Middle Out Economics

[DirtyDan17]

Middle-out economics is not just a catchy rhythmic contrast to trickle-down; it's a strategy based on a set of facts about how the economy really works.

Here are the premises derived from those facts:

-Demand from the middle class - not tax cuts for the wealthy - is what drives a virtuous cycle of job growth and prosperity.

-Rich businesspeople are not the primary job creators; middle-class customers are. The more the middle class can buy, the more jobs we'll create.

-America has the right and the responsibility to decide where the jobs created by our middle class will be located - here or in China.

-Trickle-down has given us deficits and a decimated middle class.

-Middle-out economics means investing in the health, education, infrastructure, and purchasing power of the middle class.

-Middle-out economics marks the difference between what is good for capitalism broadly versus what protects the vested interests of a select group of capitalists narrowly - and it invests in the former.

And here is the policy framework these premises demand:

-Create a truly progressive tax system. The richest citizens and the largest corporations pay a little more so that middle-class citizens and small businesses get the support they need to thrive. This isn't a tax increase, just the loopholes being closed so wealthy individuals and the most profitable corporations actually pay what they're supposed to.

-Invest in the skills and health of the middle class. Continue investments in programs that help the middle class succeed, and convert poor families into middle-class families that can purchase goods from our nation's businesses and drive our economy.

-Fight for American businesses and jobs.

-Pursue balanced trade and economic development policies that encourage companies to make things in America and discourage foreign companies from competing unfairly with American workers and businesses.

-Help workers help business. Push for a fairer and more equitable split between workers and owners of the value created by enterprises. This does not punish capitalists or ask for their charity: Higher wages for workers means more business for American companies. It's Henry Ford's long view.

-Make strategic investments in the next middle-class industries. Invest strategically in the industries of the future. Make big investments in R&D, and offer tax incentives for consumers as well as for companies and investors to use the power of the market to foster innovation.

-Emphasize entrepreneurship and innovation. Provide smart regulations and incentives to enable ever more Americans to start businesses and generate the economic activity that will sustain us in the future. This is rooted in the recognition that the way to help businesses, small and large, isn't less regulation but more thriving customers.

Middle-out economics has several important advantages over trickle-down. One is reality: This is how complex, adaptive systems like economies in fact thrive.

A second is politics: Middle-class voters will naturally prefer a story that puts them in the center as the prime actors, rather than at the margins as bit players. And the third is cultural intuition: We know in our gut that we're all better off when we're all better off.

 

[millerbleach]

And how do people get to be middle class? Could it be a rich person employed them?

 

[DirtyDan17]

And how do people get to be middle class? Could it be a rich person employed them?

It COULD be, it could also be any number of other ways. I mean, I'm not employed by a rich person. The middle class has been steadily shrinking for about 30 years, and yet the rich get richer.

I don't begrudge them for it, but if we could adopt a middle out approach it would make the most economic sense.

-more people with disposable income would grow the economy. Let's be real, people tend to spend their excess.

-pulling people out of poverty decreases criminality with the added benefit of getting people off of welfare. I personally love that this would shrink government overreach.

-closing loopholes and more people paying in could reduce the national debt. (It won't because they'll find something else to spend on.)

Emphasis on creating American businesses and jobs and pursuing balanced trade and economic development policies that encourage companies to make things in America and discourage foreign companies from competing unfairly with American workers and businesses seems like what Trump is already doing.

I just dont see the downside as it isn't a zero sum game, in this situation the rising tide raises all ships.

 

[liberator74]

It COULD be, it could also be any number of other ways. I mean, I'm not employed by a rich person. The middle class has been steadily shrinking for about 30 years, and yet the rich get richer.

I don't begrudge them for it, but if we could adopt a middle out approach it would make the most economic sense.

-more people with disposable income would grow the economy. Let's be real, people tend to spend their excess.

-pulling people out of poverty decreases criminality with the added benefit of getting people off of welfare. I personally love that this would shrink government overreach.

-closing loopholes and more people paying in could reduce the national debt. (It won't because they'll find something else to spend on.)

Emphasis on creating American businesses and jobs and pursuing balanced trade and economic development policies that encourage companies to make things in America and discourage foreign companies from competing unfairly with American workers and businesses seems like what Trump is already doing.

I just dont see the downside as it isn't a zero sum game, in this situation the rising tide raises all ships.

