Capitalism and its Discontents

[ProfessionalLeftist]

Capitalism and its Discontents - a long but educational read:

Barsamian: Can the government pay for the sort of jobs programs you recommend without more deficit spending? How worried should we be about the deficit?

Wolff: The reason the U.S. government takes in less than it spends is because it chooses not to tax corporations and the rich at the rates applied to them in the 1950s and 1960s. Then the government turns around and borrows money. It borrows from foreign governments, but also from banks, insurance companies, large corporations, and rich individuals who purchase Treasury bills, notes, bonds, and securities. In effect corporations and the rich can not only keep more tax dollars; they can then turn around and loan the money they kept to the government and earn interest on it. The interest that must be paid to them comes either from taxes levied upon the mass of Americans or from the savings the government achieves by cutting its payrolls and programs. So the rising deficits are a result of an unjust tax system. Eventually, as the financial burdens grow and the public grasps why, social tensions will rise. The U.S. tomorrow could look like Greece today.

Barsamian: The Right says the government should not be in the job-creation business. That should be left to the private sector.

Wolff: Much of the rhetoric on the Right is less an ideological debate than it is a thin fig leaf for private business interests. When the Right says it wants the government to “create jobs,” it means it wants subsidies for private business and bigger defense contracts, but not higher taxes to provide funds to hire government workers. Direct government hiring of people to produce goods and services threatens private business with actual competition — and they might lose — so the Right opposes it.

Barsamian: Do you think we can reform the system but keep it intact?

Wolff: Reform is what was accomplished the last time the economy collapsed, in the 1930s. Reforms are never secure. The banking reforms of the Depression were later repealed. The taxes on corporations and the rich were later sharply reduced. The federal employment programs were ended. Social Security benefits are now being cut. When reforms are not accompanied by a reorganization of enterprises, they leave power in the hands of people who have the incentive and the resources to undo those reforms. Major shareholders and their boards of directors use profits to buy the political power needed to undo the reforms that mass movements manage to win. Thinking people are already saying no to reform proposals. Systemic change must now be on the agenda, just as the Occupy Wall Street movement suggests.

Entire article:
http://www.thesunmagazine.org/issues/434/capitalism_and_its_discontents?page=1

[JDPriestly]

1. This is precisely the problem:

So the rising deficits are a result of an unjust tax system.

Schwarzenegger refused to raise taxes on the rich. Instead, he floated bonds. Rich people buy bonds and profits by collecting the interest paid for the bonds. That is how our state got into such an abysmal financial condition.

Governments should tax the rich at the level of the 1950s adjusted for inflation and get our economy back on track.

[CousinIT]

2. Exactly. Pols have only continued to support

an unsustainable system that protects the rich (of which too many pols are part). They know better. They just don't want to do better. Greed rules.

The whole article pretty much hits the nail - worth a read and a share. Esp with the OWS folks.