Lately, the phrase, “Spending our way out of recession” has been repeated over and over. I honestly never understood it, and it does not seem to be having concrete benefits.
What this country needs is good ol’ trickle down economics.
Trickle-Down Economics is, in my opinion, one of the most assailed economic thought processes in the country right now. Right next to Socialism, that is. To be honest, I never quite understood the criticism and in fact, I believe trickle-down economics is what this country needs for the economic recovery.
Ronald Reagan used trickle down economics in order to bring the United States out of the recession. Basically, the theory believes that if the higher tax bracket of wealth-owners is subjected to a smaller tax percentage, it will increase the amount of jobs and the income of employees.
There is one basic principle behind this theory: the fact that the wealthiest people in this nation are the ones who own the businesses, and thus control the number of jobs in the private industry. When times are tough, businesses need to cut costs, and more often than not, this occurs with layoffs. It only makes sense to cut taxes on businesses in order to maintain the upkeep.
However, there are criticisms of supply-side economics, as this system is often called. One criticism is that it’s basically “giving money to those who don’t need it.” I take offense to this criticism because it is based on one flaw – that the people who have the money didn’t have it in the first place. This criticism assumes that other people are having their money taken away from them and given to richer people.
That is not the case. People should be rewarded for their hard work – not be forced to give it to Uncle Sam.
It is my bet that trickle down economics would be able to pull us out of this recession much quicker than “spending out way” out of it with money we simply do not have. Let the private industry pull us out of the recession the natural way – any public driving force will simply cause more problems.
If you disagree with my analysis, please let me know! Comment away!