Labor voter wrote on Feb 2
nd, 2016 at 10:16am:
America: Land of shrinking opportunity
Wealth does not trickle down from the rich to the poor. Period.
That's not Senator Elizabeth Warren talking. That's the latest conclusion of new research from the International Monetary Fund.
In fact, researchers found that when the top earners in society make more money, it actually slows down economic growth. On the other hand, when poorer people earn more, society as a whole benefits.
The researchers calculated that when the richest 20% of society increase their income by one percentage point, the annual rate of growth shrinks by nearly 0.1% within five years.
This shows that "the benefits do not trickle down," the researchers wrote in their report, which analyzed over 150 countries.
By contrast, when the lowest 20% of earners see their income grow by one percentage point, the rate of growth increases by nearly 0.4% over the same period.
Related: Class war locks poor kids out of top U.K. jobs
The new report called widening inequality "the defining challenge of our time," echoing earlier comments from President Obama.
The authors explain that high levels of income inequality drag down growth because poor people struggle to pay for health care and education, which hurts society as a whole.
"For instance, it can lead to under-investment in education as poor children end up in lower-quality schools and are less able to go on to college," the report says. "As a result, labor productivity could be lower than it would have been in a more equitable world."
The report builds upon research from other international organizations and Joseph Stiglitz, the Nobel laureate who has been campaigning against rising inequality.
money.cnn.com/2015/06/15/news/economy/trickle-down-theory-wrong-imf/
Pretty logical actually and easy to work out - one poor household buys one microwave - one rich household generously buys two - there are 5,000,000 households, 2% of which are 'rich' - ergo - 2% of 500k = 25,000 microwaves x 2 (they buy two) = 50,000 microwaves - leaving 450,000 microwaves bought by poor households.
Small business prospers and the economy operates at a level of sustenance.... WHEN the poor households can afford to buy microwaves.
Therefore poor households contribute nine times more economic activity and prosperity to retail small business than rich households do, even with the proviso that rich households purchase twice as many products.
Pretty simple really. Kinda makes you re-think Joe's 'poor people don't use the roads'.... doesn't it?
Let us not forget the Grappler parable of the Indian rice paddy farmer and champion cobra wrestler under the regime of the West casting millions if not billions of aid at India to upgrade education - since the funding will go the the middle classes and upper classes and not the uneducated poorer classes - and this will serve to generate prosperity for the middle and upper classes who have no genuine need compared to the poorer classes - the only 'trickle down' the Champion Cobra Wrestler will get is when he dies and is burned and slipped into the waters of the sacred Ganges to begin his journey to Paradise......
Truly, Sahib, when a Hindu is dying, it is often that the priests place on his lips a few drops of the sacred Ganges.... (probably to hasten things along a little)....
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