Quote:
Originally posted by J'Pol@17 August 2004 - 18:02
The concept of a natural dissipation of wealth is severely flawed. It is based on the concept that those with the money will spend it, rather than hoarding it.
This assumes that the wealth holders will never get worried about their spending and will always do it.
However in an unstable economy this becomes less likely. Indeed in an economy where interest rates are kept high, in order to fight inflation the rich are likely to save rather than spending. Taking advantage of said interest rates.
So what we then get is less wealth being spread and at the same time the poor having to borrow, at higher interest rates, costing them more money.
I'm afraid the capitalist utopia is not a viable economic model. At least not for the silent minority. Who are too busy / tired working all hours God sends to become politically active and do anything about it. There's the irony, the wealthy have the time and resources to ensure that their best interests are served.
Which is why the poor need wealthy people, of good conscience, to fight their corner.
In short, "trickle down economics" is the fantasy creation of the rich, which they use to justify the legislation they approve.