How Do You Grow the Economy From the Middle Out

[RINGLEADER]

I keep hearing this line from the Dems. How, precisely, do you grow the economy "from the middle out?"

[Rain Man]

I fear that I may have just become a communist.

[Comrade Crapski]

Originally Posted by RINGLEADER

I keep hearing this line from the Dems. How, precisely, do you grow the economy "from the middle out?"

The defunct Soviet Union and China already tried that---

They wound up killing about 80 million people.

Obama figures it failed because he wasn't in charge so he's trying it out here.

[Aries Walker]

I hope you're being facetious.

I'm not an economist, but from what I can understand, it goes something like this:
- Give the working (that is, middle) class tax breaks.
- This allows them to have a few extra dollars in their pockets.
- Some of which they then spend.
- As some spend, consumer confidence rises, and more spend.
- That money spent goes into businesses, of course.
- The businesses have more money.
- The businesses expand and hire more people.
- Boom.

The opposite, top-down (or trickle-down) goes something like this.
- Give the upper (that is, the job-creating) class tax breaks.
- The businesses have more money.
- The businesses expand and hire more people.
- People who were unemployed are now hired.
- People who are hired now have money.
- Some of which they then spend.
- As some spend, consumer confidence rises, and more spend.
- That money spent goes into businesses, of course.
- Boom.

How am I doing?

[chiefzilla1501]

Originally Posted by Aries Walker

I hope you're being facetious.

I'm not an economist, but from what I can understand, it goes something like this:
- Give the working (that is, middle) class tax breaks.
- This allows them to have a few extra dollars in their pockets.
- Some of which they then spend.
- As some spend, consumer confidence rises, and more spend.
- That money spent goes into businesses, of course.
- The businesses have more money.
- The businesses expand and hire more people.
- Boom.

The opposite, top-down (or trickle-down) goes something like this.
- Give the upper (that is, the job-creating) class tax breaks.
- The businesses have more money.
- The businesses expand and hire more people.
- People who were unemployed are now hired.
- People who are hired now have money.
- Some of which they then spend.
- As some spend, consumer confidence rises, and more spend.
- That money spent goes into businesses, of course.
- Boom.

How am I doing?

You are relying on the naive notion that all middle class income goes into spending. Much of it goes into saving, and often time that saving occurs under the mattress. Or to pay down debt, which is not consumption. You also leave out that the problem isn't about stimulating the middle class. It's about assuming they'll use handouts to better themselves. But that money often gets wasted on bureaucrats. It gets abused dramatically by he middle class taking more than their fair share.

I'm all for distributing wealth. But liberals make a false sh assumption that this money actually ends up in the right hands. Incidentally, conservatives make the false assumption that a rich guy will invest back into the economy. And it enrages me that no candidate is willing to meet in the middle and realize that both ideologies are flawed.

[Lightrise]

This is so doable were it not for rather stupid, factually discredited, and self-serving republican politicians. The rich are far too rich in America. I admit that I was intrigued with supply side economics. It made so much sense to me at the time having wrestled with Nixon's wage and price control, Ford's ridiculous 'Win' buttons, the Arab oil embargo and $1 gas. Arthur Laffer the famous supply side economist and seen as the father of the Reagan economic policy WARNED that taxes on the wealthy must not go below 50%. With rates for millionaires and billionaires now at 1931 rates no wonder we took on a war without paying for it, we couldn't afford it. It was shameful that republicans refused to support an increase in the minimum wage for 10 years! In 1967 CEO's made on average 27 times that of workers and now it is over 267 times. One argument you often hear is that raising taxes on billionaires and millionaires would support America for less than a week. That is the dumbest argument and totally ignorant of economic theory. That is the snake oil republicans sell because they are all being blackmailed by Grover Norquist. These people are weak leaders, misinformed leaders, bought politicans - Jack Abramoff showed us that.

Corporations are simply not people. There is no moral allegiance to a faceless entity. The opportunity they present is one where everyone benefits, goods and services we need and want, stability of worker commitment and collective resources to support innovation. But tragically the gold watch after 30 years doesn't happen anymore. Even healthy entities see themselves through the eyes of private equity firms. The fastest way to profits became cost cutting not competition and that was the beginning of the end for manufacturing. The demise of the labor movement was bad for America. I bought into the anti-labor fever like everyone else did, and the unions did bear part of the blame. But the result was the loss of collective bargaining power, the raise you got was whatever they could get away with. The fruits of labor was no longer shared. I think the fastest way to restoration of the middle class is significant increases in the minimum wage. You bet this will cost corporations money,,,SO WHAT, they aren't people. What will happen is the bonuses will go away, CEO pay will be reduced, there will be less market speculation, less corporate involvement in the political process and entities will invest in innovation. That will excite the labor force looking for stability but also looking for challenge. Workers want a stake in the game but they know the system is rigged against them. There is no rationale for spending billions of dollars in oil and gas subsidies for example.
Make money the old fashion way, earn it. The only thing the money shell game creates is a bank account in the Cayman Islands. Republicans say the minimum wage is only a starter wage, but they refuse to tell you that 65% of people compensated at that rate is over the age of 25.

