How about we go one step further, lets eliminate the private sector and have everyone work for the government. They will provide everything we need and will be ultimately more fair than the free market.

This system is working well in the Soviet Union

We have had the hugest tax cut in history that has extended over the last ten years. We should be in the middle of a booming economy. We are not.

The reason is that the cause of the housing market bubble was not subprime loans, it was the source of the investment dollars that created those subprime loans. The trillion dollars in Bush tax cuts that went to the top two percent of income earners.

The RICH do NOT start businesses with their tax cuts. Thats for idiots and the unschooled. It takes a lot of hard work for at best a five percent profit margin.

No,No, No, the rich do not to that. Thats purely squaresville thinking.

What the rich do is go look for a hot sector of the market to speculate in, because speculative investments can earn a fast turnaround profit of 15- 20 percent.

The conservative hype that if you give the rich a tax cut, they WILL use it to start businesses or expand existing ones was ancient history when they started using it.

It stopped working that way when the first corporation was allowed to divest the owners of the corporations of almost all of the risk to their personal fortunes. After that there was really no risk to the CEOs of 90 percent of the companies in the US. Probably a higher percentage.

They get to walk with their mansions, yachts and limos, as well as their huge personal fortunes, as the corporation slides into oblivion.

Now America has fallen to an average increase of GDP of about 2 percent.

All you need do is compare ALL of the prime economic data for the two quarter century periods. 1950-1975, and 1980 -2005.

Conservative economic ideas do not even come close to producing a growth economy.

The idea that tax cuts do this fail the smell test on both the macro and micro economic levels.

The way a mature economy works, on both of those levels, additional investment is not only not REQUIRED it is not allowed. Thus all new investments do is distort the Main Street Market in the shadow economy of the Wall Street market.

This is why the United States is now the second most small business unfriendly economy on the planet, with only 7.9 percent of our businesses being in the small business sector. This sector creates 70 percent of all jobs, and the other more than 90 percent only creates 30 percent, but it skims huge amount of wealth out of the main street economy in the markets.

The answer is in fact, MORE welfare, not less.

You can trust the average person getting welfare to spend that money in the REAL consumer market where it will do some good, than a wealthy CEO to NOT use his excess wealth in speculative manners that make him a lot of dough, while sending the rest of the economy into a tailspin.

This is what a recession is. The sucking sound of the rich skimming profits out of the economy as personal income.

When he raised the top tax rate to 65 percent, lo and behold, the collapse in GDP slowed down then started reversing itself

In fact recent polls show that the PUBLIC agrees with me. That the Bush Tax cuts NEVER should have been enacted and that the GOVERNMENT should have used the money to create jobs. Recent Gallop polls say that it should be the government that uses the money directly to create jobs and that the private sector, and the wealthy cannot be relied on to do so.

It has been decades since the idea that “businesses take risks and therefore are entitled to huge profits” has been true. More than half of GDP is related to GOVERNMENT spending.

Which means for the 3 trillion dollars in government spending, you are getting close to 7 trillion in GDP. No business can even come close to that sort of profit margin.

Wow!

You have solved the economic dilemma we are in.

Put everyone on welfare and watch the money grow.

You can argue about social spending, but in economic terms, social spending is “circular”. When the government gives out social benefits, every sector of the economy benefits, and the result is usually that one dollar given out by government in social benefits results in much more than one dollar being returned to the total economy. Because it is not money that is being blown up overseas.
It is being spent in local supermarkets, at local big box stores, at the local pharmacy, in local doctors offices, who go out and spend the little portions of that money they get from their clients in other local businesses.

Economists know well the negative economic ratio of defense spending. One dollar spent on defense only returns 50 cents to the economy.

Getting to this ratio is simple. We spend 12 percent of GDP on defense, and it ends up making up 6 percent of GDP.
Defense returns a small amount of money to government revenues, because of the small percent of the population that works in the defense sector, but it is not enough to offset the sucking noise of defense dollars being flushed away overseas.

If they wanted to exceed those limits, the CEO had to do something exceptional. That is his rewards were directly linked to his performance.

Which is why the 1950s through the mid 1970s were the period of the greatest economic growth in American history. 3.9 percent growth of GDP ever year on average for over 25 years. Highest rates of job creation. The rich will do anything to avoid paying taxes, so what they were forced to do by these high top marginal tax rates, was to create a “non liquid” wealth for themeselves, and the nation as well.

Low top marginal tax rates favor profit taking for individuals over “wealth creation” for the entire nation and society.

When the top marginal tax rates were pared back to 28 percent, GDP was cut in half and a new economic event occurred. The jobless recovery. Because the remuneration of the wealthy is no longer “coupled” to the remuneration of the working classes, due to changes in the tax codes in the 1980′s, a corporation gets the same tax break if it gives the CEO a billion dollar bonus, or if it uses that same billion dollars to hire more workers.