Sunday, November 23, 2008

Trickle Down Economics

Let's take a look at "trickle down" if a person rich or poor spends money, someone benefits, but let's look at it from the top down. Some wealthy person owns their own business or multi businesses and employs x number of people. Those employees pay taxes and spend money on all the necessary life expenses and someone else makes their income from that money. Also rich guy may own a home or two or three, and when he buys a home or a car, money exchanges hands more taxes get paid and income earned and so on. What about maintenance on his house and cars? Painting, roofing, carpet cleaning and floor care, house keeping and for the cars auto mechanic, car wash, tires. The list goes on and on, so I really don't think anyone should be upset when the rich get richer, because they are most likely to spend more of it and have a positive financial impact. All the companies that help maintain the possessions of the wealthy receive a benefit and in turn employ others who also spend money and pay taxes. So, a wealthy person automatically redistributes wealth every time he spends money. The creation of wealth is the reason why most people have a job in the first place. Companies don't start out of thin air, they are started and run by people, and if they are successful companies, someone might have become wealthy because of it. That wealth is spent and maybe that rich guy decides to start another company and the cycle of trickle down starts all over again, so thank some rich guy for the fact that you even have a job. All of the places you spend your money, someone is making money. You are supporting someone’s job and business. The economy runs well when we spend money, the more we spend the more everyone benefits. TRICKLE DOWN DOES TRICKLE DOWN. It is an economic fact, even if the rich get richer and poor get poorer, money still flows from the top to the bottom. I didn’t even cover all the ways the flow of money can impact the local economy where a businesses are located. If an area has businesses, it has employees who spend money on food, housing, transportation, entertainment and so many other things. So think about the benefits of big business improving income for many other smaller businesses nearby. This is not only done by creating and keeping jobs, many businesses do business with each other and this improves the economic situation for everyone, so go spend some money.