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Cutey with a booty

Top down or bottom up economics - which theory makes more sense and why?

Is it better for a country to enrich the rich so that they will then benefit the middle class? Or is it better for a country to enrich the middle class so that they will then benefit the rich?Note that I am leaving out the poor, unfortunately, because I don't think there is a branch of economics which recommends enriching the poor, or am I wrong in that?
Dick:

The bottom up theory will work as long as you are pumping something into the equation, when you stop adding it stops working.
It is much like filling a glass with water with a steady rate of consumption at the bottom, is you don't constantly add water the glass will go dry.

Dick:

And that is why I favor the top down model, it has a tendency to be self sustaining as long as it is not interfered with too much.

Ginger:

Neither. The most efficient economy is one where supply equals demand. That leaves out 'supply side' economics (once referred to as voodoo economics by daddy Bush). It also leaves out demand side economics (as attempted with the stimulus package).


Basically the market should be left to find its own balance unless it gets too lopsided, as it has recently. Then government intervention is needed to bring it more into balance.

That is not socialism nor capitalism. It is economics.

Ginger:

As long as the market takes care of itself it is capitalism.

Ginger:

I was. The market had become so loopsided that our entire financial system was clogged. Much like it was in the late 20's and early 30's. There was no way that it could unclog itself.

MaggieD:

Well! You've made me think....again!! I immediately thought of Henry Ford. He was a brilliant businessman. He understood that, if the middle class couldn't afford his cars, his business was doomed. Using that model (which was most assuredly true), would indicate that enriching the middle class is a wonderful thing to do for the economy....for business.

Then the question becomes "How does one enrich ANY class?" How about great jobs? Great educations? Great opportunities? Our government can see to it that we get great educations. Re jobs and great opportunities, in my opinion, those come from wealthier people who can create them for us.

MaggieD:

No, I haven't....

MaggieD:

Isn't it funny that we both thought of Henry Ford.

Demon:

Money begets Money so top down ....

Lovely:

Amen! Wealth creates the jobs-and not government!

Lovely:

Thank You Ginger-I totally agree and I was not for the bailout.

Lovely:

True Dick but for that to work there must be jobs if the consumer is t have any money to spend-like it or not the rich are the ones who create a helluva lot of jobs.

Lovely:

The branch you speak of enriching the poor comes at the expense of the rich and middle class. It's called redistribution of the wealth or it's better known name is socialism.

Obama told Joe the plumber that his plan is to spread the wealth around! Doesn't that sound like socialism?

Lovely:

That was a great story when America's economy was industrialized-the fact is today the economy is service related and industry creates not so many jobs as in the past.

But I liked your story Lou!

Lovely:

It's heck of a lot more capitalism than socialism-I think.

Lovely:

The CEO of FEDEX said that he employs more than 30,000 people and if capital gain taxes were lowered he could employ another 30,000.

It seems to me that it's the people who invest ther money in America are the ones who create the jobs.

High taxes only encourage them to invest their money where they won't be taxed to death-like overseas.

Lovely:

I agree Dick. No economy can work without money and poor folks don't have any or at least very little. And the middle class wouldn't have any either without the flow of money coming from the top down.

Doesn't it seem like common sense to believe that?

Lovely:

All I'm saying Achoi is that there won't be an economy of any kind unless someone with money starts a business that hires workers and of course the business must turn out a product or need that people want or the business and the future of it's workers is lesson in economic futility.

Lisa007:

To be realistic, our economy has gotten so bad that both scenarios are going to happen and we are going to be in a world of hurt soon. The best thing that will happen out of it is the communities are going to have to build up from within while the rich greedy guys all kill eachother for the money they have left.

Lisa007:

Good answer Ginger. It is too bad the lopsidedness wasn't seen before it got this bad.

Porkenstein AKA Pork, Porky, Porkens:

I don't think it is so much about enriching either class as much as greasing the wheels for them to be prosperous on their own. It is about job creators versus job consumers, not so much the rich and middle class. There are plenty of non-rich people that own businesses that create jobs. I also don't think it is an either/or proposition.

Benny:

The moral to the story is that it is the American worker that makes the economy run. It is the American worker that buys the companies goods and services and it is the American worker that need to be put back to work before the economy turns around.

Benny:

I want to tell you a story about Henry Ford, He is know doubt the grand father of American Industry and Manufacturing.
One day Henry was taking a proposed investor into one of his assembly plants to show off his newest innovation to manufacturing. His newest innovation was robotics and he told this investor that he has found a way to produce cars. These robotics can work 7 days a week, do not get paid over time, do not call of sick or take vacations nor require benefits. The investor looked at Henry and said the only problem with your innovation is that your robots can not buy your cars!

Benny:

Your Comment of Henry Ford reminded me of that story Maggie. Thanks for flipping the switch for me. :)

Cutey with a booty:

This is a very nice story. Tx

Cutey with a booty:

Well, do we need someone rich to start a business? Can middle class start a business as well? Most small businesses are owned by middle class, no?

Cutey with a booty:

It depends, let me be a devil's advocate. Middle class is responsible for most of the consumption, no? Because of the consumption, investment is needed to maintain the infra to satisfy the consumption demand. If there is no consumption demand, then, no investment is needed. Put it another way, if there is no customer, how many workers will a business hire? Probably none.

Cutey with a booty:

Why thank you. Have you read a book called Freakonomics?

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