Have you ever watched someone have an argument entirely with themselves? If not, I invite you to join me for one of my favorite sporting events: Democrats debating the soundness of “trickle-down” economics purely amongst themselves. Just consider this recent example from progressive activist Robert Reich:
Trickle-down economics has been an abject failure over the past 20 years. It’s time to invest in workers. Now.
— Robert Reich (@RBReich) December 17, 2022
They’re having this debate with themselves because no one on the Right is arguing back… and that’s because it’s a made-up term used to strawman the actual economic schools of thought found on the Right. You won’t find it taught in a single economics program, no economist can be found waxing poetic on its merits, and as a whole—based on the definition Democrats have given the term—it is wholly in contrast to actual free-market schools of economics, which the Right has traditionally (albeit, poorly) defended.
What Democrats tend to be referring to when they talk about “trickle-down” economics is the idea that cutting taxes for the rich will eventually lead to greater prosperity for all as the rich pass their increased funds onto the masses through more jobs, an expansion of businesses and GDP, higher pay, and lower prices.
But as famed conservative economist Thomas Sowell writes, “No such theory has been found in even the most voluminous and learned histories of economic theories, including J.A. Schumpeter’s monumental 1,260-page History of Economic Analysis. Yet this ‘Trickle Down’ Theory and ‘Tax Cuts for the Rich’ non-existent theory* has become the object of denunciations from the pages of the New York Times and the Washington Post to the political arena. It has been attacked by Professor Paul Krugman of Princeton and Professor Peter Corning of Stanford, among others, and similar attacks have been repeated as far away as India. It is a classic example of arguing against a caricature instead of confronting the argument actually made.”
[it’s also often confused with supply-side economics, in which both tax and regulatory policy are calibrated for production growth as a means to expand economies without creating inflationary effects. Some of those policies overlap, but not all of them. — Ed]
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