The Deficit Crisis Is a Fantasy

[jtuck004]

What if people in a position to influence others had seen what was coming in our financial meltdown, with enough of the picture to realize what the continuing cost would be, and had been able to refocus the public's attention, would we be better off today? Maybe not, because greed is a powerful force to fight, but maybe it doesn't always have to win?

This is one of those moments. It is well worth reading up on the jobs vs the deficit argument and see who benefits from this freight-train of deficit reduction hsyteria that is being promoted by some very wealthy people, and how they profit if the discussion centers around how to reduce the deficit instead of how we use our resources to bring about full employment. In addition, what has been uncovered in the financial markets so far appears to be just the tip of a melting iceburg with all the implications that brings.
We can grow our way out of this, or we can be sure the wealth of a few are preserved.


http://kmci.org/alllifeisproblemsolving/archives/the-deficit-crisis-is-a-fantasy/

<snip>
First, the Government can deficit spend without issuing debt instruments (“look Ma, no more rising national debt”) or committing to paying interest costs. It has the constitutional authority to spend money without offsetting its expenditure by issuing an equivalent amount of debt. The more it chooses to do that, the more it creates an oversupply of reserves in the reserve funds market, and the more it does that, the more competitive forces in that market will drive short-term interest rates on reserve funds toward zero. If the Government further decides to cease offering longer-term debt instruments, and to offer overnight debt only, it would decrease its annual interest costs to very near zero. So, there need be no rising national debt, nor rising Federal interest costs, nor rising business or consumer interest costs, nor sucking up private capital for investment. The whole deficit terrorist nightmare can go away. The Government can start refusing to issue debt now, and persist in that policy for as long as it wishes. Why doesn’t it do that?

<snip>

[earthside]

1. Just print new money.

Or just pixelate new money.

All that the government could ever need or want.

A couple of quadrillion and we're all stinkin' rich!

The Treasury Department could just cut us all checks.

Sounds great!

[jtuck004]

2. But how does that create jobs? The headline of that article

is just part of a whole sentence -

For example - if a patient in the hospital is bleeding out, and you have put oxygen on them, and started big IV's to get fluid back in, but they are still bleeding out, oxygen doesn't matter - you have to get the bleeding stopped. It's not that o2 doesn't matter, but by focusing on that your patient dies.

His headline is part of a conversation which goes something like "Because America is the sole supplier of our fiat currency, and is not required to borrow money to create it and use it, and our economy is sinking primarily because of a lack of jobs, the _deficit doesn't matter_". Of course deficits matter, but if you take the statement out of context it moves one down the wrong path.

What is important is to use our power as the sole supplier of our currency to influence the creation of jobs, which means spending more to offer a huge C.C.C.-like employment plan, end payroll taxes for a year, fund education for adults to move them into the current century, start some large new initiatives in forward-looking technologies like solar, in transportation, maybe nuclear energy, and encourage thousands of centers for R&D and entrepreneurship.

When the more than 31 million people who are not productive begin to pay taxes, instead of using them up, we will net more than 300 billion a year. Then it will be time to pay down the deficit.

[ClassicLiberalRoss]

3. Tuck, I'm a bit confused here...

-- but are you suggesting that the road to economic recovery lies with MORE Government spending rather than LESS? My God, man, have we learned nothing from Greece?!

And wasn't it the out-of-control spending under George W. Bush that got us into trouble in the first place?

[jtuck004]

4. That's kind of like wondering why you can't step

to the edge of a building and throw bales of money off, and expect that to pay your mortgage.

George didn't spend it to create jobs or rebuild the country. He threw it away in futile gestures for no good purpose, while at the same time turning his back on the working person.

He opened up the register and started throwing money at war with no clear understanding of what he was stepping into, nor any clear, identifiable goal, other than some thing called "winning", whatever that means.

He also shut off sources of revenue from people who were helping to pay the bills, (tax cuts for wealthy people) and began to change (or gut, as you prefer) regulations which insured that everyday working people would slowy but surely replace their assets with debt, continued the process of moving the creation of goods out of the country, and encouraged a savage heating up of a housing market based on little of substance. Some finance folks took it from there and with the magic of leverage created default swaps that still underlie a fairly shaky system today.

We aren't Greece. We are the U.S. We are the sole and only producer of the U.S. dollar which, despite all the talk, is the one currency in the world that everyone knows they can count on. Someone suggested that China might sell their bonds. And the moon might turn blue as well. That's ok, let them, someone else will snap them up. And since we are the sole source of dollars, and since our rules let us create money without borrowing, let's stop that silliness. We can add to the supply without that, save the interest.

