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Evidence Of The 'trickle Down Affect' From The Rich

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You hear lots of bleating about the merits of the so called 'trickle down affect' from the rich by the mainstream media. This is the theory that the money that the super rich/ rich spent in the economy will supposedly keep all the small businesses going, therefore they should not be taxed. But can the trickle down affect actually be quantified? Is there a way of actually quantifying and therefore proving it with figures? Or is it simply a quick fix answer to keep up the premise that the free market works for everyone, to shut up the plebs.

I reckon they should have to provide tax receipts to show how much money they spend to qualify for these tax break! How does it work in practice?

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Normally it would have trickled into savings and shares...creating loans and investment = more jobs.

However recently its trickled into residential housing so the poor cannot afford the same house as their parents thankfully they got greedy and thankfully for them the poor had to take a huge loan to stop them liquidating their residential investments.

Now the rich can trickle their bailout funds down into food futures and commodities so everything is wonderful until we can speculate on the price of the air we breathe.

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You hear lots of bleating about the merits of the so called 'trickle down affect' from the rich by the mainstream media. This is the theory that the money that the super rich/ rich spent in the economy will supposedly keep all the small businesses going, therefore they should not be taxed. But can the trickle down affect actually be quantified? Is there a way of actually quantifying and therefore proving it with figures? Or is it simply a quick fix answer to keep up the premise that the free market works for everyone, to shut up the plebs.

I reckon they should have to provide tax receipts to show how much money they spend to qualify for these tax break! How does it work in practice?

Yep.

The rich property developers make a fortune developing property, and the poor get benefits like hot and cold running water. The rich produce new inventions and produce them in swish factories, and the poor get luxuries like the fridge and the washing machine (not to mention an amazingly-reliable power supply to drive them). Jack Cohen and his heirs get super-rich by bringing consumers a greater variety of interesting foods than ever before and at vastly cheaper prices than a generation ago. All of them employ people in the process, too.

Having lived without some of these luxuries (didn't have hot running water as recently as 1984 in the UK), I'm happy to benefit from this trickle-down.

[edit] should've added a story for our times: super-rich Hermann Hauser invests his money, you and I get smartphones ....

Edited by porca misèria

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Yep.

The rich property developers make a fortune developing property, and the poor get benefits like hot and cold running water. The rich produce new inventions and produce them in swish factories, and the poor get luxuries like the fridge and the washing machine (not to mention an amazingly-reliable power supply to drive them). Jack Cohen and his heirs get super-rich by bringing consumers a greater variety of interesting foods than ever before and at vastly cheaper prices than a generation ago. All of them employ people in the process, too.

Having lived without some of these luxuries (didn't have hot running water as recently as 1984 in the UK), I'm happy to benefit from this trickle-down.

[edit] should've added a story for our times: super-rich Hermann Hauser invests his money, you and I get smartphones ....

So the richer they get, the more money that trickles down to the lower classes? Is there a chart you can refer me to show how this works? Is there an equilibrium point where poorer people start to benefit? I'm not so sure. Sounds great in practice, but the rich are now getting richer and richer, this is an undisputed fact, but is the money flooding down now as they get so much richer?

Does all the disposable income get spent as concentrated areas like London where all the super rich stay, or what?

Edited by workhou

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Like all economics it is based on a flawed model created before globalisation.

It used to be argued that if you gave the millionaire a tax break they would spend the additional income on a productive enterprise such as setting up a new factory, creating employment and spreading the new found wealth through wages.

Nowadays they will open a factory in Bangladesh, the money will leave the UK economy and the only benefit to the UK is slightly cheaper imported goods which will outcompete any existing UK businesses.

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So the richer they get, the more money that trickles down to the lower classes? Is there a chart you can refer me to show how this works? Is there an equilibrium point where pooer people start to benefit? I'm not so sure. Sounds great in practice but the rich are now getting richer and richer this is an undisputed fact, but is the money flooding down now s they get so much richer?

Does all the disposable income get spent as concentrated areas like London where all the super rich stay, or what?

How about asking an actual question. Look at my previous post for lots of examples, but to reiterate just one.

Two week's dole money today will buy you a b***** good washing machine. A couple of generations ago, a far inferior version of that amazing luxury would cost you several months average wage. That's real trickle-down of real wealth: today's dole gets you what only the rich could aspire to when the boomers were young.

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There is no trickle down effect.

The real question is what is the optimal size of an efficiently run state relative to GDP which ensures that the economy grows at its maximum, societally sustainable rate.

Our problem includes the fact that the state is not run efficiently, especially as we waste money making social landlords richer and creating a disproportionally large, expensive, non-productive, administrative and compliance burden for individuals, businessses and governments rather than spending it on services that people want.

