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Dear LSE applicants and current students,

Would you help a current Economics student to prepare a speech for the school debate society?

The topic is 'Should we help the poor' but I am focusing mainly on the economics side (my partner's speech is based on philosophy).

This the notes I have made thus far:

Multiplier effect: helping the poor is helping the economy, especially during recessions.

Because the poor has a high marginal propensity to consume (MPC) and the equation for multiplier effect is k=1/(1-MPC).
As a result, helping the poor (e.g. benefits) boosts the economy further and helping the rich (e.g. tax cuts for top earners) Some might argue because the poor has a higher MPC, redistributive taxation is justified can boosting consumption promotes growth, which makes everyone better off.

Trickle-down Economics: Making rich people richer make the rest of us richer.

We must create wealth before we can share it out.
And it's the rich who are going to invest and create jobs, for they are the one who spots market opportunities and exploits them.
When the rich gets a bigger slice of the pie, the slice of the others may become smaller in the short run. But the poor will enjoy bigger slices in absolute terms in the longer run, because the pie will get bigger.
​ Problem: it's an armchair theory not supported by any data; when adopted pro rich policies the GDP growth rate of countries slow down.
Trickle down does not happen much anyway if left completely to the market: need welfare state, otherwise effect negligible.

I am also planning to mention absolute poverty vs relative poverty, but I still need a few more points to fill 30 minutes

So any input would be much appreciated, and if it can be in a concise bullet point form it would be perfect.

Much love comrades, and good luck for those applying to LSE this year <3

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