Saturday, January 02, 2016

The Real Solutions For Our Economic Woes

(Image was found at

Americans like to believe they live in the greatest country in the world. That may or may not be true, but this country does have many problems -- both economic and social. Those problems are solvable, but sadly, too many of our politicians don't see (or don't want to see) the solutions. They are too invested in keeping things as they are, and protecting the rich and corporations -- and that just insures that the problems continue to grow worse.

Here are a few things that I think need to be done to solve the economic problems:

* We must raise the minimum wage. No one who has to work for a minimum wage can lead a decent life, because the current minimum wage is a poverty wage. And this is a problem that is growing worse. Not only do these workers fall further behind with each passing day, but by 2020 a full quarter of the jobs will be low wage jobs. That is insanity. We cannot have a quarter of all workers living in poverty. Anyone willing to work hard should make a livable wage.

I personally believe the minimum wage should be raised to $15.00 an hour, but under no circumstance should it be less than $10.00 and hour (and it should be tied to the rate of inflation, so it doesn't instantly start losing buying power again).

* We must strengthen our labor unions, and make it easier for workers to create unions and join them. And we must make a higher education more accessible. The two things that created the large middle class in this country are unions and colleges. Now unions are being attacked (through both law and right-wing propaganda) and membership is dropping as a percentage of workers -- and college is being priced out of reach for far too many people. This is causing the middle class to shrink.

We must change this. No capitalist country can survive without a large and prosperous middle class. And it can only be saved by providing an easy and affordable access to higher education, and giving unions the power they need to make sure workers get their fair share in rising productivity.

* We must fix our tax system. Americans decided long ago that a progressive tax system was the fair way to go -- that those who make the most should pay the most. But that is no longer true. Today, the richest people effectively pay a smaller share of their income than many in the middle class pay, and many very profitable corporations pay no taxes at all. We must eliminate the loopholes, subsidies, and other shenanigans that the rich and corporations use to evade paying their fair share of taxes.

* We need to fix Social Security. It is not going broke, and will be around when young people today retire in the future, but it does have a funding problem. Fortunately that is a problem that can easily be fixed -- and can be fixed without cutting benefits or raising the retirement age. All that needs to be done is to raise the cap on payroll (FICA) taxes. The cap should be raised significantly, or even eliminated. This would not affect most workers at all (who already pay the full percentage), but would make the rich pay the same percentage as the working pass pays. That is imminently fair, and would fully fund Social Security far into the future.

It would also provide the funding to raise Social Security benefits. Before Social Security was created, about 50% of the senior population lived in poverty. Social Security reduced that to around 10%. But now more seniors are sliding into poverty because Social Security benefits aren't keeping up with the cost of living. For instance, this year there was no benefit raise. That was because the cost of gasoline fell sharply. Unfortunately, seniors don't use gas as much as before they retired, and their real costs (food, medicine, housing, clothes, etc.) have all risen.

* We need to eliminate the tax that rewards corporations for shipping good American jobs to low-wage foreign countries. We may not be able to completely stop corporations from stealing American jobs and giving them to people they can economically abuse in other countries, but it is insane to reward them with tax breaks for doing it. And while we're at it, we should put a fat excise tax on the products of corporations who move to other countries to avoid our taxes.

* We need to institute a tighter rein on Wall Street and the giant banks. They should not be allowed to gamble with the money of consumers, and they should not be allowed to peddle worthless financial products -- and if they do, those that run those corporations should be jailed. And those who make their money playing the stock market should be taxed at the same rate as working Americans -- by eliminating the special capital gains tax, and taxing all income as earned income.

* We should lower the federal deficit and national debt -- and do that without cutting federal programs that help our least fortunate citizens. We could do that by passing a tiny tax on all stocks traded (something like 0.5%). That would bring in an incredible amount to our federal treasury without hurting anyone.

You may notice that I did not say anything about creating new jobs. That's because if all of the above was done, there would be a huge boost to the economy and all the jobs we need would automatically be created.

Let me add one more thing. We must elect a Democratic president and Democratic Congress this year. None of the above can be done as long as the Republicans remain in power -- because they oppose all of those measures.


  1. I agree with almost everything you say here, which is basic Democratic belief -- and I'd like to spend more time discussing the difference between corporation-based capitalism and financialist capitalism. The first needs careful watching, monitoring, and 'leash laws' like a pit bull, and more stringent liability laws, but it is vital to our economy, It produces products, services, and most of all, jobs for people to buy those things. Financialism produces financial instruments that make a very few people insanely rich, and then, when they go but make other people (other casino plyers -- and the companies they control or simple home buyers, college loan debtors or the like) much poorer -- while the original wealth maker goes off and trickles his money down to the nearest yacht vendor. "Where are the customers' yachts is still a good question.
    But more of that later, I hope. I want to get you to think more carefully about the SS cap. Yes, it needs to be raised, even doubled, but eliminating it altogether leads to two situations -- both bad. There is a reason why it is there in the first place. SS was designed mostly to let poor, hardworking people have enough money back from what they earned to have a retirement. Yes, it is 'forced savings' but there is nothing wrong with that. But one thing that would have killed the idea in infancy would have been the thught of a Rockefeller getting a government check for half a million dollars every month -- to use the contemporary symbols and value of money.
    Remove the cap entirely, keep the system as it is now, and imagine the checks that a Donald Trump, a Mitt Romney, a Bill Gates would be receiving. Then imagine how our unthinking leftists -- of the type you refer to in your opening post of the day -- would protest at more 'corporate welfare.' (I'm definitely a leftist -- with some quirks -- but a thinking one.) OR you detach payment out from payment in, turn it into what Conservatives think it is, a welfare program, and make it more attackable and less defensible.
    (One commentr on another blog replied that 'there is a limit on the maximum payout' -- without 'getting it' that the limit on payout was because of the cap. Remove one and you remove the other.)

  2. You make some good points. I just would like to point out that it is the conservatives themselves who have proposed detaching payment out from payment in -- by wanting to means-test Social Security (giving it only to those below a certain income/wealth level).

    I admit that it bothers me that the rich pay a smaller percentage than the working class does, but I could live with just a bump in the salary cap (up to at least $250,000), and then re-examine it in the future as inflation eats away at the value of a dollar.


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