Thursday, January 9, 2014

Trickle Down Mythology

Here comes the rain again
Raining in my head like a tragedy
Tearing me apart like a new emotion

Thomas Sowell challenges the political fabrication of 'trickle down economics.' Barack Obama, for example, has claimed that trickle down economics is a philosophy which "says we should give [emphasis mine] more and more to those with the most and hope that prosperity trickles down to everyone else."

These types of statements are lies because no formal theory of trickle down economics exists. It has never been developed. A mind grounded in economic reason would not propose such a theory. Not even in the most voluminous treatises on economics can trickle down theory be found.

The reason is that the idea is absurd. Why would anyone give something to A in hopes that it would trickle down to B? Any reasonable person would give directly to B and cut out the middleman.

'Give' was italicized above because the left likes to propose that some group, namely the rich, is granted some sort of special privilege (e.g., a tax 'break') via the trickle down idea. Sowell suggests that leftists are particularly prone to trot out trickle down myths when suggestions are made that taxes should be limited.

But lowering a person's taxes does not 'give' that person anything. A tax cut amounts to a person keeping property the he/she rightfully owns--property that others want to take by force through the strong arm of government.

The trickle down myth is another product of the socialist mind. Government is the gatekeeper of privilege. It must dole out this privilege smartly.

Such is the flawed thinking of the central planner.

General welfare improves not through grant of special privilege by government, but through production and trade by individuals. Social cooperation rather than state force. As productivity improves via saving, investment, and entrepreneurship, scarcity is reduced.

This is the law of capital and markets. It is not the trickle down mythology of socialists.

1 comment:

dgeorge12358 said...

The president's grand experiment in trickle-down government has held back rather than sped economic recovery. He seems to sincerely believe we can build a middle class out of government jobs paid for with borrowed dollars.
~Mitch Daniels