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Our problem includes the fact that the state is not run efficiently, especially as we waste money making social landlords richer and creating a disproportionally large, expensive, non-productive, administrative and compliance burden for individuals, businessses and governments rather than spending it on services that people want.

Yes, but that's not the market at work, it's government meddling!

Having a market that enables people to benefit from their own ingenuity and hard work has benefited all of us. Perhaps I should go back further than in my earlier post, and point to the huge benefits that everyone now enjoys from people like Brunel, Marconi, etc having once been able to get very, very rich.

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So the richer they get, the more money that trickles down to the lower classes? Is there a chart you can refer me to show how this works? Is there an equilibrium point where pooer people start to benefit? I'm not so sure. Sounds great in practice but the rich are now getting richer and richer this is an undisputed fact, but is the money flooding down now s they get so much richer?

Does all the disposable income get spent as concentrated areas like London where all the super rich stay, or what?

The rich are getting richer, and some of their riches does filter down to the poorer...in London you can see it very clearly, many a living wage has been earned by the building trade from the rich, from their extensions and developments, to the restaurants they frequent, the staff they employ down to even the hive of cottage industry craft shops and bespoke designers that make a living from their rich neighbours.....but there comes a point when the rich realise they have all they could require in material things and life must have more meaning to it than just that.......What we need to be doing is creating the new rich that will create their own new riches therefore provide a living to more new people. ;)

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So the richer they get, the more money that trickles down to the lower classes? Is there a chart you can refer me to show how this works? Is there an equilibrium point where poorer people start to benefit? I'm not so sure. Sounds great in practice, but the rich are now getting richer and richer, this is an undisputed fact, but is the money flooding down now as they get so much richer?

Does all the disposable income get spent as concentrated areas like London where all the super rich stay, or what?

Clearly its crap, rather than trickle down it is far easier to cut out the middleman and distribute it more evenly as a wider population spending will normally allocate the capital in a way that is more beneficial, concentrating the wealth will just see it go into the asset classes that give the best return on Capital, this time houses, another time tulips another time vanilla icecream, it is no coincidence that the wealth disparity levels are identical to those in the 30s when the economy also collapsed due to the debt the bottom 80% took on to stand still. And its no suprise that that debt cant be paid and has led to default because the other side (the rich wont spend it). It is the same on a personal level as it is on a country level between PIIGS and DE and US and China

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Yes, but that's not the market at work, it's government meddling!

Having a market that enables people to benefit from their own ingenuity and hard work has benefited all of us. Perhaps I should go back further than in my earlier post, and point to the huge benefits that everyone now enjoys from people like Brunel, Marconi, etc having once been able to get very, very rich.

In an anarcho-capitalist world, you are obviously correct.

In a roughly liberal democracy, we cannot ignore the existence of government. The question is how we want our government to look so that the next Marconi etc can emerge and stay here while still having a stable society.

I don't know what the answer is but I am pretty sure that state intrusion into petty aspects of our lives is not the answer.

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How about asking an actual question. Look at my previous post for lots of examples, but to reiterate just one.

Two week's dole money today will buy you a b***** good washing machine. A couple of generations ago, a far inferior version of that amazing luxury would cost you several months average wage. That's real trickle-down of real wealth: today's dole gets you what only the rich could aspire to when the boomers were young.

And if anyone thinks this only applies to technology consider the example of Bernard Matthews turkeys - http://www.bbc.co.uk/news/uk-11846786

Matthews told the BBC: "When I started the price of turkey was extremely expensive for the ordinary person. To put it in perspective there were less than one million turkeys being produced in England in 1950 when I began, and in those days a man had to work for a week, the whole of a week's wages to pay for a turkey for Christmas.

"Today, it only takes two hours of his working time to be able to buy one."

He got rich and in the process made everybody wealthier.

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Like all economics it is based on a flawed model created before globalisation.

It used to be argued that if you gave the millionaire a tax break they would spend the additional income on a productive enterprise such as setting up a new factory, creating employment and spreading the new found wealth through wages.

Nowadays they will open a factory in Bangladesh, the money will leave the UK economy and the only benefit to the UK is slightly cheaper imported goods which will outcompete any existing UK businesses.

They will also bribe the ministers in bangladesh or threaten them with moving the factory if they pay any tax there.

After this they would not be seen dead in bangladesh so they keep the money in Dubai and non dom back in the UK.

The biggest scam in the western world is that people in the USA and UK/Eu dont want to change things for the rich because one day they will be rich also, globalisation is forming a group of people above the law and rewarding those with the most anti democratic views.

Better we just forgot the idea radically invest in energy security and put a tax on products coming from countries with poor human rights otherwise are we not just giving money to those who would do us harm?

From the US cables I read a description of China in Africa where they are funding a different way of international development where you dont need to improve democracy or human rights or freedom of speech.