I don’t know about the whole middle class shrinking think. It seems tonight every restaurant in Joplin has people waiting to get in,,,,,the parking lots are full of $45,000 SUV’s and they came from new nice homes in the suburbs.

Now this might not be the case in bigger urban areas but it seems people around here are doing fine

 

[DirtyDan17]

I don’t know about the whole middle class shrinking think. It seems tonight every restaurant in Joplin has people waiting to get in,,,,,the parking lots are full of $45,000 SUV’s and they came from new nice homes in the suburbs.

Now this might not be the case in bigger urban areas but it seems people around here are doing fine

That's like saying "There are no measles outbreaks, no one around me has measles."

 

[millerbleach]

That's like saying "There are no measles outbreaks, no one around me has measles."

But, if everyones income doubled tomorrow, the chart wouldn't change. The criteria for each group keeps rising based on the average. In my 60 years the standard of living has gone through the roof (the things Liberator cited) yet we are told we are losing ground.

 

[millerbleach]

I don’t know about the whole middle class shrinking think. It seems tonight every restaurant in Joplin has people waiting to get in,,,,,the parking lots are full of $45,000 SUV’s and they came from new nice homes in the suburbs

These things would have qualified you as rich when I was a kid. It's a moving target. We were lower middle class when I grew up but today we would qualify for every government program that exists if our standard of living hadn't gone up. The middle clas in America would be the rich SOBs in most of the world.

 

[Duck_walk]

The restaurants in Joplin were busy on a Friday night. Wow, all is good. Cancer cured. Healthcare system perfect. Schools funded 100%. Infrastructure up-to-date. No hunger or gun violence in America. We are crapping in tall cotton. Thanks Joplin.

 

[DirtyDan17]

But, if everyones income doubled tomorrow, the chart wouldn't change. The criteria for each group keeps rising based on the average. In my 60 years the standard of living has gone through the roof (the things Liberator cited) yet we are told we are losing ground.

If everyone's income doubled (it wouldn't necessarily) and everyone was paying what they were supposed to in taxes, we could:

-improve infrastructure and increase opportunity for upward mobility.

-with increased access to opportunity more people become entrepreneurs, which is ACTUALLY what promotes job growth according to the most recent studies on the topic.

https://www.sciencedirect.com/science/article/pii/S0165176517305293

For those of you who can't be bothered to click on links, the gist of that article is, new businesses (5 years old and newer) create the majority of jobs, thus it would stand to reason giving more people access to the opportunity (better infrastructure, schools, homes/neighborhoods) could potentially spur even greater job growth via more entrepreneurs.

 

[Duck_walk]

If everyone worth more than $500 million in the USA paid a 2% wealth tax ONLY ON THE AMOUNT ABOVE 500 MILLION. Then we can provide universal pre-k for all children and boom our economy with 1.5 trillion in infrastructure projects employing millions over the next decade.

 

[DirtyDan17]

If everyone worth more than $500 million in the USA paid a 2% wealth tax ONLY ON THE AMOUNT ABOVE 500 MILLION. Then we can provide universal pre-k for all children and boom our economy with 1.5 trillion in infrastructure projects employing millions over the next decade.

No. This isnt asking for new taxes on the rich. It's not about punishing the rich. Close all the loopholes (for everyone) and you'd have more than enough money for whatever spending you wanted.

 

[Duck_walk]

You are "punishing" the rich with your progressive income tax sir.

 

[wccards21]

The restaurants in Joplin were busy on a Friday night. Wow, all is good. Cancer cured. Healthcare system perfect. Schools funded 100%. Infrastructure up-to-date. No hunger or gun violence in America. We are crapping in tall cotton. Thanks Joplin.

The restaurants in JoMo were full on a random Friday night. World hunger is fake news

 

[DirtyDan17]

You are "punishing" the rich with your progressive income tax sir.

We already have a progressive income tax, all this is proposing is eliminating loopholes so they're actually paying what they're supposed to pay. That's not punishment for them anymore than it is for all of us.

It increases the tax burden on everyone, which increases the pool of money with which to pay for the infrastructure, school, housing, upgrades the left desperately want.

 

[liberator74]

That's like saying "There are no measles outbreaks, no one around me has measles."

So it appears to me that there are less poor people,,,,and less middle income people,,,but a LOT more rich people.

