Hats off to this channel for making a very unbiased video about a very controversial and complex topic. Explained both sides views very well and highlighted the historical significance.
Well.. Considering he said the purpose of supply side economics was to put more in the hands of wealthy and businesses so they would spend and invest more and it would trickle down, I stopped watching. That is actually completely wrong. A supply sider believes production drives the economy, not spending. And if you do things like lower taxes or decrease regulations, that increases the after tax returns of investment. A key idea of economics is incentives matter. If you incentive more investment, you get more investment which gives you more production, which gives you a better economy. It has nothing to do with leaving more money in the hands of rich people or corporations so they will spend.
@@Kage-jk4pj Ummm. Ireland? UK? The US? Most of Western Europe? Hong Kong? Singapore? Seems to have worked. Tax rates came down and prosperity went up. What didn't work were insanely progressive taxes at rates that discouraged production. See US from 1965 to 1980. See UK in the 1970s. Look how Ireland went from barely in the first world to one of the wealthier countries on Earth. Hong Kong and Singapore have grown the fastest of any two countries over the last 70 years and have done it with very low rates.
@@Markdfadf prosperity for the ones who were already rich. Not really any improvement for the middle and lower class. Trickle down economics doesn't work. It just makes the rich even richer. Reagan is the reason there is so much inequality in wealth. Corporations having more money doesn't mean they create more jobs. It just means the corporations have more money. The decreased regulations made things worse too. It allowed corporations do almost anything they wanted regardless of who they screwed. Reagan's economic policies destroyed the middle class.
@@Markdfadf what about the 50s. That was one of the most prosperous decades in American history and the top tax rate was 90%. The rich were doing great. The middle class was doing great. Both health care and college were both cheaper and more accessible to the middle class with little to no debt. Now they are becoming luxuries for the rich and those in the middle class that do have those things many end up in mountains of debt that they will never be able to pay off.
@@legocamdude1 no, it benefited all. Reaganomics recovered the US from the worst recession since the great depression. The average economic growth was 3.5% (2% is average). The median wage increased by $4,000, and *17 million* new jobs were created. The inflation rate was decreased from 13.5% to 3.8%, and the stock market was booming. Unemployment was cut by half, from 10% down to 5%. Reaganomics, followed by Clintonomics (which was nearly identical to Reaganomics), created the best period of growth in US history.
@@juliamaher4934 Tax reform, 2nd best average GDP growth rate by any US president after the 1970s (3.6%) and increment of average household income from 21,063$ in 1981 to 34,016$ in 1989, all disagree with that.
@@pmv2015 Exactly, we have proof today that the results of Reaganomics were very positive, without companies like Amazon and private health organizations, our USA would be in the same state it was 30, these businesses would've never survived in the pre-Reaganomics Corporate tax rates.
Well it’s hard to argue with a 3x increase in the national debt during his presidency. Not to mention the fact that Clinton era policies saw 6/8 annual budgets in the black using policies exactly opposite of Reaganomics.
How do people think trickle down economics is still real? It's been 40 years and people are still waiting, meanwhile the 1% keeps growing exponentially.
Can you point me to a source that proves it didn't work? Because I've been going through the data and it seems like govt revenues as share of gdp remained stable despite reduction of the tax rates.
@@ireminmon Look at wages against inflation and wages against productivity from the labor department. Productivity has almost doubled in the last 40 years, yet wages have barely budged when adjusted for inflation. Same with the stock market with wages. The wealthy are able to keep all the wealth at the top, and almost none of it actually trickles down. Back when the top tax brackets were anywhere from 70%-90%, the rich almost never paid this top tax bracket, because most of their end of year wealth would be funneled back into the economy through jobs and businesses.
@@pieman141 The final statement doesnt make any sense. You will have to elaborate on this one. My point is Reagan managed to collect the same amount of revenues at 28% rate that prior presidents managed to collect at 70% rate. I don't understand how this is mathematically possible unless the old system was subject to awful corruption and bureaucracy.