Grover Norquist is America's Blackmailer in Chief and republicans trapped by the pledge are too weak to fight for America's survival.

[RubberSponge]

Originally Posted by chiefzilla1501

You are relying on the naive notion that all middle class income goes into spending. Much of it goes into saving, and often time that saving occurs under the mattress. Or to pay down debt, which is not consumption. You also leave out that the problem isn't about stimulating the middle class. It's about assuming they'll use handouts to better themselves. But that money often gets wasted on bureaucrats. It gets abused dramatically by he middle class taking more than their fair share.

I'm all for distributing wealth. But liberals make a false sh assumption that this money actually ends up in the right hands. Incidentally, conservatives make the false assumption that a rich guy will invest back into the economy. And it engages me that no candidate is willing to meet n the your and realize that both ideoli

And you're relying on the notion that a business owner reinvests his tax breaks into the company rather than his own damn pocket as well. I'll take an easy guess that the middle class use a higher percentage of their disposable income on consumer goods than the wealthly do. It's not really making an assumption and relying on the middle class to use their tax breaks on consumer spending rather than having the ability to put it in any savings. It is a reality that the majority of middle class live paycheck to paycheck and don't always have the ability to put money into savings. You want tax dollars to be reinvested back into the economy at the fastest rate possible. Give it to the people that either can't hold onto the money, or have to simply use it to live. That is just basic common sense on human behavior.

But by all means, give it to the guy who has no reason or intention to move that money but straight back into his personal piggy bank. And then wonder about stagnation, while blaming it on those lazy middle classers who want nothing but another handout.

[FishingRod]

I would have to put a lot of thought into this but, it would require incentivizing those that own/run business to hire. One way to do that would be to find a way to put more money in the pockets of those that own business to hire people even when it doesn’t necessarily make sense to do so.

Essentially something like a change in 401k rules that would greatly up the amount of matching funds they could dump in their own pockets to ignore what is in the best interest of the bottom line. Create some nonsensical threshold for the percentage of revenue being used on payroll and you would probably need to put a cap on how high a person’s compensation is to be counted otherwise management would just to like congress and vote their selves a raise. This could maybe work but would more likely just bankrupt a bunch of companies and make us less competitive.

[Amnorix]

Originally Posted by Rain Man

I hate those meatpackers and iron workers. They cause me all sorts of annoyance.

I get your point on this, but I'm not sure how to fix it. The government can't mandate that companies hire people, so your approach of limiting their productivity seems like the only way to go. But limiting hours and mandating overtime and stuff like that forces both employees and employers to become clockwatchers, which I don't think is good for anyone.

Could increase the ~$450/week minimum pay required to classify an employee as exempt, and then index it to inflation. I dunno when that number was set, but I imagine ti was years ago and hasn't moved in ages. It's basically minimum wage for salaried workers. That would put more $$ in the pockets of lower income employees.

There's never a simple answer to any of this stuff.

[Ebolapox]

Yep. we'd have utopia without those goddamned republicans.

[Buzz_TinBalls]

It's doublespeak, I imagine. Back when america enjoyed free enterprise, middle class was at the heart of it with all the family owned business. Farms, Industry & Trade were primarily driven by middle class.

But Corporations double - crossed americans and this country. Then, they took over our legislators and hey, no more competition, no more mom & pop middle class and no more free enterprise.

The only way to compete is to play the same game the bigs have been playing -- import Chine products & services and fill your pockets with american dollars while you continue to erode free market & america.

[Chiefshrink]

Originally Posted by Aries Walker

I hope you're being facetious.

I'm not an economist, but from what I can understand, it goes something like this:
- Give the working (that is, middle) class tax breaks.
- This allows them to have a few extra dollars in their pockets.
- Some of which they then spend.
- As some spend, consumer confidence rises, and more spend.
- That money spent goes into businesses, of course.
- The businesses have more money.
- The businesses expand and hire more people.
- Boom.

The opposite, top-down (or trickle-down) goes something like this.
- Give the upper (that is, the job-creating) class tax breaks.
- The businesses have more money.
- The businesses expand and hire more people.
- People who were unemployed are now hired.
- People who are hired now have money.
- Some of which they then spend.
- As some spend, consumer confidence rises, and more spend.
- That money spent goes into businesses, of course.
- Boom.