Instead I think we should make some more digital zeroes and target it toward education, re-tool manufacturing, create thousands of centers which would teach people business concepts or technical skills worthy of the 21st century and, since we are a consumer- driven economy put perhaps 15 million people to work with a guaranteed wage, say $15/hr. This would not only begin to increase the money for buying things (which has to come first before jobs) but would begin to stem the downward pressure on wages.

You may have read that 85% of the wealth is held by 15% of the people. A lot of those very wealthy people seem to think it would be just fine to to screw retirees and our most vulnerable to pay down that debt. Instead we should raise taxes on that 15% of the population to help pay for the programs above. Removing the cap on earning subject to social security tax would immediately give us enough revenue to pay for any problems with Social Security until the baby boomers begin to fade, right after a year holiday from payroll taxes to give people some money to spend.

And we should keep this up until inflation (which is not even close to being a problem) begins to edge up a bit, which it will, some day.

I should also mention - this is a management issue. We can't just set this up and walk away. There are still huge, HUGE problems with the debt we have taken on over the years - personal, commercial, banks, spiderwebs of just garbage, and our economy rests on that. Until it is all wound down, there will be balancing that needs to happen. But we are smart people. Will the wealthy not be as wealthy. Sure. Will people without any money be worse off. Uh, no. They are already under bridges and living in shelters, 50% of kids eating with food stamps IN THIS COUNTRY, for cryin out loud.

Because the alternative is to cut the safety net under our most vulnerable so that Pete Peterson, the 149th richest man in America, won't have to pay a few million in taxes on the 2.8 Billion (with a B) he has in assets. That is what he wants to do, so badly he established a foundation, whose message is that "we must share some pain and get the deficit down". But I think he is planning on sharing a lot less pain than you, or me, or any of the 31,000,000 of our neighbors represented in the U6 number of the unemployment report. Which will be higher on Friday.

Yup, I think I suggested that.

[ClassicLiberalRoss]

5. Again, you'll have to forgive me, Tuck...

-- because my background is NOT in economics, but just to clarify here: You're saying that having the U.S. Government monetize the debt -- that is, having it print up more money ("make some more digital zeroes") -- is a sound economic solution to our current fiscal woes which will lead us not into economic ruin of the kind befalling Greece (or Germany after WWI) but rather to renewed solvency.

And so what we need to do, pronto, is to start running off more money -- spontaneously -- and then get this money into circulation ASAP, and then hike up the minimum wage to $15/hour and begin taxing the hell out of the top 15 percent of wealth holders, and we're back in business.

Has it not occurred to you, Tuck, that the top 15 percent of wealth holders are the ones creating most the jobs and wealth in the first place? (isn't it axiomatic that whatever else it can do -- and it can do many, many things -- government cannot create wealth, but only redistribute it?)

Has it not occurred to you that artificially flooding the country with billions and billions (or more) in new dollars will devalue the currency (axiomatic) leading to runaway inflation (axiomatic) and thereby making people's savings and earnings (like your vaunted minimum-wage increase) worth LESS than it was before?

Has it not occurred to you that this same minimum-wage increase... along with your easy-peasy "tax on the rich"... is only going to incentivize the private sector (you know, the ones creating most of the wealth in the first place) TO CUT JOBS!

Or were you actually expecting businesses being hit with HIGHER TAXES and HIGHER MINIMUM WAGE REQUIREMENTS to keep everyone on the payroll? Jesus, Mary and Joseph, why the hell would they do that, Tuck? Or were you actually relying on people's good will here?

Do you have some kind of Utopian idea of how this will go down?

Oh, and since we're dealing in reality: Do you honestly think that the U.S. dollar will remain "the one currency in the world that everyone knows they can count on" if we start running it off indiscriminately like a Sunday newspaper circular?

You are clearly a bright guy, Tuck. Brighter than me, probably. But this sort of flighty, pie-in-the-sky thinking is the kind I would expect from a Republican (like, say, my older brother) who doesn't care about data, or facts, or empirical evidence, but instead believes that "wishing will make it so."

Sorry, but what I love about being on the Left is that we Liberals exist in the real world. We deal in reality, Tuck.. in DATA and FACT and HARD EVIDENCE... not in prayer.