@@ireminmon Only the dollar amount above the top tax bracket is taxed at that rate. Say someone is making 110 million a year and there is a top tax bracket of $100+ million at 70%, then 10 million is taxed at 70%. Would you rather pay the government $7 million just to keep $3 million? Or instead put all $10 million back into your business that can be used for higher wages, or product improvements that can lead to a better investment in the long run? It wasn't about tax revenue, it was about incentivizing the rich to put their excess earnings back into the economy instead of hoarding it widening the income gap. The rich could stay rich, and the middle class was strong.
@@pieman141 this argument is similar to the argument that inflation is good because it forces people with savings to invest. Its not a very good argument, becauae the end goal of investment is not investment in and of itself, but returns, and lower inflation means investor get to rake more time with their investments and invest in a wiser way.
My English teacher who did the Reagan side of the debate explained that economy ups and downs aren't really something that a president can completely control. But they take credit for upturns
Economic statistics, since the end of WW2, show that Democrat presidents tend to see more ups than downs, and Republican presidents tend to see more downs than ups. (This is probably because Democrats in that period tend to be more pragmatic and Republicans tend to be idealogs.) Look up an article called "Presidents and Prosperity" in Forbes magazine from about 20 years ago. Why was an English teacher in an economics debate?
What undermined Reaganomics was massive military spending. Germany and Japan showed that supply side economics definitely works but neither one of those countries has the massive military budget of the US.
Darrien Kennedy No. Trickle down gives an impression of the wealth trickling down or help the rich first then the wealth will trickle down. No wealth is going to directly trickle to the lower classes.
Darrien Kennedy Umm... I think you've misunderstood me. Let me repeat. Trickle down gives a false impression that helping the rich will somehow make the wealth end up in the lower classes hands. This is a strawman becasue tge wealth of the rich isn't necessarily supposed to go to the lower classes. It is also a strawman bcz it implies that the government is helping the rich or even giving money to the rich. All we are doing is allowing the rich to keep more of their own hard earn money.
In my view the government's sole responsibility is to protect our civil liberties. When people have to give up civil liberties for the sake of others there's an injustice. We can still protect the vulnerable with social programs and community services.
@@mduke2k the only thing you are doing with Social Programs is worsening their situation. It's known as the Robin Hood myth. Milton Friedman has an excellent Video on it.
@@colinwiener3268 And Friedman was wrong. Anytime you give money to someone in destitution, you have given them capital to afford more and it gets cycled back into the economy.
yeah right, the people who came up with trickle-down BS are the same people asking for de-regulation. businesses should NEVER be held accountable according to them.
@@jb34ch1 and I’m addition to that, many of Reagan’s economists stated that trickle down was based on ideas that had never worked, and were more “faith based” than anything.
@DILLON BELL That was never stated, that also tells me you do not know what supply side economics does. As for it working, the policies were implemented in the early 20's and allowed for a fast recovery. Unlike 1929 when the government decided that tariffs were a great idea.
They also opened the floodgates on stock buybacks. So rather than spending profits on expansion, by 2008 an average of 70% of profits were being spent on buying back stocks.
@@balllsdeep1750 Yeah… that’s the problem… it’s a “no productivity added” investment (unlike other investment on labor, equipment, land, etc). Stock buybacks were identified as so harmful to the public interests in the 1930s after the stock market crash (where CEOs were literally laying people off to protect their portfolios) that they were mostly banned until the Reagan era. After that, buybacks increased and domestic productive investment went overseas.
Stop looking at ideals and start looking at results. Neoliberalism or Reagans Policies help the poor much more than Social Welfare Programs. Look at Milton Friedman, F.A Hayek, and Thomas Sowell for more.
@@colinwiener3268 Not really, there is a gross amount of inequality in the US as a result of his policies. The middle class has slowly been dying as a result.
