Thursday, June 23, 2011
Robert Reich Explains The Problem With The Economy In Under 3 Minutes: He makes a good diagnosis with a bad prescription
Economist Bob Reich is right as far the economy not improving for the Middle Class the last thirty years and that most of the benefits have gone to the High Earners. High Earners income has gone up substantially the last thirty years, while income for the Middle Class has been flat or has gone down overall. He's also right that for America and probably every other country in the World to have a strong economy, they have to have a strong Middle Class. Because thats who most of the population is in a Developed Country, so for a country to do well as a whole overall, the Middle Class has to do well as a whole as well. Where I disagree with Economist Reich, the House Progressive Caucus and other Progressive Socialists in America. Is their prescription for fixing the economy, which starts with increasing taxes on everyone, including the Middle Class, who we all know are struggling right now and can't afford a Tax Hike. Especially since they are already paying Tax Hikes in a lot of places at the State Local and Levels to close the Budget Deficit's there. Not just return to the Tax Rates of the Clinton Administration, but go back to the Carter Administration in 1980, with a top Tax Rate of 70%. And where Tax Rates on the Middle Class were also high as well. And they make the case that since the economy was doing better then, then its doing now. That we would be better off with those Tax Rates. Which is a simplistic argument because what they don't mention is that the Middle Class is already struggling right now and can't afford a Tax Hike.
We have a unique problem, a huge Budget Deficit, National Debt, to go along with a weak economy. With the weak economy fueling our deficit and debt. And we need to fix them at the same time which can be done but isn't easy. What we should be doing instead is raising taxes on High Earners but go back to the Clinton Administration for them or go up to 40% as the top Tax Rate or even 45-50% for billionaires. But leave the other Tax Rates where they are. To pay down our deficit and debt while making strategic Budget Cuts and reforms in the Federal Government to make it more Cost Effective. As well as rebuild our economy, our infrastructure and Manufacturing Industry by encouraging things to be "Made in America". One of the reasons for the weak Economic and Job Growth is because people aren't spending money like they did in the past and are spending a lot less. Another reason for the weak Economic and Job Growth, is because people aren't spending money. The demand in the Private Sector is very low, so what we should do instead of raising taxes on the Middle Class. Is encourage them to spend more money instead with some type of Tax Cut or Credit that encourages spending.
At first don't make things worst then they are, so lets not raise taxes on the Middle Class, the people we need to spend more money. Instead lets raise taxes on people who can afford to pay them and rebuild the economy instead.
Click on the link of the blog to see a video from Robert Reich explaining the economy in under three minutes