The closest we will come to anything valuable trickling down from the rich on the rest of us is a golden shower, and I do not mean the auric metal.
Seven of Mine: Shrieking Feminist Harpysays
It’s all the more aggravating because it doesn’t take a PhD in economics to understand that this trickle down nonsense doesn’t work. If you give the Koch brothers and the Walton family a tax break that gets them another $250k a year, they’re not going to clap their hands and exclaim that they can finally afford that BMW they’ve been saving up for. They already went and bought the damn car the instant it occurred to them to want it. That extra money just gets added to a pile in a bank in Switzerland. None of those people is hesitating to buy a damn thing because the economy is bad.
If, on the other hand, you give average people a tax break that gets them an extra $2500 a year, that gets spent which is how jobs are created. It’s fucking obvious if you spare a few seconds to actually think about it and yet people happily skip to the polls to vote for Mitt Fucking Romney to screw them over.
As soon as the glass gets close to overflowing, they remove some of the contents of it and buy a bigger glass.
Actually some of them don’t even do that, they just remove some of the contents and place it in another glass. The other glass is golden and ornate and is stored off-shore somewhere.
vaiytsays
Trickle-down economics doesn’t work because the amount of value being siphoned up by capitalist enterprises is always going to be greater than the amount trickling down. I figured out as much in middle school, come on.
Seven of Mine @2:
I suck at economics, and even I grasp that your point is correct.
twas brillig (stevem)says
Wasn’t Ray-gun Reagan mocked for this “theory” and the Dems called it Magicnomics? “If Magic works: Trickle Down will make everyone wealthier”. ^_^
Even if my memory is fabricating that delusion, I’m still stuck with the bumper sticker of the re-elect Reagan time that simply said: “No Mo’Ron”.
Silent Ksays
I never understood “trickle down” economics.
To me, it sounded like a water metaphor, but the idea is to throw money where all the money already is, and expect it to “flow” to where the money isn’t? Isn’t that like throwing water in the ocean and expecting it to make it to the moutains?
Seems like it should be called “trickle up”, and that further illustrates how it doesn’t work.
They forgot the last frame, where the enormous glass on top crushes the pyramid holding it up, and crashes down to the floor below.
lakitha tolbertsays
Seven of Mine @2: Indeed. I figured out this shit was a lie in Middle school. I could see that there wasn’t a damn thing trickling down to our neighborhood and that in fact, people seemed to be worse off.
I have always hated Reagan, and by extension, anyone who held that man up as an example of greatness.
rossthompsonsays
Wasn’t Ray-gun Reagan mocked for this “theory” and the Dems called it Magicnomics? “If Magic works: Trickle Down will make everyone wealthier”. ^_^
The term “voodoo economics” was coined (I believe) by Republican challenger George H. W. Bush in 1980. Became vice-president instead.
moarscienceplzsays
I so need this on a t-shirt for when I visit my Fox News watching relatives this Christmas. They won’t accept it, but if they try to argue about it I can lay some badly needed facts on their ears without being accused of being pugnacious.
brettsays
The problem with “Trickle Down” is that the “trickling” doesn’t show up as higher income across the board unless we’re in a strong expansion with low unemployment, like the late 1990s and a very brief period in 2006-2007. Instead, what happens is that the higher incomes at the top get piled into some consumption and a lot more investment, and that investment drives both a massive expansion in lending as well as a mad scramble for any securities that pay higher returns.
In other words, you get the 2000s before the crash, and to a lesser extent the 1920s before the Great Depression (I say “lesser” because the 1920s did have strong income growth alongside a major expansion in debt and financial speculation).
[…] Now, just as there was in Teddy Roosevelt’s time, there’s been a certain crowd in Washington for the last few decades who respond to this economic challenge with the same old tune. “The market will take care of everything,” they tell us. If only we cut more regulations and cut more taxes – especially for the wealthy – our economy will grow stronger. Sure, there will be winners and losers. But if the winners do really well, jobs and prosperity will eventually trickle down to everyone else. And even if prosperity doesn’t trickle down, they argue, that’s the price of liberty.
