May 25, 2012 by David K. Sutton
Supply Side (Trickle Down) Economics Doesn’t Work. Can We Move On Now?
This topic will never die on The Left Call, at least not until people stop believing the lie that is trickle down economics. This idea that we need to give rich people more money in the form of tax cuts before they will create more jobs would make for a nice laugh if it wasn’t so damaging to the country and to the prospects of income and wealth equality. And when I say equality, I don’t mean totally equal, I’m talking about getting back to something more reasonable, a time when CEOs only made 30 times the average worker instead of 300 times.
I’ll try to keep this as simple as possible for the thick skulls that seem to have a problem understanding how this works.
Rich people don’t create jobs, we do. Yes, you read that correctly. Demand for products and services is what creates jobs. Tens and hundreds of millions of low to middle-income Americans are responsible for improving the economy and creating more jobs, that is, if they have the purchasing power to do so. When incomes are stagnant and tens of millions are out of work, that reduces demand and that is why the economy is slow to crawl out of a huge hole. This is why we have government stimulus. Government is the only entity in this situation that is able to reverse the course of the economy. Once the economy is course-corrected it’s then left up to good old American consumerism to increase demand and get the economy really going.
So as you see, it’s got nothing to do with the supply side. I can assure you that the supply side is quite capable of ramping up employment if there is a reason to do so. In fact, a company would happily borrow money to increase employment if that is what it took to increase the sales of its products and services. That means there is zero need for further tax cuts to the so-called “job creators”. They will create the jobs when they need to create them.
If you give tax cuts to rich people when there is no need (demand) to create jobs you are simply increasing the federal deficit with no resulting payback. That is the height of fiscal irresponsibility.