[jtuck004]

6. You are forgiven... Wow, that was fun. I'll have to do that more.

Probably neither of us are economists, else we would give a lot more credence to inputs and variabilities and not be nearly so certain that we know where wealth comes from or what the outcome of increasing our money supply would be. But we don't need to be to read and understand, or to decide whether the interests of the people telling us how things work lie with our best interests or their own pockets.

I have been told that it was that "top 15%" of people creating wealth. Actually that wealthier 15% has been telling people that since the inception of this country, according to Howard Zinn. Yet the wealth, if you want to look at it that way, actually comes from the hard work and broken backs of the other 85%. The 15'ers are more responsible for organizing, and they take a disproportionate amount of that wealth for themselves as payment. Yet working people have proved themselves quite capable of organizing, and since history suggests we would all be better off with that money being spent in the economy instead of accumulated by only a few it would probably pay us to rid ourselves of that burden. In other schools of thought "wealth" comes from the printing of fiat money which becomes desirable when people need to pay taxes - again, that more wealthy 15% begins to look less relevant.

DATA and FACT and HARD EVIDENCE are good things. Plenty is available in the writing of economists starting here and here and here, if one really wants to learn, despite the attraction and ease of finding information that feeds preconceived notions. I find it especially valuable to do the harder work when the results of the application of more "orthodox" and accepted theories seem to benefit a very small number of people, and hurt a lot of others. But your mileage may vary...

As far as tax rates and job creation, absolutely lets get into numbers. The top marginal tax rate in 1952 was 92%. today it is 35%. Based on your "DATA and FACT and HARD EVIDENCE" we should be swimming in jobs. Yet the unemployment rate in early 1953 was 2.5%, and in 2008 when Bush handed Obama the keys to the White House we had lost 2.6 million jobs, the worst year for jobs since 1945 here. We are sitting at 9.7% unemployment, and that number, representing misery for a lot of our neighbors, is likely to be higher in the morning. The outlook for many of them is not good.

Even if the 15'ers were creating a lot of jobs, they certainly aren't doing it today, so maybe we need to tax part of that wealth away and put it in hands that will use it to build a stronger country. The ability of people with less than a million in assets who could borrow a hundred or two hundred thousand to start the paint business, or buy into a sandwich franchise, or run a convenience store has been severely compromised. They created millions of jobs, jobs we can't do without. And their ability to do that has largely been destroyed by the uber-wealthy people on wall street who, apparently, thought making more money by leveraging assets was more important than their country. Things that also impact this include our inability to educate adults to the changes going on around them, the dismantling and relocation of a large part of our manufacturing base, and by several other forces which may or may not have anything to do with economics.

That tired old argument about the minimum wage just doesn't wash anymore. Let me quote from an organization, http://www.commondreams.org/views01/0829-08.htm">here, that has a much better handle on it than I do. "The federal minimum wage, first enacted in 1938, was meant to put a firm floor under workers and their families, strengthen the depressed economy by increasing consumer purchasing power, create new jobs to meet rising demand and stop a "race to the bottom" of employers moving to cheaper labor states. President Bush's proposal to let states "opt out" of the federal minimum wage would destroy it, taking us back to the pre-New Deal era.

In recent decades, the minimum wage floor has fallen, dragging down average real wages as well. The real value of the minimum wage peaked in 1968 at $7.92 per hour (in 2000 dollars). Since then, worker productivity went up, but wages went down. Productivity grew 74.2 percent between 1968 and 2000, but hourly wages for average workers fell 3 percent, adjusting for inflation. Real wages for minimum wage workers--two-thirds of whom are adults--fell 35 percent."

and

"CEO pay went up, but workers' wages went down. In 1980, the average CEO at a major corporation made as much as 97 minimum wage workers. In 2000, they made as much as 1,223 minimum wage workers." In the interest of "FACTS", I should point out that this disparity is even more stark today than it was in 2000".

The argument that increases in minimum wage would cost jobs is based on two rather presumptive errors - one is simple supply and demand, and our economy is more complicated than that. The other is an error called the fallacy of composition. Feel free to look that up on your own, but here is research from another org that uses several well-known economists to substantiate the idea that the economy is actually better off when wages are higher. But think it through - will a business be able to sell more if people have more disposable income to buy their products? And if they sell more, they need more people. There is a balance, of course, up to the limits that the production in the society will support. But skinning everyone to the bone insures that there is no meat for anyone.

