What is trickle down economics ? and why it isn’t working ?

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Trickle down economics
Trickle down economics

Before we answer this famous question that Why trickle down economics isn’t working, let’s answer on

what is trickle down economics?

According to the premise behind trickle-down economics and its practices, tax breaks and perks for businesses and the wealthy would eventually trickle down and benefit everyone. more like robin hood taking from rich and giving it to poor and benefit to everyone.

Like many other economic and political initiatives over the past 50 years, trickle-down economics has done a good job of severing the bottom 97% from their money and delivering it all to the top 3%.

But On an inflation-adjusted basis, the incomes of the lowest 90% have hardly changed since 1973:

Real family income between 1947-2022 , showing Impact of Trickle down economics

People only on top mostly 90-95% level have taken the huge benefits from this country’s continued growth.

Selling “trickle down economics” to the bottom 97% in the 1980s as a good rationale for giving the top 3% who already held 45% of the wealth and power by the early 1970s was a stroke of plutocratic genius.

Instead of giving money to those who truly needed it—particularly in the late 1970s, when the average hourly income was $3-4—we should take it all and put it first into the enormous tubs of the wealthy.

why Trickle down economics is not working?

The key was to combine a large amount of bull shit with a few tiny economic facts.

Yes, there are wealthy people who built or expanded their businesses from the ground up to earn their money the old-fashioned manner. But in reality, the majority don’t. All of the people in the top 3% are lucky than the rest of the population, albeit some are harder workers than the majority. In fact, if we reduce the field to the top 3% of the top 3%, or the top 0.1%, this pattern repeats itself. Once more, folks in the top 0.1% are comparable to the remaining 2.9%, they are just luckier.

Giving huge sums of extra money to the wealthy in the top 3% through tax cuts, tax deductions, tax credits, interest-free loans, juicy government contracts, or just plain handouts has been proven to be of no particular benefit. They won’t be spending the money on anything more miraculous. Few will invest the money, but the majority will keep it in reserve, exactly like the poorest 97% of Americans.

In fact, because they live far closer to the thin line of “basic requirements” of survival like housing, clothes, food, and water, the bottom 97% and in particular the bottom 80% will be much more likely to spend the extra money into the economy.

Given that they live well over the bare minimum, those in the top 3% don’t really need to adjust to their extra income. The additional funds do, however, accomplish the claimed objective of making the wealthy so wealthy that they might spend a little bit more on other things, which could “trickle” down to the bottom 97%.

Since they most certainly did not invest the majority of the extra money they received over the past four decades into the economy, the top 3% have grown their ownership of this country from 45% to 57-58% as of today. In order for their pawns in the bottom 97% to be able to pay the wealthy landlords with their meager earnings, they invested all of that money in assets like stocks and real estate.

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