Will The GOP Tax Scam Crash The Economy?
The countries of the world that have the most stable economies and that suffer from the smallest boom and bust cycles are the countries with the highest tax rates on the very, very wealthy. The reason for that is that the government is functioning essentially as a stabilizer, so capitalist economies, there's just a fundamental truth about them. This is not a knock on capitalism, it's just the way it is.
Capitalist economies go in cycles of boom and bust. There are big cycles - what's referred to as the 80-year cycle of major boom and bust - and then there are smaller cycles which are sometimes referred to as the eight to ten year cycle of recession. Every roughly eight to ten years there's a consequential recession.
And so when those depressions and recessions happen, a government that is well-funded - in other words it has a broad enough and high enough tax base that the government has resources - that government can spend money into the recession. They could build new roads, they can do new construction projects, they can build new sewer systems, they can build out high-speed Internet infrastructure.
Whatever it may be, that government can spend or for that matter they can in an extreme case like in the Republican Great Depression, what Franklin Roosevelt did was he even hired people to do basically scutwork - to plant trees, to sweep streets - literally. The WPA was hiring people to paint murals, hired poets to write poetry and do public readings. Not that that's scutwork, but it's not the kind of thing that traditionally you think of as government functions.
The reason our government was doing that was because capitalism was in one of its cyclical failures, one of its cyclical crash modes. And government at that point needs to step in and stimulate the economy by putting as much money as possible at the bottom of the economy into the pockets of working people, which is exactly what FDR did, and it's how we got out of the Great Depression, between that and World War Two which was the largest government stimulus in the history of the United States.
Wars are stimulative. It's not a good way to stimulate the economy because it's not long-term. If you build a hospital it stimulates the economy and continues for the next 50 years as a great revenue source and healing source. You build a bomb and it might cost the same as the hospital, but once you drop that bomb it's gone. The money is gone and the bomb is gone.
So anyhow these cycles of boom and bust are best handled by nations like the Scandinavian countries, the northern European countries. Germany during the Great Crash of 2008/2009, one of the biggest institutions in Germany that got hit was Deutsche Bank but it was mostly because they were loaning and they were gambling on American derivatives in the American housing market.
But my point is that those high tax rates - and we haven't seen high tax rates since the 1980s - I'm talking about over 50% on income over three million dollars a year, which is what we had in 1920. It's what we had in 1940, 1950, 1960, 1970 and 1980 and we no longer had after 1982.
Top tax rates over 50 percent stabilize the economy. They reduce the impact of recessions. And sure enough, in 1921 Warren Harding ran on a campaign of dropping the top tax rate on the richest in America from 91% down to 25%. He won the election and he dropped the top tax rate.
And what did it do? It started a bubble. It kicked off what we refer to as the roaring 20s which was pure bubble fueled by rich people. It was a speculative stock and real estate bubble and that bubble burst. It started bursting in Florida in early 1928 and by the end of 1929 that property bubble had reached all the way to New York City and it took down the stock market.
And it was all fueled by the tax cut of 1921. So we saw that happening and for the next 30 years, literally for the next 30 years - arguably the next 40 years - no Republican was stupid enough to say, "we need to do what Harding did, let's create another Great Depression" until Reagan came along.
And Reagan passed two big tax cuts in '82 and '86 - the first one dropped the top tax rate from 74% to 50%, the second one dropped it from 50% down to 25% and those two tax cuts then led to, in 1987, the biggest crash in the history of the stock market with the single exception of 1929.
Now the crash didn't last more than a few days - the really severe part of it - and the consequences of it, it was about a year long pain. But it wasn't just the crash.
The other thing that happened was that the growth of the middle class - the bottom 60 percent of Americans in terms of wages and wealth - was faster in the 40s, 50s, 60s and 70s than any time in the history of America, and the growth of the middle class was growing in wealth and income faster in the 50s 60s 70s up until the 1980s than the top 40%.
And this is no secret. Any economist can tell you this. High tax rates, high economic growth. Low tax rates, what happens? The country encounters a rough patch and what do we do? We have to stimulate the economy with debt. So now we're 20 trillion dollars in debt.
So you had the big tax cut of '21 led to the crash of '29, the big tax cuts of '81 and '86 led to the Great Crash of '87, the big cut of 2002 - George W Bush's - led to the crash of 2007. Another bubble economy. It was a real estate bubble just like the one in the roaring 20s.
And so now we get a giant cut tax cut in 2017. What's next?
I'd say another crash.
