No politician has proposed the type of spending necessary to lift the US out of the recession the US in. Yeah seven hundred billion is a whole lot of money, but using half to reduce taxes was just plain dumb. With the high unemployment causing taxes in the states to fail to produce the revenue necessary for the states to do the hard work of governing (yeah I mean police, fire fighters, teachers, road repair, sewage, water, garbage collection, . . .) states are laying people off and paying less to workers who will spend the money. This in turn will keep unemployment high.
Without government demand (lord knows government needs lots things like better teaching, better infrastructure, more R&D, cheap green energy, more rail, . . .) there will be no need to hire workers. Indeed demand will continue to shrink and the private sector will start to lay people off.
The Republican solution is to reduce government spending. Like reducing medicare will do anything other than cause more people to suffer and health care workers to lose jobs. Like reducing social security will do anything other than reduce demand and cause more people to suffer. The elderly tend to spend their income, not save it for tomorrow. Then we have the cut the government folks. Will the debt ceiling be increased? Yes, probably this year, but with more Tea Party folks threatening republicans in 2012, how about then? Will we see another government shutdown? I hope not, but who knows.
And then we have the reduce taxes crowd. Like increasing the deficit, without investing in tangible benefits will encourage investment in federal bonds. Who is kidding whom. Reducing taxes, particularly on the rich is a recipe for disaster. I still remember when former vice president Walter Mondale told the truth no one wanted to hear about taxes. Well folks to deal with the deficit, the US needs to increase taxes particularly on the rich, but also on the middle class. Of course the US needs to increase middle class income, but that can only be done through economic policy, not Hell No.
And then we have the financial sector. Republicans want to reduce government regulation through spending cuts. This in turn will enable the financial industry to make individuals rich while crapping on the rest of us. Imagine what the Tea Party will say when another bail out for the financial industry is needed. Republicans will support it enough to pass while Tea Party members will keep the bail out small enough to keep the high earners earning ever more money.
No one can predict when the shit will hit the fan. But I can see the shit falling and the fan a spinning.
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