It’s a simple theory – one that speaks to our rugged individualism and healthy skepticism of too much government. And that theory fits well on a bumper sticker. Here’s the problem: It doesn’t work. It has never worked. It didn’t work when it was tried in the decade before the Great Depression. It’s not what led to the incredible post-war boom of the 50s and 60s. And it didn’t work when we tried it during the last decade. […]
[…] Tax cuts for the wealthy, primarily those passed by Republicans in 2001 and 2003, lowered rates for the richest Americans to historically low levels — but those cuts were followed by massive deficits and weak job growth, not the economic boom conservatives promised. Anti-regulatory policies helped lead to a predatory financial system that busted the housing market, nearly collapsed the financial industry, and threw America into a recession that largely spared — and even enriched — the nation’s wealthiest. At the same time, millions of lower- and middle-class Americans lost jobs, retirement funds, and any hope of economic prosperity in their lifetime. Under 30 years of trickle down policies, wage growth has stagnated even as CEO pay has boomed. […]
Above excerpt is from an article by Travis Waldron.
twas brillig (stevem)says
re rossthompson @13:
The term “voodoo economics” was coined (I believe) by Republican challenger George H. W. Bush in 1980. Became vice-president instead.
Ahhhh, thank you! That’s what I was thinking of.
Foolish me: confounding “voodoo” to “magic”; just to fabricate that ‘neologism’, magicnomics.
And here’s what actually happens: http://taxfoundation.org/sites/taxfoundation.org/files/docs/Chart3.jpg
Granted, regressive payroll taxes have increased as well, but you can’t call the present system trickle-down.
@#2 Money doesn’t grow on its own. If it did, everyone would be rich. Investment income is still (usually) productive.
F.O.says
In the meanwhile, Evo Morales’ anti-liberism and the Bolivian success are swept under the rug of the media silence.
He’s not perfect, he does like two dictators (how many do WE like?), not all of his policies have been successful and Bolivia is benefiting from the price of raw materials, but look at the conditions of Bolivians…
What a dishonest graphic. Of course the tax share paid by the richest is getting higher. Because they are earning more and more money. What percentage of their income are they contributing? That’s what matters.
=8)-DXsays
@Enopoletus Harding #18
A very telling graph showing the reduction in gross taxes paid by the working poor. You do realise that the end result of the trend in your graph, where the 1% pays 99% of the taxes, is called a slave state. Trickle, trickle.
alkisvonidassays
Pah!
Let Them Drink Champagne, is what I always say! ;-)
[…] ..bottom half of the global population own less than 1% of total wealth. In sharp contrast, the richest decile hold 87% of the world’s wealth, and the top percentile alone account for 48.2% of global assets.
uh, that graph needs to also include the measurement of the increase in the proportion of wealth that 1% encompasses over the same time period.
when you do that, you find the NET percent of taxes paid by 1% in comparison to the amount of wealth they control has gone WAYYYYYYYYYYYYYY down.
so, if you think that graph is saying something? you’re a fool.
=8)-DXsays
@Lynna 23,
Every time I see this updated statistic, it get this dispair that seems to make me want to break things and shoot things. And I’m generally middle-class myself.
This is the long term fruits of Reaganomics trickle down theory. Run up deficits on
military spending, lower taxes and regulations on the rich and corporations on the
promise of creating jobs which inevitably are shifted to China, India, Mexico and
other countries where cheap labor can be fully exploited, when huge deficits
inevitably occur as a result, call for austerity, end to social programs,
blame teachers, unions, divide ordinary people against each other, all in the name
of more global profits.
mykroftsays
Trickle down economics. This is why the rich think of us as peons.
So the 1%, according to the graph, are paying almost twice as much in taxes. And over the same period, they just happened to start making four times as much as they previously did. And grew at almost four to five times the rate that everyone else did.
Also: Did you know that income tax isn’t the only kind of tax? Amazing but true!
Most significantly, the report concludes that all states have regressive tax systems that ask more from low- and middle-income families than from the wealthiest. It also finds:
– The average overall effective state and local tax rates by income group nationwide are 11.1 percent for the bottom 20 percent, 9.4 percent for the middle 20 percent and 5.6 percent for the top 1 percent
Also also: Who gives a shit if the 1% are paying the bulk of income taxes? That’s how progressives taxes are supposed to work. It is a good thing. They have the money to spare, more than anyone else. Are we really supposed to be concerned that multimillionaires and billionaires are contributing too much to the tax pool of the country with the median income of $50 fucking thousand?
F.O.says
@Enopoletus Harding: and what about people being brought out of poverty? What about full alphabetization of the country?
Why did this happened with a man that gave the finger to the IMF?
