Stimulus—for whom?

As I’ve been saying for years, any fiscal stimulus will go to the 1 percent:  “The American income distribution is like a Detroit V8 firing on one cylinder:  it doesn’t matter how much you step on the gas, only one cylinder going to fire” (source, March 2011). 

In the 2010 recovery, 93 percent of the gains were captured by the top 1 percent. That’s because top incomes grew 11.6 percent in 2010, while the incomes of the 99 percent increased only 0.2 percent. (source)

It when we know facts like this that Larry Summers’ obtuseness in recommending more debt and more fiscal stimulus becomes truly breathtaking.  Well, at least we know Jamie Dimon won’t be becoming Treasury secretary now, after his bank’s trading blooper.

The problem is the distribution, people.  Take away from the military industrial security complex and give to infrastructure workfare and education, and for Christ’s sake, raise taxes on the rich. And make the banks write down or charge off debts that won’t be repaid.

When things go wrong, people get mad, and when people get mad, they make mistakes.

I just watched Bill Moyers on public television.  He showed a bunch of people saying they are mad at corporations, that corporations are looting the common people.

But corporations are just a form of social organization that is very good at raising capital and producing goods and services.

It is the ruling class who are looting the common people, a ruling class of interlocking boards and CEOs and lobbyists and Congressmen and just plain greedy people who have forgotten to reward the people who are doing the work because they along with almost everyone else in America bought into the notion that greed is good and that it’s okay to take more than your share.  I want it all now.  It’s time for you to get into me.

The problem is the ruling class and the American social values that have until recently validated the behavior of our ruling class.  Greed has been good since Ronald Reagan’s presidency, approximately.  We let them get away with it.

The solution is to bring the people in the ruling class down to earth by raising marginal tax rates to at least 75 percent on income over one million dollars.  Take the fun out of expropriating the employees and shareholders of their corporations, let the rich bear their fair share of cleaning up the fiscal mess Wall Street created (whether they’re on Wall Street or not).

If they want to take their money out of the country, they probably can, but the IRS is making it more and more difficult.  If they want to leave, let them go, it’s still a free country, relatively speaking.

The Tea Party movement and the Republican party are sucker’s games, talking about getting government off people’s backs, when all they’re really talking about is protecting the highly unequal status quo and keeping taxes low for rich people. […]  (source)

Thank God for Bruce Bartlett

Here’s some tax truth from a Republican:

The truth is that the federal surpluses resulted from specific legislation enacted in 1990 and 1993 that virtually every Republican opposed. In particular, taxes were increased and tight budget controls were put in place that prevented taxes from being cut or spending increased unless offset by tax increases or spending cuts. These budget controls are commonly referred to as “paygo,” for pay-as-you-go.

What happened can be seen in Congressional Budget Office data. When the 1990 budget deal took effect in fiscal year 1991, federal spending was 22.3 percent of G.D.P. and revenue was 17.8 percent. The deficit was 4.5 percent of G.D.P. Revenue rose steadily to 19.9 percent of G.D.P. by fiscal year 1998 and spending fell to 19.1 percent, yielding a budget surplus of almost 1 percent of G.D.P.

Revenue continued to rise to 20.6 percent of G.D.P. in fiscal year 2000, and spending fell to 18.2 percent. The surplus reached 2.4 percent of G.D.P.

These results run 100 percent contrary to Republican dogma, which is that tax increases, especially on the rich, do not yield additional revenue because people will cease working and investing, and the economy will stagnate. Yet the hallmarks of the 1990 and 1993 budget deals were an increase in the top income tax rate; first to 31 percent from 28 percent, and then to 39.6 percent. Revenue clearly rose, as did the economy.

This is a must-read article: 

Balancing the Budget, for Real – New York Times

The Tea Party is a joke; US empire in decline

Via:  www.lewrockwell.com

Gary North reveals why the Tea Party is likely a fraud

Via:  www.petersoninstitute.org

Niall Ferguson:  Fiscal Crises and Imperial Collapses:  Historical Perspectives on Current Predicaments

(great set of slides; here’s the paper)

Why is it that Paul Krugman keeps forgetting that in 1930 America was the greatest creditor nation in the world?