Trickle down economics debunked again and again and again. Market econ means MORE participate because they buy more products by shear volume of numbers. The 1% do not and can not buy enough in volume to match. Take care of the purchasers (middle class) economy prospers. The economic story that justifies this behavior is the trickle down theory. Eventually, the mountains of money Americas owners make, will get spent and, thus, find its way to the middle class ... Unfortunately, thats not the way it actually works. Americas richest entrepreneurs, investors, and companies now have so much money that they cant possibly spend it all. So instead of getting pumped back into the economy, thus creating revenue and wages, this cash just remains in investment accounts. Hanauer explains: I earn about 1,000 times the median American annually, but I don’t buy thousands of times more stuff. My family purchased three cars over the past few years, not 3,000. I buy a few pairs of pants and a few shirts a year, just like most American men. I bought two pairs of the fancy wool pants I am wearing as I write, what my partner Mike calls my “manager pants.” I guess I could have bought 1,000 pairs. But why would I? Instead, I sock my extra money away in savings, where it doesn’t do the country much good. If $9 million out of Hanauers $10 million of annual earnings went to 9,000 families instead of Hanauer, Hanauer has pointed out, it would get pumped back into the economy via consumption. And, in so doing, it would create more jobs. Instead, it sits in Hanauers bank account or gets invested in companies that dont have enough well-off potential customers to sell to. Hanauer estimates that, if most American families were taking home the same share of the national income that they were taking home 30 years ago, every family would have another $10,000 of disposable income to spend. That, Hanauer points out, would have a huge impact on demand — and, thereby job creation. So, if nothing else, its time we stopped perpetuating the fiction that rich people create the jobs. Rich people dont create the jobs. Our economy creates jobs. Were all in this together. And until we understand that, our economy is going to struggle. Read more: businessinsider/rich-people-dont-create-jobs-2014-6#ixzz363DO50qU
Posted on: Sun, 29 Jun 2014 17:41:55 +0000
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