Also, basic economics: I have ten chicken and you have one.
I pay two chickens of taxes, you pay one chicken: I can still eat for eight, you starve.
over the same period, they just happened to start making four times as much as they previously did
you even wrote it, typed it out, and YOU STILL DON’T grasp the concept.
wow.
you are completely fucked in the head!
it’s rather shocking. really.
erik333says
@35 ichthyic
Seems to me that you’ re confused as to who wrote what?
parasiteboysays
Enopoletus Harding@33
So let’s all stop pretending the U.S. income tax system is “trickle down” in nature.
The term “trickle down” has never been used as a direct description of the US tax system, AFAIK. You seem to be confusing how trickle down economics is supposed to work, with tax policies that are consistent with trickle down economics. The richer get taxed less per capita, and if the budget stays the same the poorer get taxed more or programs get cut (usually programs that the poor rely on, which makes it an indirect “tax” on them since this still decreases their disposable income that can be used on things other than necessities). Since the rich now have more money, they invest it and create more jobs (nothing is said about better paying jobs, but more jobs). Some of the tax increase, or program cuts, on the poor is supposed to be offset by having more people working, thus expanding the tax base. There never seems to be enough expansion of the tax base to keep the poor from getting screwed even more.
parasiteboysays
erik333@36
Ichthyic@35 is just ornery because sharks “got all of them teeth, and no toothbrush”:)
lornsays
Trickle Down was never an official name for any policy, it was the descriptor applied by the doubters around the official policy, supply-side economics which was reinforced by the Laffer Curve.
Both concepts are perfectly good concepts. The dynamics are clearly and obviously real and functioning in any economy. Unfortunately while it is clear both are functional dynamics it was, previously, less clear what the relative scale of these dynamics is. As it turns out while both dynamics are real. Cutting taxes doesn’t cost the coffers quite as much as the straight math would predict and raising taxes doesn’t collect as much as it might simply because people react to the changes. Similarly stimulating the supply side does cause some of that freed up investment to benefit the lower end of the economy. It is absolutely true that some of the benefits do trickle down. Let loose a tidal wave of cash for the wealthy and the poor will have the soles of their feet moistened.
If the desired effect is to stimulate the economy long term and in a sustainable way supply-side economics is a rank failure. On the other hand, if the desired effect is to enrich the wealthy, supply-side economics is a booming success. Which tells you why most people with a lot of wealth like it so very much that they are willing to spend real money, endow economic chairs, and both found and support think-tanks to promote the idea.
Unfortunately while people dream of the glories of having all the money to themselves it is simply not a sound economic model to have all the money, or even a vast majority of money, in the hands of one, or the few. An economy is less about the total volume of money in the system than the speed with which that money moves within that system. Most of the US economy has long been consumer spending, When people are poor they minimize their spending. They essentially withdrawal from the economy. When most people are comparatively poor their minimizing of their spending slows down the entire economy. The retail economy stumbles and profits fall. In time this spreads to the entire economy and, in time, the wealthy find their profits failing to expand. This is what has finally brought the supply-side economic view into question and caused a search for alternative economic theories.
@lorn
-The first half of your comment is exactly on target, but if only consumer spending drove the economy, 1980s Brazil would have been paradise. Now, it’s obvious sudden and massive collapses on nominal demand have huge impacts (cf. Canada, 1933). But there’s no sudden or massive collapse in nominal demand going on right now. It’s just slow, weak, steady growth in both real and nominal variables. Also, if the rich simply hoarded all their money, there’s no way they would stay rich. The statement “Most of the US economy has long been consumer spending” is true, but irrelevant; it is primarily investment that drives U.S. employment and the examples of China and Bhutan show it’s perfectly possible to have investment as a large component of GDP with rapid and sustainable growth. You should all remember that the 2008 recession started with a bout of oil price inflation, not any collapse in nominal demand (which came later). The 1873-96 profit deflation in Great Britain helped bring about rapidly rising real wages (though slumping profits and employment growth due to frictions).
lornsays
You characterize roughly 2/3 of the economy, with almost 3/4 of that activity coming from purchases made by the lower 3/4 of the SE status population, as “irrelevant”?
This tells me you are more interested in preventing progress than understanding the problem and correcting it.
The closest we will come to anything valuable trickling down from the rich on the rest of us is a golden shower, and I do not mean the auric metal.
