Sunday, February 1, 2009

Trickle Up Economics

If the public money we have given to those at the top is NOT getting the results that were intended like freeing up access to capital for consumers, protecting retirement portfolios, or creating financial stability for the masses, maybe this top down approach is just the wrong strategy.
For businesses, these cuts may reduce quarterly tax payments. But have little direct effect in increasing employment, R&D, and efficiencies since most businesses are already so far gone from past declines in consumer spending.National companies will purchase inventory and equipment from Asia or Mexico (sending our public money out of our country) and usually off-shore white-collar skills in development, planning, and feasibility. The majority of these funds, including the corporate profits, will flow out of local communities and pool and stagnate in a few select regions.This does nothing to create sustainable growth. Further, many of these national companies hire less than 30% of their labor locally. Thus, the majority of these funds, including the corporate profits, will flow out of local communities and pool and stagnate in a few select regions.

they will face huge demands to hire locally. This means more wages that will stay and be spent within the community. These workers will buy houses, cars, and consumer goods and services within the communities in which they live - bolstering other local businesses. These other businesses will also face greater demands to hire more and the cycle continues. As these businesses grow and lift themselves up out of the dust, so do their employees and ultimately their entire communities.

3 comments:

  1. I just couldnt leave your web site before saying that I definitely loved the quality information you offer to your visitors but i want to recommend that if anyone is interested investing in real estate then one can go for apartments on noida expressway and 1/2/3 BHK Apartments in Golf Village.

    ReplyDelete