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Discuss Rising to the top economic theory.

ReiMeishin

Dreaming to live
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#1
Ok, we have all heard of the "trickle down" economic theory. The theory that if you give tax breaks to the richest sectors of the economy, they'll make business expansions, hire new employees, and benefits will trickle down to the lower sectors of the economy. Regan tried this, and it did not work. The problem is that when the richest sectors of the economy get more money, they have more of a tendancy to keep their money in savings, or spend it on luxury goods. This keeps money where it is, or makes it go stagnant. I think it is high time that someone showed a new model of income distribution. So here's my "rise to top" theory of economics.

When those in the lower-middle sector of the economy recieve more money, they have three tendancies

1. Save the money
This does make the money go stagnant, but their incentive to save is not as high as those in the highest sectors of the economy, so not as much money will be subject to stagnation

2. Spend the money on consumer goods
This causes the money to rise up. When you spend money on consumer goods, it goes to merchandisers and manufacturers. So, in theory, they could now make expansions and create new jobs like the "trickle down" theorists wanted in the first place.

3. Spend money on education.
This perhaps causes the best overall effect on the economy in the long run. When people become more educated, they become more skilled and increase the human capital of the nation. This benefits everyone because there will (eventually) be more of everything for everyone.

I welcome feedback and critisism. Especially if you are very knowledgeable about economics.
 

swizeguy

How dare you!?
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#2
yeah i think that it is important to spend money on education so we dont have dumb asses like bush runnnig our country years down the road...
 

DanGeo23

Resident Conservative
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#3
swizeguy said:
yeah i think that it is important to spend money on education so we dont have dumb asses like bush runnnig our country years down the road...
if there is a problem with something.. we should fix the problem before we just spend more money on it... otherwise we just have a more expensive problem.. a more expensive bad education
 

Icarus

(╯°□°)╯︵ ┻━┻
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#4
DanGeo23 said:
if there is a problem with something.. we should fix the problem before we just spend more money on it... otherwise we just have a more expensive problem.. a more expensive bad education
Which is one of Bush's problems :)

I think that you are largely correct, ReiMeishin. But on the other side of the coin is the few rich people that do put the "trickle down" theory in to play.

If we could get a few more of those, the U.S.A. would be a little less fucked.
 

msalyss85

Banned - What an Asshat!
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#5
I live in a town that puts a small percentage of money in the school system. Our buildings are overcrowded, the structures are outdated by at least 40 years, and we have hardly any money for after-school programs and sports :( . I wish that my town could give more to the community, to the schools, and most importantly to the kids.

I wish that America would spend more time making sure our schools are ok and our kids are ok. Instead America worries about other issues that are so much more important than its own: Iraq, war on "terror", 9/11, osama, ISRAEL (!)...etc.

America should focus on itself before it focuses on others.
 

ReiMeishin

Dreaming to live
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#6
Also, the law of diminising returns states that each additional unit of something you have, the less satisfaction you derive from it. That being said it makes a society feel better off overall when the wealth is spread around.
 

ReiMeishin

Dreaming to live
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#7
DanGeo23 said:
if there is a problem with something.. we should fix the problem before we just spend more money on it... otherwise we just have a more expensive problem.. a more expensive bad education
Most definately. I think that raising the salaries of educators should be seriously thought about. That would result in more competition for teaching positions and as a result, better teachers.

Also the system needs to change. Here in Japan, school is competitive from day one. It doesn't make sence to drop out either, because you cant get a driver's liscence here without a high-school education.
 

voiceofreason

Seeker of Truth
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#8
ReiMeishin said:
3. Spend money on education.
This perhaps causes the best overall effect on the economy in the long run. When people become more educated, they become more skilled and increase the human capital of the nation. This benefits everyone because there will (eventually) be more of everything for everyone.
Yes, education is the answer. The only difference between rich people and poor people is education. You can not give poor people money, because they have not been trained in what to do with it. Rich people get richer when they get money, because they have the training.

Trickle-down has always sounded so elitist to me, "yes, give the masses a trickle of our money", and that would be fine with me if it worked, but it doesn't really seem to in practice...
 
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#9
First off I don't even understand why you care. Your a "expatriate" and fly a different countries flag. Why do you even care what state the USA is in? But as for my two cents worth it wont happen in the world we live in. Too many rich people with there hands in the government for it to happen, Nice dream world you like to live in. Now snap back to reality.
 

ReiMeishin

Dreaming to live
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#11
Whiplash_DS said:
First off I don't even understand why you care. Your a "expatriate" and fly a different countries flag. Why do you even care what state the USA is in? But as for my two cents worth it wont happen in the world we live in. Too many rich people with there hands in the government for it to happen, Nice dream world you like to live in. Now snap back to reality.
Who said anything about the US? I'm talking general economics here. This can be applied to any country, anywhere. Also, something is only insurmountable when it is accepted as such. The idea that women could vote was at one time a dream. When dreamers act upon their dreams,great things happen.
 
R

RedOctober

Guest
#12
I don't believe in "trickle down".
We have seen that failing in the 1920's.
The rich bought some very expensive cars.
Yes, they were good, and beutiful.
But it was only possible to boost the economy if roads and bridges were built, and cars were made in a cheap way like the model T Ford.

The same problem we have now. We have everything.
That's why we don't buy anything.
So the economy sucks. And to make things worse, globalism causes products to be produced at a very low price in poor countries.
That causes also inemploymant in America and Europe.
So what to do?

The interest rate is low, houses are expensive, so people start renovating their homes. Make it even bigger than it already is.
In the long run, the only good investment is real estate.

But there is one problem of course..
When your neighborhood is getting crowded.
That's why people turn right in a time of crises,
while they'd better turn left.

Our industry is hopeless in their effort to produce a 1000 versions of the same. Good idea's are bought by big companies to shove it in some drawer.
Just to get it off the market!

The electronics industries don't really have a clue on what to bring on the market.
I would like a cellphone, with a GPS receiver, that I can link with my camera in some way. Just an example.
I even want to send my photos real time into my web page if I want.

I don't say it isn't there already, but it is much too expensive.
I think a GPS receiver should be standard in a cell phone.
It would be a nice way to alarm the police or firebrigade if something went wrong! Of course the info is transmitted only in case of emergencies.

What is simpler than to make a standard in displaying personal data in case of an emergency?

The bush government is working from top to bottom, but what I suggest is working from bottom to the top.
The police is there for the people, and not the other way around!