Talking Point: US Government Debt and Jobs

Job, Jobs, Where are the Jobs?

The talking point is simple. Average Americans are not spending money, and the economy is stalled, because they don't have much money. It's no use giving tax breaks and low interest rates to product manufacturers, because the people who would normally buy their products don't have money. People need jobs.

It is debatable whether the American public is responsible for 70% of domestic spending on goods and services, but by sheer number their spending potential is huge. They might make up 70% of domestic spending if they had money to spend, but they don't have good jobs.

Why not? Government policies over the past several decades, supply-side (trickle-down) tax policies and corporate globalization policies, have created a record wealth gap. A study by three Citigroup analysts indicates that the top 1% of Americans earn as much annual income as the bottom 60% and the top 1% possess as much wealth as the bottom 90% of Americans. The analysts concluded “economic growth [in the US] is powered by and largely consumed by the wealthy few.” [1] This is borne out by recent statistics showing that growth in domestic product sales have declined at discount stores and have grown in high-end stores and luxury products.

The Solution:

The government needs to set policies to put money in the pockets of average Americans, and I'm not talking about a $600 check; it needs to be tens of thousands per year, which simply put means temporarily creating jobs. The money for these jobs needs to come from the places that it is being hoarded: The richest 1% of Americans and transnational corporations who have benefited greatly from government policies over the past few decades.

After people have had government-sponsored jobs for several years, they will have the money to buy more products and services they need. This will create a market for private sector products and, in turn, support more jobs in the private sector. Eventually, the government can get out of business of job creation.

And yes, these jobs will require more government revenue in the near-term, but will also generate new revenues. In the long run, we'll be more likely able to pay down the US Government debt.

Agree? Let policy makers know:

• Contact the Broadcast Media
• Contact the US Senate
• Contact the House of Representatives

Sources:

1. Can the Middle Class be Saved? Atlantic Monthly, September, 2011.

US Economy in the Pocket of 1/100th of 1 Percent

This graphic is jaw-dropping. The yellow ball, representing the wealth of one one-hundredth of one percent (0.01%), doesn't even fit into the graphic. Whereas the bottom 90% of Americans is the tiny blue ball.

How Rich are the Superrich?

The top 400 of America's richest aristocrats hoard as much wealth as the bottom 155,000,000 people. - Michael Moore at a Madison, WI rally, March 5, 2011.

Sources:

Mother Jones, It's the Inequality Stupid, March/April, 2011.

Hope for the Establishment?

Well, the World Bank is a dirty word in some circles. But I've recently had some experiences that suggest the Global Justice Movement might have influenced The Bank.

Perhaps, the cynic would say, the following statistic is just the Bank engaging in self-promotion the justify their own existence.

According to the World Bank, 75-80 of the effects of climate change are being felt in the developing world. So, you have this inverse relationship between cause and effect.

But another take is that the Bank is, 1) acknowledging the existence of climate change, something the Palinistas won't do, and 2) providing evidence for a legal challenge with reparations as the remedy.

By chance I discussed the changes at the World Bank with someone who is #2 for a particular geographic region. In response to a question about changes at the Bank over the past decade, he said that the Bank has deeply changed it's perspective on two things. First, the Bank recognizes the use of "structural adjustments" as a condition of loans was bad policy, in part because it was coercive. Thus, nations would do what was necessary to secure the loans, but were not really committed to the changes.

Second, and related to the first, was to take a more holistic view of the loans, recognizing distribution issues and social issues. In other words, recognizing that the results of the loans need to affect a broader spectrum of people in the recipient country, with particular attention on impacts of the poorest people.

The purpose here isn't to praise the World Bank as much as it is to point to the success of the Global Justice Movement in helping raise the consciousness of an institution like the World Bank.

Financial Elite in a Sea of Poverty

Back in 1975, when oil wealth in the Middle East was accumulating, the Kuwait fund for Economic Development pledged $16 billion to developing countries. According to National Geographic,

The fund's director general, Abdlatif Al-Hamad, 39, explained the philosophy behind such generosity: "We cannot close our doors and say to hell with everyone else. Nothing is clearer than the danger of having an island of prosperity in a sea of poverty."

We've all heard that about the 1% of Americans who own 38% of the wealth. The bottom 40% owned less than 1% of the nation's wealth. These are 2001 statistics and the disparity has grown since then.

Sounds like an island of prosperity in a sea of poverty.

Where is Abdlatif Al-Hamad today?

Source:

National Geographic, "Arabs," October, 1975.