Letter: Trickle-down theory is all wet

Wednesday, July 14, 1999 | 9:35 a.m.

He says that when the rich buy luxuries with the extra money other people are employed to produce the luxuries. Yes, but if that money was in the hands of those who are less wealthy they would buy things they need, not luxuries, and yet still employ people to make these things. Why is it good to channel economic resources into making luxury items when people are in need of things such as decent homes?

He says the rich will invest the rest of their money, creating more jobs. But not all investment creates jobs here. Some money is invested overseas, creating jobs over there but not here; some is invested in better technology which replaces more jobs than it creates; some is invested in speculation, which creates nothing.

Finally, we do not need rich people to create employment. Lots of people investing a little bit each can create jobs just as well as a few people investing a lot. Tax cuts and investment incentives should be targeted at middle and lower income people; the wealthy can invest easily enough without tax subsidies.

ALAN ZUNDEL, Assistant professor, UNLV Department of Political Science