Doesn’t that mean poor and middle income people are moving up and becoming part of the upper income bracket or “rich folks”

I would think that would be a good thing

 

[millerbleach]

We already have a progressive income tax, all this is proposing is eliminating loopholes so they're actually paying what they're supposed to pay. That's not punishment for them anymore than it is for all of us.

It increases the tax burden on everyone, which increases the pool of money with which to pay for the infrastructure, school, housing, upgrades the left desperately want.

Define loopholes. If you mean eliminating expense deductions you are crazy. If you mean something else, give specific examples.

 

[millerbleach]

The restaurants in JoMo were full on a random Friday night. World hunger is fake news

Yeah that's what he said.

 

[millerbleach]

So it appears to me that there are less poor people,,,,and less middle income people,,,but a LOT more rich people.

Doesn’t that mean poor and middle income people are moving up and becoming part of the upper income bracket or “rich folks”

I would think that would be a good thing

Exactly. The percent of people that are now in the upper bracket went from 7% to 22% and the number of lower class dropped. What a horrible situation.

 

[DirtyDan17]

Exactly. The percent of people that are now in the upper bracket went from 7% to 22% and the number of lower class dropped. What a horrible situation.

I'm not saying it's a bad situation. I'm saying it's possible to do better.

 

[millerbleach]

I'm not saying it's a bad situation. I'm saying it's possible to do better.

While it is "possible", the system we have is the best in the world and I don't want to screw it up. Now, if you can show me an actual loophole, let's close the sucker.

 

[DirtyDan17]

While it is "possible", the system we have is the best in the world and I don't want to screw it up. Now, if you can show me an actual loophole, let's close the sucker.

Home Mortgage Interest Deduction and Capital Gains Tax come to mind. I'm far from a tax expert, but these are two tax loopholes that disproportionately favor the wealthy.

That's just individual loopholes, when you start considering that US based corporations avoid paying around 90 BILLION annually by shifting profits to subsidiaries, often no more than a post office box, in offshore tax havens, that seems like a corporate loophole that should probably be closed.

As far as screwing it up, it's one of those basic math arguments:

-More people have disposed income (buy material goods which drives the economy forward).

-Less people eligible for government handouts, (ie. welfare, food stamps, HUD, etc) thus the government can reallocate the money being spent on handouts to other programs (infrastructure, education, healthcare) while not having to decrease military spending.

-More people paying in to taxes (not just the wealthy) increases the tax base without actually raising taxes on anyone, simply less tax returns due to people having their money up front.

-Could reduce the national debt (if we can find a political who refuses to deficit spend) and also maintain or expand the services people want due to increased tax base.

 

[millerbleach]

Home Mortgage Interest Deduction and Capital Gains Tax come to mind. I'm far from a tax expert, but these are two tax loopholes that disproportionately favor the wealthy.

That's just individual loopholes, when you start considering that US based corporations avoid paying around 90 BILLION annually by shifting profits to subsidiaries, often no more than a post office box, in offshore tax havens, that seems like a corporate loophole that should probably be closed.

As far as screwing it up, it's one of those basic math arguments:

-More people have disposed income (buy material goods which drives the economy forward).

-Less people eligible for government handouts, (ie. welfare, food stamps, HUD, etc) thus the government can reallocate the money being spent on handouts to other programs (infrastructure, education, healthcare) while not having to decrease military spending.

-More people paying in to taxes (not just the wealthy) increases the tax base without actually raising taxes on anyone, simply less tax returns due to people having their money up front.

-Could reduce the national debt (if we can find a political who refuses to deficit spend) and also maintain or expand the services people want due to increased tax base.

If you try to eliminate the mortgage interest deduction, it won't be the rich howling. Every lower and middle class family with a mortgage will be hurt far more than the rich.
We will never have less people "eligible" for government handouts. No matter the income, a certain percent will be at the bottom and thus "worthy" of assistance. It's pretty hard today to find anyone on government assistance that doesn't have a cell phone and cable. Very few people today have less than we did when I was a child but they are in poverty and we weren't.
The tax base increases under the current structure when the economy grows as it is now. You haven't made a case to me why we need to change anything.
I see no reason a person or corporation shouldn't be allowed to shelter money overseas. They can't spend it or use it when it's there either.

