We've been living in a nightmare world called "Trickle-Down" economics for almost 30 years now, and it's proven without any doubt to be a profound and devastating failure for all but a handful of our wealthiest citizens. I'd like to put forth a description of what a better system would look like.
It begins with government spending. I can see the reaction already...
Now, before everyone starts to freak out and run for the door, hear me out. Let's see how it plays out.
The goal is to get as close to 100% employment as possible, so the first initiative is based on the following principle:
Anyone who wants a job, can have a job
You read that correctly. A paid job will be made available for anyone who asks.
What are these jobs, you ask? They are "shovel ready," community-based, neighborhood improvement jobs, like:
- Street cleaners
- Road workers
- Bridge builders
- School and public building renovation workers
- Public Park planners and workers
- Gardners to plant trees and flowers
- Construction workers to build new schools, libraries, town halls, music halls, waterfront boardwalks
- Food bank workers
- Anything else you can think of which may fall into the category of providing a public service
What do these services provide?
- Clean, garbage-free neighborhoods
- New Public spaces
- Alley's become parks
- Schools are built, allowing more teachers to be hired and better student/teacher ratio
- Potholes are filled, roads repaved, eyesores removed or rebuilt
- Cultural additions enhance the neighborhood, like music halls and museums
- Anything else you can imagine needing improvement in the public square will be taken care of
Since a job is available for everyone, we no longer spend tax-payer money in any substantial way to cover unemployment benefits, which helps with an individuals income, but provides no public service improvements
But that's not all, beside the overall improvement of the town you live in, there is another, perhaps more important result of these initiatives. The working class is working and making money again. What does this lead to?
- Lower and middle income workers are more likely to spend their money and do so in their neighborhoods
- This helps local business make money and grow
- These local businesses then hire more workers for their expanded businesses
- As the "shovel-ready" jobs morph into merely "maintenance" jobs, those workers are now slowly moving from public sector jobs to private sector jobs
- Taxes are being collected through increased business, as well as increased private sector jobs
- The initial tax burden which paid for the "shovel ready" projects is slowly being repaid by this new system-wide growth
- A robust middle-class has re-formed
So, what we see is an upgraded infrastructure, improvements in schools, public services, cultural institutions and overall quality of life, while additionally leading to a robust middle class, who are now opening businesses, buying cars and homes eating and shopping at local restaurants and businesses.
At this point, we would commit to the concept of 100% employment, with a larger percentage already appearing in the private sector. But the "if you want a job, you can have one" initiative must remain active. This serves as the fuel, which keeps the improvements, and spending within the community active.
This is what I call "trickle-up" economics. Shall we give it a try?
THE ECONOMIC CYCLE WE HAVE BEEN LIVING WITH FOR OVER A CENTURY
Our economy in its simplest terms relies on the U.S. government using taxpayer dollars to help corporations (not the general public), and only serves the public to the extent that it keeps them afloat; allowing them to act as good consumers, which is their most important function. The goal is to keep them purchasing; or to keep them borrowing, in order to keep purchasing. The government uses taxpayer money for corporate imperialism abroad, which serves corporate interests and UNDERMINES the general U.S. population. The system survives by striking a firm balance, which keeps the taxpayer living on the margins, with just enough income to continue spending; but not earning TOO much, which will eat into corporate profits. After all, cheap labor is easy to find in third world countries, so why pay Americans? The answer is simply because they HAVE to pay them SOMETHING, or else they can't PURCHASE goods any longer.
What happened the last 8 years is greedy Capitalists threw the balance into the trash and let greed take over. The "consumer" was hit too hard, which destroyed this delicate balance and resulted in the general public losing the ability to purchase or even borrow money to purchase. Simply put, the Capitalists "cashed in their chips." The "bailouts" merely borrow from the CHILDREN of the "consumers," who can no longer pay the bill themselves. This has happened numerous times in our history. Let's look back at a similar crisis, long forgotten:
The Depression of the Spring of 1837: The causes were complex, but they revolved around rampant speculation in real estate. Serious investors and mere speculators had begun to contemplate and then fantasize wildly about the opportunities that new railroads and canals like the recently completed Erie canal would open up in the west, particularly in the Mississippi River Valley. They bought up land in towns that did not exist, except in their imaginations. They bought into potential railroads that carried phantom passengers from one imaginary town to another. This speculative fever rose and spiraled out of control. The result was the catastrophic collapse, in April and May 1837, of 343 of the nations 850 banks.
Sound familiar?
These types of "bubbles" are inevitable under a system which allows corporate money to influence government policy, which in turn systematically removes regulation and social safety nets. A base level of protection must be introduced, which keeps employment high and money flowing from the bottom up at all times.
THE CYCLE LOOKS SOMETHING LIKE THIS:
less government regulation and oversight of markets leads to
exploitation of the working class, reduced wages and benefits, out-sourced jobs to 3rd world countries which
causes a spike in corporate growth, but
this growth is concentrated into the coffers of the wealthy classes and
the nations wealth distribution becomes increasingly unbalanced in favor of the wealthiest as
real, inflation-adjusted wages and benefits stagnate and in most cases drop for the masses (aka - the consumer class) while
the spike in corporate growth masks the fact that the masses are struggling until
the system reaches a point of no return when the masses (aka - the consumer class) have
spent all their money and have maxed-out their borrowing capabilities, which had them
living beyond their means, until
they reach the end game and stop purchasing anything besides bare essentials, while
cutting back on spending even for those essentials like food and health care, and
also begin to default on loans (credit cards, mortgages, car loans, student loans) which
combined, leads to a recession, which
causes those corporations to cut jobs, wages and benefits even further, which
exacerbates the problems for the working class (aka - the consumer class), causing an official
death spiral, which
forces the government to step in and "save" capitalism with
massive deficit spending on infrastructure, public works as well as
renewed emphasis on social safety nets and regulation of the markets which
gets the masses (aka - the consumer class) back to work again earning money which
enables them to return to functioning consumers yet again, which
leads to a revitalized economy across the board as
incomes and wealth rise across all income levels until
the wealthy corporate class uses their wealth and access advantage to
once again push for less government regulation and oversight of the markets which
repeats the above listed cycle
To stop this cycle, we need a robust public safety net which guarantees an avoidance of the "death spiral" as described above. We continue to run through cycles which end up requiring ENORMOUS tax-payer financed "stimulus" spending. My concept has us instead paying a constant stream of small tax-payer financed "stimulus" spending. It's all about long-term sustainability. Pick you poison. The eventual monster stimulus, when hell has broken loose, or a constant stream of smaller stimulus, geared toward avoid the collapses?
The smaller stimulus plan additionally helps more people. It's geared toward helping the masses. The large stimulus which is inevitable and truly cyclical under our current paradigm, helps the wealthy. As we have seen, even in times of substantial growth, Main street saw little of it. Yet Main street pays the bill when the collapse occurs. If Main street is going to pay the bill, maybe they should see some return from that investment.