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Posts Tagged ‘demand’

It should be pointed out that the rich use the money from their tax cuts to corrupt government at all levels, and rig the economic and political markets against the 99 percent, and push for legislation that redistributes income from the 99 to the 1 percent. It should also be pointed out that all of the evidence says that tax cuts for the rich destroys jobs, rather than creates them, and for the reasons mentioned above.

Because tax cuts by the wealthy are used to corrupt government, which then passes treaties and legislation that redistributes income from the 99 to the 1 percent, which in turn weakens the demand for goods and services on the part of the 99 percent, and leaves the once healthy economy staggering like a drunk sailor, it can be stated with a high degree of certainty that tax cuts for wealthy wreck economies, and suppress the demand for goods and services, something that President Franklin Roosevelt understood. See the video below.

Now that demand is weak due to tax cuts, US corporations are forced to sit on $6-7 trillion in the US, and another $6-10 trillion overseas. That money is not creating jobs, it’s destroying jobs by not being used to purchase goods and services. If that money were being spent by the 99 percent, the economy would be humming like it was the 1960’s again.

For an example of how tax cuts for the rich destroy an economy, what has occurred in the United States over the last thirty-four years of giving tax cuts to the rich is an excellent example.

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The first law of economics is that demand for goods and services is a product of people being able to purchase things with money. For thirty years, politicians such as Wall Street Senators Ron Wyden, Mitch McConnell and Orrin Hatch have continueously and successfully devised ways to redistribute income from the 99 to the 1 percent via free trade treaties, privatization scams, a bloated military, and numerous other government actions. Now the economy is weak and getting sicker all the time, and the morally depraved and politically corrupt servants of Wall Street mentioned above continue down the same path. That’s because the US government is about as corrupt as anybody can make it.

It’s as if those three senators and numerous other politicians want to turn the USA into the United States of Haiti like poverty.

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The Guardian of the UK, normally a straight forward and honest broker of news and commentary, has bought into the lying bull shit of the US corporate press. Some Guardian idiot named Larry Elliot wrote,

“America’s growth figures have come as a nasty shock to Wall Street. For nine months the stock market had been rising on hopes that the world’s biggest economy was on the mend. But the latest data suggests the US recovery is still very much work in progress.”

No, no, no, the stock market was rising because corporate profits are at record levels! Apparently, Elliot doesn’t seem to understand the connection (simple cause and effect) between stock prices and corporate earnings. He’s too dense to understand that the only way those earnings can grow in the face of worldwide declining demand is by redistributing income from the 99 to the 1 percent. Shipping jobs overseas is the easy way to push stock prices up because the difference between the old wages here and the new lower wages overseas increases corporate profits year after year. Studies by the Federal Reserve show that between 1.2 to 2.4 million jobs are shipped from the US to elsewhere every year.

It’s easy to predict slower growth in the US because the demand for goods and services has been redistributed into the fat wallets of the super wealthy. They’ve used their control of the US government to pass legislation that does this. They now take home over 31 percent of total income produced in the US, compared to about 8 percent thirty-three years ago. That leaves the rest of us with little or no money to buy goods and services to the point where economic growth can be vibrant, like it used to be. Meanwhile, the rich invest in things like politicians and derivatives, which does nothing to create demand, but does everything to destroy it. The redistribution process is growing. That means the economy will continuously weaken, although it is possible there might be occasional and abnormal historically weak growth spurts.

At least Elliot did get something right, although not completely:

“The even worse news is that the US economy may slow down in the second quarter. Not only will activity be impeded – perhaps severely – by cuts in federal programs, but consumers are unlikely to continue running down their savings to finance their spending in the way they did in the first three months of the year.”

What he doesn’t say is that consumers are unlikely to continue running down their savings” or use their credit cards when their income is continuously being redistributed to the 1 percent by their government. (more…)

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