Has The Illusion Of Trickle-Down Economics Perpetuated By The GOP Ruined The USA?

[DJ_KiDDvIcIOUs]

America! The greatest country in the world—where our robust free market system ensures that our economic growth is the envy of all lesser nations! Right?

Jeremy Grantham is one of the world’s most famous investors, a money manager who helps oversee more than $100 billion. His periodic letters to investors are widely read. His latest one, released this week, asks the question: is America all it’s cracked up to be? It is a great place for the extremely rich, but what about for everyone else?

For the 50 years I have been in America, Business Week and The Wall Street Journal have been telling us how incompetent at business the French are and how persistently we have been kicking their bottoms. If only they could get over their state socialism and their acute Eurosclerosis. And as far as I can tell we have generally accepted this thesis. Yet Exhibit 1 shows what has actually happened to France’s median hourly wage. It has gone from 100 to 280. Up 180% in 45 years! Japan is up 140% and even the often sluggish Brits are up 60%. But the killer is the U.S. median wage. Dead flat for 45 years! These are the uncontestable facts.​

In another chart, Grantham looks at how much of our hard-earned (and barely growing) wages we are all paying to the jack-booted thugs of the U.S. government:

The data presented in Exhibit 6 examines the proposition that “more and more goes to the government and soon they will have everything.” You have heard that many times recently in the political debate. Sorry, “bull sessions.” You can see that the U.S. share going to the government in taxes is about the least in the developed world and that it has barely twitched for 50 years. Yet, apparently we have been steadily going to hell.​

The conclusions that one might draw from these simple charts are:

-America’s wealth is being captured by the very rich to a greater degree than almost anywhere in the developed world.

-The average American worker has been getting screwed by corporations and the government for the past 45 years.

-We pay lower taxes than most everywhere in the developed world, and who saves the most money because of that? The rich, who by the way are also the only ones whose wages are growing at a healthy pace.

-We should raise our taxes and we should enact policies that direct economic growth towards the middle and lower classes.

Or, you can vote for the Republicans, whose political platform is the exact opposite of these propositions.

https://www.gmo.com/docs/default-source/public-commentary/gmo-quarterly-letter.pdf

The numbers don't lie, trickle-down economics is a failed proposition for anyone that is not already extremely wealthy. Numerous recent studies have shown that ensuring money is going to the middle and lower classes directly grow the economy. The definition of insanity is doing the same thing over and over again and expecting different results

 

[NotFadeAway]

Outsourcing has killed trickle down economics. The manufacturing jobs that put money in the pockets of the middle class are now going to foreigners, as well as some office jobs. Therefore, American citizens don't have the money to trickle down with.

The simple solution is to manipulate taxes. First I believe in taxing corporations, not individuals. What needs to be done is to tax the hell out of any coloration that sends work overseas while giving tax breaks to companies that keep work in the states, maybe using a qouta system.

On two related side notes, Ive always viewed the economic belief of the two parties goes like this. Republicans = Sink or swim, Democrats = Tread Water. Neither is a correct course.

 

[Decepticonus]

Outsourcing has killed trickle down economics. The manufacturing jobs that put money in the pockets of the middle class are now going to foreigners, as well as some office jobs. Therefore, American citizens don't have the money to trickle down with.

The simple solution is to manipulate taxes. First I believe in taxing corporations, not individuals. What needs to be done is to tax the hell out of any coloration that sends work overseas while giving tax breaks to companies that keep work in the states, maybe using a qouta system.

On two related side notes, Ive always viewed the economic belief of the two parties goes like this. Republicans = Sink or swim, Democrats = Tread Water. Neither is a correct course.

True, because we had in a sense trickle down economics in the 20's with Harding & Coolidge but individuals paid less, it was mainly the super rich paying taxes (though still a lower rate), the government wasn't blowing the kind of money it does today and as you mentioned more manufacturing jobs over here during the 20's.

 

[SV Fan]

The simple solution is to manipulate taxes. First I believe in taxing corporations, not individuals. What needs to be done is to tax the hell out of any coloration that sends work overseas while giving tax breaks to companies that keep work in the states, maybe using a qouta system.

While I agree with this the problem is all trade deals we make basically make it hard to put tariffs on foreign products.

One thing the Fed Government could do it put conditions on all contracts it gives that you must buy American products unless you have no alternative. I would like to see States become more proactive in this regard as well signing deals with other States that they will try buy stuff from those States if that is an option(sort of a State by State trade agreement)

 

[NotFadeAway]

That's why we need to steadily remove ourselves from this idea of globalism!

 

[Decepticonus]

While I agree with this the problem is all trade deals we make basically make it hard to put tariffs on foreign products.

One thing the Fed Government could do it put conditions on all contracts it gives that you must buy American products unless you have no alternative.

No! Americans like cheap, foreign goods. Plus, they want those goods if they are better if what American already has to offer. And especially much lower class Americans prosper from cheap, foreign goods. We don't want a trade war. Tariffs in sense would not help American consumers.

 

[Decepticonus]

That's why we need to steadily remove ourselves from this idea of globalism!

And what, become nationalists?

 

[NotFadeAway]

If that's what you wanna call it....I call it being self-sufficent, self-reliable. Heaven forbid we take care of ourselves and our own for a change.