It just seems like this is what Republicans do. They suck up as much money as they can for themselves and the donors who own them - the wealthy clients, the top 1%, the top one thousandth of 1%. Republicans take as much money out of the economy as they can to give to those people, the morbidly rich, and then the morbidly rich direct their media empires to tell us that that stuff falling on our heads is actually rain. It's a golden shower!
Yes, trickle is trickling down on us. And we know that we're just peons.
So they're playing this game again, right? The Republicans they played this game in '21, it led to '29, it led to a disaster. They played this game in 1980 and it led to a disaster. And it flattened the wages of working people for literally 35 years to this day. And then they played this game when George W Bush came in and it led to a disaster 2008-2009.
They're doing it again. It is said, "the definition of insanity is doing the same thing over and over again and expecting a different result." There is going to be a reckoning.
Economically you can ask any rational economist, there will be a reckoning. But the political question is, who's going to take the blame? And there is a theory suggesting that what the Republicans are doing is they're setting up the next crash in anticipation of the Democrats having political power when the crash happens so that they can blame the whole thing on the Democrats. They can say, "see?"
Because if the crash happens right after the 2018 election or in 2019 or right after the 2020 election - and frankly I don't think it's going to take that long - if the crash happens after that and Democrats have seized power, the Republicans are going to be saying, "see, look at what the Democrats did to you!"
We'll see how that works out but I'm just giving you advance warning.
Thom, you're wasting your breath. The electorate of this country has been so dumbed down by lack of fundamental education, the corporate media and mental sloth in the form of identity politics and religion that no amount of bellowing about the trickle down scam trademarked by the Republicans (but practiced equally by the Democrats) will make any kind of difference. This bovine population will only turn back on its tormentors when driven into a box canyon. And the ruling elite class is smart enough to avoid that outcome. Can you say "mooooo"?
During the Great Republican Depression of 1929 my parents, who lived in San Francisco, were hit hard. They were married in 1930 and In 1935 my father got a WPA job drilling holes in Acorns. In the 1930's people used curtains made of Acorns. Other people painted muras on the interior walls of Coit Tower, a local attraction. My father worked for a time before that for my grandfather in his auto shop. Then in 1939 he obtained a job with the Postal Service as a "speedy" working nights delivering Special Delivery letters. Times were tough. My brother was born in 1933 and myself in 1936. Things improved a lot when my father got the post office job which later turned into a regular mail carrier job. Because universities were free, my brother and I both attended UC Berkeley which had no tuition. We could not have gone to college if there was tuition. My first job was with the National Park Service in Yosemite National Park. The WPA built all those rock walls along the highways, they also built trails and bridges and the park service buildings. This was true of most national parks in the west. Contractors built the highways in the parks. Then along came Saint Raygun and screwed the pooch..
This narrative needs to be ACTIVELY, DAILY voiced by Progressives and Democrats from today on.... The Republicans must be publically called out on their cynical willingness to manipulate the economy and the very lives and meagre treasure of ordinary Americans in order to become electable in the future. Who would have imagined Tea-Party Republicans being so eager to add $1.4T unnecessarily to the national debt...this after their crucifixion of Obama for his increase of the debt in response to an actual economic crisis? Hypocrites all.
With this tax bill we are being set up to repeat the experience. A crashed economy is easily within the long-game plan of Ryan and his ilk.... blame the crash and debt on Democrats and social services like Medicare, Social Security, Medicaid etc... then repeal them.... political cynicism at its worst; a "tax plan" that is immoral and unethical by design.
Thom just stated some facts surrounding our 20th and early 21st century economic history. Conversely the Kochpublican Party leaders have totally ignored these economic facts and trumpet their own fairy tale trickle down lies in defense of the massive transfer of wealth from people who work, to those who don't work, the extremely rich, .. ...and the corpse media lets them get away with their god damn lies.
For example, why is the media repeating over and over that Trump is keeping a campaign promise with his tax scam? Yeah right, he told voters that he was going to run the debt up by trillions in order to give those who already have billions, more billions. The corpse media even calls this an achievement..LOL
Anyway, for those gullible foxaganda drinkers like Diane and Bachmann, I've got news for them. Their health insurance will soon skyrocket as well as their state and property taxes, or maybe Bachmann will get laid off from her Public Employee job, can't have it both ways ...good luck with coming out ahead.
Definition of insanity "Doing the same things over and over again expecting different results" Albert Einstein
Insanity: doing the same thing over and over again and expecting different results.
Read more at: https://www.brainyquote.com/quotes/unknown_133991Insanity: doing the same thing over and over again and expecting different results.
