I have a one word response to The Huffington Post’s article “Trump Tax Plan To Rely On Future U.S. Growth To Fund Cuts: Officials – Trickle Down is Back!” YES… What part of this is so difficult for you Leftists to understand? People and businesses get to keep more of the money that they earn which they in turn invest in business growth or consumer spending… Or is it the part where cutting taxes leads to business growth which in turn increases the GPD and increases employment rates which increases the total amount of money from which the government draws taxes. There was a point in time when even Democrats understood this principle as John F. Kennedy famously said that “A rising tide lifts all boats” he was directly speaking to how cutting taxes increased economic opportunity for all… not just the wealthy as The Huffington Post would have you believe. The government under Obama thought they could do a better job of growing the economy than the free market and they failed miserably as I wrote about in “It’s the Economy Stupid: The Numbers Don’t Lie, Obama was the Worst” which details how the measly 1.6 GDP growth rate under Obama was the worst of all modern presidents.

Let’s compare some numbers from what the Leftists derisively call “trickle down” economics of the Reagan era versus government centric Obama led economic policies of the last eight years or as Real Clear Policy notes “conservative prescriptions” versus “activist government”.

  • GDP Growth – As Real Clear Policy reports, “Through the first 25 quarters of Mr. Obama’s recovery, GDP growth has averaged 2.2 percent, whereas during the comparable period for Reagan, GDP advanced at a 4.6 percent annual pace.” Since Obama ended up with an average of 1.6 it means that his last few months were well below what most economists consider a growth rate required to keep the lights on of 3%.
  • Family Incomes – Also reported in RCP is the difference between how families did under Reagan versus Obama. “For hard-working families, the results are predictable — annual family incomes have declined about $1,650 during the Obama years, whereas they increased $3,900 during Reagan’s tenure.”
  • Labor Participation Rate – I have always had an issue with the unemployment rate numbers because they purposefully exclude the chronically and long term unemployed. A better measurement on how well we are balancing producers and takers in a society is the labor participation rate. Now while I will free admit that Obama might have more baby boomers joining the ranks of the retired it does not account for the deep dive in these rates. Compare that to the rates of the Reagan era where they increased the number of citizens participating in the labor force as trickledown economics created additional opportunities. (Source Trading Economics)

https://d3fy651gv2fhd3.cloudfront.net/embed/?s=unitedstalabforparra&v=201704131729t&d1=19170101&d2=20171231&h=300&w=600
source: tradingeconomics.com

  • Government Debt – While there was an uptick of government debt under Reagan it is nothing compared to the sharp spike during the Obama years where he single handedly doubled the national debt of the previous 43 presidents before him.

https://d3fy651gv2fhd3.cloudfront.net/embed/?s=unitedstagovdeb&v=201704142129t&d1=19170101&d2=20171231&h=300&w=600
source: tradingeconomics.com

  • Food Stamp Reliance – If the Obama policies were so great then why the high spike after he took office which took into his second term for them to even reverse direction? You will notice that the numbers decreased every year under the evils of “Trickle-Down”.

FoodStamps

This is a sampling of the difference in an economic recovery that is led by the private sector versus one that is led by the government. In one version of the economy the government gets out of the way and scales back regulations to let the free market do what it does best… create wealth and economic opportunities. In the other version the government tries to micromanage the economy through burdensome regulations and tries to dictate how businesses should run. One is about freedom and liberty and the other is about transferring control to bureaucrats. There can be no mistake that the Democrats will continue to disparage “trickle-down” policies, but they always have a hard time disputing the numbers. Individual outcomes will never be equal and no amount of government intervention will change this fact regardless of political system. Instead our focus should be on the equality of opportunities. While I do not think Trump is Reagan I will gladly live through the “horrors” of trickle-down again because while HuffPo and their readers may lament the fact… I say let it rain baby… let it rain.

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Posted by redstateronin

One Comment

  1. This is an article based on cherry-picked data and information to support a confirmation bias that trickle down economics is great and works well in all circumstances. It diesn’t.

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