@@adrianhutabarat1736 Hows that? I mean how did his policies have the middle class dying as a result and is there evidence for the point that his, and only his policies are to blame? It's just always very difficult to blame some politician's politics for how something that occurred later on without falling into the trap of certain biases.
I agree that it is not on academic writing, but it does not matter. “Trickle down” is an EXPRESSION used to figuratively portray the process that when there are tax cuts and deregulation for corporations will lead to more investments,and the benefits will eventually “trickle down” to ordinary working class citizens. THERE IS NOTHING WRONG WITH THIS! Why are people so like you so sensitive when it comes to this expression?
BigBOY BOB because it is presented as a technical term of economic science by a lot of left wingers to give sustain to their silly economic ideas, whereas in reality, that term was invented by a comedian who peed himself on stage (so you understand the relevance of this term). Furthermore the term trickle down does not specify rich physical people (which belongs to demand) from rich juridical people (which is supply) which is a fundamental distinction between supply and demand economics, but this obviously is clamorously ignored by that comedian who can’t even figure out the difference. Left wing economic theories and terms are literally created by clowns (comedians in this case that are basically clowns) -> who uses that term likes clown economics
BigBOY BOB I think people don’t like the term bc it’s a myth. Trickle down should be considered mythology like big foot or the lochness monster. It’s been proven to be a lie over the past 40 years.
I lived and worked before and after Regans 1981 and 1986 tax restructures. I can tell you from experience, ONLY the wealthy and big business benefitted. Middle class is still suffering to this day.
It was bad policy for the government to have obligations that it could not fund. Once Reaganomics went into effect, the national debt soared from 900 Billion to 2.7 Trillion by the end of his terms. This put many government programs in the red. Reagan's belief that these programs could be starved out of existence was misguided. It set us on the poor financial footing which continues to this day.
it’s 1 am, and i’m scrolling in the comment section looking for other lemon demon fans who clicked on this and laughing hysterically at their comments when i find them.
0:55 Lmao corporations do NOT invest their savings back into their employees, into higher wages, or to create more jobs, yet they’re increasing prices. Everyone is feeling this and it’s why more and more employees are picketing for unions, and why there is no employee loyalty anymore.
Margaret Thatcher and Ronald Reagan are often portrayed as economic soulmates, but they had serious differences. Thatcher believed much more in "sound money" and in balancing budgets. She privately believed that what Reagan's huge budget deficits were economically irresponsible.
Thatcher increased spending (more like deficits went up through people claiming unemployment benefits): she left with deficits. Any surpluses under Thatcher were from economic boomtimes. She reduced inflation by increasing interest rates.
Yep. But sometimes it’s good to know if our way of doing things sucks so we can improve on them. Sometimes we gotta hear the cold truth to better our country
@@jdubo1998 But sometimes a buffon like raegan deserves to be hated upon. Dude cut welfare and social programs. Bro lead to the death of small businesses in the us. Bro stop fighting monopolies and was just an outright greedy moron.
Good video. I will just add Reagan didn't ONLY cut taxes for the top income earners and businesses, he cut taxes for everyone. But naturally, the more money you pay in taxes in terms of whole dollars, the more you'll save when there is a reduction. I also say that I'm 37 and inflation has never been an issue of serious concern in my lifetime. My parents (63 and 62), tell a different tale. So SOMETHING must've worked to curb inflation
It wasn't Reaganomics. He is the only reason we have a $31trillion debt today. Republicans borrowed that money to give to the wealthy and put the debt on the American people. As Republicans have it now, the wealthy pay about one third the percentage of their income in taxes as a middle class family does, you call that fair? How about reading that Bible you are clutching? Try Luke 12:48. Yes, the wealthy need to pay more, much, much more.
The Reagan policies were great and they would have made USA into a very prosperous nation if they weren't changed. Most people are too stupid to even conceptualize a fraction of the economy so they have no idea how good or bad the policies were.
