Pros And Cons Of Trickle Down Economy

1: What is Trickle-down economics
Trickle- down economics is the idea that the money that the “Super Rich” spend circulates and promotes growth in the economy and benefits others. It is the theory that the drivers of economic growth are people that are successful in the economy and that from the tax cuts they receive they will spend more of their money in the economy and invest in business’s which will supposedly generate more jobs. Yet if this is in fact true then why is it that the living conditions are still bad and jobs are at an all-time low. It is promoting inequality and creating a bigger divide between the working class citizen and the super-rich. According to research done by (YouTube video) Britain is the only economy that has grown
…show more content…
He introduced the trickle-down effect which was commonly known as “Reaganomics” back then. Since then it has led to a huge gap between the rich and the poor in the US. It has the opposite effect on what is it supposed to do and should be reversed. During a campaign to introduce the idea of trickle-down economics Reagan said he had a “recipe to fix the nation's economic mess”. He believed that tax cuts would enable rich people to spend and invest more which would generate even more revenue for the government. There were mixed opinions on Reagan’s theory. Some people believed that Reaganomics would spark up and cause high inflation and a rise in interest rates. As a result of this between 1981 and 1982 there was a recession in the US. Europe then followed on to imitate what the US had previously done even though there was little or no proof that it even …show more content…
The government feel that if they tax the rich more then the rich will spend less, the objective with the trickle down effect was to make poor people richer and not rich people poor. The government see taxing society as raising revenue which will raise society. A lot of these economic policies are based around the trickle-down theory and it simply does not work therefore they should be reversed. Although the government have yet to make any concrete changes it seems they are trying to re-adjust the tax system, “We want a simpler, fairer tax system that supports those on low and middle incomes while making sure that those who can best afford it make a fair contribution.” (

Related Documents