 

[DirtyDan17]

If you try to eliminate the mortgage interest deduction, it won't be the rich howling. Every lower and middle class family with a mortgage will be hurt far more than the rich.
We will never have less people "eligible" for government handouts. No matter the income, a certain percent will be at the bottom and thus "worthy" of assistance. It's pretty hard today to find anyone on government assistance that doesn't have a cell phone and cable. Very few people today have less than we did when I was a child but they are in poverty and we weren't.
The tax base increases under the current structure when the economy grows as it is now. You haven't made a case to me why we need to change anything.
I see no reason a person or corporation shouldn't be allowed to shelter money overseas. They can't spend it or use it when it's there either.

They can though and it reduces their taxable income. You think losing out on $90 billion isnt a big deal?

 

[millerbleach]

They can though and it reduces their taxable income. You think losing out on $90 billion isnt a big deal?

You sound like a liberal politician thinking it's the governments money and not theirs.

 

[DirtyDan17]

You sound like a liberal politician thinking it's the governments money and not theirs.

You realize the majority of this plan is stuff Trump is already doing right? Closing tax loopholes is the key to making it work.

You don't like it, I get it, but that doesn't change the fact that this is a way to help the greatest amount of people. It's called a compromise (which I understand both sides refuse to do) for all I care there can be a tax cut as long as the loopholes (especially hiding it offshore) are closed.

What do you have against improving infrastructure? When I talk about improving schools, I'm not talking about throwing money at schools just for the sake of doing it. I'd want to see more technical training available and not push the college prep diploma as the end all and be all. Give kids access to internships and apprenticeships (as well as just teach) in HVAC, plumbing, carpentry, mechanic training, landscaping, and other career based programs so a kid can graduate and get directly into the job market. Make technical career development just as important as "college prep" and you've improved the lives and school experiences of a lot of kids, as well as setting them up for future success (oh and like this entire plan entails, they'll have access to more expendable cash through their career path which in turn helps grow the economy).

Ultimately this plan doesn't toe the party line or talking points, which may be why you aren't on board, maybe I'm doing a poor idea of explaining it, or maybe it's not a good idea. But I dont see how improving upon our economy and potentially reducing our debt is a bad thing. Stop getting hung up on taxes (in which there is no tax increase btw) and look at the rest of the original idea. How is it a bad thing?

 

[millerbleach]

You realize the majority of this plan is stuff Trump is already doing right? Closing tax loopholes is the key to making it work.

You don't like it, I get it, but that doesn't change the fact that this is a way to help the greatest amount of people. It's called a compromise (which I understand both sides refuse to do) for all I care there can be a tax cut as long as the loopholes (especially hiding it offshore) are closed.

What do you have against improving infrastructure? When I talk about improving schools, I'm not talking about throwing money at schools just for the sake of doing it. I'd want to see more technical training available and not push the college prep diploma as the end all and be all. Give kids access to internships and apprenticeships (as well as just teach) in HVAC, plumbing, carpentry, mechanic training, landscaping, and other career based programs so a kid can graduate and get directly into the job market. Make technical career development just as important as "college prep" and you've improved the lives and school experiences of a lot of kids, as well as setting them up for future success (oh and like this entire plan entails, they'll have access to more expendable cash through their career path which in turn helps grow the economy).

Ultimately this plan doesn't toe the party line or talking points, which may be why you aren't on board, maybe I'm doing a poor idea of explaining it, or maybe it's not a good idea. But I dont see how improving upon our economy and potentially reducing our debt is a bad thing. Stop getting hung up on taxes (in which there is no tax increase btw) and look at the rest of the original idea. How is it a bad thing?

I'm in favor of closing loopholes too. I really don't care if they tax every dollar of profits (including money placed overseas) but if money is made by a US company overseas it shouldn't be taxed here and there too. I've also seen many expenses considered tax loopholes.
When have I ever said i'm opposed to improving schools?
Increasing the percentage collected IS a tax increase. It may be just but it is still an increase. Taking money out of the economy (taxes) is not the way to improve the economy.

 

[DirtyDan17]

I'm in favor of closing loopholes too. I really don't care if they tax every dollar of profits (including money placed overseas) but if money is made by a US company overseas it shouldn't be taxed here and there too. I've also seen many expenses considered tax loopholes.
When have I ever said i'm opposed to improving schools?
Increasing the percentage collected IS a tax increase. It may be just but it is still an increase. Taking money out of the economy (taxes) is not the way to improve the economy.

