What The GOP Doesn't Want You To Hear
A very interesting op-ed in today’s LA Times starts with: Congress should let the Bush tax cuts expire for the wealthiest Americans and use the additional tax revenues that are generated to invest in infrastructure and research. Now you probably think this is some whack, socialistic liberal or something. Of course you would be wrong. […]
A very interesting op-ed in today’s LA Times starts with:
Congress should let the Bush tax cuts expire for the wealthiest Americans and use the additional tax revenues that are generated to invest in infrastructure and research.
Now you probably think this is some whack, socialistic liberal or something. Of course you would be wrong. This piece is written by Garrett Gruener, a venture capitalist and founder of ask.com.
Gruener brings up some very interesting facts, you know, those pesky little things the GOP tries to deny. Here’s one that really sticks out:
The supply-side, trickle-down economic policies of the last decade benefitted people like me, but the wealth didn’t trickle down. So while we did quite well, people who live from paycheck to paycheck didn’t.
When inequality gets too far out of balance, as it did over the course of the last decade, the wealthy end up saving too much while members of the middle class can’t afford to spend much unless they borrow excessively. Eventually, the economy stalls for lack of demand, and we see the kind of deflationary spiral we find ourselves in now. I believe it is no coincidence that the two highest peaks in American income inequality came in 1929 and 2008, and that the following years were marked by low economic activity and significant unemployment.
Now I am not an economist by any means, but I try to utilize common sense. One of the the arguments the GOP has been launching for the tax cuts is that it will allow businesses to hire more. More money for the owners equals more employees – right?
Not so fast.
If my company is making widgets and my current output is satisfying my demand, then why would I increase production? If I’m selling 1/4 million units per week and no one is selling out, doubling production won’t do anything but cut into my bottom line.
The simple fact is that without demand then supply is not needed. If the middle class doesn’t have the money to buy my widgets, then why make more?
For a party that prides itself as being “business minded”, the Republicans sure don’t seem to understand this basic concept of business.
Sadly this is also what the Democrats have been saying for years – trickle down does not work. But we live in a world where the truth falls to the slick used car salesman lies of the GOP. If Democrats want to win the message war on the tax cuts, then they need an army of Grueners out there to explain how things work from a first person view. There are many more available, so it’s for the Democrats to start recruiting.