Trickle Down, Not Hemorrhage Out

During the 1980 campaign for the Republican Parties nomination for President some words about economics flew back and forth between Ronald Reagan and George H.W. Bush. Ronald Reagan brought out the Trickle Down theory of economics what George H.W. Bush called Voo Doo Economics. Hard to believe the two ended up as running mates.

The Theory of Trickle Down Economics is basically this: To fix the ailing economy and to stimulate growth the Government would institute programs such that the Government would build infrastructure like roads, bridges, and that type stuff, plus purchase ships, planes, and other equipment for the military and other Government agencies. All kinds of programs were designed to pour money into the economy using U.S. companies. The idea that the spending would put money into the companies who in turn would pay their U.S. workers then those workers would spend the money spreading it around buying goods and services increasing demand thereby increasing manufacturing in other sectors which leads to more jobs. A great theory, heck it worked for the U.S. to help end the Great Depression, of course back then it was known as the New Deal. Reagan may have been a Republican but he had a Roosevelt Democrat leaning.

If you look at things it is logical and works. What makes the theory not work is when the vessel (our economy) has holes or blockages at the top levels and instead of the money making down to the workers it goes somewhere else or it doesn't make it down at al. What constitutes a hole or blockage?

A hole is where the government provides money or tax break to a corporation and instead of using U.S. workers they outsource to foreign countries for cheaper labor then pocket the difference. That is a hole and the money leaks out of our economy. Heck, now so many companies are doing this it has become a hemorrhage. Our workers have lost jobs, savings, and homes because of this while the companies have profited, huge profits.

A blockage is when the Government provides money or tax break to a company to help but instead of putting the money to active use they use the funds to fudge their books to make it look like they have more assets on hand than they actually do. They do this to manipulate their stock to encourage people to invest in the company. Talk about fraud. Some company officials use the money to pay themselves astronomical bonuses. Wow, what a rip.

Now if we look at our economy as a living organism and money flow as the circulatory system, we can see it is no good. Our work force is what sustains us, it is the living tissue and if it lacks nutrients or oxygen it dies. When someone hemorrhages unless it is stopped that person dies. When there is a blockage of a blood vessel it could lead to heart attack or stroke, both are deadly.

Not good!

During the George W. Bush Administration we suffered from hemorrhages and blockages. Jobs went overseas, government bailout money was to manipulated stocks and pay bonuses, and our economy went to heck. They funny thing, actually sad thing, is corporate heads made ridiculous amounts of money while the poor got poorer. The gap between the wealthy is larger than the Grand Canyon.

Now we need to plug the hole and remove the blockages. If we do this and instigate President Obama's plan set forth in his State of the Union Address we will prosper, every one of us.