Feeds:
Posts
Comments

Archive for July, 2012

During an economic downturn, the government spends money it doesn’t have by borrowing. As people lose their jobs, the government spending increases, thereby taking up the slack in demand caused by the layoffs.

Technically, we’ve been out of recession for a few years, but his year the deficit should be over a trillion dollars. That’s because the demand for goods and services is remarkably low due to the redistribution of income and wealth from the 99 to the 1 percent over the last three decades.

Thirty years ago, the 1 percent received about 8 percent of all income generated in the USA. That figure had held steady, more or less, from 1940 or so until the ascendency of Ronald Reagan as president.

Think about this; the four decades from 1940 to 1980 created the greatest number of jobs in US history, had budget surpluses now and then, and saw the standard of living for most Americans rise. That was in an economy half the size of today’s economy. That’s because the demand for goods and services was strong because the 99 percent had more money to spend.

Nowadays, the 1 percent has legislatively stolen about 27 percent of all US income, and during the last two years, those people have legislatively robbed the rest of us of 93 percent of total income growth.

Look at the numbers closely. From 1940 to 1980, 100 percent of national income minus the 8 percent for the 1 percent left 92 percent of national income for the rest of us to spend on stuff, which created jobs through effective demand. Nowadays, 100 percent of national income minus 27 percent for the rich gives the rest of us 73 percent to spend.

That has left the demand for goods and services extremely weak, which is why the economy is so sluggish. The economy, however, is most likely in a state of slow motion collapse. The only things stopping the economy from a rapid collapse are the New Deal (Social Security, unemployment insurance, etc…), the Great Society Programs of President Lyndon Johnson (food stamps, etc…) and the federal deficit. Those programs create demand.

To stop the economy from imploding because of a lack of demand, the government has been forced to borrow money and find ways to spend it to take up the slack caused by the redistribution of income from the 99 to the 1 percent. That includes borrowing to sustain unemployment insurance and food stamps.

That’s the reason for the size of the federal deficit in a very large nutshell.

One other point should be made. Politicians from Wall Street Obama to Wall Street Mitt from John Boehner to Nancy Pelosi know this, and so does the media, but nobody’s going to say a word to the 99 percent.

Advertisements

Read Full Post »

The state of the economy is always a crucial factor in presidential races – even more so than some overseas gaffes, like Mitt the Twitt’s comments about the London Olympics. It’s true Obama inherited a disaster of epic scale, but he ignored the fires of an economic blaze that is fueled by the redistribution of income from working people to the uber wealthy. In fact, with his free trade treaties with South Korea, Colombia and Panama, and his continued negotiations for the Trans Pacific Income Redistribution Free Trade Treaty, Obama clearly shows he is not the man for the job.

Neither is Wall Street Mitt. So we have a choice in the is election between nincompoops. Click the link for more on the faltering economy.

The president’s primary mission seems to be to redistribute income from the 99 to his favorites among the 1 percent; whereas Mitt’s mission to do the same for his favorites, including himself, no doubt, among the 1 percent. Mitt’s favorites and the rivals of Obama’s 1 percent supporters.

GDp Data Shows US Economy is Losing Steam–the Guardian UK

Read Full Post »

Read Full Post »

Poverty rates in the United States rose during the 2000s; it started happening during and because of the economic policies of the illegal Bush regime. The trend was exacerbated by the Great Recession and its aftermath, which, to fair degree, were products of the Bush tax cuts.

The US government is continuously working on behalf of the 1 percent to redistribute income from working Americans to the 1 percent. In this way, Wall profits can constantly move upward. Without this redistribution, corporate profits would go down, down, down, and Wall Street would shrivel up and die. See links below.

According to a study by the Economic Policy Institute (EPI), “By 2010, just over 46 million people fell below the U.S. Census Bureau’s official poverty line (according to data from the Current Population Survey).”

EPI’s “‘The State of Working America, 12th Edition’ puts the U.S. experience with poverty in an international context, comparing the lower end of the wage and income distribution in the United States with that of “peer” countries, largely countries within the Organisation for Economic Co-operation and Development (OECD) with roughly similar GDP per hour worked as the United States.” Check it out at the link below.

Related Stories

Economic Policy Institute–US Poverty Rates Higher, Safety Nets Weaker

Charts Show Tax Cuts for the Rich Destroy Jobs

Obama and Jobs; Hostage to Fortune; or How Free Trade Treaties Redistribute Income From the 99 to the 1 Percent

Read Full Post »

The US economy slowed again during the second quarter of the year, government figures showed Friday.

The nation’s gross domestic product (GDP) – the broadest measure of the economy – grew at a sluggish 1.5% between April and June, the US commerce department said. The latest figure compares to 2% growth during the prior three months, and 4.1% in the fourth quarter of 2011.

The slowdown came as consumers cut back, local governments cut spending, factories received fewer orders and exports were hit by a global slowdown and a stronger dollar. This has occurred due, in part, to a reduction of US deficit spending engineered by the Republicans to make President Obama look stupid and less electable in November.

The Republicans created a public relations campaign to sow fear of deficit spending in the minds of the American public. The public bought it; so did Obama. So the president reduced deficit spending during a time of negative demand for goods and services and in spite of warnings by some of the world’s brightest economic minds, none of whom serve in the president’s administration. That tells you all you need to know.

US growth slows as consumers cut back on spending–The Guardian of the UK

Read Full Post »

Interest rates remain at historic lows despite massive government borrowing. For years Republican deficit hawks (and a few dumb Democrats) have tried time and time again to instill panic among the mass of financially ordinary US citizens by insisting that continued government borrowing would raise interest rates, thereby bringing on a terrible recession and destroying everybody’s livelihoods. Like that hadn’t already occurred during the Bush regime when then Vice President Dick Cheney famously said, “Ronald Reagan showed up that (federal) deficits don’t matter.” Cheney understood the lesson, President Obama didn’t.

The purpose of this public relations stunt was to influence the Obama administration into cutting government spending, thereby slicing jobs and gross domestic product, and in the process letting the president cut his own throat when it came to being reelected to a second term. The result has been spectacular since President Obama was stupid enough to take the bait.

US deficit spending has been reduced, although still growing strong. The official unemployment rate remains mired between 8 and 9 percent; the real unemployment rate is closer to 15 percent if the rate was measured in the same way it was during the Great Depression.

Click the link below for more interesting points of view on deficit spending by Nobel Prize winning economist Paul Krugman.

New York Times–Money for Nothing

Read Full Post »

Susan Ford, a senior executive at Corning Inc. testified this week to the House Ways and Means Committee that the high US corporate tax rate placed her company at a massive disadvantage. Over a four year period from 2008 to 2011, Corning Inc. earned almost $3 billion, yet it was one of 26 companies that managed to avoid paying any American income taxes. That’s right. The company paid zero in taxes and a senior executive had the audacity to tell members of congress that zero was too high. Okay, the company didn’t pay that high of a rate since it received a $4 million refund from 2008 to 2010 on taxes it didn’t pay. That means it had an effective tax rate of less than zero. What hypocrisy.

Think Progress–Corning Paid no Taxes from 2008 to 2011

Read Full Post »

Older Posts »