That bit about China is totally changing the subject. Trickle down economics was sold as something that would benefit the people of the US. Trickle down economics was not just about trade either. It has always been about tax cuts, deregulation and trade policy. But they have never been about raising the status of people in China. The graphic posted by bearkat shows it was a colossal failure. What you say confirms this -- the benefit went to somebody else, except you mistakenly put it in China. The benefit went to the wealthy of the world, particularly the 1% in the US.
Why would we continue a failed experiment? Its time to experiment with trickle up economics.
You're missing my point...
Trickle down theory actually goes back to Jean-Baptist Say, in the 18th century he was a French economist. In the United States the idea began to gain popularity in the early 20th century and Kennedy was really the first president to implement them. His tax cuts went into effect after he was assassinated, and was the one who famously said a "rising tide lifts all boats."
Reagan dropped tax rates again from 70% to 50%,. What American politics gets wrong is that their is blame for the downturn in economic cycles. No economic policy can change that.
Would you agree with me that government revenue would be about the same at a 0% tax rate as it would be at 100%? The government wouldn't have revenue if it didn't tax, and no one would work if they had to pay 100% tax.
So how does the China thing affect this, you ask.
It has nothing to do with how supply side (trickle down) economics has been pitched to Americans. I'm simply pointing out how this trickle down policy has been nerfed by our trade policies.
The tax cuts and regulations were said to benefit Americans because the wealthy would take this money and invest it, spend it, start business ventures and the like. THEY HAVE.
In the past this would have helped in America. But all too often now, those investments go into businesses that manufacture those goods in China. Thusly bypassing those in America who it would have helped as recently as the 1990s.
As to your comment about trickle up, we've tried it. Keynsian economics was the cornerstone of FDR. We didn't get out of that depression until the end of WW2, thanks to the rest of the world being destroyed and American factories being largely the only ones left to rebuild the planet. Obama has largely ran his policies off of this idea and this has been one of the worst recoveries in history.
For what its worth, Reagan lowered the taxes to 50%, Bush W. had them down in the mid-low 30s, I think that might be too low.
But the central question here is what is better for the middle class and poor, having money in the hands of the government, or allowing the wealthy to create opportunities for those lower on the ladder to advance and earn more?
Supply side seems to support merit based advancement. The wealthy business owner will reward his best employees.
Demand side (trickle up) seems to be just government giving money to the poor from taxing the rich. As someone else pointed out there isn't enough rich people to make that worthwhile.