Read more at: https://www.brainyquote.com/quotes/unknown_133991
It has a recorded history. Except this time we are cutting taxes in a boom, not during a bust. What are we going to use in the bust?
By the way Centurylink services suck:
You knocked this one out of the ball park, Thom!!
Important discussion, but just to be fair there were other causes of the 1929 crash. Germany's inability to borrow more money to pay its ruinous war repatriation debts was a big factor. Incidentally, there was also a nasty smash-up in 1921, though it ended in a couple of years. That was largely due to economic dislocations as the country got off a war footing. So cutting taxes on the rich is only part of the story, though one we forget at our peril. Expecting this to lead to more jobs is as stupid as supply side economic theory, and I suspect most Republicans know it too.
And why are they doing it again? Because, there was no accountability for the last time they did this. If anything, their actions were validated and rewarded with being allowed to keep most of their ill gotten gains with not even one day behind bars. So why wouldn't they do it again? How could they feel there was anything immoral about what they did if society and the criminal justice system were not willing to exact any punishment? If it was alright with the American people i.e. the American government, then it was certainly alright with them. What was the lesson learned?
So the logical, if somewhat shady, conclusion would be, wait until there was a President of a more favorable attitude. There dream has come true! The door was left wide open and now the welcome mat has been replaced with a red carpet.
stopgap. Extremely important point! Fascists must be held accountable at every level in every instance; otherwise, they'll only increase their power over the rest of us. That hard reality has slapped us upside our stupid heads repeatedly.
Great comments all to a great blog!
2950-10K. Absolutely! The corpse media may not be the original perpetrators of the Koch's Goebbels-esque "Big Lie" against the proper roles of government and private industry in a healthy economy in a functioning, constitutionally-protected, representative, PEOPLE'S democratic republic, but their crony corporate "news" rooms certainly are the loudest, most effective purveyors of the billionaires' libertarian, free-market (for the wealthy and the privileged), fascistic agenda.
Un-frigging-believable! The Republican reprobates in a stolen White House and Congress tripped all over their corrupt selves to ram this cynical, 100% partisan monstrosity giveaway to a small cadre of some of the richest bastards on the planet right before Christmas, right before God and everybody -- at the ultimate expense of every working stiff, present and future, especially the working poor in dire need of benefits to minimally fill the gap between starvation wages and the barest of living expenses.
When the Kochs ,Trumps, McConnells, Ryans, and the families of all the other Republican traitors who voted for or supported this purely evil legislation gather around their gaudy Christmas trees to open their shiny baubles and trinkets and Santa sacks full of donor cash, will they have the shameless audacity to kneel in prayer before their plastic idols of Christ on a cross? And what will they pray for? More and more and more?
Maybe they should actually heed their Saviour's admonitions:
Matthew 25:34-40 34 Then the King will say to those on his right, ‘Come, you who are blessed by my Father, inherit the kingdom prepared for you from the foundation of the world.35 For I was hungry and you gave me food, I was thirsty and you gave me drink, I was a stranger and you welcomed me, 36 I was naked and you clothed me, I was sick and you visited me, I was in prison and you came to me.’ 37 Then the righteous will answer him, saying, ‘Lord, when did we see you hungry and feed you, or thirsty and give you drink? 38 And when did we see you a stranger and welcome you, or naked and clothe you? 39 And when did we see you sick or in prison and visit you?’ 40 And the King will answer them, ‘Truly, I say to you, as you did it to one of the least of these my brothers,[a] you did it to me.’
The parable of the great banquet seems to allude to the cozy relationship corporatized politicians have with the donor class:
Luke 14:12-14 12 He said also to the man who had invited him, “When you give a dinner or a banquet, do not invite your friends or your brothers[a] or your relatives or rich neighbors, lest they also invite you in return and you be repaid. 13 But when you give a feast, invite the poor, the crippled, the lame, the blind, 14 and you will be blessed, because they cannot repay you. For you will be repaid at the resurrection of the just.”
Or perhaps all the truly righteous priests and preachers across Trump's kingdom should just hogtie his sycophantic trolls, hypocrites, liars, and other fake Christians who don't believe in adequate welfare and healthcare for the disadvantaged and downtrodden. Get the worthless bastards pinned down and brand 'em with a pithy proverb right in the middle of their sloped foreheads above the unibrow between their horns. Here's a few for starters:
Proverbs 29:7 A righteous man knows the rights of the poor; a wicked man does not understand such knowledge.
Proverbs 22:22-23 22 Do not rob the poor, because he is poor, or crush the afflicted at the gate, 23 for the Lord will plead their cause and rob of life those who rob them.
