Trickle Down vs. Bubble Up

I’m not an economist. just a person who watches the news, connects the dots and considers history. Whenever I have heard the phrase “trickle down” economics, my first reaction was, “Wouldn’t that be nice.” And the next was, “I don’t think so.” The benefit to the top is supposed to help those beneath, but ….

         We’ve just had a sterling example of the weakness in that reasoning. There was a recent huge tax cut to those in the very upper levels of the economy.  I wonder if the people giving that tax cut even believed their statements that this would provide business with the resources to hire more people and raise their wages. Well, surprise surprise, for the most part it didn’t happen. The businesses did not create a rainy day fund or invest in employees. They bought back their own stock. Now they ‘d really appreciate more help to cover their losses.

Capitalism is really great. Unfortunately, it’s not actually what’s been going on. I’ve often thought that it would be better to have a “bubble up economy.” And we are about to see how this will work.  The government is going to put money in the hands of people who will really spend it. More equitable tax laws could have helped all a long, but a chunk of cash right now is a good thing. It’s a good thing for the individuals, but also for the economy. Those at the top will benefit as people spend and the profits for the businesses they favor will bubble up to the top.

      The impact of this plan may not be as clear in the current context with so many challenging variables, but it’s an experiment that is long overdo.