by George Leef
The Democrats always posture as “the party of the little guy” and that’s sheer baloney since most elected Democrats readily support all manner of special interest legislation that hurts people with lower incomes the most. (Not that the Republicans are better; they posture as the party of limited government, but hardly any elected Republicans do any more than pay lip service to the Constitution.)
While Obama goes around the country blathering on how he wants to somehow have the government help the middle class, he ought to be called to account on the terrible effects his policies have had on lower income people, as Richard Alm and Michael Cox write in this IBD editorial.
For decades now, it has been the Democratic line that tax cuts for the wealthy are a failure because the “trickle-down” theory doesn’t work. That epithet gets in the way of clear thinking, however. What helps people to find better paying jobs and therefore earn more is increased capital investment. The more wealth Washington (Parasite City) sucks out of the private sector and into the wasteful maw of the state, the less capital investment there must necessarily be, and therefore fewer opportunities for poor and middle-class workers to improve their situations.
Increased government spending (see the video below) at most creates a temporary trickle of money for those lucky enough to get near the government’s money distribution. It cannot do anything to bring about more productive investment or more efficient use of resources. On the other hand, the formerly unemployed person (maybe someone who had worked in the housing industry before that bubble burst) who get a new job because of investment by an entrepreneur doesn’t just get a “trickle” of income; he gets a torrent.