As far as our currency, any country that chooses not to do business with us is free to use whatever currency they want. So what do they choose? The Yen. Doubtful. The Renminbi? What court are you going to use if the deal goes badly? The Euro? It's still a little tenuous, as you pointed out above. The fact is, and despite the decrease in our manufacturing capacity, we are still the big dogs, especially in commercial aircraft and weapons\military technology, and a few other areas. They have to have dollars to pay our taxes, and to buy our products.

Austerity is nothing but a downward spiral into some of the outer circles of Hell. We can manage our deficit much better by employing everyone, which would mean, at a minimum, 300 Billion more dollars coming into our coffers than we have today. The only inflationary pressures I see are the references above to Greece and Germany, (we are not even close), and the idea that we would create currency by "running it off indiscriminately like a Sunday newspaper circular". No one is suggesting anything other than using our ability to create our own currency and manage our deficit as the smart group of people that we are. Inflation is far away with 31 million people (and growing) either unemployed or without enough income to live, much less buy up a lot of things to increase inflation. Today some can't even buy good or heat their homes without begging for assistance. When the time comes, we increase taxes and pull some of the heat out of the economy.

One last resource I would like to point you to is Warren Mosler's 7 Deadly Innocent Frauds of Economic Policy. He covers a lot of this much better than I.

But then again, I could be wrong.

Enjoy your salvation. ;)

[Statistical]

7. "that the top 15 percent of wealth holders are the ones creating most the jobs?"

If the top 15% are really creating all the jobs...

Strange that when Clinton raised taxes on them they produced more jobs at any point in last 40 years.
Strange that when Bush cut their taxes they produced less than jobs at any point other than the oil embargo recession and great depression.

So IF the rich are the ones making jobs it would seem based on historical evidence that lower taxes doesn't seem to stimulate job growth does it.

[jtuck004]

8. Yeah, he is not the first person I have heard that from.

It is amazing that people still try to put that myth out there. From the links I found it is pretty clear that with the top tax rate at 90% in 1953 we had 2.5% unemployment. Now that the TTR is 35%, unemployment will likely be close to 10% tomorrow. Yours provides a more recent example. Between those two if someone doesn't see the connection, they just don't want to.

thanks

[Statistical]

9. Yeah I have no doubt that the rich DO create (some) jobs.

I mean it takes money to make money. It takes money to start a new business, bring a new product to market, or capitalize on a new ideat. Someone struggling to put food on the table is unlikely to have resources to create employment for someone else.

That being said where the link fails is this belief that lower taxes means that money will be sunk into new investments. There clearly is no relationship between taxation and rate of entrepreneurship. The "rich" created jobs when taxes were much higher than today. Bush cut taxes (which were already historically low) to even lower level and rate of job creation plummeted.

[Art_from_Ark]

10. One thing about that 2.5% unemployment rate in 1953

was that there were few older women in the workforce. Most women were employed in traditional women's jobs (as teachers, secretaries, librarians, etc.), and were often expected to quit after they got married (especially in the private sector). Also, there was a large number of African-Americans in the South who were not employed in paying jobs, so were they included in the unemployment figures? If they were working as sharecroppers, would they be counted as being employed, even if they were barely squeaking by?

[jtuck004]

11. I don't know how that would really impact the figures as far as percentage.

The survey was started back in 1940's<?> as part of the WPA as I recall, and it has undergone some revisions over the years. They still survey from a pool, from which is pulled 60,000 households, and from there a smaller group is surveyed, then dropped and the selection process begins again, or something along that line.

The survey measures who is looking and who is employed, and the percentage is of those looking in their particular cohort, whether they were looking at sex, race, age, etc. The Census had started putting "color" as a selection on their forms in the 50's, so I know they were including at least a part of the minority poplulation. And I know women began to increase their participation, but men's participation has declined.

Any paid work, even 1 hour, during the survey period counts as employed, from my previous reading of their procedure. And having looked for work puts you in the workforce. One would have to wade through the increase in jobs, increase in population, changes in the workforce, etc to really know what you are looking at. They have a lot of data up on their site at BLS.

They do a pretty good job of counting, so I don't think adjustments for who was or wasn't counted would make a huge difference, and certainly not enough to "prove" that taxes kept jobs from being created. There is plenty of correlation that even during times of high or increased taxes jobs can be and are created in large numbers, whether in the 1950's or in the 90's.

On the other hand, if I was going to try to make the argument that the tax increases were distributed in such a way that they helped cause the job creation, I would have a whole lot of work ahead.

Thanks!

