Tinkle Down Economics on Steroids

They have been pushing the idea for decades – give rich people more money and they’ll give a little more to the rest of us. They’ll give us jobs, the economy will get better, the wealth will trickle down on the rest of us.

“Don’t piss down my back and tell me it’s raining.” – Fletcher (“The Outlaw Josey Wales” – 1976)

I see no evidence that it works that way. In fact, I see lots of evidence it works the opposite way.

In the real world, when we need more money, we work harder. We get a second job, or bust our asses going to school in the evenings to qualify for something that pays better. Our spouses get a job, and the chores that used to be done by the stay-at-home spouse get divvied up.

Give a person more money beyond a certain point, and they’ll start to slack off, they’ll start to do less because they don’t have to work as hard to get what they want and need.

The rich have been doing that to us for decades. Wages have not kept up with costs, and families have been leveraging themselves to keep up with their bills. Within reason, this strategy keeps us working hard for them – we have to fight to keep ahead, we have to work harder, get second jobs, do things like educate ourselves to become more productive. Take it too far and we end with economic collapse – two thirds of the economy (under normal circumstances) is driven by consumers, in other words, you and me.

And while wages have, at best, remained stagnant for the rest of us, income for the top half-percent have increased by a staggering 20 times, even after accounting for inflation. At the same time, their tax rates have dropped to one third the level in the 1950’s and 1960’s.

The top income brackets have become less and less productive, contributing less and less to the economy as they suck up more and more of the economy’s resources. They are retiring younger, and their kids aren’t engaging in expanding the economy (beyond the occasional porn tape).

They aren’t hungry enough to get out here and use the resources at their disposal to bring the economy back to life. Instead, they are sitting on all that money and not hiring people, all the while whining that taxes are bleeding them dry, the poor things, and if we would just stop taxing them altogether, the “most productive members of society” would be able to afford to give you a job.

In the mid 1990’s, tax rates on the upper incomes edged back up just a little bit, and the economy roared to life. The government was able to not only pay its bills, but pay back money it had previously borrowed. Lenders, lacking the source of income that used to be provided by government borrowing, began lending to just about anyone with a business idea, and we had the biggest economic boom in a generation or more. (That boom is the only reason our salaries are even close to being as good as “stagnant”!)

It is time to tax the rich and balance, not just the federal budget, but the economy as a whole.

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One Response to “Tinkle Down Economics on Steroids”

  1. 12 Days of Funny – Day Five « Politically Me Says:

    […] Tinkle-Down Economics Share this:Like this:LikeBe the first to like this post. […]

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