Even now I am reading a newspaper (north africa) were its saying Eu is it worth it? is it better to go with the Gulf money and or China? for those in charge yes because those pesky EU folks have to ask questions when lending money.

Globalisation is commoditising the poor human rights are a efficiency drag as are a middle class.

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How about asking an actual question. Look at my previous post for lots of examples, but to reiterate just one.

Two week's dole money today will buy you a b***** good washing machine. A couple of generations ago, a far inferior version of that amazing luxury would cost you several months average wage. That's real trickle-down of real wealth: today's dole gets you what only the rich could aspire to when the boomers were young.

Sorry, not good enough, particularly from you. Can do better.

That's nothing to do with rich trickle down and everything to do with the power of manufacturing technology.

Thanks to pitifully paid physicists, underpaid electronic whizzes and undervalued engineers. Oh, and near slave labour.

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They will also bribe the ministers in bangladesh or threaten them with moving the factory if they pay any tax there.

After this they would not be seen dead in bangladesh so they keep the money in Dubai and non dom back in the UK.

The biggest scam in the western world is that people in the USA and UK/Eu dont want to change things for the rich because one day they will be rich also, globalisation is forming a group of people above the law and rewarding those with the most anti democratic views.

Better we just forgot the idea radically invest in energy security and put a tax on products coming from countries with poor human rights otherwise are we not just giving money to those who would do us harm?

From the US cables I read a description of China in Africa where they are funding a different way of international development where you dont need to improve democracy or human rights or freedom of speech.

Even now I am reading a newspaper (north africa) were its saying Eu is it worth it? is it better to go with the Gulf money and or China? for those in charge yes because those pesky EU folks have to ask questions when lending money.

Globalisation is commoditising the poor human rights are a efficiency drag as are a middle class.

+1. We should limit tarriff free trading to other social democracies or do ourselves imense harm.

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How about asking an actual question. Look at my previous post for lots of examples, but to reiterate just one.

Two week's dole money today will buy you a b***** good washing machine. A couple of generations ago, a far inferior version of that amazing luxury would cost you several months average wage. That's real trickle-down of real wealth: today's dole gets you what only the rich could aspire to when the boomers were young.

It's hard for me to argue this point with you as I never experienced these conditions as I was born in the late 70s. Without going off topic though I would say that these prices are only possible because we have a slave labour force at work in third world countries so we can pay these low prices. In addition if these white goods were made in the UK consumers would pay higher prices sure but maybe these people on the dole would have jobs making the washing machines instead of waiting for crumbs of the rich man's table. Aside from this, most of these wonder products break down after 1 or 2 years, quality was different in the olden days or so I am told.

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It's hard for me to argue this point with you as I never experienced these conditions as I was born in the late 70s. Without going off topic though I would say that these prices are only possible because we have a slave labour force at work in third world countries so we can pay these low prices. In addition if these white goods were made in the UK consumers would pay higher prices sure but maybe these people on the dole would have jobs making the washing machines instead of waiting for crumbs of the rich man's table. Aside from this, most of these wonder products break down after 1 or 2 years, quality was different in the olden days or so I am told.

There is far more stuff that can break down, the life span is shorter and when it does break down it is now disposed of instead of repaired.....we now have far too many choices, better I would have thought to have far less choices and far better quality.....but that would be no good for the economy ;)

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There's probably some. Money for development and improvement doesn't come from people struggling to survive. However, it's a very inefficient and morally dubious method. Morally dubious because it seems pretty difficult, if not impossible, to get rich without screwing over many people on the way there (and I just can't accept that the differences in levels of wealth are at all deserved), and inefficient because whilst you need a pool of money in order to have large enough scale investment to develop further even more of it sits in their own pockets as their hoard, at best passing it amongst each other.

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In an anarcho-capitalist world, you are obviously correct.

In a roughly liberal democracy, we cannot ignore the existence of government. The question is how we want our government to look so that the next Marconi etc can emerge and stay here while still having a stable society.

I don't know what the answer is but I am pretty sure that state intrusion into petty aspects of our lives is not the answer.

How much actual power does the elected government in a liberal democracy have to affect change? The elected governments now are toothless tigers really in the scheme of things. Clearly this trickle down effect does not work but there is bugger all anyone can do about it because the financier classes will just up sticks and leave. Because of global capital the government can't do jack sh*t about it. Until we see the next crisis of capitalism as Marx predicted, we will be dependent on the non-existent trickle down affect in our economy.

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Most rich people used to be poor

Not actually true.

Look at how many many multi-multi-millionaires are truely self-made.

The likes of Steve Jobs, Alan Sugar etc are very rare.

And then we have to decide if Abramohvic counts as "self-made" or as a gangster.

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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