Ronald Reagan was blasted for his belief in the trickle down theory of economics. In brief, it is an economic model that encourages those with funds to invest in businesses, stocks, and their own startup enterprises which in turn will promote growth that will create a need for more employees as business grows. And as employees prosper that opens more doors for economic growth. In other words, trickle down turns into trickle up and the process repeats itself millions of times in the market place each year with those who wish to better themselves moving up while others are content to stay where they are on the economic ladder and choose not to make the effort to move up.

The benefits of trickle down are enormous for everyone including the government. As the economy expands the tax take increases without a tax increase which creates less revenue for the government rather than more. But that isn’t good enough for some groups. They constantly complain about tax cuts for the rich which ostensibly is keeping them from having more. Unions representing government employees want a living wage and others, notably older people, want more benefits of all kinds under the mistaken idea that the rich have it all and therefore the rich should give them all that they justly deserve. The idea that the rich should be taxed heavily to provide for all needs is nothing but Marx-Lennon Communism. It isn’t our way of life given by the founders but no one is listening. 

Another screed from the give me more crowd is the minimum wage now called the living wage since it seems no one wants to start at the bottom of the pay scale. They want the pay scale raised while ignoring the fact that government has neither right nor duty to tell any employer how much he or she should pay anyone. That is totally a function of the competition for labor in the market place and the profit or loss statement of a business. It is another form of taxation on those perceived as rich by the give me more crowd. When taxpayers resist paying more taxes then the clamor begins to soak the rich employers who are making all that profit and who aren’t sharing the goodies. That attitude refuses to accept that the surest way to betterment is more skills, better skills, and education. It also overlooks the fact that there are differences in people which cause people to be on different levels of employment and wages. 

When government sets wages and gives largesse to governmentally identified groups deemed poor or worthy or deserving, then an artificial factor has entered the system, which in the end drives up taxes and costs for everyone. Someone has to pay for the increased cost of wages and for the increased handouts. Again the money will come from those who are struggling to keep the economic engine going through investment in stocks, bonds, and their businesses to meet the needs of an expanding economy. 

Ronald Reagan repeated what JFK said, “A rising tide lifts all boats,” and cutting taxes improves the economic health of the nation. It did by leaps and bounds in both the 60’s and the 80’s but the give me more crowd doesn’t want to hear it. They want it handed to them with no effort made other than showing up for a check each week. As much as they despise the trickle down theory, their wanting a higher minimum wage … oops … living wage and more handouts all paid for by the rich, is nothing more than government supplied trickle down with each one only receiving a small amount more than they received before. Government mandated wages and handouts will never lift any boats to the level which each one thinks he or she should live. We lift ourselves with the sweat of work and wise investment. That is the trickle down that truly works. And that trickle has turned into a rushing tide for millions who practice it each day.

 © 02-27-2005