My attempt at winning the prize for stating the obvious:

[hedgehog]

When a very few people have lots and lots of extra money, they spend a little of it but keep most of it.

When lots and lots of people have a little extra money, they spend it, which means that more people have a little extra money to spend, which means they go out and spend it, etc. etc.

Corollary: The rich person pays taxes n the money once, then it sits around. The Middle class person pays taxes on the money, then spends the rest. The next person pays taxes on the money, then spends the rest. The next person pays taxes on the money, then spends the rest.

[izquierdista]

1. The definition of being rich

Not having to spend money. In fact, since you have bought everything you want, there's not much to spend it on.

[Skink]

2. Can we get those rebate checks now.

[Curmudgeoness]

3. What part of "no taxes on the rich" don't you understand?

Don't you know from hearing it endlessly drivelled at you that the rich are the only ones who create jobs with all that money they are keeping? Haven't you heard "a poor man has never given me a job"?

Give me class warfare these days! Consumers create jobs----and this is proven with the reasoning that we are not coming out of the depression/recession/bump in the road because consumers are not spending. Consumer = spending = jobs created.

[BR_Parkway]

6. Actually most jobs come from the small businesses - and most of

us in that category are no where near 'rich'

[JHB]

7. Then taxing the rich wouldn't affect you...

...but it would affect the financial decisions they make, including paying people more because they get more milage out of it that way than trying to pocket it and have Uncle Sam take a huge chunk.


It worked for us from the 40s until Reagan.

[BR_Parkway]

9. No arguement there at all - when rates were high, business (of all sizes)

reinvested in their plants, equipment and people as way of tax avoidance - now there's no disincentive to cutting everything except the bottom line and pocketing the profits

[JHB]

10. I call it the "top line"...

...as a way to underscore that the big impact of the high marginal rates wasn't to "soak the rich", but to change the decisions they made to not get soaked, in all the ways you outlined. It built asset value and let them gain wealth by capital gains, as opposed to the present structure, which favors liquidation and specualtion.

[Curmudgeoness]

8. You wouldn't know it to hear the Repugs talk. But I believe you. nt

[Winterblues]

4. All those poor people just haven't got their trickle yet..

Pretty soon those Rich folks are going to open their wallets and let the money trickle all over the place..I am absolutely sure of it because Republicans have stated it as fact, and everyone knows how credible they are on every single issue..

[EC]

5. And for every place the money is spent

the middle class are also paying sales taxes...

[EstimatedProphet]

11. Exactly

This is also exactly why the outsourcing of the '00s, and the staggering increases in pay of CEOs were such a problem for the economy.

Say you have a company which employs 501 people - 500 employees and one CEO/owner/manager. With the exec pay rates of the 21st century, it's quite possible that the CEO makes as much as the 500 employees. It used to be about 50.

These 501 people translate to 501 gallons of milk a week, and/or loaves of bread, and/or tanks of gas, and/or boxes of cereal, and/or dinners out, etc. Again, in earlier days the CEO would only have made 50 times the amount of money than the average employee, which means that for the same money, the company can only employ around half the employees as before. so that means less loaves of bread, gallons of milk, etc. consumed. Now, let's say the company lays off half of its workforce and gives the CEO the money instead (exactly the kind of thing corporations were doing under Bush). That's 250 less consumer items being consumed. The CEO is simply not going to make up the difference and buy 250 loaves of bread a week. That's money that disappears from the local economy.

The righties love to talk about how paying people all this money is good for the economy, but it shuts it down pretty fast.

[EOTE]

12. You're talking about two concepts. Marginal utility of the dollar and...

The Multiplier Effect. Both are very real and tell you just about everything you need to know about how Trickle-Down Economics is a bunch of BS. Poor people and the middle class obviously have a high marginal utility of the dollar and a higher marginal propensity to consume. This is tied in with the Government Multiplier Effect that shows that Government spending can have a very strong multiplier effect (it can provide more of an economic stimulus to the economy than what was originally provided) when it is focused towards the people with the highest marginal utility of the dollar and the highest marginal propensity to consume. The thought of providing more money to those with the smallest propensity to consume (the wealthy) during this time of recession while they're currently hoarding all the wealth they currently own is absolutely ridiculous.