Trickle-down economics
These opponents reject the notion that spending by this elite group would "trickle down" to those who are less fortunate and lead to economic growth that will eventually benefit the economy as a whole.
[12] In 1896, United States Democratic presidential candidate William Jennings Bryan described the concept using the metaphor of a "leak" in his Cross of Gold speech.
[15] William J. Bennett credits humorist and social commentator Will Rogers for coining the term and observed in 2007 its persistent use throughout the decades since.
"[18]After leaving the presidency, Democrat Lyndon B. Johnson alleged "Republicans ... simply don't know how to manage the economy.
They're so busy operating the trickle-down theory, giving the richest corporations the biggest break, that the whole thing goes to hell in a handbasket.
[27] Reagan administration officials including Michael Deaver wanted Stockman to be fired in response to his comments, but he was ultimately kept on in exchange for a private apology.
Arthur Okun,[29] and separately William Baumol,[30] for example, have used the term to refer to the flow of the benefits of innovation, which do not accrue entirely to the "great entrepreneurs and inventors", but trickle down to the masses.
And Nobel laureate economist Paul Romer used the term in reference to the impact on wealth from tariff changes.
[36][37][38] In the 1992 presidential election, independent candidate Ross Perot also referred to trickle-down economics as "political voodoo".
[41] In 2013, Pope Francis condemned "trickle-down theories" in his apostolic exhortation Evangelii Gaudium, saying that "Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world.
[44] In his speech to a joint session of Congress on April 28, 2021, US President Joe Biden stated that "trickle-down economics has never worked".
[50] Kansas governor and politician Sam Brownback's 2018 tax cut package was widely labelled as an attempt at trickle-down economics.
[59] In a 2020 research paper, economists David Hope and Julian Limberg analyzed data spanning 50 years from 18 countries, and found that tax cuts for the rich increased inequality in the short and medium term, and had no significant effect on real GDP per capita or employment in the short and medium term.
[60][61][62][63] A 2015, IMF staff discussion note by Era Dabla-Norris, Kalpana Kochhar, Nujin Suphaphiphat, Frantisek Ricka and Evridiki Tsounta suggests that lowering taxes on the top 20% could actually reduce growth.
[64][65] Political scientists Brainard Guy Peters and Maximilian Lennart Nagel in 2020 described the 'trickle down' description of tax cuts for the wealthy and corporations stimulating economic growth that helps the less affluent as a "zombie idea", and stated that it has been the most enduring failed policy idea in American politics.
