Trickle-down economics

The phrase "trickle-down economics" originates in the 1980s, coming primarily from the White House. The phrase describes the idea that if business is allowed to expand without restraint, laissez faire or very close to it, then they will expand and grow, thereby creating jobs for citizens. As the businesses get richer, the money will "trickle down" to the people and everyone will be happy.

Although many aspects of supply-side economics were successful, such as holding down both unemployment and inflation by dramatically increasing spending, my opinion on trickle-down theory is that it is a pretty poor idea. The Industrial Revolution and subsequent Teddy Roosevelt Administration crackdown on monopolies demonstrates what happens when business isn't reigned in.

As Democrats in Congress said during the 1980s: "The only thing trickling down is going down the President's leg."

The idea that giving tax cuts to the rich will help the poor- that helping the economy by giving money to those who invest the most will improve the economy in general. This doesn't really work- money has gravity. Money always attracts more money (see: compound interest). That's what the rich get richer, and the poor get poorer.

A tenet of supply-side economics. Predicated on the theory that a rising tide lifts all boats. Flawed in that some boats still have holes in them.

The problem with that is that America runs on a demand-side economy.

See also: Reaganomics, Voodoo economics.