Trickle Down Flaw

Prices rise to absorb the amount of money available. Ask any tourist.

If you make it, they will buy.

   Give tax breaks to the rich and the benefits will trickle down through the rest of the economy and everyone becomes better off.
   That summarizes the core of Supply Side Economics and its companion Trickle Down Theory.
   A major flaw in that proposal is that the rich don't spend the extra cash that tax reductions provide, but instead put it aside in bank accounts and investments, adding to their net wealth. Thus, they become even more rich.
   There is, after all, a practical limit to how much they can spend. Even if they do look to buy more stuff, the extra supply of cash results in higher prices, even on luxury goods, which those at lower income levels can't afford anyway. And as prices rise, the unaffordability quotient for mid-level households is even greater.
   Result: The wealth gap widens. And as wage levels stagnate, as they have in recent years, the poverty level rises also, and erodes the middle class even more.
   Wait for the trickle? In the long run, everyone will benefit, claim the supply siders.
  Don't hold your breath, because "In the long run, we are all dead," quoth John Maynard Keynes.