I worded my other question wrong. Should be : Explain to me why Trickle-Up econo
Posted in the Iron Gate Forum
#1 Nov 20, 2013
I worded my other question wrong. Should be : Explain to me why Trickle-Up economics doesnt work?if you give the middle class and poor more money, they will spend it. They will spend it on food, electronics, furniture, clothes, and to pay their bills. Chances are, they aren't going to save it, or put it into their stock portfolio (if they even have one)
Now looking at reports from the WSJ, Apple reports that future earnings will be extremely bad due to a predicted lack of sales. Now why is that? It's because the consumer can't afford to buy their products. If you give the consumer what McCain calls a "welfare check", wouldnt that result in the consumer having more money to spend on birthday gifts, holiday gifts, and personal luxuries? So wouldnt the money that these people get due to tax credits, only result in more sales to the businesses who had their taxes increased?
Look. A 4% increase in taxes on a small business whose PROFITS (not gross revenue) is $250,000, would result in a $10,000 loss for that business. Now even though they lose $10,000, hundreds of millions are people are getting $1,000. Chances are, the overwelming majority are going to spend this money on the items i said before that they are having trouble buying now.(the fact that consumers are having trouble buying now is the reason why businesses are losing profits). So i see it as, if you give people "free money", they are going to spend it, boosting up revenue and sales for business, and although business had their taxes increase, the sales that will generate from the millions and millions spending more money will greatly increase profits on businesses, which will greatly exceed the amount they paid in extra taxes.
Am I wrong?
If so, explain how "trickle-down economics" is a better idea.
#2 Nov 20, 2013
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