@Chris Kozak We should have given extra money to the small man directly instead of giving them through corporations while risking them withholding the money
Reagan really just shifted the tax burden. Cutting taxes on corporations, capital gains, the highest income tax bracket was cut in half from 70% to 28% by the time Reagan left office. Meanwhile the poorest tax bracket got a 2% cut from 15% to 13% and taxes were raised on gasoline and cigarettes in 1986. Tips now were taxable. Effecting the service industry 1982. In 1983 the payroll tax was increased to support Medicare and social security.
@@eatcarpet No it doesn't. You seem like you are on welfare. If you cut taxes on corporations, they tend to expand, which requires more employees (more job). What part of basic economics don't you understand??
@@emichels Bro, if you're "conservative" then you're supposed to very slowly and gradually change things. Suddenly changing from 70% to 28% is radical revolutionary right.
I was an infant in the early 80's. Can someone explain their thinking as to why they thought human dragons would give money back to working people? Like, it's never made sense to me. Was it just straight propaganda?
There were no benefits to Reganomics that positively gave benefit to the working class. He claimed that corporate greed fuled economic downt turn, then fueled the fire and made it so much worse
In 1980 the United States had been in great inflation since 1965. "Stagflation," a term used a decade before Regan's presidency, where prices were rising and unemployment was high and the economy was stagnant. "Reaganomics" was based on a trickle down theory by lower costs for corporations by cutting their taxes, businesses used those savings to invest. The thinking was more money for corporations means more jobs and higher wages workers thus, increase spending. They argued that when corporate taxes are cut social programs suffer. And the rich get richer. Reaganomics was also about ° Deregulating businesses, ° Turning gov't services over to private contractors, and ° Decreasing spending on social programs: food stamps, social security and disability insurance." Reagan signed two tax bills into law in 1981 and 1986. Combined, the top income tax rate was slashed from 70 to 28% the lowest rate since 1920 for the rich. By 1983 the economy started to recover which led to a period of economic prosperity that continued throughout his terms. Stagnation again followed after he left office. Reaganomics led to smaller budget deficits and a larger national debt.
bro what the past 42 years we haven't even been using the same reaganomics. Bush Sr and Clinton increased taxes in the 90s which was to balance out Reagan's tax cuts that succeeded but hurt the deficit. Bush Jr's tax cuts in 2000 caused more harm as it did reverse to what the past two Presidents did, then Obama and Trump continued the same policies as Bush
if Reagan was really that bad to the working class I wonder why they reelected him in 1984 with Reagan winning 525 electoral votes, 49 states, and 58.8% of the popular vote and with Mondale only winning his home state of Minnesota with 0.18% vote margin and Mondale obviously won D.C (which always votes Democrat. )
As a student, I have been trying to come to a conclusive answer on this question for more than four years and there is so much controversy surrounding this debate that its almost impossible to conclusively understand it as an individual. It is really hard to try and wrap your head around more than 50 years of economical history and also to go ahead and combine all of the theoretical knowledge with two opposing factions who ALSO have spawned different neutral subfractions who all give you different answers that are in strong opposition to each other. I have heard so many different answers that are all plausible that this is one of the most difficult issues to fully explain in a short sentence. The thing is; I am a centrist. That means that I don't follow an ideology and in general, advocate balanced policies that have the intention of finding well, the best working positions of different rivalling factions and combining them. The issue with Reaganomics is frankly that fact that the US lacks a balance. Deregulation is good - unless you overdo it and it leads to monopolies. Social welfare is good - unless it becomes thoughtless or simply not affordable. You could spend hours talking about these two ideas alone and in the end, as much as I like catchphrases, they are not true. For example; president Obamas administration got famously into trouble for bailing out banks AND the car industry. What would have been the right course of action? Just help the banks? Just help the car industry? Help neither? Something entirely different? Sure, you will be able to find an answer to this question but once you realise that it's also one of the easiest questions despite being quite complex on its own, it helps to put the scale of the issue into perspective.
