By: Ethan Miller, Student Voices writer
Supply-side, free market, or my favourite: ‘voodoo’ economics, is a capitalistic approach to commerce by and for the elite. Introduced by Ronald Reagan in the 1980s to curb rising inflation and unemployment through tax reductions and decreased government spending. In my opinion, this political perspective is morally wrong. I don’t agree that by allowing the wealthy to grow more wealthy – an objective which stems in greed – will grossly affect the poorest in society, and liberties granted to them will in fact increase the wealth gap.
Firstly, I’d like to tackle the stigma towards tax. The idea that taxation is an evil instrument used by corrupt leaders who want to suck peasants’ pockets dry is simply wrong, and can in fact be the exact opposite of the truth. There is a laissez-faire attitude still present in modern American culture which dictates that the government should not interfere with everyday life and each citizen should have freedom. This is an attitude we had in Britain not too long ago. After the world wars we realised how stupid that was and thus elected a ‘party for the people’ which gave us the welfare state including free healthcare. Fair taxation is so important because it provides equality. Income tax in Denmark, a socialist country, can reach over 50%, where the US barely reaches 30% at its peak. High tax isn’t leaders being greedy, government spending in Denmark is staggering and practically every public service is free. Tax equals free stuff. Fair tax equals equality. The wealthy should pay higher tax so everyone can have access to healthcare, education, state housing and other vital services. When people don’t want to pay for other people to learn, have a house, and be healed, I think that person is well and truly foul.
Now that we have come together on the fact that tax is good, we can make the logical link to the second fact that tax breaks for the wealthy are not good. More stigma we must overcome is the idea that left-wing economics takes down the rich to raise the poor, but right-wing economics greatly raises both. That is not true. While during Reagan’s term of office the majority of income levels rose, it was the top 1% whose income almost doubled when the poorest 20% saw a decrease in income. Sadly, poor income is not what capitalists care about, it’s GDP. GDP stands for gross domestic product, this is the value of all goods and services produced, often calculated ‘per capita’ which means per each person. The US dominates in GDP when you don’t calculate per capita, because they often don’t care about each individual, just the rich. This is the basis of trickle-down economics. If we help the rich, they will boost our economy and with a ‘strong economy’ the poor will benefit from more job opportunities, given that they haven’t died yet. In 2013 the United States of America’s GDP per capita was 6789.72 USDs lower than that of Denmark the same year. Cracking down on large corporations and favouring small businesses doesn’t ruin an economy but strengthens it while keeping moral values. The Danish aren’t focused on pleasing the rich to keep them in their country, they are concerned about the people. Denmark and many other socialist countries have governments which care about the people, and so provide free public services, have high GDP’s, and are statistically the happiest countries in the world. If you haven’t guessed already, I quite like Denmark.
What hope does Britain have in having a secure and moral economic system? Here in Britain, we have growing austerity, privatisation, and welfare cuts because of the long standing Conservative government. We also have public distrust in their main opposition the Labour party due to the events of 2008, which are explained here: http://filibuster.org.uk/2015/12/04/what-actually-happened-in-2008/
However, John McDonnell, Shadow Chancellor of the Exchequer has been working on their new economic plan which shows promise. Mr McDonnell with Nobel Prize in Economics winner Joseph Stiglitz is working to create a new brand of economics and in doing so, is stepping into very left-wing ideas. They have started with the base structure of anti-austerity, pro-nationalisation of transportation and industry, and the controversial universal basic income, the last of which will greatly decrease poverty and increase equality if achieved. All these are expensive policies, but can be paid for by high but fair tax, which is not a bad thing! If in 2020, Labour run with this economic plan of drastic economic change, I hope the British population will see that it can and will work, that five more years of trickle-down economics will ruin Britain, and that we can together, if we try hard enough, become Denmark.
Why trickle-down economics doesn’t work Reviewed by Student Voices on 13:20 Rating: