Tuesday, April 23, 2013
Friday, February 1, 2013
The Magic Word
"Austerity" is the word most thrown around by conservative politicians all over the world. They seem to be under the impression that by making life harder for those people already struggling to make ends meet, the economy will miraculously heal itself. The thought process behind this illogic, is that by cutting spending on programs like social security and medicare, as well as reducing funding for non essential programs like public education, fire and police departments and public hospitals, the government will have more money to use toward paying down the country's overall debt.
While this makes sense, in that our credit payments will be reduced, it causes more economic problems by stifling consumer spending and preventing the economy from growing. Austerity measures that are being called for by the GOP in this country are very much like those that went into effect in Britain after the last election there put the conservative party in control.
As a result of these measures, the British economy, which has been struggling to recover from a double dip recession received another blow when the latest economic numbers were released. The austerity measures that were supposed to buoy the economy, are instead, leading it to the edge of a triple dip recession. According to Reuters in London, the gross domestic product of Britain fell 0.3 percent in the fourth quarter. This is even worse than analysts were projecting. Britain's economy is now 3.3 percent smaller than it was in Q1 of 2008, which is a worse performance than most other major economies in the world. The latest numbers show output in the service sector, which comprises more than 3/4 of the GDP, was flat while industrial output was 1.8% lower. This means that businesses aren't hiring, consumers aren't spending, and the country isn't manufacturing goods.
Cutting government spending on public services means that jobs are cut and people are unemployed. This means that people have less money to buy goods and services which causes businesses to cut labor, causing more unemployment and even less spending which perpetuates the cycle. The British example of use of " Austerity measures", should send all governments running in the opposite direction. The truth is that people have to have money to spend in order to keep an economy from collapsing. Governments should be creating jobs to put people back to work, not reducing jobs and causing unemployment. Government investment in infrastructure projects is the best and surest way to put people back to work and grow the economy. Middle income people spend money, and this spending supports the economy. Government spending has to expand, not contract during a recession. Work projects started by President Roosevelt during the Great Depression helped jump start the economy and move us toward a period of prosperity. Roosevelt exhibited the kind of forward thinking that we need in our government if we are going to avoid the kind of economic catastrophe facing Britain right now. "Austerity" is not the way to battle a recession and is not the Magic Word.
While this makes sense, in that our credit payments will be reduced, it causes more economic problems by stifling consumer spending and preventing the economy from growing. Austerity measures that are being called for by the GOP in this country are very much like those that went into effect in Britain after the last election there put the conservative party in control.
As a result of these measures, the British economy, which has been struggling to recover from a double dip recession received another blow when the latest economic numbers were released. The austerity measures that were supposed to buoy the economy, are instead, leading it to the edge of a triple dip recession. According to Reuters in London, the gross domestic product of Britain fell 0.3 percent in the fourth quarter. This is even worse than analysts were projecting. Britain's economy is now 3.3 percent smaller than it was in Q1 of 2008, which is a worse performance than most other major economies in the world. The latest numbers show output in the service sector, which comprises more than 3/4 of the GDP, was flat while industrial output was 1.8% lower. This means that businesses aren't hiring, consumers aren't spending, and the country isn't manufacturing goods.
Cutting government spending on public services means that jobs are cut and people are unemployed. This means that people have less money to buy goods and services which causes businesses to cut labor, causing more unemployment and even less spending which perpetuates the cycle. The British example of use of " Austerity measures", should send all governments running in the opposite direction. The truth is that people have to have money to spend in order to keep an economy from collapsing. Governments should be creating jobs to put people back to work, not reducing jobs and causing unemployment. Government investment in infrastructure projects is the best and surest way to put people back to work and grow the economy. Middle income people spend money, and this spending supports the economy. Government spending has to expand, not contract during a recession. Work projects started by President Roosevelt during the Great Depression helped jump start the economy and move us toward a period of prosperity. Roosevelt exhibited the kind of forward thinking that we need in our government if we are going to avoid the kind of economic catastrophe facing Britain right now. "Austerity" is not the way to battle a recession and is not the Magic Word.
Sunday, January 27, 2013
laissez-faire? Or just plain lazy
As I sit here watching Meet the Press, listening to Paul Ryan spew his anti middle class bile and rhetoric about how the deficit is the most important thing in the world, and if we don't pay it down we will all die a slow and painful death, I think my head will explode. Really? It's the most critical thing? Funny how it wasn't nearly so important when the idiot Bush was in the White House. Just sayin'.
"Austerity measures" is the new conservative catch phrase for cutting what they consider unnecessary spending on government programs like social security(which WE pay for), and medicaid(which WE pay for),public education, police and fire departments, as well as health care. By cutting spending on these programs, they are forced to cut jobs and lay people off, adding to the already massive number of unemployed. Of course the spending cuts will also curtail welfare programs so that these unemployed educators and police and firemen( referred to as deadbeats by conservatives), will not receive benefits.
The Great Depression in the 1930's was the last big test of the government's ability to steer our economy out of poverty and back to work and prosperity. Republican President Herbert Hoover was a staunch supporter of the laissez-faire system and felt that the economy would correct itself and that direct government assistance would weaken the moral fiber of the American people. 25% unemployment and another 25% underemployment was doing a pretty good job of that already. Hoover wanted to impose austerity measures that would cause hardships on people already suffering in poverty. Hoover was easily defeated in 1932 by Democrat Franklin D. Roosevelt.
Under FDR, Congress quickly passed several programs geared toward putting people back to work. These programs were collectively called the New Deal. Roosevelt applied the theories of the English Economist John Keynes who thought that the government should focus it's substantial financial powers on spending at the bottom of the income pyramid rather than at the top. This is the opposite of trickle-down economics which is the pet program of the conservative party.
One of the first and most successful programs implemented by Roosevelt was the Tennessee Valley Authority (TVA) in which millions of dollars were spent to create good paying construction jobs in several poor states along the Tennessee River. These jobs were geared toward dam building, electric power generation, and flood and erosion control. By creating these jobs, the government put people to work on projects that improved the lives of all the residents in this area. That should be the focus of any government.
Conservative politicians have this laissez-faire mentality that this recession is just a painful but necessary course correction and the economy will right itself. AAARRRGGGHHH.... ! Spending on infrastructure creates jobs and improves quality of life for everyone including the 1% that conservatives are concerned about. It just makes good sense NOT to be lazy!
"Austerity measures" is the new conservative catch phrase for cutting what they consider unnecessary spending on government programs like social security(which WE pay for), and medicaid(which WE pay for),public education, police and fire departments, as well as health care. By cutting spending on these programs, they are forced to cut jobs and lay people off, adding to the already massive number of unemployed. Of course the spending cuts will also curtail welfare programs so that these unemployed educators and police and firemen( referred to as deadbeats by conservatives), will not receive benefits.
The Great Depression in the 1930's was the last big test of the government's ability to steer our economy out of poverty and back to work and prosperity. Republican President Herbert Hoover was a staunch supporter of the laissez-faire system and felt that the economy would correct itself and that direct government assistance would weaken the moral fiber of the American people. 25% unemployment and another 25% underemployment was doing a pretty good job of that already. Hoover wanted to impose austerity measures that would cause hardships on people already suffering in poverty. Hoover was easily defeated in 1932 by Democrat Franklin D. Roosevelt.
Under FDR, Congress quickly passed several programs geared toward putting people back to work. These programs were collectively called the New Deal. Roosevelt applied the theories of the English Economist John Keynes who thought that the government should focus it's substantial financial powers on spending at the bottom of the income pyramid rather than at the top. This is the opposite of trickle-down economics which is the pet program of the conservative party.
One of the first and most successful programs implemented by Roosevelt was the Tennessee Valley Authority (TVA) in which millions of dollars were spent to create good paying construction jobs in several poor states along the Tennessee River. These jobs were geared toward dam building, electric power generation, and flood and erosion control. By creating these jobs, the government put people to work on projects that improved the lives of all the residents in this area. That should be the focus of any government.
Conservative politicians have this laissez-faire mentality that this recession is just a painful but necessary course correction and the economy will right itself. AAARRRGGGHHH.... ! Spending on infrastructure creates jobs and improves quality of life for everyone including the 1% that conservatives are concerned about. It just makes good sense NOT to be lazy!
Sunday, January 20, 2013
Credit Where Credit is Due
When I was reading the news the other day, I came across an article stating that some members of the GOP have decided that tax reform is just impossible, so they are floating the idea to do away with income tax altogether, and they want to make up the revenue by increasing the sales tax. This is just another form of a flat tax that impacts the middle and low income Americans while benefiting upper income Americans.
While the idea of taxing our wages is unpleasant, income taxes are actually the fairest way to raise revenue to support the needs of the country as a whole. This is only true of course, if the tax codes are applied fairly to everyone. Sales taxes, on the other hand, are a heavier burden on middle and low income Americans who spend a larger percentage of their income on taxable goods and services. for example: $ 200 per week for food is the same amount whether you make $25,000 per year, or $250,000 per year, but that amounts to
$ 9,600 per year just for food. To someone making $ 25,000 per year, this is over 38% of his annual income. For a person with an income of $ 250,000 , $ 9,600 is a paltry 3.8%. By increasing the sales tax, the price of food effectively goes up, causing middle and low income Americans to spend even more of their income on food. By the time you factor in other taxable items such as clothing, the burden becomes even greater for the people already struggling the most to put food on the table and clothes on their back.
