The Trickle-Down effect (Reaganomics)
Many Americans bought into the idea presented to them back in the 80's that cutting taxes for businesses, corporations and those who invest in those corporations would somehow stimulate the economy and create jobs. We were told our economy would be better because the better off business was, the better off all of us would be. That really just did not happen.
What really transpired from that moment on and even until today was that, a small percentage of Americans grew much wealthier at a faster rate but many Americans began to lose out, even before they knew they were losing out.
Tax rates for the wealthiest of Americans fell at tremendous rates. The top rate went from 70 percent to 28 percent. Reagan's concept was to make government smaller even though he increased military spending by huge margins - defense spending went from $325.1 billion in 1980 (in 2005 dollars) to $456.5 billion in 1987.
Ten years after Ronald Reagan introduced us to Trickle-Down economics, the Federal Reserve Board concluded that those who were the wealthiest got wealthier and the rest of the nation's income stagnated.
Redistribution of Wealth - Trends Upward
For over thirty years, we have been told that if we kept taxes low for the "Job Creators" it would stimulate growth and we would all prosper -- half the country has bought into that theory. I say theory because Reaganomics have never been proven to work. Maybe I could put it another way if I just ask; how many Americans are living better because of Reaganomics? I think most of us know the answer to that question and it hasn't been good.
A Better Life before Reaganomics
Any of us who are old enough to remember the 60's can remember a time when a household could be supported by one income; parents could afford to send their kids to college and health care was affordable. Unions thrived and all Americans who worked hard could obtain a good life for themselves and their families. The "American dream" was reachable by a majority of Americans, at least those with the determination and the drive to get there.
Then the 80's were upon us and Reagan was elected and introduced us to trickle-down economics, which I believe was the end of the American Dream for so many.
We were robbed of the American Dream and we continue to be robbed. A recession hits and suddenly millions of workers lose their jobs and many of those who still have jobs are asked to take concessions in their pay and benefits. Yet CEOs of banks and corporations are paying themselves huge bonuses - some of the same banks we bailed out.
Banks Got To Play By Their Own Rules
Our banking system has been deregulated I think, to the point that its main purpose is to enrich the lives of that small group of people, the wealthy. Thanks to those deregulation, that banking system became a huge gambling casino for millionaires and billionaires.
Starting in late 1986, changes in banking regulation that had been set up back in 1933 -- to keep big commercial banks out of the business of underwriting stocks and bonds -- had been in all respects, overturned. The deregulation was then approved of and encouraged by incoming chief chairperson, Alan Greenspan.
This was yet another step for a group of the wealthiest of Americans to proceed turning even more wealth their way and out of the hands of middle-class Americans.
We stood by and watched as the banks cried foul when their mortgage securities gold mine turned into a coal mine instead. Our government, thanks to George W. Bush and a congress horrified at the consequences of no action, passed a bailout bill. What did we get for our tax dollars? I will say it is tough to get a loan unless you have superb credit nowadays. Big Business is holding onto their money and not reinvesting it into the economy, in fact much of their capital is going into overseas banks, mostly to keep from paying U.S. taxes on that income.
We Are the Losers
Ordinary Americans have lost so much, thanks to Trickle-down Economics. We will continue to lose as we allow Republicans to continue to protect the interests of the wealthiest of Americans. Protecting those interests by guarding tax cuts implemented by the Bush Administration, and by deregulation; both in our finance system and environmental protections, all favored by huge corporations that hate spending their profits on environmental protections such as our water and our air.
Now we must ask ourselves; are we going to continue to lose? Alternatively, are we going to end the influence that wealth has over our elected leaders? Finally, will the American Dream once again be for everyone or shall we just keep over-feeding the rich? The answer to those questions will undoubtedly be revealed to us through the ballot this upcoming Election Day.
This is a republish from my website: Fidlerten Place