Hollowing Out the Economy

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Make no mistake, the trillion-dollar tax cuts for the wealthy proposed by Trump and his friends in Congress will create deficit dollars. Sooner of later those deficit dollars will be repaid by cutting “entitlements”, i.e. taking from working families and the poor. This is a recipe for increased tribalization, radicalization, and rise of demagogues. I question whether our noble democratic experiment can withstand further destruction of our working families.

Do they think we have amnesia? It wasn’t that long ago when the Tea Party members of the house blackmailed us by shutting down the government and insisting that we cut entitlements to balance the budget. Under that pressure, Obama even agreed to cut Medicare at one point, but the deal was never consummated.

The only successful path forward is to grow our economy and our tax receipts by paying workers more. This will require new regulations for corporations.

In case there is anyone out there who still believes that unfettered corporations are good for the economy or our citizens, we need look no farther than the lives ruined by guns, opioids and increasingly destructive storms.

The largest corporations and monopolies have sent their top financial people to Washington to work around the clock to ensure that their financial ox is not gored by the trillions of dollars of loopholes being closed. This means that this river of financial blood will be drawn from workers who are the source of demand for our goods and services and from small companies who would otherwise compete with new products or services to reduce price gouging by monopolies. Rising prices will then further squeeze working family purchasing power. All this to put even more money in the pockets of those who have so little need that they will probably invest most of the proceeds in foreign assets.

We know how this hollowing out of economic demand ends — financial collapse followed by at least a decade of global economic depression during which demagogues gain traction and major wars are fought. The irony of it all is that, in addition to all the suffering and misery they will cause, the oligarchs will find their own fortunes destroyed. Many great fortunes were destroyed by the Great Depression, World War II, and the ensuing inflation used to pay off war debts.

An enlightened oligarch would realize that it is far better to own half a loaf of an economy where everyone wins than a full loaf of one where everyone will ultimately lose.

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