I definitely have to give credit where credit is due. The GOP is always coming up with creative ideas to make life easier for people who make enough money to make it worth their while, in the form of generous contributions. It really is a Grand Ole Party isn't it?
While the idea of taxing our wages is unpleasant, income taxes are actually the fairest way to raise revenue to support the needs of the country as a whole. This is only true of course, if the tax codes are applied fairly to everyone. Sales taxes, on the other hand, are a heavier burden on middle and low income Americans who spend a larger percentage of their income on taxable goods and services. for example: $ 200 per week for food is the same amount whether you make $25,000 per year, or $250,000 per year, but that amounts to
$ 9,600 per year just for food. To someone making $ 25,000 per year, this is over 38% of his annual income. For a person with an income of $ 250,000 , $ 9,600 is a paltry 3.8%. By increasing the sales tax, the price of food effectively goes up, causing middle and low income Americans to spend even more of their income on food. By the time you factor in other taxable items such as clothing, the burden becomes even greater for the people already struggling the most to put food on the table and clothes on their back.
I definitely have to give credit where credit is due. The GOP is always coming up with creative ideas to make life easier for people who make enough money to make it worth their while, in the form of generous contributions. It really is a Grand Ole Party isn't it?
Monday, January 14, 2013
Equal Representation?
So, continuing the theme of non-representatives......... this whole Grover Norquist pact to protect the uber wealthy from paying their fair share of taxes had me pondering exactly where these billionaires all live, and whether or not there are any billionaires living in states where middle and low income Americans live.
Interestingly, the United States Census Bureau statistics for red states such as Alabama, Mississippi, Georgia, South Carolina, Louisiana and Kentucky, shows an average per capita income in 2011 of $23,354.50 per year. The Forbes list of top 400 billionaires indicates that only 3 live in Georgia, 1 lives in South Carolina and 1 lives in Kentucky. There are none listed in Alabama, Louisiana or Mississippi so this begs the question of why the elected "representatives" of these states are such staunch supporters of this ridiculous pact.These findings also force me to give a shout out to Saxby Chambliss of Georgia who spoke out against the pact in spite of the fact that he "represents" more billionaires than the other state representatives combines. Hmmmmmmmm.
People in these red states must wake up and look beyond their little bubble if they are ever going to improve the quality of life that prevails in these areas. We must have representation that is equal to the population, not to the self interests of the people we elect to Congress. Grover Norquist does not represent the middle class. He does not represent any body, and yet he has a stranglehold on the people who represent the citizens of these poor states. This ridiculous pact needs to be torched, and we need to hold our representatives accountable to their constituents.
Interestingly, the United States Census Bureau statistics for red states such as Alabama, Mississippi, Georgia, South Carolina, Louisiana and Kentucky, shows an average per capita income in 2011 of $23,354.50 per year. The Forbes list of top 400 billionaires indicates that only 3 live in Georgia, 1 lives in South Carolina and 1 lives in Kentucky. There are none listed in Alabama, Louisiana or Mississippi so this begs the question of why the elected "representatives" of these states are such staunch supporters of this ridiculous pact.These findings also force me to give a shout out to Saxby Chambliss of Georgia who spoke out against the pact in spite of the fact that he "represents" more billionaires than the other state representatives combines. Hmmmmmmmm.
People in these red states must wake up and look beyond their little bubble if they are ever going to improve the quality of life that prevails in these areas. We must have representation that is equal to the population, not to the self interests of the people we elect to Congress. Grover Norquist does not represent the middle class. He does not represent any body, and yet he has a stranglehold on the people who represent the citizens of these poor states. This ridiculous pact needs to be torched, and we need to hold our representatives accountable to their constituents.
Wednesday, January 9, 2013
A Rude Awakening
For the majority of my adult life I have lived in areas where the economics have been in line with my education and have made sense. In order to grow the economy, the middle class has to spend money. This can only be accomplished by making sure that the folks in the middle class have money to spend. When we spend money, the goods and services that we purchase allow businesses to hire more employees and put money in the pockets of more people who will spend money on more goods and services to allow businesses to keep hiring. This grows the economy. Makes sense right?
Imagine the culture shock when I re- located to a part of the country where the economics supports the very wealthy at the expense of the middle class and working poor. This shock was compounded by the fact that the majority of the people in this area are middle class and working poor. The confusing thing is that the very people who are being repressed by the economics of the area are the very ones who continue to elect government representatives who do not represent them, but rather support the rights of the very wealthy to make sure that they are looked after and can safely harbour their enormous assets in interest bearing off shore accounts without being subjected to those pesky taxes. The majority of middle class citizens are not shoveling disposable income into offshore accounts and are paying a heavy burden in taxes because their representatives are not representing them. What ever happened to representatives who actually do represent their constituents, and why do the constituents in this area continue to elect the non representatives?
These are the questions that plague this Blue dog in a Red State.
Subscribe to:
Posts (Atom)