Nothing looks good. It seems obvious that Republican obstructionism is designed only to get a Republican into the White House -- at any cost to the country -- in the coming presidential election. The major Republican goals are to avoid raising taxes, particularly taxes on the very wealthy, and to roll back regulations that hamper business no matter if the regulations protect not only consumers but business itself.
It's madness. The reason it seems like madness in Washington now is that it's indeed madness.
It's also a tragedy. Truly, there is no way to save our future without raising taxes and the government using the tax money to get people back to work as quickly as possible -- to increase consumer demand, which will increase business, then increase hiring of new workers in a new growth cycle. Everything else is a pipe dream sold by Republicans and too many Democrats, baloney to brainwash the booboisie. American business is based on consumption of goods and services -- not on "confidence" of business executives resulting in hiring of new workers in the absence of demand. Without demand the American free market economy heads into a ditch, and with 25 million unemployed or underemployed there will never be enough demand to get out of the ditch no matter what the "confidence" of the business community.
It's Coolidge-Hoover lala-land all over again.
Under George W. Bush, Republicans inherited a surplus from the Clinton years, quickly blew the surplus away with a tax cut for the wealthy, then plunged the country into huge deficits with an unnecessary war whose real purpose was probably to avenge the attempted assassination of George W. Bush's father by Saddam Hussein and to also provide huge war contracts to a number of well-connected corporations.
So what lies ahead? If the present political madness continues, our future will see our economy in a ditch. Probably at least for a miserable decade.
And it seems to me we will not come out of it without a repeat of the ending of the Great Depression -- a major all-out-effort of a war that will put the unemployed into defense factories working full blast with government contracts paid for by what? BY TAXES!
Oh, there will be plenty of taxes, taxes out of everyone, including the rich. In a major all-out war the rich will have no choice but to pay through their noses for it. Today's political nonsense is simply pushing taxation down the road by political imbeciles who think the future is merely a continuation of the present.
If that were all, we could survive it. But our survival will not be that simple. Who, please, will we fight in a major war? The only possibility is China.
But China is a country with five times our population and a country on the verge of state of the art technology. In ten years China will be far ahead of where they are now.
We will not win a major war with China. We will lose an all-out war with China. They will out-produce us and out-man us. We will fight a tragic lost war with an ironic consequence -- the end of "free market" capitalism in America.
What an irony! Present free market conservatives, now yapping all around us like hound dogs, will throw the country into a ditch and then into a lost major war with the consequent ending of the American free market economy.
Will it really end? Yes, it will really end.
America after a major war a decade or so from now (if anything is left here) will be a mixed economy and not a free market economy -- and you don't need to be an economist to understand that. Free market capitalism is not a religion, it's only an economic system, and whenever and wherever it fails society it gets booted out the door. It has happened before and it will happen again.
Republican politicians are now demonstrating they will fail society out of sheer stupidity.
This is the course our current imbecile political and business communities are pushing us toward. A big push of capitalism to destroy itself by greed for short term gain and consequent long term destruction. What should we call it? Here's a name for it -- THE GREAT SURGE.
You state, ‘It's also a tragedy. Truly, there is no way to save our future without raising taxes and the government using the tax money to get people back to work as quickly as possible -- to increase consumer demand, which will increase business, then increase hiring of new workers in a new growth cycle.’
I hate to break this to you but counter-cyclical Keynesian political payola has never worked. It didn’t work during the 30’s, 40’s, the 70’s and it did not work now. It has been a failure.
More importantly, at our levels of debt, any gains—even immediate—are offset by the negative effects of debt. Research shows that countries that have had similar debt and fiscal problems in the past got out of them more successfully form reductions in spending not increases in ruinous taxes.
Thank God we have some adults in the room that understand that we can no longer borrow-and-spend our way out of situations, in doing so we are really just robbing opportunity for the children of tomorrow, and it is ruinous to do so now lest we end up like Greece. The key to autonomous real private sector growth and the sustainable jobs that come with it is not through Keyensian stimulus; no one hires for a long-term sustainable job based on short-term artificial and unsustainable government borrowing and spending. The reality has shown that!
Kai
Thanks foir your comment. Your "reality" is not a reality based on any science. Economics is not a science. So-called economic "theory" in this context is too often a rhetorical device serving the interests of one class or another--especially of the leisure class. The injustice of our time is that too many people fight wars with other peoples children while they accumulate capital with no return to society. As for cutting government spending, it may work in some places but not here. Contraction here will certainly put us in a ditch--so some other excuse to avoid tax increases needs to be cooked up if reason rather than greed is to prevail. Dan Agin.
Thank you for taking the time to respond.
You state, ‘Economics is not a science. So-called economic "theory" in this context is too often a rhetorical device serving the interests of one class or another--especially of the leisure class.’
You are the one that went off on a theoretical tangent, discussing aggregate demand, government-driven consumption, Coolidge-Hoover. I was the one pointing out that a) that theory has never worked, and b) actually, to the contrary, most ‘reality-based’ research on countries in fiscal crises show that spending and tax cuts work better than that Keynesian nonsense. But thanks for pointing out that your theories are not science. It is good to get that out up front.
I would point out that research on real fiscal crises and debt show real data that countries that rely on fiscal consolidation are better off.
ECB: ‘The study finds that ambitious expenditure retrenchment and reform coincides with large improvements in fiscal and economic growth indicators.’
http://www.ecb.int/pub/pdf/scpwps/ecbwp634.pdf
And Goldman:
http://www2.goldmansachs.com/ideas/global-economic-outlook/limiting-the-fallout-doc.pdf
Sweden:
http://www.economonitor.com/dolanecon/2011/07/31/how-smart-fiscal-rules-keep-swedens-budget-in-balance/
Canada:
http://mercatus.org/sites/default/files/publication/Canada's%20Reversed%20Budget.Henderson.5.5.11.pdf
http://www.imf.org/external/pubs/ft/issues4/index.htm
Research Paper: ‘Fiscal stimuli based upon tax cuts are more likely to increase growth than those based upon spending increases. As for fiscal adjustments those based upon spending cuts and no tax increases are more likely to reduce deficits and debt over GDP ratios than those based upon tax increases.
http://www.economics.harvard.edu/faculty/alesina/files/Large%25252Bchanges%25252Bin%25252Bfiscal%25252Bpolicy_October_2009.pdf
Research paper: ‘We find that deficit-financed tax cuts work best among these three scenarios to improve GDP, with a maximal present value multiplier of five dollars of total additional GDP per each dollar of the total cut in government revenue 5 years after the shock.’
http://onlinelibrary.wiley.com/doi/10.1002/jae.1079/abstract
You then state, ‘The injustice of our time is that too many people fight wars with other people’s children while they accumulate capital with no return to society.’