Wealth doesn't "trickle down" from the rich to the poor

I feel like this has been a discussion about student loans more so than Reaganomics. Both of us seem to agree that student loan debt is a big problem. But, where we disagree is supply side economics. What I’ve been trying to say is that more often than not, money given to poor and middle class people will be put back into the economy. Those who are defaulting on their student loans are a minority (although a noticeable one). Most of them would spend the money on something else since they are already paying off their student loans. If you give that money to a rich person, that money will just sit there and not be pumped back into the economy. The GOP claims that their platform will create jobs and opportunities for all. However, in reality, all it does is enrich the already rich. Look at all their corporate donors (I realize that Democrats have them too). Is it a surprise that they are trying to make them richer? You would expect them to serve those who are funding their campaigns first. If rich people are donating tons of money to their campaigns, then they are going to serve the interests of the rich. That’s why the GOP continues Reaganomics. Do you seriously believe that they are going to look out for the average person before their campaign donors? The Republican Party is the party of the rich. A lot of what you see promoting Reaganomics is corporate propaganda. The myth that wealth “trickles down” has been debunked so many times. Why doesn’t it work? I feel like I can’t say this enough, but it fails because the more wealth that goes to the top (and stays there), the less wealth that’s available for the middle class so less demand is created. This actually harms job growth, and this makes sense given studies done on it. Please, tell me how fixing the student loan problem will enable supply side economics to work. I’m still waiting for an answer. Wouldn’t that wealth just stay at the top? Why would the rich spend it if the poor and middle class aren’t burdened by student loans? I don’t get it. So, when can we expect to see a “trickle?” If the poor and middle class are supposed to benefit from supply side economics, then when will that happen? Why hasn’t it happened now? You’re telling me that supply side economics is supposed to benefit the economy as a whole. That hasn’t happened yet. The rich just pocket that extra money and don’t spend it because they don’t need to. What creates jobs is demand, and that’s how we benefit the economy as a whole. Cutting taxes on the rich decreases demand due to an increase in wealth inequality. Give it to people that would actually need it and you would see it pumped back into the economy. You’ve been arguing that this won’t happen because many are burdened by student loans. Although a noticeable minority is drowning in their student loan debt, many people would still be able to pump it back into the economy because they would need to spend it on other things. Most graduates do end up finding a job and paying off their student loans in a timely manner.I know that I intended this round to be a conclusion of our overall arguments, but I feel like I would just be repeating what I’ve said before. So, I’m going to do some more rebuttals. 1. “Exactly. So any "trickle down" just evaporates into an abyss of nothingness. Give a trickle down to someone who is financially bombed, and your trickle down is meaningless.” But, as I’ve told you, a lot of people are already paying off their student loans in a timely manner, so if they were given extra money they would probably spend it on something else. There are also quite a bit of poor and middle class people that don’t even have student loans to pay back (either because they never got them or already paid them off). So, a lot of that money would actually be pumped back into the economy. Don’t you think that student loans are a separate problem? If we elect someone like Bernie Sanders, maybe something will be done about the problem of sky high college costs. I would agree that college costs are out of control these days and that we must do something. High college costs further burden the poor and middle class. But, look at what Reaganomics has done to them. Wealth inequality and the national debt have exploded. GDP growth is said to have been slowed down. Like I’ve been saying, if you give a rich person money, he or she won’t have the urge to go out and spend it. Why? Because he or she will not need to. So, you won’t see a trickle giving the money to the rich people, so why do it? At least giving money to poor and middle class people actually help them. They need it given the conditions of the economy today. 2. “If they owe $150,000 in useless debt and we give them $500, the government intercepts their money to help pay the federal student loan debt. They intercept tax refunds, parts of paychecks, and any money owed to them. So...now they owe $149,500.” What if that person is working on paying off the student loan debt? The government doesn’t just take any money they acquire to pay off the student loan if they are already paying on it. If one defaults on the loan, then that could happen. Although a considerable number of people are burdened by student loans and may never pay them off, a lot of people are successfully paying them off. Remember that most people who graduate college do end up getting jobs. Those that do get jobs and pay off student loans are pumping that money back into the economy. 3. “How much money would then go directly into the economy? It would make a massive difference.” So, aren’t you admitting that giving money to poor and middle class people does go back into the economy (assuming they aren’t drowning in debt)? Then why not fix the student loan problem and give them more money? Or, at the very least, why not give them more money? It would help them and in many cases it would go back into the economy. More often than not it would be put back into the economy. It’s better than giving it to a rich person as it will not be pumped back into the economy. This wasn’t intended to be an argument about student loans. It was intended to be an argument about Reaganomics. What I’m trying to say is that when you give more money to the rich, it doesn’t get invested back into the economy, so what is the point? To make them even richer? Isn’t wealth inequality high enough these days? 4. “This has a horrible effect on the economy. If graduates are paying back student loans every month, they can’t save up for retirement or a mortgage, or pay off credit cards, financing on vehicles and other debts. They’re unable to spend money at stores, which has a devastating effect on the economy at all levels.” It does but remember we are debating Reaganomics, not student loans. If a graduate is paying off his or her student loans, don’t you think that he or she could use some extra money? Don’t you think that he or she would pump it back into the economy by saving up for a mortgage, car, or whatever? Wouldn’t that money be pumped back into the economy? Remember that most graduates are paying off their student loans, so any money would be beneficial. 5. "Trickle down" theory holds that tax cuts for the wealthy will benefit the whole economy because new wealth at the top will circulate throughout the market and find its way into the pockets of the middle class. But that new wealth at the top doesn’t circulate throughout the market. It just stays concentrated at the top. Look at the increase in wealth inequality since the 1980s. You will see that the rich just continue to get richer. All that money that they are keeping is not helping the economy as a whole. Why? Because the rich don’t pump that money back into the economy. They have no need to. Do you see the connection? 6. “In the 30 years from the 1980s through the first decade of the new century, supply side economics contributed to the biggest boom in U.S. history.” But that prosperity went to those at the top. Average Americans did not get a huge share of all the prosperity that was created. Look at how that economic boon ended. It ended in a crash caused by the deregulation of Wall Street. Millions lost their jobs and homes. So, was all the economic growth for those at the top worth it considering it ended up being a disaster for the poor and middle class in the end? Sources: 1.http://www.forbes.com... 2.http://fortune.com... 3.http://www.examiner.com... 4. http://www.huffingtonpost.com... 5. http://michiganradio.org...