In Barack Obama's first budget proposal, he has an extraordinarily ambitious goal: to cut America's $1.2 trillion budget deficit in half. Here's the New York Times:
After a string of costly bailout and stimulus measures, President Obama will set a goal this week to cut the annual deficit at least in half by the end of his term, administration officials said. The reduction would come in large part through Iraq troop withdrawals and higher taxes on the wealthy.
I fully agree with this method. Democrats were elected to Congress in 2006 on the platform of ending the war in Iraq, and it's about time they started taking that promise seriously. It's a complex situation but all things considered, the United States must begin to draw down soon. At some point you simply have to realize that it doesn't matter what you want to do; you don't have the money.
As for taxing the wealthy, this is many years too late but absolutely necessary in this day and age.
While ordinary Americans' real wages have remained stagnant since about 1980 and fallen since 2000despite Americans working harder, the wealthiest have seen their incomes rise to extraordinary, previously unimaginable levels. Leaving aside the trend of explosive inequality since the Reagan era, let's look at the 2002-2006 Bush recovery in terms of distribution of wealth as household income grew, as housing is what precipitated this meltdown.
See that enormous piece constituting $626 billion? All that went to the top 1%. See that crumb in dark blue? That's what 90% of America got. Now, one doesn't need to be an economist to know that that isn't good for America.
Moreover, much of this growth in household income, as we now know, wasn't due to real growth -- it was imaginary wealth. And many among that top 1% took big chunks of that, such as CEOs Chuck Prince, Stan O'Neal, Henry Paulson and Dick Fold. These individuals (among others) oversaw and pushed the predatory lending, which they bonused for millions off of just before economy collapsed and millions were forced into bankruptcy.
So taxing this bracket is completely justified and necessary. These people need to help the rest of us out of this crisis, because not only did they cause it, they profited immensely from it. Dick Fuld of Lehman Brothers walked away with nearly $500 million in salary and bonuses after the toxic debt he spewed into the economy.
Of course, there's nothing wrong with wanting to make lots and lots of money -- it's the American way as we all know. But in these dire times, somebody needs to step up to help finance this crisis and pay off this debt, and those top 1% are the only ones capable of doing so. If people like Dick Fuld whine about this, they're not real patriots.