The proponents of the Bush-era tax cuts say that letting tax cuts for the highest earners lapse would be a serious setback for the economy because those taxpayers represent a big share of consumer spending. If they don't step up their spending, the argument goes, the recovery will stall, and the rest of us will suffer too.However, when big businesses, such as banks, only use federal funds, such as those from TARP, to increase their own salaries, there is nothing to trickle down. The issue today is that capitalism has run rampant unregulated for too long. There are no rules to prevent companies from doing this, and so they continue to do it. In order for our economy to make a recovery, the amount of greed among big businesses needs to drastically decline.
Tuesday, September 28, 2010
Does the "Trickle Down" Method Trickle Enough?
One economic strategy is the "trickle down" method, in which when given vast amounts of money, big companies will spend and let the benefits trickle down to the common person. In theory, this method should work, right?
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