Trickle down strikes again!Reader comment on: Krugman on Millionaires' Money Submitted by benjamin (United States), Aug 9, 2010 21:26 Your second paragraph is a neat distillation of trickle down economics. Of course the money doesn't sit in a mattress, but consumption on private jets etc. has not nearly the money multiplier effect compared with other types of spending. Investing in education, infrastructure, green technology etc all have positive societal effects above and beyond the direct jobs created. Not to mention, a good bit of money for these yachts, fine wines and third and fourth homes around the world often leaves the US to other nations, having limited and indirect effects on our economy and our workers. Note: Comments are moderated by the editor and are subject to editing. The Future of Capitalism replies: Actually the research on multipliers, as much as it can be believed, which is not much at all in my opinion, is that the multiplier on tax cuts is bigger than the one on spending. The paper is by, of all people, Obama's outgoing chair of the Council of Economic Advisers, Christina Romer. http://gregmankiw.blogspot.com/2008/12/spending-and-tax-multipliers.html Other reader comments on this item
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