Thank you for visiting our website

Featuring breaking political news and commentary on local, state, and national issues.

Friday, September 26, 2008

The Last Nail in the Coffin of Trickle-Down Economics

Ann-Marie Luciano Bio

Not so long ago, President Reagan entered office proudly touting the conservative theory of trickle down economics, which holds as its chief tenet that the best way to stimulate the economy is to give tax breaks to corporations and the wealthiest individuals because the extra wealth given to them will someday "trickle down" to the rest of us. The theory goes something like this: if you give the majority of tax breaks to corporations, they will have more money to produce more, hire more people, and increase salaries, which will in turn allow the average Joe to spend more money in the economy. These conservatives also believe that the bigger the tax break given to a wealthy individual, the greater the amount of wealth that will eventually trickle down to the non-wealthy individual.

My initial reaction to this theory has always been pretty basic: if the point is to get more money in the hands of the average consumer so that they can spend money in the economy, shouldn't you just give it to them outright? Isn't the best way to know that the consumer is getting money to spend in the economy to actually give them that money, rather than creating a complicated system whereby the rich are given the money, with the hope that someday it will trickle down?

History tells us what has happened when trickle down economics is implemented as a philosophy of government. Under President Reagan, the deficit, inflation and unemployment all soared. Surprise surprise, the wealth from corporations and the wealthy didn't trickle down - it stayed in their pockets. After eight years under President Clinton, a deficit was turned to a surplus, unemployment hit record lows and the middle class swelled in size.

History also repeats itself, except this time around it is much, much worse. We are all victims of eight years of Bush tax cuts for corporate giants and the wealthiest 1% of Americans. Where did all of that extra wealth go? It didn't trickle down to any of us - it gushed into the hands of greedy Wall Street investors, banks and Big Oil.

The evidence of the failure of deregulation and trickle down economics is now evident in every sector of the economy. Now that we are in the midst of what some say is the worst economic crisis since the Great Depression, some conservatives have finally been able to acknowledge the obvious: the free market doesn't always work. Greed sometimes overcomes reason. Maybe now that the evidence is so stark, reason will finally overcome political philosophy.
To receive "Daily Updates" from Air-it-Out with George, click on "Subscribe to this feed" below.

No comments: