This is an idea called trickle-down economics. It has a long pedigree-and has long been discredited. As we've seen, higher inequality has not led to more growth, and most Americans have actually seen their incomes sink or stagnate. What America has been experiencing in recent years is the opposite of trickle-down economics: the riches accruing to the top have come at the expense of those down below.21
Trickle-down economics is a theory that has been around for a long time, but it has lost credibility over the years. The premise suggests that benefits granted to the wealthy will eventually be shared with the rest of society. However, the reality is that increased income inequality has not led to economic growth, and many Americans have faced declining or stagnant wages.
What has been observed in recent times contradicts the principles of trickle-down economics. Instead of wealth flowing down from the top, the financial gains of the wealthy have often come at the cost of lower-income individuals. This trend highlights the flaws in the theory and suggests that economic policies favoring the rich can exacerbate inequality rather than alleviate it, as detailed by Joseph E. Stiglitz in his book, "The Price of Inequality."
