake of the common good.189

You state:

1. The Catholic Church rejects corruption and I cannot imagine they’d be okay with crony capitalism.
2. My message to non-Catholics is to be very wary of what some “Catholics” say on here even if they note themselves as Catholic on their profile. Catholics are notorious in many cases for picking and choosing what rules they want to follow.

I agree with you on your last statement…” Catholics are notorious in many cases for picking and choosing what rules they want to follow.”
You obviously were picking and choosing and didn’t even bother to look up what Pope Francis and the Catechism of the Catholic Church really says.

 

[thechef]

If the United States is “overtaxed,” what does that make the rest of the world?

Taxes for members of the Organization of Economic Co-Operation and Development (OECD) average 36.2 percent of Gross Domestic Product. The United States, an OECD member, averages only 27.3 percent. Of all OECD members, only Turkey, Chile and Mexico have lower taxes. (Source: Tax Policy Center)

I’m not saying the US should raise our taxes. I actually am sick of the “fair share” argument.

As of 2007, the top 5 percent of Americans earn 33 percent of income, but pay 57 percent in taxes.

The bottom 50 percent earn 13 percent of income, and pay just 3 percent of taxes.

Nobody asks the poor to pay their “fair share,” but we expect the rich to continue to pay more?

Here are the facts to correct your opininons:
U.S. companies face the highest official corporate tax rate in the world. But there’s a big difference between the rates set out by law and the cash that’s actually collected.

Large, profitable U.S. corporations paid an average effective federal tax rate of 12.6% in 2010, the Government Accountability Office said Monday.

The federal corporate tax rate stands at 35%, and jumps to 39.2% when state rates are taken into account. But thanks to things like tax credits, exemptions and offshore tax havens, the actual tax burden of American companies is much lower.

In a report commissioned by Senators Carl Levin (D-Mich.) and Tom Coburn (R.-Okla.), the GAO looked at taxes paid by profitable U.S. corporations with at least $10 million in assets.

Even when foreign, state and local taxes were taken into account, the companies paid only 16.9% of their worldwide income in taxes in 2010.

Coburn said in a statement that the report “underscores the need for comprehensive tax reform.”

“An individual’s or corporation’s tax rate shouldn’t be dependent on their ability to hire a tax lobbyist,” Coburn said. “It’s especially wrong to ask families who are struggling to make ends meet to subsidize special breaks for corporations.”

Republicans as well as President Obama have called for a lower statutory corporate rate along with the closing of loopholes. The prospects for such reform appear remote for now, given the fractious nature of the current Congress.

Related: The real reason corporate tax reform is going nowhere fast

The GAO’s calculation for effective corporate tax rates is lower than a number of previous estimates. That’s in part because the office excluded unprofitable firms, which pay little or no taxes, from its analysis.

Including those firms’ losses would reduce the total net income from which the average tax rate is calculated, and would not “accurately represent the tax rate on the profitable corporations that actually pay the tax,” the GAO said.

The GAO used figures on taxes paid from actual IRS returns, which it noted were “on the whole, lower than the tax liabilities reported in the corporate financial statements.”

U.S. corporate tax collection totaled 2.6% of GDP in 2011, according to the Organization for Economic Cooperation and Development. That was the eleventh lowest in a ranking of 27 wealthy nations.

The Senate’s Permanent Subcommittee on Investigations has hauled several corporate executives to Capitol Hill over the past year for testimony on their tax practices.

A report released by the subcommittee last month charged that Apple (AAPL, Fortune 500) used a complicated system of international subsidiaries and cost-shifting strategies to avoid paying taxes on some $74 billion in income from 2009 to 2012.

In September, the subcommittee heard from Microsoft (MSFT, Fortune 500) and Hewlett-Packard (HPQ, Fortune 500), whom Levin called “case studies of how U.S. multinational corporations… exploit the weaknesses in tax and accounting rules and lax enforcement.”

A subcommittee report at the time alleged that Microsoft had saved nearly $7 billion off its U.S. tax bill since 2009 by using loopholes to shift profits offshore. H-P, the report said, avoided paying taxes through a series of loans that shifted billions of dollars between two offshore subsidiaries.
As for the poor not paying their fair share of taxes, again you have it wrong:

1. Forty-seven percent of Americans don’t pay taxes.

The most pernicious misconception about people who don’t pay federal income taxes is that they don’t pay any taxes. That oft-heard claim ignores all the other taxes Americans encounter in their daily lives. Almost two-thirds of the 47 percent work, for example, and their payroll taxes help finance Social Security and Medicare. Accounting for this, the share of households paying no net federal taxes falls to 28 percent.