They only use religion when it is in their favor.
Yep. The giant crash (bust) is just ahead of us. Its not even around the corner... The crash of 08 was saved by the "merchant princes" who own the federal reserve. To the tune of tens and tens of trillions of dollars (in the form of digital zeros and ones, not even worthless paper money) that they injected into computers of these " to big to fail" financial banks all over the planet... That trick wont work this time, because all those banks are still flush with all the "digital" money from ten years ago...
The 700 billion that we (the taxpayer) gave for the supposed bailout of 08, was used for all the golden parachutes of the "to big to fail " CEOs... Its absolutely insane! And they're doing the same crap again on steroids!!
Odd isn't it that not one of those passages in the scripture says that government should do those things. Just as Christian conservatives give more and do more for the sick and poor than any liberal group(s) do. Liberals want to give money to the government and then throw up their hands and say "see, we did all we could".
Here's a quote for you deepspace:
"The devil can quote scripture for his own purpose" William Shakespeare
I joke on the "golden parachutes"... Though, maybe there is some truth to that! "Chuckling"... But, what we gave was the proverbial "drop in the bucket" in the 08 "bailout".
Interesting how Thom Hartmann selectively picks an event in history and then attempts to find something that will support his hatred or love for what caused that particular event.
One question for all you malcontent leftie/socialists. If the rich (defined as anybody that has more money than you) are in control, things are rolling along at a strong pace, and they are in fact getting more wealthy, why the hell would they want to crash the economy? Your "logic" is bullshit and even the dimmest of you ought to be able to figure that out.
Learn people, that there have always been economic cycles and world markets will respond accordingly. Few, if any, can be blamed on one singular event as the cause.
Just don't pretend to be an accurate prognosticator of these cycles as you all can see clearly is a yuge mistake.
Do you have a reference Kilo? Here is one.
Lefty? Socialist? No, lm a realist. There is hundreds and hundreds (I've heard/read different figures... exact amount?) of trillions of this "faux money debt" thats spinning around the stratosphere of this tiny planet! Way more than the total GDP of every country combined... Way more than enough debt to bring down the whole world financialy.Now, thats reality!! And it has nothing to do with left or right... Socialist, Capitalist, or Fascist! Its the insane politics and religion of greed and power that is in the hands of a very few psychopaths...
The "Merchant Prince's".... To quote Machiavelli.
If it's not, nuclear war, the Russians, net neutrality, melting ice, ISIS, it's too hot, it's too cold, hurricanes, tornados, cow farts, air pollution, tsunami's, overpopulation, floods, choking dolphins, the Koch brothers, parrot fever, Melaina's shoe choice, Donald's hair,
but #1 on the list,
wearing far too many tin foil hats.
Learn to hunt and take care of yourself.
jefflisse is relatively new here and does not know that with Diane Leftie/Socialist is as original as it gets.
BTW... This "so called" lefty, socialist. Grew up on a farm in rural southern Wisconsin. Ive been growing a large vegetable garden for most of my life I've been an avid hunter since a young teen. Bow, muzzleload, and modern firearms.... I avidly hunt big and small game.
Oh my... Does that go against your Fox - Breitbart stereotype of all us so called lefty socialists!
I love the way Thom always suggests Scandinavian countries are so much better off. Ya if you love to live in a 400 sq/ft apartment and zero disposable income it's great. Also unlike the US and Canada they have limited their immigration to almost zero to preserve their culture and keep unemployment low and wages high.
One factor Thom missed is we now have a global economy. It is so much easier to business anywhere so if it is too expensive to make here we make it somewhere else and ship it here. You can ship a 40 foot container anywhere in the world for around $6000 so in the 80's millions of jobs where going offshore
I am glad I am not a liberal living in that much fear must be very stressful
I have worked twice in Sweden. Fortunately both times in the Summer. I hear the winters are tough. I found the living standards to be very close to the USA for the employees that I worked with and knew. The country is incredibly clean where I was. Infrastructure in excellent condition. All around nice place in the Summer.
I also notice Thom conveniently misses the fact Al Gores invention known as the internet boosted the global economy which started to grow exponentially starting in the early to mid 1980's during the Reagan administration.
Living in liberal land is obviously very stressful but somewhat eased with prolific drug usage.
BTW, A great use for your tax savings may be a one way airfare to Malmo, Sweden which can be had for around $550 which is less than price for a week of restaurant lunches for a family of four in in the land where everyone stands around and stares at their shoes.
