TIL that in 2024 people are still trying to claim that trickle-down economics works. Given all the wealth at the top these days, I'll expect my trickle-down check in the mail any day now.
Do I understand your position correctly?
Giving government money doesn’t really change the way government operates. The government has the budget for the year and that’s the spending for the year. If government needs something done, an item gets budgeted, money is borrowed, and paid out to get stuff done. Giving money to the government only offsets the debt; nothing else changes from that besides the number in the spreadsheet.
Imagine a world where you had 15 billionaires and 5 people working. How much are are. Those billions worth when they are fighting each other to have one of the 5 useful people wipe their ass in their care home?
This only holds when supply of work is high and demand is low. If the amount of work requested in the future is higher than the supply then it doesn’t matter how many pieces of paper you have to prove that you worked in the past, you are not going to get that work done.
With a shrinking population you’re relying of productivity gains, and in areas that old people need, like personal care, there’s only limited gains to be had. If there’s only 100 hours of ass wiping being done but 200 hours demanded, then half of the people requiring that service will be disapointed.
But that’s just the general problem of timeshifting your work. You rely on the next generation to honour “the deal”.
Now the 401k specifically has other issues. It tends to be “pile money in the S&P”, which simply increases the values of those stocks regardless of their fundamental worth. Passive investments lead to bubbles and collapse.
https://www.ft.com/content/994bdda8-b704-4e4c-9b19-4e0021f0b...
Throw both of those together and you end up with a disaster waiting to happen.
So to me, it would be very hard to make an argument that it trickles up. It has to come from investment. And investment in the private sector is usually done by rich people, because you need money in the first place to invest and also because investing well makes you rich.
Also considering that the super-rich in developing nations are not that far behind the super-rich in developed nations, why hasn't their wealth trickled down and uplifted those developing nations? The reality is that developing nations have even higher wealth inequality, so refuting your argument.
I am from a developing country. There aren't a lot of super rich here. In fact there isn't much wealth at all. Having some greater gini coefficient doesn't mean you have more wealth, inequality really isn't a relevant measure.
If raising wages was the only component to development, Somalia could simply set their minimum wage to $50 an hour and watch the country soar. Wages follow development, not the other around.