Warren Buffett: Trickle-Down Theory Doesn't Work

See, I don't see "trickle-down doesn't work" as proof that "trickle-up does work."

There's nothing wrong with diagnosing that the problem is lack of spending by timid businesses and unmotivated rich, and therefore staving off an early recession through taxation (or even borrowing, if you intend to make it up with a surplus later) and spending.

But there's a point where shuffling money around isn't going to help anymore. Government spending is already 10% of the economy. We're approaching a point of severe diminishing returns.

 

So there is no waste in government spending?

 

I have three jobs, Dick. I read the WSJ every day. I read across the spectrum, even stuff that makes me gag (probably anything you love). I give away as much of my money as I can to help people that are in need, in addition to what the IRS takes. I have no real beef with paying taxes.

Your assumptions about what I read and what I listen to just make you look like an ass.

Talk is cheap. If you, Buffett, Gates, or any of the 45 people who sent the petition (http://www.fiscalstrength.com) to raise taxes on millionaires is so fired up about it, give until it realllllly hurts.

 

Folks, all economic data shows that wages in the country have stagnated since the Reagan administration. So you had companies giving less and less in the way of raises and Cost of living adjustments (which were NOT the same thing, once upon a time) while the cost of EVERYTHING continues to go up. What the hell did they expect to happen?

 

A lot of the basic fundamental things we count on has needed legislation in order to happen.

Legislation to have food prepared with some sanitary standards? Check.

Legislation for clean air and water? Check.

Legislation to stop treating a darker hued segment of the population as slaves? Check.

Legislation to allow half the population, the ones with vaginas, the right to vote. Check.

Legislation to make sure that businesses can't pay you just one penny a day? Check.

And many more.

If it wasn't for legislation, you'd have either anarchy, or a dictatorship of the most powerful people.

 

Rational actor theory said that people would lower their lifestyles in adjustment to their shrinking buying power.

Instead, they borrowed (and encouraged politicians to borrow) ever increasing amounts of money to try to pretend like we weren't losing ground.

 

Bootstraps!