Monday, September 19, 2011



The reaction of business to the last federal stimulus and the next stimulus has been and will continue to be thank you for the incentive but no thanks!  When this happened in the 1930's, FDR told the private sector, if it won't hire the unemployed the government will! Americans can expect the same reaction from business in 2011 to this new round of stimulus for jobs, thanks but no thanks! Congress in the 1930's was more aggressive toward the private sector because they had an alternative in Keynesian economics, they could spend their way out of the depression. The economic system reached the lowest record level of unemployment in the 1950’s. The height of prosperity and any rational tax revenue plan to include all the social classes took a back seat from that point forward. The middle class supported the government’s spending through the ensuing several decades. The second world war provided a great incentive to re-tool factories and deficits never exceeded what the country could produce. But, the limit of borrowing has reached its end. The country's capacity to produce is equal to its 13 trillion dollar debt to the banks. The Congress of 2011 cannot afford to be as aggressive with the private sector as it was in the 1930’s. In fact, Congress in 2011 is moot on the crisis befalling the middle class and economic growth.  The end of prosperity that is punctuated by increasing impoverishment of the middle class, proves the two parties do not see beyond the Keynesian model. It is of no consequence that this Congress is pro-business. Legislative reforms enacted in the Supreme Court and Congress over the last 35 years by the right and the left, successfully positioned Big Business for the coming austerity measures they saw as the only way to continue lending to the federal government. But, this time the government would have to cut from its budget the more expensive programs as a guarantee of repayment or pay the interest on the current debt. These programs would include cuts in the services the declining middle class and the poor depend on for survival as poverty deepens in the United States. Therefore, an alternative party is an essential question!


This financial crisis is the same as the EU crisis. What is coming to a head in the EU is coming to a head in the US. The EU borrowed and minimally taxed the corporations and the rich for decades as did the US. Republicans and Democrats accepted the Keynesian practice of borrowing and spending as a permanent fix and prosperity voided the political incentive to reform the tax code that would serve to balance the budget through a real and practical taxation plan with pragmatic changes to the size of government and its role in the private sector. In a word, they avoided the problem. We observe from the unfolding of deficit woes that taxing the rich and corporations and the people refuse taxes. This stalemate is causing massive erosion of societies in Europe further hastening the process of decline. The EU governments react with more bail out, more borrowing and higher reserve capital in banks to shelter future mortgage shortfalls. Rather than to address the system as a whole the governments focus on the single cause that brought down the financial system in 2008, and attempt to shore up the housing market with the expectation of recovery. Governments go into hock to the banks and payment of the deficit over the long term excludes corporations and the rich with the crude compromise offered by parliamentarians to repay the total deficit through cuts in services. This same deal offered by our Congress, presents to the middle class with newcomers to Congress from the business sector, to replace career politicians. Career politicians who are reluctant to cut programs intended to shelter individuals and families from further destitution. And, as another round of foreclosure actions take place the programs become ever more indispensable.


While there is no Left opposition outside of government to force the Congress to tax the rich the fear of criticizing the whole system immobilizes the left inside Congress and the Right sweeps away with all the votes.

Taking no chances the private sector and the right opposition in Congress vis-a-vis the Tea Party; push the limits of this crude compromise of continued borrowing, cuts in spending and no taxes to the rich are incapable of criticizing the entire model of spending and borrowing. This is due to their financial ties to the private sector and the increasing role of powerful special interests in Congress. Through campaign reforms made in the past, new Democratic rivals are set up in Congress to force a bitter pill down the throats of the public in the guise of business sector experience and job creation. They propose cuts and no revenue streams from the private sector in addition to no changes in the system as a whole. That a plan for rational taxation and scaling down the size of government coupled with a plan to re-industrialize the economy, proves the two parties, focus like their EU counterparts, on a single pronged solution to fundamental economic problems of the middle class and the growing poor. Instead of changing institutionalized inequity they propose to leave intact the institutions encouraging the behavior.

The objective of the middle class, in response to their plight, ought to be a broad movement against short-sighted and special interest policies coming from both parties. A movement that surpasses single issued causes and proposes through an independent party a rational plan for taxation and spending of government that is wholly independent of moneyed interests. The two mainstream parties are indebted to the private sector and this cripples their ability to act in the best interest of the nation. Needed is a neutral Third Party that is not afraid of criticizing the system as a whole the way the mainstream Republican and Democratic parties fear rebuke from powerful lobby groups and cannot criticize economic practices and policies. A Third Party that can move the country forward into an ecological change on how our economy interacts with the environment that neither the mainstream parties take interest in. A Third Party that makes new demands on society and has a vision to replace a system that has come to the end of the line. A system of taxation and spending that has worked for a few but not all, and is now a chief cause of engulfing a majority into poverty. A Third Party that addresses the huge student loan endemic waiting to explode exceeds total credit card debt is unprecedented. A Third Party that focuses on long term stable economic growth and deficit elimination dividing the surplus into meeting needs in defense, reserve funds for natural disasters, research and development, health and education as the role of government in society and supported by all social classes in a fair and rational manner as the purpose of taxation. A Third Party serious about ending the Wars.

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