It’s all the more aggravating because it doesn’t take a PhD in economics to understand that this trickle down nonsense doesn’t work. If you give the Koch brothers and the Walton family a tax break that gets them another $250k a year, they’re not going to clap their hands and exclaim that they can finally afford that BMW they’ve been saving up for. They already went and bought the damn car the instant it occurred to them to want it. That extra money just gets added to a pile in a bank in Switzerland. None of those people is hesitating to buy a damn thing because the economy is bad.
If, on the other hand, you give average people a tax break that gets them an extra $2500 a year, that gets spent which is how jobs are created. It’s fucking obvious if you spare a few seconds to actually think about it and yet people happily skip to the polls to vote for Mitt Fucking Romney to screw them over.
As soon as the glass gets close to overflowing, they remove some of the contents of it and buy a bigger glass.
Actually some of them don’t even do that, they just remove some of the contents and place it in another glass. The other glass is golden and ornate and is stored off-shore somewhere.
Trickle-down economics doesn’t work because the amount of value being siphoned up by capitalist enterprises is always going to be greater than the amount trickling down. I figured out as much in middle school, come on.
Like I always say, Don’t trickle down on my leg and tell me it’s raining.
I have long that that a great new reality TV series would be “Hoarders: The Billionaire Edition”.
Seven of Mine @2:
I suck at economics, and even I grasp that your point is correct.
Wasn’t Ray-gun Reagan mocked for this “theory” and the Dems called it Magicnomics? “If Magic works: Trickle Down will make everyone wealthier”. ^_^
Even if my memory is fabricating that delusion, I’m still stuck with the bumper sticker of the re-elect Reagan time that simply said: “No Mo’Ron”.
I never understood “trickle down” economics.
To me, it sounded like a water metaphor, but the idea is to throw money where all the money already is, and expect it to “flow” to where the money isn’t? Isn’t that like throwing water in the ocean and expecting it to make it to the moutains?
Seems like it should be called “trickle up”, and that further illustrates how it doesn’t work.
Apparently the new argument by neo-cons is that “trickle down economics” is a made up phrase, a lie, by evil liberals to slander the good name of St. Ronnie.
http://www.nationalreview.com/article/367682/trickle-down-lie-thomas-sowell
They forgot the last frame, where the enormous glass on top crushes the pyramid holding it up, and crashes down to the floor below.
Seven of Mine @2: Indeed. I figured out this shit was a lie in Middle school. I could see that there wasn’t a damn thing trickling down to our neighborhood and that in fact, people seemed to be worse off.
I have always hated Reagan, and by extension, anyone who held that man up as an example of greatness.
The term “voodoo economics” was coined (I believe) by Republican challenger George H. W. Bush in 1980. Became vice-president instead.
I so need this on a t-shirt for when I visit my Fox News watching relatives this Christmas. They won’t accept it, but if they try to argue about it I can lay some badly needed facts on their ears without being accused of being pugnacious.
The problem with “Trickle Down” is that the “trickling” doesn’t show up as higher income across the board unless we’re in a strong expansion with low unemployment, like the late 1990s and a very brief period in 2006-2007. Instead, what happens is that the higher incomes at the top get piled into some consumption and a lot more investment, and that investment drives both a massive expansion in lending as well as a mad scramble for any securities that pay higher returns.
In other words, you get the 2000s before the crash, and to a lesser extent the 1920s before the Great Depression (I say “lesser” because the 1920s did have strong income growth alongside a major expansion in debt and financial speculation).
Let’s quote President Obama:
Think Progress link. Video also available at the link.
Above excerpt is from an article by Travis Waldron.
re rossthompson @13:
Ahhhh, thank you! That’s what I was thinking of.
Foolish me: confounding “voodoo” to “magic”; just to fabricate that ‘neologism’, magicnomics.
And here’s what actually happens:
http://taxfoundation.org/sites/taxfoundation.org/files/docs/Chart3.jpg
Granted, regressive payroll taxes have increased as well, but you can’t call the present system trickle-down.
@#2 Money doesn’t grow on its own. If it did, everyone would be rich. Investment income is still (usually) productive.
In the meanwhile, Evo Morales’ anti-liberism and the Bolivian success are swept under the rug of the media silence.
