With the American economy still struggling to recover from the blowout of 2008, many citizens on all sides of the political spectrum are now openly questioning the government’s ability to provide solutions and answers to the fiscal crisis. While, unfortunately, those that are given the most attention by the mainstream (read: corporate) media are the undereducated and woefully ignorant “Tea Partiers”, there is a growing level of discontent in the moderate middle of this country, who are beginning to realize that the promise of the “American Dream” has been corrupted and destroyed by decades of corporate interference and influence peddling. In spite of this debasement of democracy, which has never been so obvious and obnoxious, the solutions that the right wing have chosen for the economic crisis have been centered around in the first case ensuring that the revenue and wealth for the richest in society remains at the highest levels the greater populace will tolerate and in the second case destroying any ability of the poor and less privileged to participate in society as anything more than pure labor by the inexorable destruction of all social social spending.
The tax cut extensions, passed by Congress and signed by ostensibly (laughably) liberal Democrat President Barack Obama will have the effect of adding approximately 2.5 trillion dollars to the deficit over the next 10 years. It’s hard to see what possible stimulation to the lagging economy this can provide, given that in a weak economy, wealth is hoarded, not invested, as the return on investment is so difficult to predict (unless you’re a bank, in which case you can rely on being bailed out, but that’s another story). Therefore, giving tax cuts to those who already hold the vast majority of wealth in society is not only irresponsible, but fiscal suicide.
One can go even farther and see how foolish the tax cuts are, for the reasons stated above, and their inevitable effect on the economy as a whole. The economy rests on consumption as its main driving factor. If the consumptive power of the majority of citizens in an economy is restricted by their inability to access wealth, through the hoarding by the rich and the lack of incentive to invest, then the economy begins to stagnate. With no demand, there is no reason to supply. With no reason to supply, there are no jobs, and with no jobs, less reason to consume, more reason to hoard for all strata in society, etc, etc. This circular bathtub drain decline of the economy is what made the Great Depression even worse following the Stock Market’s crash. No jobs- no demand- no supply- no jobs- no demand. The Great Depression was alleviated by the public works programs instituted by President Roosevelt, although were it not for World War II and the resulting demand for material the programs would have failed, mainly because he did not do enough and actually had begun to roll back many of the programs (resulting in an almost immediate dip in the economy).
The postwar economy was robust, and grew for an historically unprecedented two decades until 1973, when the inevitable contraction occurred. This contraction was not only inevitable, but easily foreseen. It is simply impossible for an economy and consumption to continually grow. Eventually the need for more products will wane. The world, resources and demand are finite necessarily. With the contraction of the economy, the wealthy looked around the landscape and realized their wealth could not exponentially grow at the levels it had in the past from their investments. Thus began a wholesale attack on a tax code which had been acceptable when growth was ensured, union and labor rights that had been a necessary evil to ensure timely production and social spending which would guarantee the freeing of personal funds for consumption. The wealth at the top would necessarily have to be protected at all costs, and then, as now, those in office were far far more beholden to the wealthy than the middle and lower classes.
In the past three decades, the assault on the poor and middle class has been relentless, with social services and public works programs being cut with the same zeal as taxes for the richest in the country. That the two cuts are frequently parallel should be unsurprising. Today, the Republican controlled House of Representatives is demanding more social spending cuts to facilitate the extension of tax cuts for the richest passed just this past December, and although the Democratically controlled Senate and Executive branch state they are only trying to compromise by offering up programs to be cut, it almost appears from an outside stance that the two are working together to ensure just the outcome the Republicans are forthright enough to say openly (whether that’s actually true is irrelevant, this is complete conjecture given the general state of affairs in our government and the corporate influence). An even more damning example of the simultaneous groveling to the wealthy and attack on the lower classes is the union busting bill in Wisconsin- Governor Walker rammed through tax cuts and corporate subsidies valued at 140 million dollars of losses for the state treasury, then turned around and cut 137 million from public works and social spending to fix the deficit HE HAD JUST CREATED.
The only solution within our current economic and governmental societal makeup for the crisis we find ourselves in should be apparent to all but the most ideologically blinded. In order to reinvigorate the American economy, the American consumer must have the necessary wealth to consume. The hoarding of the wealthy is doing nothing for the economy as a whole when it is not invested. Therefore, we must tax the rich at levels above 40 percent and redistribute that wealth to the remaining 90 percent of Americans through social services, public works and even debt relief. If consumerism is the engine on which our economy relies to drive, we must stimulate it accordingly.