Firstly, I want to make one thing clear, that I am addressing to these sets of policies as “trickle-down economics” and not “Reaganomics” on purpose, purely to try and debunk the mocking and myths of the socialists who argue against these policies.
Trickle-down economics is one of the most contested issues of the 20th century, with the calumniation of some fooling the general populace into thinking that “Reaganomics” somehow fails. However, over the past few years, a larger and larger proportion of the population have been seeing beyond this much propagated lie, and seeing the voice of reason, instead. This voice says that Reaganomics will obviously work because of a few simple reasons, which are really not too hard to pick out. Of course, hardcore socialists will say that Reaganomics will not work, however their theories will be debunked, not by the capitalists, but by logical thinkers who actually see why these economic policies will succour the positive growth of America. The first reason why trickle down economics works is that it discourages outsourcing.
As seen in France, when the rich are taxed heavily, then very often, they leave very quickly. These departures frequently lead to the eventual collapse of an economy, shown by France’s rapidly decreasing economic growth over the past five years. When you give tax cuts to the rich, you are making sure that they are not incentivised to leave, and therefore you maintain a strong tax base with which to spend. Do not be fooled by socialist propaganda telling the lie that it is the normal person, the average Joe, that fuels the economy of America, or any country, in fact, because it isn’t. As much as you and I would love for this idealistic reality to be the case, it simply is not true. It is the rich and famous that encourage growth and economic expansion, as it is only when they have more money in their pockets that they can employ more people, meaning that without this, less people will have a job, and therefore the government will have a larger pool of money to spend.
While trickle-down economics ensures that the rich will not leave the country à la France, it also encourages the growth of small businesses, which will only make sure that innovation levels increase, logically spurring the economy. It is an obvious axiom that when people have more money in their pocket, they will choose to spend it (unless you are in a saver’s economy such as Japan or India), meaning that more small businesses will be created. This will obviously increase employment levels, and therefore increase the revenue that the government receives from tax. This money will further be spent by the government, creating a positive spiral of economic expansion, prosperity, and growth. It is only when people have money in their pockets that they can try something new, and trickle-down economics recognises this, and ameliorates the issue by cutting taxes.
Finally, a common argument put forward by detractors of trickle down economics is that it does not work because the rich hoard the money. However, the only place the rich will put the extra money that they have is into other economic industries, meaning that the money they save will always be reinvested, and that, as the cost of starting up a small business goes down, more people will attempt it. It’s no secret that the Reagan administration presided over the lowest unemployment in years, from an unemployment rate of 10.2% to an unemployment rate of 4.9%. This cannot have simply been achieved by the rich “hoarding money” as some socialists will say, but from capital consistently trickling down the classes of the U.S.A., which logically reduced unemployment. It is my firm belief that these trickle-down economic policies will be looked upon more generously in future, with people realising that the policies they so detracted were actually some of the best ones that America has ever had.