How am I doing?

You are all over the place here in both segments. Combine both segments and you have "Trickle down". Since when does the working class provide jobs? They don't. This 'bottom up" BS is non-existent and never has existed in world history and is just class warfare Marxist speak.

Jobs come from wealth created in the free market by the individual/company of people who then keep investing thus creating more jobs for the working class thus more wealth for the working class. This notion that the wealthy individual/group of people go into business to provide jobs to the masses is just absolute 'idiocy". People go into business to get rich however they define rich. They continue to invest and develop other businesses to get wealthier and the by product and a HUGE BY PRODUCT of that free market approach is that it creates more jobs thus making "Joe Sixpack"'s life a lot easier. The Left just can't stand the fact that "a people are free to attempt to get rich" (actually earn it) and then enjoy it. And it is Left that tries to attempt to define what rich is and who is too rich and needs to shaaaaaaaaaare more of their wealth(Marxist speak)

[La literatura]

Originally Posted by RubberSponge

And you're relying on the notion that a business owner reinvests his tax breaks into the company rather than his own damn pocket as well. I'll take an easy guess that the middle class use a higher percentage of their disposable income on consumer goods than the wealthly do. It's not really making an assumption and relying on the middle class to use their tax breaks on consumer spending rather than having the ability to put it in any savings. It is a reality that the majority of middle class live paycheck to paycheck and don't always have the ability to put money into savings. You want tax dollars to be reinvested back into the economy at the fastest rate possible. Give it to the people that either can't hold onto the money, or have to simply use it to live. That is just basic common sense on human behavior.

But by all means, give it to the guy who has no reason or intention to move that money but straight back into his personal piggy bank. And then wonder about stagnation, while blaming it on those lazy middle classers who want nothing but another handout.

Aren't savings to personal piggy banks also monies banks will use to give loans for things like businesses and large purchases? It's not like when a rich person puts money into their savings account, it actually sits there. It gets reinvested by the bank. Or am I missing something here?

[FishingRod]

Lightrise
"I think the fastest way to restoration of the middle class is significant increases in the minimum wage."

Just playing devil’s advocate. But wouldn’t raising the minimum wage to an amount that would actually help, cut the number of people a business could afford to hire thus causing more unemployment?

It seems to me that we ( the United states) need to develop an new resource/technology/product that the rest of of the world needs to get from us so that dollars and wealth are flowing into the country at a greater rate. What that would be, I don’t know.

[Iowanian]

Originally Posted by BigRedChief

Without a strong middle class its impossible to have a strong America.

I agree and I think anyone with a brain would a agree that a strong middle class is important and is the backbone of the country's economy.

The area where left and right disagree on is how to get there. In the real world, the saying "it takes money to make money" is very true. If I had $50k to speculate with on land or auction items, I know I could make purchases on cheap items and flip them for profit. Without the cash to do so, you can't.

Starting a business is expensive. Even small business that doesn't require great inventories or large store fronts or office space. Equipment, computers, software, general insurance, professional liability insurance, licenses, permits, supplies, inventory, legal fees, corporate filing fees, CPA, starting and operating capital and on and on.

It's very much possible to start a new business and create jobs for a middle class person but it's hard. You have to spend years collecting savings, get collateral on your own or via family or some type of angel investor. You get that done and you start the process of fighting your way through government regulations and environmental testing and permits and on and on....all before you even get into employee issues, workforce development, figuring out the taxes and forms and reports.

I've done it successfully, and this year shut down another attempt after a year of work. It failed not because of the effort of myself or partners, but very specifically because of government regulation, red tape and nonsense. Government policy and requirements absolutely killed that opportunity and at least 3 jobs.

The Republican strategy makes sense to me more than the Dem for reasons directly relating to what I have shared above. Reducing government red tape, environmental regulations and other ignorant restrictions are important. Lowering taxes on businesses and payroll taxes make it possible to stay afloat during the vital first 2 years of a business. Less taxes, less expenses fighting through government requirements can make or break creation of a new job.

Making it easier for existing business to expand for corporations to grow and for people with the financial means to either create business or spent that money as an investor in a new company in my opinion are the best way to create jobs.

I'm not a 1%, I'm not wealthy but I am a small business owner who is absolutely against the democratic talking points which have zero actual strategy or impact on new business development.

[BucEyedPea]

Originally Posted by Tom.Jay61

The defunct Soviet Union and China already tried that---

They wound up killing about 80 million people.

Obama figures it failed because he wasn't in charge so he's trying it out here.

And he has drones to implement it this time.