I enjoyed David Stockman's recent piece on what has to be done in order to reign in our nation's debt. Likely, no one is going to like what needs to be done including myself. He gets right to the point very quickly.
The resulting squabble is not only deepening the fiscal stalemate but also bringing us dangerously close to class war. This lamentable prospect is deeply grounded in the policy-driven transformation of the economy during recent decades that has shifted income and wealth to the top of the economic ladder. The share of wealth held by the top 1 percent of households has risen to 35 percent from 21 percent since 1979, while their share of income has more than doubled to around 20 percent.
The culprit here was the combination of ultralow rates of interest at the Federal Reserve and ultralow rates of taxation on capital gains.
Hmm...who else has been saying these same things? Me. And I was never lucky enough to be the Budget Director for Ronald Reagan. So, Stockman's not exactly a liberal although by the current GOP's standards he's probably a communist. Later in the article, he puts forth some solutions, one of which I don 't agree with at all.
We are about to descend into class war because the Obama plan picks on the rich when it should be pushing tax increases for all, while the Ryan plan attacks the poor when it should be addressing middle-class entitlements and defense.
Well, there it is. At least someone had the guts to say it. Everyone needs to have their taxes raised. Except I can't see how that would be helpful given the decided lack of consumer confidence. Given that consumers make up two thirds of our economy, raising taxes on the lower 90 percent, in my opinion, would be disastrous. The middle class is the engine that drives this economy and they do not need any more burdens place upon them.
Overall, Stockman's piece states the obvious. Everyone wants solutions but no one wants to sacrifice. Worse, political theater is driving all of this which means nothing is getting done. I've stated many times on here that, as far as I'm concerned, everything is on the table including Social Security and Medicare. Hell, simply controlling the growth of Medicare would make a significant dent in our deficit and debt. Of course, that would mean controlling the cost of health care which means government regulation which means a pile of skulls, right?
3 comments:
I have no idea about "GOP standards" (now or back then) - but Stockman was a pissant when he worked for Reagan and all indications are he still is.
The share of wealth controlled by the top 1% today is about the same as it was during the Kennedy Admin. It dropped by the late 70s (quite possibly due to erosion from inflation) to the cited 20%. But what I want is for someone to tell me how horrible the concentration of wealth was in the late 50s to early 60s. If it is so terrible now, it must have been at least as bad if not worse back then - right?
You've mentioned that you don't teach science. Is it safe to assume that you don't teach mathematics either?
Why don't we just use debt management and risk perception? The national debt is meaningless and we will never have to pay it back.
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