Trickle-down economics

Trickle-down economics

https://en.wikipedia.org/wiki/Trickle-down_economics

Trickle-down economics

"Trickle-down economics", also referred to as "trickle-down theory", is the theory that economic benefits provided to upper income level earners will help society as a whole. In theory their extra wealth will be spent into the economy, providing wealth for lower income earners and creating jobs. This wealth in turn is spent back into the economy. The term originated in United States politics.^[1][2]:27-28 It has been attributed to humorist Will Rogers, who said during the Great Depression that "money was all appropriated for the top in hopes that it would trickle down to the needy."^[3]

Economist Thomas Sowell has made the case^[4] that no economist has ever advocated a "trickle-down" theory of economics, which is rather a misnomer attributed to certain economic ideas by political critics who either willfully distort or misunderstand the actual stated goals of their political opponents.^[5]

In more recent history, the phrase is most closely identified with critics of the economic policies known as "Reaganomics" or laissez-faire. David Stockman, who as Reagan's budget director championed Reagan's tax cuts at first, but then became critical of them, told journalist William Greider that the "supply-side economics" is the trickle-down idea: "It's kind of hard to sell 'trickle down,' so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory."^[6][7] Political opponents of the Reagan administration soon seized on this language in an effort to brand the administration as caring only about the wealthy.^[8]

trickle-up effect 

The trickle-up effect or fountain effect is an economic theory used to describe the overall aggregate demand of households and middle-class people to drive and support the economy. The theory was founded by John Maynard Keynes (1883-1946).^[1] It is sometimes referred as Keynesian economics in which stimulation is enhanced when the government lowers taxes on the middle class and increases government spending.^[2]

trickle-down effect  (Marketing)

Proponents of the trickle-down effect believe that a free market, which is uninhibited by heavy taxation and other forms of government controls, will cause an increase in wealth for society as a whole, part of which will "trickle down" from the affluent to the less wealthy, making the latter group better off. In this model, relative poverty may increase, but proponents state that this is a moot point because absolute poverty decreases. Opponents to this theory may point out that a large gap in the distribution of wealth can lead to a similarly large gap in power and influence, thus making this economic model undesirable. The trickle-down effect is usually used to describe a process by which benefits to the wealthy "trickle down" to benefits for the poor. The trickle-up effect, in a corollary to this, states that benefiting the poor directly (for example through micro loans) will boost the productivity of society as a whole and thus those benefits will, in effect, "trickle up" to benefits for the wealthy.^[3]

trickle-down effect 

The trickle-down effect is a marketing phenomenon that affects many consumer goods. Initially a product may be so expensive that only the wealthy can afford it. Over time, however, the price will fall until it is inexpensive enough for the general public to purchase.^[1]

When applied to fashion, this theory states that when the lowest social class, or simply a perceived lower social class, adopts the fashion, it is no longer desirable to the leaders in the highest social class.^[2]

The theory also exists in social behavior. For instance, the urban middle and upper class of Europe adopted the bicycle, both for distinction purposes and for the green values it represents,^[3] in contrast to everyone's polluting car. Street designs are increasingly bicycle-friendly, with bikeways, cycling infrastructure. Some cities even decide to fund a publicbicycle sharing system.