A government ecomomic plan in which taxes are lowered on the wealthy so that they have incentives to do things with the extra
money they would have would lead it to 'trickle down' to the middle and lower classes.
For example, the wealthy might use the extra
money to expand their businesses or buy more shares in the stock market, thus expanding the economy and providing more jobs for those in the middle and lower classes.
The wealthy might also spend the extra
money on more goods and services, thus providing the middle and lower classes with more work.
Probably the most significant stream of
money trickling down is from the extra
money that the wealthy put in banks. Because there is more
money in banks, there is more
money for the middle and lower classes to borrow for buying houses and starting and expanding businesses.
Many liberals like to attack trickle down economics as an unfair benefit to the wealthy. Their mistake is that they ignore the idea of the "invisible hand" that is implicitly behind the idea for such an economic policy. Trickle down economics is good because it inevitably leads to more jobs and
money for the middle and lower classes and to an expanding economy.