@@alexeyr2872 In theory or in practice? Thing is; I like to talk about the exact definitions of both systems a lot but in the end; reality usually complicates these affairs to the point where distinguishing between the two is quite complex. To give an example; can capitalism change? And if the answer is yes, when does it stop being capitalism and start being something else? Is socialism without the theoretically dictated equality of all even socialism? Or just a lesser variant with socialistic tendencies?
@@alexeyr2872 And so is capitalism. In theory it doesn't even consider what happens when someone becomes successful and in practice, it caused the rise of communism and socialism through monopolized industry. Socialism in theory is the idea of absolute equality - and impossible proposition. But in practice, social policies are among the most universally applied policies on the planet. Just like capitalism, it's far more important to discuss facets than theories. Because in practice, no functional society can be 100% capitalistic or socialistic. It's just not possible.
while the deficit did go up , so did tax receipts, a thing critics of reagon always leave out. the huge increase in military spending is what drove the deficits, not the tax "cut"
HeyMildred You are subservient if you accept that the “masters” are our providers...they are our exploiters...their abilities should be for the good of their fellow citizens and not to feather their own decadent nests. Private ownership should be curtailed and wealth more evenly distributed. The boss/master cannot survive without the workers...the worker is the rightful boss.
HeyMildred It’s not confiscated it’s reinvested via taxes. All the above is fine as long as regulations are in place to prevent exploitation of workers and excessive ownership/control. We are of course working within a democracy.
michael clarke Actually the boss can survive without the workers..... because he can just hire new people. There are always people looking for work. If you’re not grateful for yours then you can leave.
I recently got a 20 cent raise and my factory's giving us free Great Value ice cream cones once a week this month. Trickle down economics is really working!
The economy in this country will never by as great as it should be until people realize that the government has a spending problem not a revenue problem.
The Great Depression was the worst economic downturn in the history of the industrialized world, lasting from 1929 to 1939. It began after the stock market crash of October 1929, which sent Wall Street into a panic and wiped out millions of investors.
After cutting government spending and keeping tax rates low (thanks to Harding & Coolidge), there was the Roaring 20s. Then came Black Thursday & Black Tuesday. The recession became a Great Depression when Herbert Hoover intervened in the economy in 4 ways to impede the flow of money. In effect he threw sugar into a gas-tank. 1) Hoover raised the top level of income tax from 28% to 63%. 2) Over time, he raised the short-term government loan rate from 2% to 4% to nearly 6%, thus making all loans more pricey. 3) Hoover signed the Smoot-Hawley Tarriff Laws, which caused a world-wide rise in the prices of food and goods so foreign nations bought far fewer American Goods. This caused American trading partners (like Great Britain) to raise their tariffs, and thus far fewer American goods were purchased. 4) The Government did not put money into the economy through the Federal Bank, so there was less money to go around as the US Banking System was collapsing. Government over-action and over-intervention made the Recession become a Great Depression.
the fact that he modelled his economics to trickle down at the same time as he slashed the top income tax just says everything about how he hoped his economy would function. Wealth disparity is now grossly large and still widening.
Honestly this was amazingly neutral. There is only one critique. Trickle-down economics is used by opponents to the economic policy in order to de-legitimize it. In the spirit of keeping it neutral, I won't go further into it.
Jesse Pinkman trickle down and supply side aren’t the same thing at all. Trickle down is a buzz word and a straw man used by the left to demonize actually supply side economic theories.
What ideal economic system is:- 1. 15% income tax for all individuals with unemployment & death insurence. 2. 30% for corporations. 3. Free healthcare. 4. Free education. 5. Free justice. 6. Government small free shelter homes for poors. (Not oceanfront villa) 7. Scrap corporate lobbying law. 8. Strict law and how much currency can be printed per year or gold stan... (Ykwim)
History channel did a They did They did a video on a Lemon Demon song _vibrating_ THEY DID A VIDEO ON A LEMON DEMON SONG Wait never mind no they didn't, ignore me I am a mere mortal
Trickle down theory works but there has to be a limited supply of workers to insure company's compete for them just as much as they compete for people to buy their products and services.
