One reason I've never much liked the phrase "trickle-down economics" is that it's kind of a straw man.
The GOP's argument was never literally that by cutting taxes for the rich, their extra money would somehow magically find its way into the pockets of lower-income people.
The GOP's argument was never literally that by cutting taxes for the rich, their extra money would somehow magically find its way into the pockets of lower-income people.
Rather, their argument was, under lower taxes, businesses can afford to produce more, and with a higher supply of goods and services, cost of living will become cheaper to the point where the poor can get by on the money they already have.
The big flaw with GOP supply-side economics is that not all goods and services are equally price-elastic, and the big bulk of working people's expenses are housing and health care — two things that are extremely *insensitive* to supply.
There are definitely certain benefits supply-side policy has had for the economy — for instance, it has made consumer electronics MUCH cheaper.
But it hasn't solved any of the core human needs that existed back in Reagan's day. In fact, they've only gotten worse.
But it hasn't solved any of the core human needs that existed back in Reagan's day. In fact, they've only gotten worse.
There are also negative consequences to letting wealth inequality get too high that have nothing to do with whether the poor are able to buy what they need.
For instance, it concentrates political power, triggering regulatory capture, cronyism, and market failures.
For instance, it concentrates political power, triggering regulatory capture, cronyism, and market failures.
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