Trickle Down Economics: Revitalizing the Market or Just Another Theory?

Trickle Down Economics is an economic theory that functions by lowering taxes for the wealthy, so corporations or 1%’s have more money to push back into the economy. For example, let’s say some fat cat CEO, who qualifies for the cut, decides to build a new house. They have the money to buy a large piece of land and employ people to build the house. In an ideal situation they would push as much as there money back into the U.S Economy, but if this person has the money to spend, they might want order their marble countertops from Italy.

This kind of tax cut is also provided to large corporations. Supporting the supplier, to pay off some of their fixed costs, and in turn create jobs. By being able to supply jobs, They are creating more consumers and generating demand.

This theory is justified by the Laffer Curve. The graph is saying that there is an equilibrium for amount of taxes that government can collect without constraining economic growth. If they raises taxes above this amount, demand would drop severely and then while trying to correct the damage by narrowing the tax base the government begins to lose revenue, and loss revenue ultimately closes the government.

The main flaw with this Economic theory is that it is not attached to any real figures. If our economy existed within a state of ceteris paribus this theory would work. However, not every dollar made and spent is reported to the government, and not all of it that money stays inside domestic trade. There also lots of ways people can avoid paying taxes, and lots of people whose taxes are already too high.

Former President Ronald Reagan stuck by this thinking. In 1981, Reagan signed the Economic Recovery Tax Cut. This plan cut 25% of the tax rates across the board, Cutting the top rate from 70% to 50%, the bottom rate from 14% to 11%, also lowering estate taxes and the taxes for corporations. The implementation of this supply-side economic plan lasted from 1981 to 1989. It is often referred to as Reaganomics. While it did allow for economic growth, it doesn’t take inflation into account. During this period there was a 6% increase of government tax receipts, which was mainly due to the 12% rise of inflation.

As an Economics student this makes a lot of sense to me. Within an academic environment, this theory feels like a move that supports the prospects of Capitalism and free market. In practice however this theory has seen a mix of success and losses. After my research I’ve come to understand just how unpredictable and almost unscientific the economy is. There seems to be no economic idea that hasn’t been proven wrong at least once, due to the lack of consistency within to the economy.

 

Sources: https://www.thebalance.com/trickle-down-economics-theory-effect-does-it-work-3305572

https://www.thebalance.com/what-is-the-laffer-curve-explanation-3305566

https://www.britannica.com/topic/Economic-Recovery-Tax-Act

Four Years a King

In the beginning, America was founded as a nation free from tyrannical rule. Escaping the injustices that once plagued them by spreading the power that the monarch had across three branches of the government and into the hands of the people. The Executive branch of government is definitely the most attention grabbing in the nation. The role of the president and the power the president is a constantly evolving discussion involving much more than the reality of the office’s control.

In the Constitution of the United States, Article II addresses the powers of the executive branch. The powers of the president described in Article II, Section 2 include, “Commander in Chief of the Army and Navy of the United States, and of the Militia of the several States, when called into the actual Service of the United States”. From this description the power of the president involves a lot of military duties and responsibilities. The executive branch in a lot of ways ensures that United States Citizens follow the laws. They are in charge of enforcement. They have a say in approving laws, but they don’t make the laws, they can’t guarantee that what they want to see in the American Government is possible.

With all of this said we still treat each election for the president’s chair like we are putting a new king into office who will decide the fate of our country. Individuals and parties win campaigns based on the things they promise. They win the next campaign by theoretically reflecting on what they got done in the past four years. We often forget the bounds of the President’s direct power. The idea of one person controlling the government seems counter productive to America’s founding political philosophies. Obviously the office doesn’t hold all the keys to total control of a country, yet presidents make promises that they could only be made into a reality with total control.

The role of a president today is much different than it once was. Today it seems president’s serve as a median between the people and the government. This role is extremely important. The current Trump administration is definitely one of the most interesting cases of the loose definition in what sitting in the oval office means. Of the 44 presidents proceeding Trump has been at the forefront of redefining how people see presidential power. Donald Trump made it into office because of his resilience and strongly opinionated voice. However he should’ve played his cards a little closer to his chest. His totalitarian mindset seems to have put him in between a rock and hard place. With the inability to deliver even a fraction of what he seems to believe he could get done; he has lost the faith of both his supporters and his party. This isn’t his fault however, this is the way our government was designed, to protect the best interest of the people.

The lack of productivity in his first term so far seems to be a result of his mindset. One of Trump’s objectives is to defund Planned Parenthood. This is an excellent example of why the presidential seat is such strange limitation of power. Trump has said, “I would defund it because of the abortion factor, which they say is 3 percent. I don’t know what percentage it is. They say it’s 3 percent. But I would defund it, because I’m pro-life”. Setting aside biases on this issue this quote demonstrates a president making a claim on their own personal belief. This is where the line between president and wanting to be a King is drawn. Bring the ideas of a party into office is not by any means a new thing. However a king would make changes to the state of a country based on opinion. A president should make changes based on the good of the people.

The system is set up so ideally what is best for the people will happen. This raises questions about what it means to be president at the same time. Did Trump just promise too much? People seem to almost be keen to the idea of one person making all the decisions for the country. Do our presidents today still symbolize what they once were? Do we want a king? In a time of political change and presence of information among the population is it any surprise that the unfulfilled promises are to be expected? The next four years onward will be vital in defining the role of the leader of the free world.

