Um okay. You ask about a psychological phenomenon and then dismiss it without any basis.
Is that "keeping things factual" that you are advocating earlier in this thread?
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Trump's budget.
- Thread starter Michael J. Fletcher
- Start date
Um okay. You ask about a psychological phenomenon and then dismiss it without any basis.
Is that "keeping things factual" that you are advocating earlier in this thread?
Can you name me a well known millionaire or billionaire who spends 30% on properties that he uses to live in (not investment) or on items of pleasure or need that are a significantly higher percentage share of his wealth than the percentage on same items by someone in the middle class? I don't know anyone. I guess empirical evidence is my basis here. I would actually claim the opposite happens for wealthy people: they spend percentage wise way less on discretionary spending than a Joe in the middle class.
Um okay. You ask about a psychological phenomenon and then dismiss it without any basis.
Is that "keeping things factual" that you are advocating earlier in this thread?
Can you name me a well known millionaire or billionaire who spends 30% on properties that he uses to live in (not investment) or on items of pleasure or need that are a significantly higher percentage share of his wealth than the percentage on same items by someone in the middle class? I don't know anyone. I guess empirical evidence is my basis here. I would actually claim the opposite happens for wealthy people: they spend percentage wise way less on discretionary spending than a Joe in the middle class.
The wealth effect really works on the middle class and lower where the "gamma" of spending is higher.
This is why trickle down economics doesn't work.
One does not conclude or lead to the other. I don't see the link.
The wealth effect really works on the middle class and lower where the "gamma" of spending is higher.
This is why trickle down economics doesn't work.
Precisely...The wealth effect really works on the middle class and lower where the "gamma" of spending is higher.
This is why trickle down economics doesn't work.
There's ample empirical evidence to suggest that the wealth effect is real for the middle class and that the opposite actually holds for the 1%. As nwm points out, this is why it's hard to argue that tax cuts for the wealthy actually stimulate the broader economy. Moreover, there is also evidence to suggest that the other elements of the "bigly yuge" tax plan are going to do diddly squat to get the American economy to that magical 3% (or was it 5% that the Big Man said was gonna happen?).
One does not conclude or lead to the other. I don't see the link.
It follows from your statement that the wealthy don't spend more and my comment that the middle class do when their wealth (real or perceived) increases.
I don't think that the "wealth effect" is at all related to this whole discussion, it was never mentioned as main benefit of corporate tax cuts. It was about corporations paying lower taxes and the wild assumption that in turn corporations rain all their blessings down on the working class something I strongly question to the degree of outright declaring it a myth. It's completely irrelevant what the rich do with tax cuts as there is hardly any evidence they would ever spend more. They already got everything they need. Hence I believe the wealth effect I find completely out of place in this exchange.
Precisely...
There's ample empirical evidence to suggest that the wealth effect is real for the middle class and that the opposite actually holds for the 1%. As nwm points out, this is why it's hard to argue that tax cuts for the wealthy actually stimulate the broader economy. Moreover, there is also evidence to suggest that the other elements of the "bigly yuge" tax plan are going to do diddly squat to get the American economy to that magical 3% (or was it 5% that the Big Man said was gonna happen?).
And how is this again related to lower corporate taxes? Even the current administration never claimed that the economy is benefitting from gifts to the rich but they claim paradise will come as soon as corporations pay lower taxes which I think is a huge hoax.
It follows from your statement that the wealthy don't spend more and my comment that the middle class do when their wealth (real or perceived) increases.
What other kind of economics is there?The wealth effect really works on the middle class and lower where the "gamma" of spending is higher.
This is why trickle down economics doesn't work.
And how is this again related to lower corporate taxes? Even the current administration never claimed that the economy is benefitting from gifts to the rich but they claim paradise will come as soon as corporations pay lower taxes which I think is a huge hoax.
We went down a rabbit hole when you asked about the wealth effect. Trump actually used the words "trickle down" in the second debate. Corporations are no different than rich people. It's shown the gift of low interest rates just led to stock buybacks and dividends and not to significant capex investment.