[econoclast]

12. Good discussion. Coupl'a points.....

1). In talking about unemployment and marginal tax rates in 1953, remember that in 1953 the world had only recently emerged from WW 2. With the exception of the US, most of the industrial capacity of the planet was either a smoldering ruin or locked behind the Iron Curtain. So the US was the major supplier of most everything and it is no surprise that unemployment was low IN SPITE of high taxes. As Europe and Asia reestablished themselves as industrial powers (thanks to the Marshall Plan etc). America lost it's monopoly on supply. The demographic points about women and minorities in the counted workforce are also well taken.

2). Regarding job creation and the 15%-ers ... There is good data that shows that most NEW job creation comes from start-ups and young companies in their first 5 years or so. So we might have ( at least in part ) the cart before the horse here. People don't create jobs because they are 15-ers, but rather people become 15-ers because they started or invested in business that created jobs! Why would someone who is an 85-er take the risks associated with starting a new venture if you know that if you succeed most of the rewards will get taxed away? We complain bitterly ( and rightly so ) about bankers taking excessive risk because the profits are personal but the losses are socialized. But in a new startup it is just the reverse. If you succeed your profits get socialized but if you fail you are on your own! Nobody bails out failed small businesses. To loop back to the idea in #1 above ... In 1953 because there was less competition the risks associated with starting a business may have been smaller, helping offset the drag of higher taxes. As anecdotal evidence I'd point to the number of car companies that used to exist back in the day. Buick,Cadillac and Pontiac were separate individual entities, DeSoto, Studebaker, Nash. Etc.

3). Clinton era job creation benefited from the Internet/tech bubble. There is a school of thought that argues that the Internet/tech bubble bursting was just the first leg of asset price bubble bursting that continues today. There is another idea regarding jobs and taxes that bears on the Clinton era. There is a paper from a team of economists. (husband/wife pair out if Berkley? The names escape me ). It shows that in general raising taxes 1% decreases GDP growth by 3%. The exception is taxes raised to reduce the deficit. Those tax increases seem to have a slight positive impact oh GDP growth. Probably because the confidence in lower Future interest rates outweighs the drag of higher taxes. The Clinton era tax increases certainly fall in that deficit -reduction category. Ahhhhh. Romer/Rohmer. Christine? I think that is the name.

Anyhow ... Fun discussion

[Lagomorph]

14. Apples and Oranges....

The employment rate was calculated much differently in 1953.

If we fail to meet our financial obligations and start adding zeros, we'll end up with a Zimbabwe, or post WWI German economy. If you take $100 to buy groceries, by the time you get to the cash register, it will cost $250. By the next day it will cost $2500. Printing money has never worked for those who have done it. There are a multitude of examples demonstrating failure.

If it were easy, it wouldn't be a problem and we'd sitting around all happy and stuff. At some point, we all have to tighten our belts if we want to keep everyone off the streets. Even going after the rich has it's drawbacks. Once their wealth is gone, we're right back where we started with no more pockets to pick unless we built a sustainable and frugal economic system.

We buy too much stuff just because it's there. That how the rich got our money and are spending it on what THEY want.

[jtuck004]

16. I could agree that the "rate was calculated much differently" if you

could provide some specific information and a citation for that. The BLS publishes information on how the survey began in 1940 as a project of the WPA and although they acknowlege some changes, there is very little public information that would substantiate a claim that it is far different from today. The Census still counts the population, and counts people who work or don't work. While it is true that race played a part, from the information that I have been able to find says that it is the best long-term picture of employment we have in this country.

But why go back that far? The rate is calculated much the same way when we look at the employment in the 90's. Among other things, the investment in R&D within ARPA by the government gave us the Internet, and that gave us a remarkable number of jobs and businesses in the 90's. Is there a cycle? Yes. Did the "boom" last forever? No. But, as you will notice, that is how we are communicating today, and those jobs are real. We could invest in Mag-lev trains to many cities, or into silicon plants like the Chinese have done (40 in production or under construction) so they can OWN the solar industry. We know this yet we are just choosing to sit on our hands.

I have begun to find it humorous as to the number of people that bring up Zimbabwe or the Weimar Republic. In this post it says the rate was calculated differently in 1953, yet have no problem comparing our modern ability to manage inflation with an economy from the Weimer Republic in 1923? Suddenly there is not difference in how we might manage our economies? And I can't be expected to take seriously a claim that there might be inflation because our financial system can be compared to Zimbabwe.