He’s not perfect, he does like two dictators (how many do WE like?), not all of his policies have been successful and Bolivia is benefiting from the price of raw materials, but look at the conditions of Bolivians…
PZ, why don’t you post this? http://www.nytimes.com/2014/02/17/world/americas/turnabout-in-bolivia-as-economy-rises-from-instability.html
@ Enopoletus Harding
What a dishonest graphic. Of course the tax share paid by the richest is getting higher. Because they are earning more and more money. What percentage of their income are they contributing? That’s what matters.
@Enopoletus Harding #18
A very telling graph showing the reduction in gross taxes paid by the working poor. You do realise that the end result of the trend in your graph, where the 1% pays 99% of the taxes, is called a slave state. Trickle, trickle.
Pah!
Let Them Drink Champagne, is what I always say! ;-)
This is according to a new report: “The Global Wealth Report by Credit Suisse.”
<a href="https://publications.credit-suisse.com/tasks/render/file/?fileID=60931FDE-A2D2-F568-B041B58C5EA591A4"PDF of the report.
Daily Kos link.
uh, that graph needs to also include the measurement of the increase in the proportion of wealth that 1% encompasses over the same time period.
when you do that, you find the NET percent of taxes paid by 1% in comparison to the amount of wealth they control has gone WAYYYYYYYYYYYYYY down.
so, if you think that graph is saying something? you’re a fool.
@Lynna 23,
Every time I see this updated statistic, it get this dispair that seems to make me want to break things and shoot things. And I’m generally middle-class myself.
No, my previous link was not dishonest. Top 1% is only earning 20-ish % of the income.
http://www.cbpp.org/images/cms//3-7-12inc-fig1.jpg
The income tax system has become somewhat less progressive since 1980, but not by much. It’s become more progressive with the partial Bush Tax Cut repeal of 2013.
@F.O.
Last year, Bolivia grew .6 percentage points better than Peru. This is not exactly a miracle. And Peru grew by a greater absolute amount.
http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&ctype=l&met_y=ny_gdp_pcap_pp_kd#!ctype=l&strail=false&bcs=d&nselm=h&met_y=ny_gdp_pcap_pp_kd&scale_y=lin&ind_y=false&rdim=region&idim=country:BOL:PER:HTI&ifdim=region&hl=en_US&dl=en_US&ind=false
Unquestionably, growth in Bolivia has been impressive for a country with such terrible policies toward the private sector. I suspect it relies largely on illegal&informal employment and unusually careful management of government assets. This is corroborated by the relevant Enterprise Survey: unusually few registered new businesses, unusually lax enforcement of business registration. And there’s probably lots of tax avoidance, too:
http://www.doingbusiness.org/data/exploretopics/paying-taxes
http://www.enterprisesurveys.org/data/exploreeconomies/2010/bolivia#informality
you’re full of shit
http://www.motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph
…as usual.
This is the long term fruits of Reaganomics trickle down theory. Run up deficits on
military spending, lower taxes and regulations on the rich and corporations on the
promise of creating jobs which inevitably are shifted to China, India, Mexico and
other countries where cheap labor can be fully exploited, when huge deficits
inevitably occur as a result, call for austerity, end to social programs,
blame teachers, unions, divide ordinary people against each other, all in the name
of more global profits.
Trickle down economics. This is why the rich think of us as peons.
http://blogs.wsj.com/economics/2011/10/25/income-growth-of-top-1-over-30-years-outpaced-rest-of-u-s/
After tax income, 1979 to 2007:
Average growth rate: 62%
Growth rate for bottom quintile: 18%
Top percentile growth rate: 275%
So the 1%, according to the graph, are paying almost twice as much in taxes. And over the same period, they just happened to start making four times as much as they previously did. And grew at almost four to five times the rate that everyone else did.
Also: Did you know that income tax isn’t the only kind of tax? Amazing but true!
http://www.itep.org/whopays/
Also also: Who gives a shit if the 1% are paying the bulk of income taxes? That’s how progressives taxes are supposed to work. It is a good thing. They have the money to spare, more than anyone else. Are we really supposed to be concerned that multimillionaires and billionaires are contributing too much to the tax pool of the country with the median income of $50 fucking thousand?
@Enopoletus Harding: and what about people being brought out of poverty? What about full alphabetization of the country?
Why did this happened with a man that gave the finger to the IMF?
Also, basic economics: I have ten chicken and you have one.
I pay two chickens of taxes, you pay one chicken: I can still eat for eight, you starve.
@F.O., Ichthyic, and anteprepro
-Respond to what I write, not what you imagine I write. Didn’t I explicitly say
?
