Examine what happens if the wealthiest 10% of a society is given a tax break in order to stimulate a stagnating economy. This 10% suddenly has more money at their disposal and start saving and/or spending it. They start building or renovating their homes, buying new cars, clothes, going on vacations, buying tv's, radio's, computers, etc... Housing construction workers, car facory workers, clothes store employees, etc. now have jobs in order to supply the demand. These workers now have money and some of them are even making a living wage. However, is there still a better way? A down side to this system is that when the economy slows down, the workers lose their jobs while some of the wealthy get richer and some stagnate, but the wealthy don't bear much of the burden. It is the workers that feel the full impact of the recession. Even if a business goes down in a recession, the owner usually walks way with a sufficient amount of money while the workers lose their jobs and their source of revenue and usually don't have much in savings.
In order for there to be a alternative to trickle down economics, there must be an alternative to the hierarchy paradigm of society and thus economics. One paradigm could be an equality paradigm. The economics and society could be based on the fact that all men are created equal. This includes intellectual equality. This paradigm requires faith in the intelligence of the average person. There is no such thing as intellectual superiority. The only thing that comes close to this kind of superiority is when people have serious brain dysfunctions like down syndrome, tumors, or an injury to the brain. There can, however, be those that are more educated and those that are less educated, which in turn makes people more or less qualified for certain functions in society. This paradigm would say that nurture is more important than nature as far as intelligence is considered. It would be based on the fact that ordinary men have tremendous creative capacity which would be a generator of stuff which would stimulate the economy. For example, when the light bulb was invented, this created a whole range of new products which were demanded by society which was a stimulant for the economy. Creativity creates wealth.
The answer to these questions is that all of these are psychological. They are relative and arbitrary. They are imaginary. They are creations of the imagination. Take gold for example. Why do people find it to be valuable? In order to fully understand the answer to this, one would have to do an entire historical/anthropological investigation, which I will try to avoid here for practical purposes. Societies all around the world in many different periods of time have valued gold because it is shiny and comparable to the sun. It can also be shaped when heated with fire. People have shaped gold into all kinds of things, large or small. This makes it very flexible. When you can take something and do what you want with it, it becomes valuable to you. It gives you control. When something has value, people will act in order to obtain it for themselves. This is what resources are, physical things that people consider to be valuable. Civilizations around the world have competed amongst each other for resources, which are things people use in order to have control. Resources are things people use to shape the world around them to conform to their imaginations. Resources can be considered as tools to physically shape the world into what a person sees in his imagination. This could imply that intelligence has the power to change the determined course of the universe. A person's free will gives him control over the physical properties of the universe. Intellingence gives man superiority over other living creatures because man can see the determined course of things and then take control over the course of things. Control equals survival. Control equals prosperity. The popluation that controls is the one that survives.
Another example is cement. It is very flexible and can be shaped into many things which are difficult to destoy. Someone had to use thier imagination to see that cement can have a lot of uses for people. There are probabley lots of uses for lots of things in existence today which no one has discovered yet. It's just a matter of someone seeing it with thier imagination. Electicity and oil are more examples of things which are flexible and have lots of uses and are valuable. Actually, when I think about it, there is a logic behind what is considered valuable. Valuable things are things which enable a population to survive and to prosper. Part of prosperity is pleasure, which is what people get when they shape gold into a piece of artwork.
The guidline that should be used by American society when dealing with economic issues should be that the U.S. should have a middle class that occupies 80% of the population. It would be a middle class economy, middle class economic policy. All policies should be made to encourage the system to keep 80% of the population as a middle class. Its simple and it's straightforward and it is just and fair. Why 80%? Because it is realistic and attainable. Also, you cannot have a 100% middle class without being communist, and communism doen't work. There must be incentive for people to create businesses, this incentive has to be money. That is why part of the remaining 20% must be the wealthier class. People need to have the opportunity to make lots of money, that is a form of motivation.
What % of society should be poor? The answer to this should be: as little as possible. This can be reduced to almost 0 if all people in a society have hope to make more money than they already have. They need to have opportunities. The ideal society would be one in which the only poor people are the ones that don't want to do anything. They just want to sit around and be poor. Those in poverty would only be in it because they choose to remain in it. Once they want out of it, they can get out. Currently in the U.S. and throughout the world, I'm sure most of the people in poverty would love to get out of it, they just can't find a way out. A lot of them probably don't have any hope or belief in their own ability to make lots of money legitamitely. It is also important to note that in the U.S., a large portion of those in poverty don't even vote. This shows that they have no feeling of hope to have substatial influence in the government's policies, regardless of wether or not they vote.
If tax for the poorest were eliminated completely, and a break was given to the middle class, they will buy things, which will bring the economy back up. I wonder if more small businesses would pop up as a result of a policy like this. More government grants should be given to the poor and middle classes to start small businesses in order to boost local economies. Small, independent businesses are better for an equality-based society than larger, networked corportations. This is because businesses tend to be structured heirarchically. The more businesses, the more hierarchies. The more hierarchies, the more decentralized is the power overall in society. When there are fewer, yet larger hierarchies, which becomes the case when the government adapts policies that are more favorable to large corporations, the power in a society is more centralized. The more centralized the power in a society, the more of a hierarchy it is. When it is a hierarchy, there is less equality. Therefore, a society that wishes to be based on equality should be more biased towards small businesses instead of large corporations.
Another way of balancing power against the hierarchical structure is the formation of workers unions. An equality based society will be more favourable towards workers than towards the hierarchies in big businesses.