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Posts Tagged ‘trickle up theory’

Obamanomics: Lesson 1, The trickle-up theory

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September 18th, 2011 Posted 1:34 pm

Bizarreville will feature a series of economic lessons which will attempt to illustrate the principles of Obamanomics in order to better educate the public on how these elements will stir the economy to fast, sustainable growth for the short term and long term.  The first lesson is the Trickle-up theory.

First, we must debunk the preposterous trickle-down theory.  This flawed theory believed that tax benefits given to the high-end of the paying spectrum would incent these business leaders to invest the windfalls into expanding their businesses, creating more economic growth, new jobs, new research and development into product and service improvements.  Of course, as anyone can see, the truth is that the rich guys just squander the wealth on larger neo-xanadu’s, barns full of classic Oldsmobiles, ridiculous amounts of philanthropy that generate no wealth, 48-dollar aged steak entrees at their exclusive snooty clubs, and vacations at Bertha’s Vineyard.

A better theory is the Trickle-up theory.  This idea starts with giving big tax breaks to people who pay no tax.  Unquestionably, these dollars will immediately go into consumer spending for twinkies, bar tabs, Lotto tickets, premium brand cigarettes, Natty Lights, grazings at the golden corral troughs, and jaunts to ripoff casino boats…the foundations of sustainable economic growth.  But, more importantly, these immediate actions will then have ripple effects that will generate even higher economic activity:

– Increases in junk food consumption will generate rises in obesity, spurring escalated activity in weight-loss plans, and new clothing purchases as the old XL sizes no longer fit and must be replaced with 3XL.  Stretch pants that have gone beyond stretch limits will need to be discarded and upsized.

– Associated increases in medical treatment spending as heart disease, lung cancer, and diabetes rise.  Pharmaceutical R&D  spending will increase to find new cures for new epidemic-level ills and new surefire weight loss pills.

– Job growth, as the need for new cops rises to handle increasing drug trade, and WalMart fights between customers for that last flowery size 22 blouse or chintzy video game.

– Weapons and ammunition sales increases as people want additional personal protection from drug thugs and parking place stealers.

– Expanded garage sales, to redeploy newly outgrown clothing.

– Exciting upgrades to trailer homes, by purchase of new curtains, indoor/outdoor carpeting for living rooms, and cheesy landscape artwork for their simulated paneling walls…the latter spawning a new generation of low-end artists who previously had struggled getting real jobs due to lack of motivation and/or lack of desire to wake up early in the morning.

The new flurry of economic activity will prompt creation of new, innovative discount store concepts.  These new retailers will find new ways to merchandise bargain basement goods to a group seeking the ultimate discount on flimsy stuff they didn’t even know they needed.  Some discount chains may conceivably even add check-out cashiers to ease the mile-long check-out lines…although this is considered by many analysts to be wishful thinking.

The trickle-up theory is a more practical concept in that assumptions do not need to be made in terms of how the recipients will act on their new benefits.  The tricklers will spend them immediately, as their past practice has proven…no ifs, ands, maybes, or wait and sees.  Historical data has proven this behavior to be true:  that there will be no stash-aways into some future college fund, or rainy-day fund.  It will be spent, and spent quickly…and begin the leveraging effect of widespread economic activity that will produce jobs.  The trickle-up theory is one that more and more wise people are glomming onto, and represents a foundation of new progressive thought.

 

Disclaimer:  all stories in Bizarreville are fiction, including economic lessons.