-Exactly. So let’s all stop pretending the U.S. income tax system is “trickle down” in nature.
Here is an even more usefull comment coming from a plutocrat. You might be amazed,
http://www.ted.com/talks/nick_hanauer_beware_fellow_plutocrats_the_pitchforks_are_coming
you even wrote it, typed it out, and YOU STILL DON’T grasp the concept.
wow.
you are completely fucked in the head!
it’s rather shocking. really.
@35 ichthyic
Seems to me that you’ re confused as to who wrote what?
Enopoletus Harding@33
The term “trickle down” has never been used as a direct description of the US tax system, AFAIK. You seem to be confusing how trickle down economics is supposed to work, with tax policies that are consistent with trickle down economics. The richer get taxed less per capita, and if the budget stays the same the poorer get taxed more or programs get cut (usually programs that the poor rely on, which makes it an indirect “tax” on them since this still decreases their disposable income that can be used on things other than necessities). Since the rich now have more money, they invest it and create more jobs (nothing is said about better paying jobs, but more jobs). Some of the tax increase, or program cuts, on the poor is supposed to be offset by having more people working, thus expanding the tax base. There never seems to be enough expansion of the tax base to keep the poor from getting screwed even more.
erik333@36
Ichthyic@35 is just ornery because sharks “got all of them teeth, and no toothbrush”:)
Trickle Down was never an official name for any policy, it was the descriptor applied by the doubters around the official policy, supply-side economics which was reinforced by the Laffer Curve.
http://en.wikipedia.org/wiki/Supply-side_economics
Both concepts are perfectly good concepts. The dynamics are clearly and obviously real and functioning in any economy. Unfortunately while it is clear both are functional dynamics it was, previously, less clear what the relative scale of these dynamics is. As it turns out while both dynamics are real. Cutting taxes doesn’t cost the coffers quite as much as the straight math would predict and raising taxes doesn’t collect as much as it might simply because people react to the changes. Similarly stimulating the supply side does cause some of that freed up investment to benefit the lower end of the economy. It is absolutely true that some of the benefits do trickle down. Let loose a tidal wave of cash for the wealthy and the poor will have the soles of their feet moistened.
If the desired effect is to stimulate the economy long term and in a sustainable way supply-side economics is a rank failure. On the other hand, if the desired effect is to enrich the wealthy, supply-side economics is a booming success. Which tells you why most people with a lot of wealth like it so very much that they are willing to spend real money, endow economic chairs, and both found and support think-tanks to promote the idea.
Unfortunately while people dream of the glories of having all the money to themselves it is simply not a sound economic model to have all the money, or even a vast majority of money, in the hands of one, or the few. An economy is less about the total volume of money in the system than the speed with which that money moves within that system. Most of the US economy has long been consumer spending, When people are poor they minimize their spending. They essentially withdrawal from the economy. When most people are comparatively poor their minimizing of their spending slows down the entire economy. The retail economy stumbles and profits fall. In time this spreads to the entire economy and, in time, the wealthy find their profits failing to expand. This is what has finally brought the supply-side economic view into question and caused a search for alternative economic theories.
http://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014.html
http://billmoyers.com/2014/09/11/a-wealthy-capitalist-on-why-money-doesnt-trickle-down/
@lorn
-The first half of your comment is exactly on target, but if only consumer spending drove the economy, 1980s Brazil would have been paradise. Now, it’s obvious sudden and massive collapses on nominal demand have huge impacts (cf. Canada, 1933). But there’s no sudden or massive collapse in nominal demand going on right now. It’s just slow, weak, steady growth in both real and nominal variables. Also, if the rich simply hoarded all their money, there’s no way they would stay rich. The statement “Most of the US economy has long been consumer spending” is true, but irrelevant; it is primarily investment that drives U.S. employment and the examples of China and Bhutan show it’s perfectly possible to have investment as a large component of GDP with rapid and sustainable growth. You should all remember that the 2008 recession started with a bout of oil price inflation, not any collapse in nominal demand (which came later). The 1873-96 profit deflation in Great Britain helped bring about rapidly rising real wages (though slumping profits and employment growth due to frictions).
You characterize roughly 2/3 of the economy, with almost 3/4 of that activity coming from purchases made by the lower 3/4 of the SE status population, as “irrelevant”?
This tells me you are more interested in preventing progress than understanding the problem and correcting it.