Good Old 'Trickle Down'

"Trickle down economics stems from the early 1950's when we were the only Western country whose industrial infrastructure had not been smashed and it was accurate to say that whatever was good for General Motors was good for the United States. That was no longer true by the time Reagan came to power, money was being left in the hands of America's economic elite which was investing it overseas -- not in America."

The above is from a comment by George McNaughton on an article by Dan (open minded conservative) K called Dear Mr. President .

It illustrates a problem with the Republican approach to the 'cut taxes to stimulate the economy' idea. It never was accurate to say that 'whatever was good for General Motors was good for the United States." In the 1950's and now the accurate phrasing of the statement is "whatever is good for the United States is good for General Motors." ( though General Motors may have already been demollished by the decades of abuse of the real 'United States')

To put it in terms more in line with what most people think of as the 'trickle down' concept; "what's good for the rich is good for the rest" is, was, and always has been false! the proper statement is, was, and always has been "what's good for the rest is good for the rich!" You do not stimulate an economy by stimulating rich people. any more than you water a tree by spritzing its top leaves. Rich people get rich when a whole lot of 'not so rich' people have money to pay them for what they supply.

'Rich people' don't consume much more that poor people and whatever they can consume they already are consuming so giving them more money does nothing for the economy.

And an economy is not made more vigorous by upping the available funds to create things, it is made more vigorous by upping the available funds to consume things.

The ability to create a product will never make you rich, it is the ability (and willingness) of customers to buy your product that makes you rich. Stimulating an economy is all about stimulating the consumers not the producers. A ready and able consumer is all the stimulus any producer needs!