No one said it was easy. The article said that we are the sole provider of the dollar, and that we don't have to borrow it to create it. And there is no refuting that, it's a fact. And with the Fed Rate at 0%, and 31 million people out of work (or more, and growing) who is buying anything to create inflation? When we get some, then we might worry about it, but that is very likely a long, long time down the road. Then we raise taxes and pull money out of an overheated economy. No, not easy, but something we have done and can do if we expect to remain as a country.

A few people got rich through their hard work, and a few through luck and/or good investments. But thousands more, documented in books such as "It Takes A Pillage" have taken the pocketing of TRILLIONS of taxpayer dollars to a whole new level through a mix of irresponsiblity and theft on a scale we have never known, with the implicit backing of not just the previous administration, but this one as well. They gave up 700 Billion in the TARP program in the last year of the Bush Presidency, yet the bailout to Wall Street is now between 10.4 and 14.4 TRILLION dollars. All while millions of jobs were being lost, along with the income that went with them. Purchasing was decreasing, yet these banks and investment firms were still bringing in profits from our tax money.

The ones who need to be adjusting their belts are those that are getting fat and happy from the hard work of ordinary taxpaying citizens. And their wealth won't be "gone" - it will reduce the supply of outstanding money (which, as you point out, can lead to inflation) and we can use our money to benefit the country through education and the re-tooling of manufacturing, not to finance the lifestyles of a few.

[Lagomorph]

17. Without saying so much...

I was referring to WHO was counted. A lot of WWII workers were dropped after the war and dropped off the roles, in some cases when they were replaced by returning veterans, in other cases when "such people" were no longer required.

Other than that, I agree with just about everything you say. In many states there are laws against targeting certain members of the community for special taxes. Tax law is complicated is all I'm saying.

Zimbabwe and the Weimar Republic still stand as good examples of what not to do if you want to remain a participating member of the international financial community. Our trading needs require us to do so.

[Warpy]

15. That pinned my BS meter, too

because no one in that top 15% has ever handed out a job unless there were a lot of people in the bottom 85% with money in their pockets, waiting to pay for whatever goods or services that job would provide.

That's why the supply siders have been absolutely wrong about everything. The wealth transfer to the top produced a net loss in jobs, since it stripped money out of the pockets of the very people who were going to spend it on goods and services. Only opening the credit spigot wide for a couple of decades kept this economy on life support, and it was artificial life support, at that.

You can't run an economy on debt forever because eventually servicing that debt cuts into subsistence. You can't run an economy on subsistence if you want people to buy things that economy produces. The whole economy flows from the bottom up, not the top down as the supply side true believers would like to tell us.

The proof of all this can be seen in the last 30 years of our economic history. Unemployment has been creeping up (until it started to gallop in 2008) as the working and middle classes saw their purchasing power going down every year. The wealthy might have bid up securities, creating a 300% increase in the Dow during the 90s, but they did nothing to invest in domestic industry to increase the number of jobs out there.

If you want to know that supply side economics is a dismal failure, just look around you at all the empty storefronts and the going out of business sales, and the long lines wherever jobs are advertised. The wealthy have never had it so good since the 1920s, the last time the supply siders crashed this country's economy. The jobs have disappeared, just like they did the last time.

Anybody who still tries to push this crap on DU, where so many of us know better, is doomed to the same dismal failure the supply siders have once again demonstrated their threadbare dogma is.

[truedelphi]

13. You say:

top 15 percent of wealth holders are the ones creating most the jobs and wealth in the first place? (isn't it axiomatic that whatever else it can do -- and it can do many, many things -- government cannot create wealth, but only redistribute it?)

That notion, of giving the tax breaks and the government handouts to the people on the top and those actions will have them create jobs for us doesn't hold up any more.

For one thing, when most rich people make investments to build and create an industry, and thus create jobs, they now do so outside this country.

Look at how the textile manufacturing of the South has moved to places like Guatamela, or Bangladesh, and the car industry is now in Mexico. Research laboratories are as likely to be in Singapore or Seoul as in some American university town.

I would love to see taxes raised on wealthy people but if they want to qualify for a lower rate, then they agree that whatever investments they make occur here. Otherwise they pay 40%. (People paid
40 % back in the fifties and sixties and it didn't seem to hurt the very wealthy or the economy.)

[TheWatcher]

18. So Is The Recovery.

It just really depends on which fantasy you want to hitch your wagon to.

There are PLENTY out there, so people should definitely compare and contrast and find the one that's right for them. :)

Personally I like the Jobless Recovery Fantasy.

It's a great feel-good paradigm, and it really eases the mind about never working again for at least the next ten years. :)