Recently in 2015, the International Monetary Fund researched the trickle down theory throughout 150 countries and released the analysis to the public. They found that when top earners in society make more money, it actually slows down economic growth. Instead they discovered when poorer people earn more, society as a whole benefits. Their calculations showed that when the wealthiest 20% of society’s income is increased by just 1%, the annual rate of growth decreases by nearly .1% within the next five years. This led them to flat out say “the benefits do not trickle down”. However when the lowest 20% of earners receive and income growth of 1% the rate of growth goes up by nearly .4% over the same 5 years. The numbers just simply back up the obvious point that if billionaire Donald Trump receives $100, he will probably take it, place it in his pocket and then place it in savings. Nevertheless if you give a homeless man $100 he will buy, food, clothes, and probably use the rest to rent out a cheap motel for the night; all things that help small businesses thus benefiting the economy. An example like that easily points out other cons regarding the Trickle-Down Theory. For starters, where did the hundred dollars come from? Was it stolen? Was it borrowed? Was it a gift? In all three instances someone(s) took the loss of $100 for it to just be given to Donald Trump. Sadly enough in this case it is only $100 but in 2008 it was over 700 billion dollars and that “who?” regarding who took the loss on it was the taxpayers. Initially that’s hurts the economy because the 700 billion could go to many other things like roads, schools, research, hospitals, veterans etc. but since the money was taken all those things were left neglected. The second point to be made regarding the example is since the homeless man spent the money and Donald Trump didn’t, who in turn really benefits?
Recently in 2015, the International Monetary Fund researched the trickle down theory throughout 150 countries and released the analysis to the public. They found that when top earners in society make more money, it actually slows down economic growth. Instead they discovered when poorer people earn more, society as a whole benefits. Their calculations showed that when the wealthiest 20% of society’s income is increased by just 1%, the annual rate of growth decreases by nearly .1% within the next five years. This led them to flat out say “the benefits do not trickle down”. However when the lowest 20% of earners receive and income growth of 1% the rate of growth goes up by nearly .4% over the same 5 years. The numbers just simply back up the obvious point that if billionaire Donald Trump receives $100, he will probably take it, place it in his pocket and then place it in savings. Nevertheless if you give a homeless man $100 he will buy, food, clothes, and probably use the rest to rent out a cheap motel for the night; all things that help small businesses thus benefiting the economy. An example like that easily points out other cons regarding the Trickle-Down Theory. For starters, where did the hundred dollars come from? Was it stolen? Was it borrowed? Was it a gift? In all three instances someone(s) took the loss of $100 for it to just be given to Donald Trump. Sadly enough in this case it is only $100 but in 2008 it was over 700 billion dollars and that “who?” regarding who took the loss on it was the taxpayers. Initially that’s hurts the economy because the 700 billion could go to many other things like roads, schools, research, hospitals, veterans etc. but since the money was taken all those things were left neglected. The second point to be made regarding the example is since the homeless man spent the money and Donald Trump didn’t, who in turn really benefits?