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The Second Amendment in Today’s world: Gun Use and Publicity

The second amendment of the constitution states, “A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed”. This is the second thing listed in the Bill of Rights, one of the foundations of our country.  Ratified in 1791, the right to bear arms has been a  symbol of freedom and personal liberty to many gun owning Americans. Since this amendment was first implemented the technology and availability of firearms has changed a lot. Making the issue one of America’s most debated subjects to date. However gun violence is not just a result of gun control, but of the way we discuss gun violence and domestic terrorism.

One of the factors of gun controls re-occurrence in politics is the way guns have evolved. The muskets available at the time of bill’s ratification could fire one shot every 15-20 seconds, averaging around 3 to 4 shots per minute. They weren’t nearly as powerful or accurate as today’s guns on the market. It is also a lot easier to buy a gun. Just in the City of Dallas there are over 20 gun retailers. One of the most popular rifles on the market is the AR-15. Being a semi-automatic rifle, the number of rounds fired off is determined by the amount of times you pull the trigger, the size of your clip, and your reload time. This rifle gets a lot of heat in the gun debate even though it is only accountable for about 24% of mass shootings. It is important to look at this gun not through the lens of violent crime, but as an example of how a gun’s efficiency compared to the muskets of the time.

Another reason this gun is important to the topic is its use for self defense. The AR-15 is one of the most popular guns used for protection. Being able to defend one’s life or property is one of most celebrated pro’s of gun ownership. However, having a gun of this magnitude for self defence can be seen as putting more powerful weapons onto the streets that can be used in malicious ways.

Beyond the access and power of firearms the way we treat gun violence and domestic terrorism in the media is much more threatening. Today we live in a world where we can know every detail in a matter of moments after a major event occurs. Then this tragedy is discussed on printed media, television, and the internet for weeks to months after the event took place. We take these stories and create a celebrity out of the shooter. For weeks to months afterwards the media holds on to viewers, by discussing every specific detail trying to label the shooter’s motive. Making them a public spectacle, and making them into infamous figures. This fame can be appealing to extreme individuals who are trying to spread a message. By glorifying this violence and tragedy we are not any closer to stopping these tragedies from occurring.

The media makes these tragedies into a debate over gun control. We can’t stop gun violence by changing or abolishing the second amendment, we must start by detaching the shooter from the tragedy. We must be respectful of the victims by not pursuing their stories. Don’t make the shooter into a spectacle. The discussion of gun control are always fueled by these tragedies. Gun control is instantly villainized as both the cause and the solution to the problem. These issues are far more complex than just the possession of guns by Americans.

Gun control is not going to change soon, but gun violence can be slowed down. These tragedies have been proven to cause an increase in gun purchases. We currently have the right to own guns and people who intend to do harm other already own guns as well. The defense of ‘leveling the playing field’ is often an argument made by pro-gun advocates. It is not possible to take guns away. It is possible to work on how we communicate tragedy, discuss gun violence, and glorify the perpetrator behind the shooting. Debating gun control, won’t stop domestic terrorism. When we discuss a shooter they get what they want. They scare millions, we must stop making the problem worse ourselves. The media’s relationship with tragedy must change.

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Is Democracy Crumbling? You Won’t Believe the Answer

In 2017, America is the most politically divided it has ever been. The legislative branch of government has become unable to make any decisions because of the stiff polarization between the two major political parties. We have lost our sense of compromise and driven our country apart. We must change the way we think of politics and respect the ideals of Democracy.

It is a popular belief that Political Extremism stems from misunderstanding. This is important to keep in mind when you look at the recent popularity of the Alt-right and Antifa. Both of these groups see injustices in their communities and want change. However they have had to resort to violence, because we live in an age where hurling insults comes before discussion. People don’t want to sit and talk anymore, they want their way. Though this may not be true for everyone who identifies with these groups, it is prevalent in their public affairs.

The internet has created echo chambers of like-minded individuals on both sides who have been protected by the anonymity of a screen name. If you do a quick google search of any of these new political parties you will find highly populated forums, websites and posts. Which may seem surprising to a non-member of these communities. They have found safety in numbers, getting riled up behind their keyboards and arranging public events to meet beyond the false invincibility of their monitors.

The creation and popularity of these political parties speaks to the state of our country. So many people from both the left and right have locked themselves into place, and those who really want change have had to be bigger and louder than those in Washington. However they have also gravitated towards exaggerations of what these parties have stood for, and developed new political identities.   

Democracy works best when compromise is reached. Because not everyone can be satisfied with the state of the government, compromise ensures that we can reach a median. We are no longer one people of one nation, but a divided people who are struggling for power over the other half.

Part of our problem is how we see politics. We are told to not discuss politics when we meet new people, because it has become such a sensitive issue. This train of thought makes politics very personal, so when someone doesn’t agree with you, it almost like an attack on you as a person. Which is absolutely ludicrous. If we are going to label political discussion as a taboo we are impeding on our own freedom of speech and progression as a nation. Without responsible, and respectful political discourse nothing can be done in our country.  

We should value our say in the decisions of our government, but we should also value our disagreements between us as a people.  We should see that challenging what we believe to be right or wrong is what made America into the global superpower that we are today. We have lost these ideas in the clouds of mace and useless violence. We can not be reunited as a nation until we can see someone else’s perspective and respect their right to have an opinion. We must push forward as a people through compromise.  

Image Source: netivist.org