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Trickle Down Economics Doesn't Work

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Voting Style: Open Point System: 7 Point
Started: 8/22/2016 Category: Economics
Updated: 2 months ago Status: Post Voting Period
Viewed: 254 times Debate No: 94901
Debate Rounds (3)
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Trickle Down, or Supply-Side economics, has been in effect for over thirty years. I believe it has caused the downfall in the middle class.

Anyone wishing to discuss will be taking the Pro side of the Trickle Down theory. Thanks!


The reason why trickle down economics hasn't worked "sinceit was enacted" 30 years ago is because we have had no trickledown economics. Rich people today don't invest their money, they hoard it in a bank someplace off in Bermuda so they don't pay taxes. Corporations also do't invest their money in things that would create jobs anymore, they put it into their own stocks to rank up the stock prices and rigg the stock market.

This is because companies productivity is measured by how manyy digits they take out of the economy, not by the value of the goods and services they produce; most American Corporations are just money laundering schemes in effect because they earn money literaly by fiddling with digits.

his is based aroun Keynesian economics which links prosperity to the ammount of currency in circulation, as opposed tto market economics which links prosperity to the productrion of real wealth. Thus companis can make more money just by fiddling with bank ledgures, rather than producing anything, in effect factories shut down because they just aren't as profitable, and people lose their jobs.

During the 60's, however, rich people invested their money in factories and things that produced real wealth, creating jobs and wealth. Thus we had a strong middle class. As you can see it is Keynesian economics which lead to the downfall of the middle class not trickle down economics.
Debate Round No. 1


First off, I can't agree more with your views of American corporations. They do hoard their wealth gleaned from tax cuts and lowering their employees salary. But that's the crux of Hayak's trickle down theory. Give the rich tax breaks and incentives and they will "trickle" it down to the rest of us. But as you noted, that's not happening. Which is why Trickle Down economics doesn't work.

John Maynard Keynes submits that economic output is linked to demand- not supply. You mentioned the prosperity of the 60s. At that time, we employed Keynesian economics. The top tax rate for the rich was 91%. And the middle class exploded. Then Reagan came into office and slashed rates down to 30-40%. Thus began the shrinking of the middle class and the start of our ever increasing debt.

If rich people aren't investing their money in the US economy, then how has our Stock Market reached unparalleled heights? No matter what their tax rate, the rich will always invest in the US because they will make money.


We are employing Keynesian economics today, that is why the Federal Reserve chose to print our way out of 2008 rather than addressing the real issue- speculative and irresponsible banking practices. A real solution would be to enforce the regulations se up in the Glass Steagall Act, increase intrest rates and raise the Fractional Reserve ratios, Ben Bernakie could have done all of this, but he didn't.

I also want t point out to my opponent that the Middle Class went into decline and wages stagflated after the Nixxon administration:

Stock prices are rising because corpporations are loaning made-up money from the banks to buy their own stock, thus inflating its price.
Debate Round No. 2


There seems to be some confusion here. Everything mentioned about the Fed's actions in 2008 is based on supply side economics- per the conservative Bush Administration. Raising interest rates and instituting Glass-Steagall regulations are all Keynesian moves.

Keynesian Economics calls for government regulation of speculative Wall Street trading, stimulus spending to the middle class and cutting tax loop holes for the rich. These are all supposedly Democratic beliefs. Which is why wages stagnated under the Republicans Nixon, Ford and Reagan.

Corporations are instituting stock buyback, which is un-American. But that's not the cause of a rising stock market, it's the result.


Keynesian economics is the idea that printing money creates economic growth, they basically think they can print their way into prosperity. This is also why the minimum wage is crap, leading to a shrinking middle class:

The Fe has inflated the dollar so now we get payed sh*t wages.

Stock prices are overvaluedbecause of asset infltion, caused by the exessive avalibility of cheap credit.

Keynesian economics believes in subsidizing the banks p.s., notthe middle class, the fed didn't send us free money in 2008 they sent it to the banks who created more money out of thin air through fractonal reserve lendin and lent it to the government.
Debate Round No. 3
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