No, trickle down doesnt work and the bailouts of the past are proof of that. With globalism, capital just ends up trapped in the elite buying up billions worth of property in the global market or simply stashing the money in tax havens.
@@wokeeye6441 You're right, the communist/democratic party is performing economic miracles right now! Why don't we cease more money from Americans and redistribute it!
@@cam7minus1 Employment's the lowest it has been for decades. You only seem to care about inflation. You are a typical monetarist. How popular are your marvellous austerity policies? Communist? Your ideas lead to a communist revolution when people have enough of your s*it. And by the way, no one says "trickle down" theory. There is no such thing in economics. There is the neoclassical synthesis. But you wouldnt know that. You are ignorant of basic macro and micro economics.
I agree and disagree, yes that spending is not good, however, the military in the US is the main Institution when it comes to socio-economic growth. It was in other terms almost necessary.
Cut taxes on production, decrease the cost of goods and services. 50-70% of the cost of every single thing you buy is directly attributable to taxation.
@Ace Diamonds I cant remember the number but the New York facility would've paid workers on average over 100,000 a year. You're right companies sitting on money isnt good but you know why they're incentivized to horde it away? Ask me please ask me. When the taxes are lower they produce more revenue. Again not rocket science.
@Ace Diamonds lol.... tax revenues increase with lower taxes... Automation of production only applies to that area, production. Its bound to happen as science progresses. You still need skilled labor to attend to the machines as well. Keep raiding minimum wage as no you'll see an increase in automation as well. A company that sits on money is a company that will fail. Large companies that can get away with everything you've brought up are a biproduct of higher taxes that cripple small businesses eliminating competition and incentivise those to hide their money in off shore accounts. Simple cause and effect. I'm not going to keep debunking your same flawed argument over and over. Good day sir
Trickle down economics was more than a 3 point plan. He also stopped enforcing All of our antitrust acts. And he wrote legislation that allowed manufacturers to leave the country.
Wealth was never meant to trickle down, the economy wasn't dynamic enough at the time when his tax policies where passed for it to have this effect. They focused their deregulation efforts on industries that had close ties to the administration but kept them up for their competitors to struggle with, then they conveniently ignored the welfare state and minimum wage as to prevent the deflationary effect that would occur. They knew that deregulating too much would end up hurting their bottom line, and they knew that a deflationary effect would give their new competitors in the market (as a result off fewer barriers to entry) an advantage due to lower loan amounts to start their business in an environment with lower nominal profit than what previously existed. They would have had to default on their high nominal debt because of low nominal profit in a deflationary period while a tremendous amount of new competitors entered the market. In comparison, the people would suffer for a time as they would also have to default on their debts, but the economy would now be capable of adjusting better to their conditions so that any new wages they received would likely afford them an even higher standard of living than before. The tide would have lifted the boats but the private interests would have failed, hence his inaction.
He also allowed(plausible deniability my foot) the selling of guns to another country and the flooding of coke that ran rampant in America during his time.
I think among those that continue Reagan's thinking are men like Larry Kudlow, who now serves as the chief economic advisor to Trump. Prior to Trump's presidency, Phillip Tetlock wrote a book and used Kudlow as an example of someone that clings to their ideology to the point that they cannot properly understand the current economic climate. In Kudlow's case, he was unable to see the recession that was occuring under Bush and kept talking about a "Bush boom," all while others had noticed it already in 2007 and 2008. He did on TV and in the print at National Review. Partisanship blinds people terribly.
Funny considering the mortgage loan crisis and subsequent 2008 financial crisis was a direct result of policies implemented in the 90s under Bill Clinton. Ah yes but something something Wall Street!!!
