Saturday, October 20, 2012

The Truth About Trickle Down



Trickle-down, supply-side or voodoo economics-- no matter what you call it, it is still a shell game that makes the rich in America richer and impoverishes everyone else.  We tried it under Reagan to end the recession of 1980 and again under George Bush to end the recession of 2000. It didn't work then and it won't work under a President named Mitt Romney.

Let's take a look at the record of "supply-side economics".  Under Reagan, while taxes for the rich and corporations were cut, government spending (a powerful spur to economic growth) tripled-- mostly on military and defense. Remember " Star Wars"? 
In his second term Reagan had to raise taxes, and even so left the nation with a huge national debt. Under Clinton, with the trickle down policies reversed, prosperity returned.  A massive tax hike for the wealthy and government supports for the working classes were not the whole story, but they helped to do the trick..  Here's what Factcheck.org has to say

The Clinton years showed the effects of a large tax increase that Clinton pushed through in his first year, and that Republicans incorrectly claim is the "largest tax increase in history." It fell almost exclusively on upper-income taxpayers. Clinton’s fiscal 1994 budget also contained some spending restraints. An equally if not more powerful influence was the booming economy and huge gains in the stock markets, the so-called dot-com bubble, which brought in hundreds of millions in unanticipated tax revenue from taxes on capital gains and rising salaries.
 Clinton’s large budget surpluses also owe much to the Social Security tax on payrolls. Social Security taxes now bring in more than the cost of current benefits, and the "Social Security surplus" makes the total deficit or surplus figures look better than they would if Social Security wasn’t counted. But even if we remove Social Security from the equation, there was a surplus of $1.9 billion in fiscal 1999 and $86.4 billion in fiscal 2000. So any way you count it, the federal budget was balanced and the deficit was erased, if only for a while.

It took George Bush about ten minutes to cut taxes for the wealthy and corporations again, while also increasing defense spending and starting two wars-- three if you want to count the " war on terror."  Do we all remember that when Bush left office we were on the edge of economic collapse and about to bring the world down with us? Hello-- taxes on the wealthy and on corporations were the lowest they have ever been in 2008 when we had the worst economy ever since the Great Depression.

 Obama is still in the process of putting Humpty Dumpty together again, in spite of tremendous congressional opposition.  No matter what Republicans say, the truth about trickle-down is that it didn't work under Reagan or Bush and it won't work now.  Our only hope is four more years for Obama.





3 comments:

Nomad said...

I made some pretty thorough research on the hoax of Reaganomics, what it was and what it wasn't, its already discredited history before Reagan and what the hoax was really all about. You might find it interesting in a pathetic sort of way. :)

http://nomadicpolitics.blogspot.com/2012/10/the-incredible-hoax-of-reaganomics.html

Roberta Kyle said...

Hi Nomad and thanks for leaving the link. I just went and read your excellent post on Romney spinning away and trying to tar the Obama administration with the failure of " trickle down" by applying the word to government.

Slick-- but I bet it backfires

JamaGenie said...

Republicans want us to forget that not long after Reagan took office, David Stockman, his "economic guru" publicly stated "trickle down" was only a gimmick he (Stockman) came up with to get the former actor into the White House, but that would NEVER EVER work in the real world.

Decades of experience have shown Stockman was correct, so I've always been puzzled that "trickle down" continues to be the (public) mantra of rich Rethugs.