Trickle-down economics

"Trickle-down economics", also referred to as "trickle-down theory", is a term associated with laissez-faire capitalism in general and more specifically supply-side economics. The term is often used to criticize economic policies which favor the wealthy or privileged, while being framed as good for the average citizen.

In recent history, the phrase has been used by critics of supply-side economic policies, such as "Reaganomics". , who as Reagan's budget director championed Reagan's tax cuts at first, but then became critical of them, told journalist William Greider that the "supply-side economics" is the trickle-down idea: "It's kind of hard to sell 'trickle down,' so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory." Political opponents of the Reagan administration soon seized on this language in an effort to brand the administration as caring only about the wealthy.

Multiple studies have found a correlation between trickle-down economics and reduced growth, and that higher taxes on the wealthy are linked to economic growth. Trickle-down economics has been widely criticised particularly by left-wing and moderate politicians and economists, but also some right-wing politicians.

In 1896, Democratic Presidential candidate William Jennings Bryan used the metaphor of a "leak" in his famous Cross of Gold speech:

Humorist Will Rogers jokingly advised in a column in 1932:

This election was lost four and six years ago, not this year. They [Republicans] didn’t start thinking of the old common fellow till just as they started out on the election tour. The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickles down. Put it uphill and let it go and it will reach the driest little spot. But he didn’t know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night, anyhow. But it will at least have passed through the poor fellows hands. They saved the big banks, but the little ones went up the flue.

William J. Bennett wrote:

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