And those aren’t the only other taxes they bear. According to economic research, the corporate income tax discourages domestic investment; that depresses wages, so workers are effectively paying some of the corporate tax. More directly, many households pay federal taxes on gasoline, beer and cigarettes. And then there are state and local sales, property and income taxes — all of which are often less progressive than the federal income tax. Putting all these together, a family of three with an income of $30,000 would owe no federal income tax (in fact, they would get money back). But they could easily pay more than $4,500, or 15 percent of their income, in taxes.

 

[JSSD]

Rebuttal:
A quote from Pope Francis:
“…Trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world … has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power…Meanwhile, the excluded are still waiting.”

I guess my issues with this is that Pope Francis is certainly the authority on a lot of things, but I’m not quite ready to list economics as one of those things.

Again I state, “trickle down” is a perjorative which is fairly meaningless.
Again I ask, which supposedly superior system is out there that one might prefer?

I think we can easily paraphrase Churchill here: It has been said that free market / capitalism is the worst form of economic / social system…. except all the others that have been tried.

 

[CatholicHockey7]

Here are the facts to correct your opininons:
U.S. companies face the highest official corporate tax rate in the world. But there’s a big difference between the rates set out by law and the cash that’s actually collected.

Large, profitable U.S. corporations paid an average effective federal tax rate of 12.6% in 2010, the Government Accountability Office said Monday.

The federal corporate tax rate stands at 35%, and jumps to 39.2% when state rates are taken into account. But thanks to things like tax credits, exemptions and offshore tax havens, the actual tax burden of American companies is much lower.

In a report commissioned by Senators Carl Levin (D-Mich.) and Tom Coburn (R.-Okla.), the GAO looked at taxes paid by profitable U.S. corporations with at least $10 million in assets.

Even when foreign, state and local taxes were taken into account, the companies paid only 16.9% of their worldwide income in taxes in 2010.

Coburn said in a statement that the report “underscores the need for comprehensive tax reform.”

“An individual’s or corporation’s tax rate shouldn’t be dependent on their ability to hire a tax lobbyist,” Coburn said. “It’s especially wrong to ask families who are struggling to make ends meet to subsidize special breaks for corporations.”

Republicans as well as President Obama have called for a lower statutory corporate rate along with the closing of loopholes. The prospects for such reform appear remote for now, given the fractious nature of the current Congress.

Related: The real reason corporate tax reform is going nowhere fast

The GAO’s calculation for effective corporate tax rates is lower than a number of previous estimates. That’s in part because the office excluded unprofitable firms, which pay little or no taxes, from its analysis.

Including those firms’ losses would reduce the total net income from which the average tax rate is calculated, and would not “accurately represent the tax rate on the profitable corporations that actually pay the tax,” the GAO said.

The GAO used figures on taxes paid from actual IRS returns, which it noted were “on the whole, lower than the tax liabilities reported in the corporate financial statements.”

U.S. corporate tax collection totaled 2.6% of GDP in 2011, according to the Organization for Economic Cooperation and Development. That was the eleventh lowest in a ranking of 27 wealthy nations.

The Senate’s Permanent Subcommittee on Investigations has hauled several corporate executives to Capitol Hill over the past year for testimony on their tax practices.

A report released by the subcommittee last month charged that Apple (AAPL, Fortune 500) used a complicated system of international subsidiaries and cost-shifting strategies to avoid paying taxes on some $74 billion in income from 2009 to 2012.

In September, the subcommittee heard from Microsoft (MSFT, Fortune 500) and Hewlett-Packard (HPQ, Fortune 500), whom Levin called “case studies of how U.S. multinational corporations… exploit the weaknesses in tax and accounting rules and lax enforcement.”

