That is not "Trickleup" theory. An accurate example is, give a bum $10 and he will spend it, and the whole economy will benefit.
Trickledown may have a chance of validity in a closed society, but not in the way the global economy is working today. 50 years ago 1/3 of the US population worked in manufacturing. Since then we have lost many thriving industries such as steel, electronics, clothing, and appliances. We are now are in danger of losing what little of the computer and auto industries we have.
As manufacturing jobs move offshore, the US post-industrial economy now focuses on service industries. Since 1960, 2 out of 3 factory jobs have been lost due to outsourcing. 80% of our jobs are now in service industries, and of that about 50% are involved in retailing or consumerism.
What is happening is that trickledown is trickling our wealth to offshore manufacturing and service jobs; and what's left is trickling to American employment in the consumerism industries. Much of today's consumerism is in products with elastic demands. During a recession, people can do without a new house, car, dish washer, TV, phone, or latest fashion in cloths. They will let their older purchase wear longer. Then small businesses and large retail franchises will increasingly fail, and the large employment sector in retailing and related service sectors will further drop.
As people lose buying power through lower wages and job loss, how can giving the wealthy and large corporations tax breaks improve the economy? What will the new service jobs be? There certainly won't be much more manufacturing jobs unless we reduce wages enough to compete with outsourcing. Then the buying power of the middle class will erode even further, and invalidate the reason for creating manufacturing jobs.
Progressive taxes as we had a few decades ago will favor the 90% of Americans that have a lot of buying power. That will have a chance of keeping our capitalist economy more stable. Whereas with outsourcing, giving tax breaks to the wealthiest people and industries will not really induce them to promote further employment at home.
I am not promoting Socialism. I am promoting Capitalism with more long-term stability. I am surprised conservatives don't feel the same way.
I am not saying foreign outsourcing is bad. I am saying that trickledown theory looses validity with the amount of outsourcing we do.
With the global economy as it is, US capitalism is having a very difficult time competing with the economy of foreign socialists states. People may call progressive taxes "Socialism" but they are too hung up on labels and not the realities of capitalism.
