Robert Reich castigates Washington. Raise tax thresh hold to $45,000 reduce deficit by $700bn a yearSubmitted by Ian56 on Mon, 02/04/2013 - 10:37
Robert Reich is correct.
He is also mostly correct in his analysis but he does not go nearly far enough in castigating Washington.
Government and Federal Reserve policy is the EXACT OPPOSITE of what it should be to improve the economy.
$2tn a year is currently being transferred from the middle class and the poor to large Corporations and thence to a select few rich elites.
We already have the widest disparity in incomes between the top 1% and the rest since the late 1920's and government policy is making it worse.
It there is ever to be economic recovery in America, disposable incomes for ordinary people need to rise at the cost of a small temporary decline in what are currently record Corporate profits.
First Measure for economic stimulus :-
Cut Corporate Welfare by over $1tn a year.
Use some of that money to raise tax thresh holds.
Raising tax thresh holds to $45,000 would cost less than $500bn a year. Only 67 million people paid any income tax in 2010. It would take 30 to 40 million people out of paying tax altogether.
This money would then be returned to the people it rightfully belongs to - ordinary Americans who would spend most of it in American businesses.
Yes I do mean raising the current $8,700 income tax thresh hold by 5 times to $45,000.
It would be a MASSIVE economic stimulus.
Income Tax is levied at 15% between $8,700 and $35,350.
It is levied at 28% on income between $35,350 and $85,650.
Second measure for economic stimulus :-
Stop the massive Federal Reserve printing and bail out of the big banks - $1tn a year from 2013.
This is being used by Wall Street for speculation and is raising the prices of food and gas.
Food and gas is a large proportion of ordinary people's disposable income. It isn't for the rich.
Third Measure for economic stimulus :-
Obamacare will make Healthcare less efficient and more expensive.
The cheapest family policy is going to be $20,000 in 2016 - according to the IRS.
This will be a huge drain on the middle classes.
Even the poor and unemployed will pay part of the cost - small and medium sized businesses are already starting to pass on their expected increases in costs and people will have less money to spend in small businesses - a double whammy.
It will make America less efficient and poorer. Anything that makes America less efficient or poorer costs jobs - so the currently unemployed will find it even harder to find work.
The Current Economic Situation and what needs to be done to fix America's economic woes
4m of the new jobs created since the start of 2009 have gone to the 55+ age group.
People are working longer because they cannot afford to retire.
If they are worried about their retirement and getting old they are not going to go on a spending spree.
MINUS 1m jobs have been created in the 16 to 54 age category.
Most of the jobs that have been created since 2009 are low paid, minimum wage or part time.
Total wages and median incomes continue to plummet as do disposable incomes (except for the people at the top who are getting large bonuses from record Corporate profits).
The big banks continue to be bailed out, but for 2013 the rate of bail out by the Federal Reserve has accelerated to about $1tn a year.
This will lower ordinary people's disposable incomes. We are already seeing price rises in food and gas because of Fed policy in handing out massive amounts of free money to the big banks.
Current Federal Reserve policy is very similar to what it was between 1925 and 1929. Flooding the markets with very loose monetary policy and lots of cheap money, except that today it is free money for the big banks.
The Fiscal Cliff deal just made things a hell of a lot worse.
ALL of the well over $1tn a year of Corporate Welfare was retained while the middle class and the poor got a HUGE $200bn a year tax hike. EXACTLY the wrong thing to do.
Obamacare is coming along. Another huge burden for the middle class. It is the equivalent of of another huge 3.8% tax hike. The minimum cost of a basic policy in 2016 will be $20,000 according to the IRS. The cost of healthcare is going to skyrocket. Fewer people are going to be able to afford good healthcare - it will be rationed by cost. The average healthiness of ordinary Americans will decline not increase because of the way Obamacare is structured - it will make healthcare less efficient and more expensive.
Robert Reich is correct that the rest of the world is slowing down economically.
Europe has just started a major recession/depression.
China, India and Brazil are all slowing down.
Economic growth won't come from exports - exports are set to decline. (Except for arms - the level of conflict around the world is set to increase - Obama is going to start spreading conflict in Africa now.)
The only way that there will be any sort of recovery is if the balance of record Corporate profits and plummeting disposable incomes of ordinary people is addressed and reversed.
The power of the cartels in each major industry needs to be broken up. The big banks, big oil, big pharma, big food, media etc. and the soon to be Healthcare cartel.
Government and Federal Reserve policy takes us in the EXACT OPPOSITE direction.
The power of the big banks is increasing not decreasing.
Barack Obama has declared that the big banks are no longer subject to the Rule of Law, with settlements made during his first term.
I share Robert Reich's frustration, which comes through in his piece.
Trying to wake up the masses to what their government is doing to them is like trying to wake up the comatose.
Current government and Federal Government policy is taking us into economic depression.
An economic depression that could last for multiple decades - not just one decade like the 1930's.
I have historical charts of economic activity going back to the Roman Empire.
Looking at these charts I don't see America starting any economic recovery until about 2060.
It could be changed if the government COMPLETELY REVERSED it's direction.
But there are no absolutely no signs of that from either Party.
It is going to take a catastrophic economic depression to change it.
Global economic depression is heading this way.
Obama's "Recovery" and America's lost decade.
The story so far in a series of economic charts and commentary.
The EXACT OPPOSITE of current government and Federal Reserve policy is required for economic recovery.
Disposable incomes of ordinary people need to stop plummeting and the power of large Corporations needs to be reduced instead of forever increasing.
See the last part of this for the solutions that are required to get America out of it's current economic mess.
Why are YOU such a big supporter of the big banks, large Corporations and rich elites?
Anybody who voted for Barack Obama or Mitt Romney is a supporter of the big banks, large Corporations and rich elites, because that is who they support.
Why current Federal Reserve policy is lowering disposable incomes.
It is not only people in America that are working longer because they cannot afford to retire.
It is happening across the whole of Europe too.
The Rule of Law no longer exists.
The big banks have now been declared to be above the law.
The strength of the Rule of Law is THE primary factor in determining economic growth.
Civil liberties and the Rule of Law continue to be abused generally by the government.
Barack Obama is planning for severe economic deprivation across America because of his economic policies.
Obamacare is going to make Healthcare less affordable, reduce disposable income for other things and lower the healthiness of average Americans.
It will make EVERYBODY worse off except for a few large Healthcare companies.
Where current government policy (of BOTH parties) is ultimately heading.
The loss of the US Dollar as the world's Global Reserve Currency.
China is already planning and begun making preparations for it.
It has publicly stated it's intentions.
THE major developments in the world today.
We are seeing history being writ large.
The handover of power from US hegemony to a Chinese centered SE Asia hegemony.
We haven't seen a change of this magnitude since Europe started ruling the world about 500 years ago.
Global growth projections to 2030
The above projections (from 2009) were over optimistic for America and Europe.
They are already sinking far faster than this chart predicts.
We haven't seen a disaster like this be inflicted on the West since the Black Death or the Fall of Rome.
The Black Death killed 30 to 40% of Europe's population.
N.B. All of the above is just a first step to getting America's house in order again.
Further reductions in taxes, government spending and deficits would come next year.