1. The National Debt was deliberately inflated by pushing through huge tax cuts and a myriad of tax deductions and tax shelters without spending cuts, and without raising additional revenues. The budget deficits were exacerbated by the wars in Iraq and Afghanistan, the senior drug program, TARP, under Bush, and the stimulus program and health care reform under Obama. Declining tax revenues and demand for relief is widening the deficit.
2. For the last 30 years, wages were depressed by weakening private labor unions, outsourcing, immigrant labor and neglect of the minimum wage. As a result, since 1980, average yearly earnings for the bottom 90% increased only $303 during a 28 year span. The preceding 30 year period average annual earnings rose by 75%. Nearly 40,000 manufacturing plants closed between 2001 and 2008. Poverty rates have risen steadily since 2000 and unemployment officially remains at 9.6%.
3. By contrast, in 2007, CEO annual pay averaged 344 times the annual pay of typical American workers and the wealthiest 10% were earning 50% of all income. They accumulated vast wealth and currently hold $1.8 trillion dollars in investment income. They used their wealth to increase profits by gaining political favors, by writing their own rules, by receiving favorable trade practice, by developing new accounting strategies and by driving up prices with credit. Corporations were allowed unfettered growth and lax regulation. The Stock Market was used to syphon off stockholder earnings into huge salaries and bonuses for CEO's. They used the banks to create risky investment instruments and when the loans defaulted, the market crashed and they ran to the government for a bailout, which they promptly received.
4. They used the budget deficits to create public sentiment for reducing spending (1) by downsizing government, (2) by pushing for private investment of Social Security funds, and (3) by cutting taxes for the rich (which would actually add $70 billion to the debt over the next 10 years).
5. The biggest problems facing Americans today is the lack of jobs and low wages; and yet,the government has focused much more attention on tax cuts for the rich, budget deficits, and the national debt. America's economy cannot grow sufficiently without a strong labor force. Growth in employment will grow the GDP, increase tax revenues, and reduce demand for government assistance. However, spending cuts will increase unemployment, result in more home foreclosures and bankruptcies, and create a greater demand for government assistance. There are currently more than 15 million Americans out of work, which will make recovery impossible until they return to work. Any cuts in spending or any cuts in taxes must be built around a viable jobs program to succeed, meaning that any policy decisions with regard to taxes or spending cuts should be forestalled until work on a jobs program is completed.
6. The wealthiest Americans are not in need of a tax cut at this time, when over half of the population is suffering. Approximately 40 million people are receiving food stamps, and over 40% of all workers are earning less than $25,000/year; there were 1.4 million bankruptcies last year and 2.8 million home foreclosures. The bottom 50% of the population owns less than 1% of all wealth.
7. The dramatic shift in wealth is not merely the result of strategic business acumen. It is rooted in the drastic income tax cuts of the 1980s, along with the Bush tax cuts. It was designed in think tanks and executed by the federal government. Saddled with the responsibility of identifying potential reforms for debt reduction, even the U.S. Debt Commission was unable to put their prejudice for the rich aside, choosing instead to place the burden of reducing the debt squarely on the shoulders of the workers. Their recommendations appeared to be totally oblivious to the plight of the worker. The reason may be more obvious than it seems. They are attempting to preserve the disproportionate concentration of wealth, even though it has been toxic for America and devastating for the middle class and poor. It is a system of designer profiteering, which was tried over a hundred years ago during the McKinley administration. It is Plutocracy and it's ultimate climax was the Great Depression.
The discussion of tax cuts and spending cuts is nothing but a diversion from the real issue of jobs. It neglects to acknowledge the real causes of existing economic conditions: high end tax cuts, outsourcing, and speculative investment practices. Until these issues are resolved , it will not be possible to construct a realistic economic development program. The burden for correcting this assault on the middle class, the poor and labor cannot be shouldered by them, because these conditions were the direct result of an economic movement engineered to oppress American workers
and to extract maximum profits from the U.S. financial network. They have already given up too much and it is time for the responsible parties to own up to their ill-conceived embezzlement of American capital. Plutocracy is not Capitalism. It is a perversion of Capitalism, perpetuated primarily by those earning more than one million dollars a year and those heavily involved in stock trading and monetary speculation.