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[–] canbot 13 points 59 points (+72|-13) ago 

People who pay $4000 more in taxes aren't making their dining decisions based on taxes. The 400 people who got $100 in assistance can now afford to eat at that restaurant. That is a 40,000% increase in business. When people go shopping the money trickles up. When you give money to people in the hope that they will create more products for those that can't afford to buy what is already out, you are a Republican.

Every transaction in capitalism is trickle up.

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[–] jimmyrussel 4 points 25 points (+29|-4) ago  (edited ago)

Exactly, it's a well known fact (and studies back this up like this one) that the wealthy save more money per dollar. That's money not immediately being reinvested in the economy via purchases that drive business. The implication that somehow these saved funds thrown into bank accounts or other assets like government bonds results in job growth is ludicrous.

Edit: I need to clarify some things here. I made some incorrect arguments in downstream comments. Relevant clarification below.

The argument that I should be making instead is one of job creation and how it happens. I can't believe I got through a discussion of trickle-down econ without it. The assumption with trickle down is that it assumes that money to the higher income levels will result in more jobs being created than if it went to lower incomes. Here's why it's not true:

The first point is lower income levels have a higher propensity to spend (as opposed to invest). Businesses take revenue and use it to reinvest in the company, ideally creating more jobs. Since lower income people spend more, this is at a higher rate since more money is spent. The companies receive more revenue and reinvest it to create jobs.

The second (and the part I missed) is that money that the higher income people invest typically does not result in job creation, but instead furthers their own wealth (i.e. goes to their personal bank account or personal investments as opposed to a job creating investment/capital). The argument here is that in order for jobs to be created more via higher income people, they have to make investments that create more jobs than the potential jobs that could've been created through a company gaining more revenue from spending.

The difference then is that giving to higher incomes just results in personal wealth accumulation, that may or may not be used to create a job. The lower income tax break route results in more money going to companies via revenue directly which is more likely to be reinvested and create a future job.

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[–] CallASpadeASpade 1 points 4 points (+5|-1) ago 

What are you talking about? The money doesn't just sit there in some giant Scrooge McDuck moneybank. It gets loaned out and any increase in the supply of loanable funds drives down interest rates so that everybody else can borrow at a lower cost.

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[–] Aducknamedjoe 2 points 0 points (+2|-2) ago 

Seriously, do you even economics bro?

Do you understand how banks and investment work?

Do you realize that the money the wealthy save which you hate so much is the same money a small business is loaned by a bank to get started?

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[–] NedTaggart 2 points -1 points (+1|-2) ago 

So you think you deserve a piece of what someone else saves? Or is it that you resent them for using their power of choice to make decisions and behave in a way that allows them to save money? Are you under the impression that these guys have a big Scrooge mcduck vault full of cash? Are you unaware of the concept of interest, where that money allows others to borrow money for a fee?

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[–] bob3333 1 points 12 points (+13|-1) ago 

It's called marginal propensity to consume if you've never taken economics. It's the reason we KNOW that money tends to flow up, not down.

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[–] CatNamedJava 0 points 0 points (+0|-0) ago 

That and the consumption multipler effect.