Friday, June 10, 2011
How to Get It Done [Excerpted from Robert Reiche's book AFTERSHOCK
TRANSITIONAL STRATEGY: I agree with sentiments of how we go about changing laws, regulations to offset threats to inequality. The ECONOMIC threat, the POLITICAL threat.
I. ECONOMIC - unless America's middle class receives a fair share, it cannot consume without going into debt. Debt which is unsustainable.
II. POLITICAL - Big government & big business are in cahoots to make the rich even richer causing resentment, anger, demagogues, movements and perhaps revolution.
1. A Reverse Income Tax, workers earning less than $20,000 would receive a wage supplement of $15,000. Supplements would be scaled up to those making $50,000 where it would reach $0 for F/T workers.
2. Cut Taxes to 10% for those w/ incomes between $50K-$90K. Those making $90k-$160K taxes would be 20%. In addition a carbon tax [starting at $35/metric ton of CO2 up to $115/ton], and higher taxes on the top 5% of incomes; example: top 1% pay 55% tax, top 2% 50% tax, top 5% 40% tax. Revenues could reach nearly a trillion in the first year and surpluses used for reemployment.
3. Reemployment system rather than an unemployment system. Free education, 90% of former wages are paid for a minimum of 1 to 2 years during retraining.
4. School vouchers based on family income.
5. College loans linked to subsequent earnings. Tuition should be FREE at all public colleges and universities.
6. Medicare for all. As of 2010 almost 50% of Americans already receive some form of public health care.
7. Public Goods. There should be a sizable increase in public goods such as public transportation, public parks, recreational facilities, museums, libraries all free of charge to users.
8. Get Money Out of Politics.
How to Get It Done?
Politicians and media can't keep saying it's getting better, when it's not. People feel the heat from housing foreclosures, high unemployment, lower earnings, less economic security, widening inequality, soaring pay on Wall Street and they are angry. Another deep recession might be enough to trigger reform but a mild recession may not be enough to upend vested interests that can too readily hold on to their power and anachronistic views.
Pretty soon Wall Street banks and corporations will become concerned about their inability to generate profit, as the middle class cannot afford to purchase their products and services.
If nothing is done to counter present trends, the fault line will go beyond Democrats and Republicans to the mad-as-hell populace determined to take back America. None of us can thrive in a nation divided. The lopsidedness not only diminishes prosperity but tears the fabric our society. Stability rests in a system that operates in the interest of us all. Any loss of such trust threatens the well-being of everyone. We will choose reform, it's the only sensible option we have.