It's an increase because they're paying what they should have been paying all along.

I still say it's a net gain, but I've been wrong before.

 

[millerbleach]

It's an increase because they're paying what they should have been paying all along.

I said it may be just. Either way, you are taking money out of the private sector. Trump lowered the taxes to get this money back to the U S and it worked for the most part.

 

[DirtyDan17]

I said it may be just. Either way, you are taking money out of the private sector. Trump lowered the taxes to get this money back to the U S and it worked for the most part.

I dont think you see the forest through the trees on this one. I've already asked you to look at the rest of the proposal instead of focusing on the tax portion which you've made abundantly clear you dont like.

 

[millerbleach]

I dont think you see the forest through the trees on this one. I've already asked you to look at the rest of the proposal instead of focusing on the tax portion which you've made abundantly clear you dont like.

Why is that different than looking at socialism without looking at the taxing part?
It's the total package. You can't have one without the other.

 

[DirtyDan17]

Why is that different than looking at socialism without looking at the taxing part?
It's the total package. You can't have one without the other.

It's not though. There is no redistribution (no more than there is now), just people paying what they're supposed to in taxes and increased opportunity through improved infrastructure and schooling. The money isnt going directly from the rich to the poor, it's following the same mechanism we have now.

 

[millerbleach]

It's not though. There is no redistribution (no more than there is now), just people paying what they're supposed to in taxes and increased opportunity through improved infrastructure and schooling. The money isnt going directly from the rich to the poor, it's following the same mechanism we have now.

I didn't say it was socialism. I said you can't look at socialism without looking at the tax side. Same with your plan. You asked me to forget the tax side and look at the benefit side only. Socialism looks great if you don't look at all aspects of it.

 

[DirtyDan17]

I didn't say it was socialism. I said you can't look at socialism without looking at the tax side. Same with your plan. You asked me to forget the tax side and look at the benefit side only. Socialism looks great if you don't look at all aspects of it.

So closing loopholes in the tax code (not increasing taxes, heck, we could lower taxes as long as people paid in what they were supposed to) to the betterment of the country is a bad idea. Got it.

 

[millerbleach]

So closing loopholes in the tax code (not increasing taxes, heck, we could lower taxes as long as people paid in what they were supposed to) to the betterment of the country is a bad idea. Got it.

Cmon. I never said that. I did say you had to look at the total package. The question is, is it worth taking money out of the private sector to pump up the public sector. The other question that comes to mind is, why is it a good thing to increase public sector spending?
My point is, it isn't a no brainer for me to pump up public spending.

 

[DirtyDan17]

Cmon. I never said that. I did say you had to look at the total package. The question is, is it worth taking money out of the private sector to pump up the public sector. The other question that comes to mind is, why is it a good thing to increase public sector spending?
My point is, it isn't a no brainer for me to pump up public spending.

It's giving more people access to spending power. Which is what drives an economy.

It's not taking "more" out of the private sector, it's taking the amount people have been determined (by their duly elected representatives) to pay into the system without hiding assets. It's actually making things much more equitable (which the left likes to complain about) in that it puts more people's skin in the game as more people will have enough money to have to pay in.

As I've stated repeatedly, this actually shrinks government as people will start making enough to be taken off the government dole (welfare, WIC, HUD, food stamps, etc). Which can break cycles of poverty, reduce crime, and reduce dependence on government.

This is a VERY conservative proposal that you're poo pooing because tax loopholes are being closed.

 

[Duck_walk]

It's giving more people access to spending power. Which is what drives an economy.

It's not taking "more" out of the private sector, it's taking the amount people have been determined (by their daily elected representatives) to pay into the system without hiding assets. It's actually making things much more equitable (which the left likes to complain about) in that it puts more people's skin in the game as more people will have enough money to have to pay in.

As I've stated repeatedly, this actually shrinks government as people will start making enough to be taken off the government dole (welfare, WIC, HUD, food stamps, etc). Which can break cycles of poverty, reduce crime, and reduce dependence on government.

This is a VERY conservative proposal that you're poo pooing because tax loopholes are being closed.

You are trying to explain economic concepts to Miller. Head meet wall.