Trickle Down Economics
Question: Who is going to pay for a government run health care system? Or it might be better to ask who is going to have a larger percentage of their income taken away to help defer costs for government run health care? Answer: It is not just the people earning over $250,000 per year.
In a small town in the mountains a group of contractors who largely earn much less than the magic $250,000 number were sitting in a bar discussing how great it will be to have free health care. Across town the man who owns the small local grocery store on the corner who has been in the neighborhood for decades is talking to his wife about how wonderful free health care will be, as is the farmer in the Midwest.
Most people in this country believe that the U.S. has the best healthcare system in the world. People around the world agree that the U.S. has the finest healthcare system, and will come here for treatment if they can afford to. Mother Theresa came to the Scripps Hospital in La Jolla, as did the Emperor of Japan. The wife of the Canadian Prime Minister came to the U.S. for medical treatment, preferring our hospitals and doctors to the Canadian system. People in this country that are in favor of a new government-run healthcare system basically want the system we have financed by someone else – some rich guy somewhere that should spread their wealth. People that are not in favor of a government run system know exactly who will be paying for the new program, and it is not just those earning over $250,000.
For example:
Company A is doing well and with the profits it decides to purchase new equipment, hire more employees, pay the employees that they have higher salaries, expand the company’s physical offices, and any number of other things to increase their profitability. They contact manufacturers and sub-contractors, Company’s B, C, and D for example, for the additional computers, office supplies, automobiles and farming equipment. Company B, C and D benefit directly from how profitable Company A is, and they also have employees that they are paying and equipment and supplies that they need to purchase.
And what about those contractors that are sitting at the bar in the small town? They are hired by Company A to build additional office space for the new employees and equipment, the small grocer in the neighborhood will have additional customers with new people moving into the area being employed by Company A, and the farmer in the Midwest will be supplying more products to the grocer. The employees of Company A will send their children to school, pay their taxes, go to shopping malls and to the movies, and spend a portion of their earnings for a home, a car, a new television set, and on occasion pack up the car and go to a baseball game or on vacation.
What happens when the profits of Company A are hit with higher taxes to pay for a government-run healthcare system? Will they expand their offices? Will they hire additional employees? Will they increase the salaries of the employees they have? What about Companies B, C and D? And what about those contractors sitting in the bar in the small town in the mountains and the grocery store down the street and the farmer in the Midwest?
Question: Who is going to pay for a government run health care system? Or it might be better to ask who is going to have a larger percentage of their income taken away to help defer costs for government run health care? Answer: It is not just the people earning over $250,000 per year.
In a small town in the mountains a group of contractors who largely earn much less than the magic $250,000 number were sitting in a bar discussing how great it will be to have free health care. Across town the man who owns the small local grocery store on the corner who has been in the neighborhood for decades is talking to his wife about how wonderful free health care will be, as is the farmer in the Midwest.
Most people in this country believe that the U.S. has the best healthcare system in the world. People around the world agree that the U.S. has the finest healthcare system, and will come here for treatment if they can afford to. Mother Theresa came to the Scripps Hospital in La Jolla, as did the Emperor of Japan. The wife of the Canadian Prime Minister came to the U.S. for medical treatment, preferring our hospitals and doctors to the Canadian system. People in this country that are in favor of a new government-run healthcare system basically want the system we have financed by someone else – some rich guy somewhere that should spread their wealth. People that are not in favor of a government run system know exactly who will be paying for the new program, and it is not just those earning over $250,000.
For example:
Company A is doing well and with the profits it decides to purchase new equipment, hire more employees, pay the employees that they have higher salaries, expand the company’s physical offices, and any number of other things to increase their profitability. They contact manufacturers and sub-contractors, Company’s B, C, and D for example, for the additional computers, office supplies, automobiles and farming equipment. Company B, C and D benefit directly from how profitable Company A is, and they also have employees that they are paying and equipment and supplies that they need to purchase.
And what about those contractors that are sitting at the bar in the small town? They are hired by Company A to build additional office space for the new employees and equipment, the small grocer in the neighborhood will have additional customers with new people moving into the area being employed by Company A, and the farmer in the Midwest will be supplying more products to the grocer. The employees of Company A will send their children to school, pay their taxes, go to shopping malls and to the movies, and spend a portion of their earnings for a home, a car, a new television set, and on occasion pack up the car and go to a baseball game or on vacation.
What happens when the profits of Company A are hit with higher taxes to pay for a government-run healthcare system? Will they expand their offices? Will they hire additional employees? Will they increase the salaries of the employees they have? What about Companies B, C and D? And what about those contractors sitting in the bar in the small town in the mountains and the grocery store down the street and the farmer in the Midwest?
An economic theory proposed by Wolpert and Macready in the 1930’s stated that, “There is no free lunch.” It means that whatever goods and services are provided, they must be paid for by someone - i.e. you don't get something for nothing. There is also no such thing as free healthcare.
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