 

[Decepticonus]

If that's what you wanna call it....I call it being self-sufficent, self-reliable. Heaven forbid we take care of ourselves and our own for a change.

Nothing wrong with being self-reliable, but if we can get better products and resources and for cheaper from elsewhere, GET THEM! We live in a very interconnected, globalized world. You have to accept it, the 1930's are over, I'm sorry.

 

[NotFadeAway]

The products aren't better, just cheaper....and their is something wrong with keeping good money out of you're own citizens wallets for the sake of profit that in turn creates a reliance on more government dependence that we cannot afford due to a job as a McDonalds cashier not being a life sustaining career. And no, I don't give democrats credit for creating cashier jobs!

 

[Decepticonus]

Depends what products you are talking about, some can be better. Overall the system exists for the consumer really, the consumer usually wants cheaper goods, even I do. American goods does not just automatically equal good all around.

 

[Napoleon]

If we're talking about trickle-down economics in relation to Ronald Reagan's implementation of them, then yeah, it's definitely not been good for our country. In fact Reagan's entire legacy, that of this wave of authoritarian conservatives who want to blow our budget on military spending and impose their values on both the American people and the world, has been a disaster.

 

[NotFadeAway]

Depends what products you are talking about, some can be better. Overall the system exists for the consumer really, the consumer usually wants cheaper goods, even I do. American goods does not just automatically equal good all around.

Its not the price of the goods, it is who is being paid to make them. I'd rather pay .50 more cents for an object knowing that fellow Americans were being paid to make them.

In order to save the middle class and cut the national debt, the nationalism you talked about must be displayed to a point. Nationalism is often only associated with military force and expansion. I'm talking nationalism through economics. The longer we have laid in bed with other nations, the more of a hit our economy has taken.

 

[DJ_KiDDvIcIOUs]

The USA is a post-industrial society and to sit here and act like we can fix the problem with factories cranking out crap goods is a joke. We need to focus on educating Americans so they are able to integrate with products and services that move us forward not backwards. If we focus on tech and green energy along with rebuilding our infrastructure that's going to go a lot further than any crappy factory job ever would. We are supposed to be at the forefront of the world not stuck I'm the past.

 

[Decepticonus]

The USA is a post-industrial society and to sit here and act like we can fix the problem with factories cranking out crap goods is a joke. We need to focus on educating Americans so they are able to integrate with products and services that move us forward not backwards. If we focus on tech and green energy along with rebuilding our infrastructure that's going to go a lot further than any crappy factory job ever would. We are supposed to be at the forefront of the world not stuck I'm the past.

Thank you! We cannot keep thinking of ourselves as just American citizens. We need to think globally. It's bad enough in school we prepare students to think more local and state wise about their future careers. The reason these factories jobs aren't here anymore is because it can be done cheaper elsewhere. So we need to bring back old school, low paying jobs and then make consumers pay more for these goods?

 

[Thundercrack85]

Tax the rich at 90%. Imprison those who don't pay taxes.

That's all there is to it.

 

[Decepticonus]

Tax the rich at 90%. Imprison those who don't pay taxes.

That's all there is to it.

We used to do that.

Eisenhower. And we did it to gangsters like Al Capone.

Again, "used" to do that.

 

[Schlosser85]

90% is a bit excessive.

 

[Thundercrack85]

90% is a bit excessive.

Make up for revenue lost by reckless Republican tax cuts.

 

[Decepticonus]

90% is a bit excessive.

Yeah, but we did it all the way from 1954 until LBJ in 1964. Hell, for a year they had at 94% during WWII.

 

[NotFadeAway]

Tax the rich too hard and they will just cut jobs and/or send more work overseas. And if you pound the rich, their is no incentive to make money....hypothetically the rich could disappear and then what?

 

[DJ_KiDDvIcIOUs]

The rich will never disappear. They make too much money and live to good here to ever leave. I don't agree with taxing the rich at 90% and even though that may have been the rate on the books at one point we all know damn well they didn't pay that. We need to reform the insanely complicated tax code designed by the rich so they can hoard as much as possible and we need tax the hell out of corporations that are destroying the earth. Those two things will go a long way towards putting us on the right track.

 

[Thundercrack85]

Tax the rich too hard and they will just cut jobs and/or send more work overseas. And if you pound the rich, their is no incentive to make money....hypothetically the rich could disappear and then what?

Even if we taxed at 100% I would doubt that. Humans love money. That has always been our problem. The day a human stops making money is the day he dies.

 

[SV Fan]

Tax the rich too hard and they will just cut jobs and/or send more work overseas. And if you pound the rich, their is no incentive to make money....hypothetically the rich could disappear and then what?

I guess we would go back to the days of mom and pop shops instead of box stores.

I hate this idea that if we tax the rich they are not going to do anything and just stop providing the services, simple fact is they will still want to make money and if they don't somebody else will come in and take their business.

I don't think we need to increase taxes, I think we just need to get rid of a lot of corporate welfare and tax breaks only rich people use.

 

[Charlatan]

Tax the rich too hard and they will just cut jobs and/or send more work overseas. And if you pound the rich, their is no incentive to make money....hypothetically the rich could disappear and then what?

then someone steps up to take their place. also it's bs. they will not just cut jobs. jobs are determined by demand. not how much extra cash a business owner has in the bank.

that old boogeyman story about the rich taking flight and taking their jobs with them is a lie.