A subcommittee report at the time alleged that Microsoft had saved nearly $7 billion off its U.S. tax bill since 2009 by using loopholes to shift profits offshore. H-P, the report said, avoided paying taxes through a series of loans that shifted billions of dollars between two offshore subsidiaries.
As for the poor not paying their fair share of taxes, again you have it wrong:

1. Forty-seven percent of Americans don’t pay taxes.

The most pernicious misconception about people who don’t pay federal income taxes is that they don’t pay any taxes. That oft-heard claim ignores all the other taxes Americans encounter in their daily lives. Almost two-thirds of the 47 percent work, for example, and their payroll taxes help finance Social Security and Medicare. Accounting for this, the share of households paying no net federal taxes falls to 28 percent.

And those aren’t the only other taxes they bear. According to economic research, the corporate income tax discourages domestic investment; that depresses wages, so workers are effectively paying some of the corporate tax. More directly, many households pay federal taxes on gasoline, beer and cigarettes. And then there are state and local sales, property and income taxes — all of which are often less progressive than the federal income tax. Putting all these together, a family of three with an income of $30,000 would owe no federal income tax (in fact, they would get money back). But they could easily pay more than $4,500, or 15 percent of their income, in taxes.

Two problems, first of all you’re comparing corporate taxes with personal. While collected by the same government, they are different systems.

Second, while the US may indeed have the highest corporate taxes, but other countries collect more because the US system has not kept up with the global marketplace. Other countries use tax systems that allow them to still tax revenue generated outside their national borders. The US code has so many loopholes that major corporations (including Apple) have amassed roughly $3 trillion in overseas holdings that go untaxed every year. These aren’t factories or offices. This is cash. It is left sitting there because if it moves back to the US it gets hit with those taxes.

Ultimately this leaves Apple looking like a very stable and solid company, driving investment. The reality is they can’t invest large sums of money because it was generated by their overseas business and it would not be cost-effective to bring back to the US.

 

[CatholicHockey7]

What you are speaking of is generally attributed to Bill Clintons actions including the removal of Glass-Steagall protections. We all know how that played out don’t we.

Timing is certainly important. But you have to look at things in long rather than short periods. Overall, trickle down has been an failure. ATB

Clinton’s removal of Glass-Steagall was a response to the rapid growth already happening as a result of economic policies from Reagan and Bush.

The idea was basically, “Hey, those guys set us up for success, but we can have even more if we remove this little piece of legislation.”

 

[stinkcat_14]

I am no authority on the Church’s social justice teachings; however, I understand they may be more complex than what you state. However, I do agree with your statement that trickle-down economics does not work, in large part because it does not occur. Rather, the rich get richer (apparently more so under Democrat administrations) by spending and investing their money mainly for their own benefit; while the (working) poor and middle-class either stagnate or, with respect to real cost-of-living wages, get poorer. There must be a better economic solution than this kind of capitalism, a middle ground which does not entail a socialistic redistribution of wealth. Any ideas?

I think part of the problem is that there is no intrinsic reason for the rich to care about the well-being of the poor. If they are part of a faith tradition that might steer them towards more of a concern but there is a question of how many rich people are part of a faith tradition. There is some evidence that some of their philanthropy goes towards helping out people like themselves such as contributing to elite institutions such as ivy league universities.

That said, I think there is significant opportunity in the US to move up the income ladder, the problem I think is that many people don’t really understand economics that well in order to learn how to acquire wealth and improve their living standards. It is not always clear that human beings should be trusted to handle money.

I do think that government policy is often steered at keeping the wealthy that way. Certainly corporate profits have not suffered under Obama and the rich were the primary beneficiaries of the bank bailouts. I think in the income distribution debate there is plenty of room for common ground if we start with some of the corporate welfare that nobody can defend.

 

[JSSD]

I think part of the problem is that there is no intrinsic reason for the rich to care about the well-being of the poor. If they are part of a faith tradition that might steer them towards more of a concern but there is a question of how many rich people are part of a faith tradition. There is some evidence that some of their philanthropy goes towards helping out people like themselves such as contributing to elite institutions such as ivy league universities.

That said, I think there is significant opportunity in the US to move up the income ladder, the problem I think is that many people don’t really understand economics that well in order to learn how to acquire wealth and improve their living standards. ** It is not always clear that human beings should be trusted to handle money.**

Who do you propose?

I do think that government policy is often steered at keeping the wealthy that way. Certainly corporate profits have not suffered under Obama and the rich were the primary beneficiaries of the bank bailouts. I think in the income distribution debate there is plenty of room for common ground if we start with some of the corporate welfare that nobody can defend.

Go further with this one, if you would please.