The Trickle Up Effect is defined as the economic theory used to describe the flow of wealth from the poor to the affluent.
A common criticism of republicans and capitalism is that the rich get richer and the poor get poorer. Capitalism by definition alone makes this argument just whining. I will make an argument for Trickle Down Economics by exposing and dismantling the Trickle Up Effect (Obamanomics/Clintonomics/FDR’s “Bad Deal”). Look, I like Robin Hood as much as the next guy. I mean that cute, cunning little fox helped all the forest folk by stealing from the evil Sheriff of Nottingham. It was a great story. Well, life’s not a cartoon. Here’s where the lunacy starts.
The trickle up effect states that benefits to the wealthy will be realized due to an increase in sales relative to the amount of benefits that are given to the poor. OK, you got me; I’m intrigued; do go on. The trickle up effect argues itself as more effective than the trickle down effect because people who have less tend to buy more. In other words, the poor are more inclined than the wealthy to spend their money. Why on earth are they poor then? This being so, proponents of the trickle up effect believe that if the lower and lower-middle classes are given benefits(paid for by increased tax rates on businesses and the “wealthy”), such as tax breaks or subsidies, the increased funds would be spent at a much higher rate than would the upper class, given similar fund increases. Furthermore, the trickle up effect argues, many upper-class individuals do not spend their entire yearly salary to begin with, which is an indication that they will not spend any additional funds. You mean being responsible? Instead, they will save additional funds, thereby withholding those funds from the economy and increasing the gap between the rich and the poor. The word withholding is actually slang for re-investing…I know it’s tricky. The trickle up effect avoids this pitfall by giving more money to those who would be more inclined to spend it. So, stop me if you’ve heard enough.
Wednesday, October 29, 2008
Socialism is bearing down upon us.
As the election nears, I can't help but have a sense of fear for what might come. Senator Obama is the biggest threat to our Country. He will take the principles that this country was founded on and abolish them. There has been much criticism on his theory of "spreading the wealth". I say not enough. This sounds like a great idea to many. This same group of people are also at the root of our housing crisis. Senator Obama was at the forefront for making un-affordable housing affordable. I don't have a problem with this, until it is mis-managed. What happened was, he and other's forced banks to give home loans to individuals that were not worthy. I am not an elitist, rather an objectivist and realist. Let me explain further.
Sen. Obama implemented a program in Illinois called NINJA. NINJA: No Income No Job or Assetts. This was a loan program offered to the very people that it was acronymed after. Excuse me! Housing is not a right, it is a well earned privilege. Income aside, I am not credit worthy at this point in my life. I was irresponsible. I embrace the regulation that I cannot, at least with a decent rate, receive a home loan. OK, so how does this relate to Socialism? One way is that these very same banks, that either chose to abuse the system or were forced into supporting this system, no longer have liquidity to lend to businesses. Businesses cannot take out pay-roll loans(good debt), because the bank's funds are spread across defaulted home loans. This is the beginning of the cycle. Bank rates go up for these businesses in order to recuperate some of the money. Businesses lay employees off to counter the rate hikes. Now this individual who has been laid off no longer has his or her own revenue to re-invest(consume) back into the system. Capitalism is broken. How do we fix it? Bigger Government? This will help regulate some of the corrupt banks and businessmen who control them. Well, who pays for these new salaries? Taxpayers. We can't tax the people that have been laid off, so let's increase the taxes on the businesses that laid them off. You see how dangerous this will become.
If Barack Obama wins this election, one thing is certain... he will preside over the largest expansion of the government's role in the economy since the 1930s. This "New New Deal," as some Democrats are already calling it, may well have the same result as the original one: to turn a sharp, painful recession into a long Depression. Will that set the stage for a GOP president in 2012 -- the way '70s stagflation under Jimmy Carter set the stage for Ronald Reagan? I doubt it. More likely, Obama will be able to parlay the hard economic times into a second term. How? The same way FDR did… by blaming everything that happens on his watch on his predecessors. The worse things get, the more the Obamacrats will blame it on "eight years of Republican deregulation, tax cuts and greed," calling for even more government intervention as the solution. And the media, of course, will back them up.
Related Article
http://www.aynrand.org/site/News2?page=NewsArticle&id=21701
Sen. Obama implemented a program in Illinois called NINJA. NINJA: No Income No Job or Assetts. This was a loan program offered to the very people that it was acronymed after. Excuse me! Housing is not a right, it is a well earned privilege. Income aside, I am not credit worthy at this point in my life. I was irresponsible. I embrace the regulation that I cannot, at least with a decent rate, receive a home loan. OK, so how does this relate to Socialism? One way is that these very same banks, that either chose to abuse the system or were forced into supporting this system, no longer have liquidity to lend to businesses. Businesses cannot take out pay-roll loans(good debt), because the bank's funds are spread across defaulted home loans. This is the beginning of the cycle. Bank rates go up for these businesses in order to recuperate some of the money. Businesses lay employees off to counter the rate hikes. Now this individual who has been laid off no longer has his or her own revenue to re-invest(consume) back into the system. Capitalism is broken. How do we fix it? Bigger Government? This will help regulate some of the corrupt banks and businessmen who control them. Well, who pays for these new salaries? Taxpayers. We can't tax the people that have been laid off, so let's increase the taxes on the businesses that laid them off. You see how dangerous this will become.
If Barack Obama wins this election, one thing is certain... he will preside over the largest expansion of the government's role in the economy since the 1930s. This "New New Deal," as some Democrats are already calling it, may well have the same result as the original one: to turn a sharp, painful recession into a long Depression. Will that set the stage for a GOP president in 2012 -- the way '70s stagflation under Jimmy Carter set the stage for Ronald Reagan? I doubt it. More likely, Obama will be able to parlay the hard economic times into a second term. How? The same way FDR did… by blaming everything that happens on his watch on his predecessors. The worse things get, the more the Obamacrats will blame it on "eight years of Republican deregulation, tax cuts and greed," calling for even more government intervention as the solution. And the media, of course, will back them up.
Related Article
http://www.aynrand.org/site/News2?page=NewsArticle&id=21701
Welcome All
The intentions of this blog, are just like that of most blogs. I intend to express my beliefs for whomever care to read. The entries will be my feelings on pressing issues in our world, in my heart, and even some fun updates from me. I love provocative interactions. I encourage debaters and free thinkers. I hope that my entries will inspire people to respond. I do not accept hate or negativity. This will be a platform for openness and listening. I am proponent of encouragement and hope. I hope to chat with you soon.
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