Killasquid #18. And what, prey tell, is my purpose other than to point out the utter religious hypocrisy of phony Christians in leadership positions, even according to the clearly spelled out key tenets of their own purported faith? If quoting the simple yet profound truths of certain biblical passages makes me your "devil," then so be it. Maybe a good poke in the butt with a pitchfork is just what you need to wake the fock up!
Extraordinary claims require extraordinary proof. Prove -- with unbiased and nonpartisan studies or any other credible sourcing -- that "Christian conservatives give more and do more for the sick and poor than any liberal group(s) do." Prove that "Liberals want to give money to the government and then throw up their hands and say "see, we did all we could".
BTW, volunteerism, although a wonderful gesture that helps so many, still addresses only a small fraction of the extreme, third-world poverty in America (a scourge that afflicts red states more than blue states). The numbers of Americans in critical need are astronomical, rendering voluntary efforts totally inadequate in the face of the challenge. Ireland found that out during "The Great Hunger."
Why do you not know this? "OUR" government must and should provide a comprehensive safety net for our citizens. To believe otherwise is more than just a partisan delusion; it's wildly insane and irreligiously cruel!
"Da guvmut" is not a faceless machine -- it is made up of real people who are in charge of the "general welfare" of all U.S. citizens, not just a tiny base of "free" market wealthy donors and the starry-eyed congregants of Fux News true believers. At the moment, your people are in charge of this nation, and nearly 100% of them have loudly touted their so-called Christian faith, e.g., loser Roy Moore, in their lust for more and more political power.
Matthew 6:2 Therefore when thou doest thine alms, do not sound a trumpet before thee, as the hypocrites do in the
synagogues and in the streets, that they may have glory
of men. Verily I say unto you, They have their reward.
Matthew 6:5 And when thou prayest, thou shalt not be as the hypocrites are: for they love to pray standing in the synagogues and in the corners of the streets, that they may be seen of men. Verily I say unto you, They have their reward.
Your people are now using their overbearing religious, political, and economic power to violate nearly 100% of their Lord and Saviour's message about helping the poor, the sick, and the helpless -- a virtue hugely and glaringly fleshed out in numerous passages throughout the Bible, more forcefully in the New Testament in Christ's own words, especially when it comes to caring for innocent children. (So, do you also support your people in allowing national funding for CHIP to expire?)
By Killasquid's logic then, Jesus Christ himself must also be a "devil" pursuing "his own purpose." But why do people need to read a religious book to understand morality, compassion, and empathy on an intellectual plane; isn't that more of a problem of the heart?
Maybe it's time to put all conflicting thoughts aside for the time being, and just study one's own conscience and behavior firsthand -- beyond mere words. Be "present" with your own mind. 'Tis the season, no?
@30 Dumb shit
“Give a man a fish and he’ll eat for a day; Teach a man to fish and he’ll eat for a lifetime.”
Give a woman a corndog.
And she'll take a ridiculous picture...
Haha ...okaaay, we can call it a "corndog" for the sake of etiquette. #31 is another meaningless non sequitur retort from the corndog "lady" -- just more background white noise from the far-right fascist fringe. Methinks she/he is the "inside joke" spoke of in a previous thread. The double entendre avatar is just a reflection.
deepspace: Well said! Religious hypocrisy is one of those cognitive dissonance hot spots with the trolls. What would Jesus do? .....absolutely nothing kochpublicans do!
Diane #24...LMAO.....OK ....so you miss obsessing about Benghazi and Clinton's emails? can't handle reality?
I think Bachmann is a male gym teacher, with a Bachmann fantasy...my guess.
Lol. She/he might be a washed-up bot, just a strand of leftover Russian code from their attack on our democracy, which helped install Trump.
Give a man a fish and he will eat for a day. Teach a man to fish and the Republicans will poison the water.
Let's see what we're learning about you. Not only to you judge a person by their skin color. You also want to keep women in their "place".
What did you mean by "Give a woman a corn dog. And she'll take a ridiculous picture."
You'll have to forgive the trolls if they seem a bit extra testy this week after being snubbed for the Trump ass-kissing marathon that followed the passage of the "tax reform bill" this week. Yes, it must be frustrating to know that after you put out so many times, that the opportunity to cram your noses deeply up into Trump's stinking ass was reserved only for cabinet members.
Fear not. There will no doubt be many other Trump klan rallies for the cult of Trump faithful allowing ample oppurtunity to grovel at his feet, kiss his ring, pucker up for a big ass-kiss and bend over for a big Trump corn dog reception.
Feel better now???
Those of us who have some stock are trying to figure out the timing to get out! That takes more than genius, it takes pure luck.....
I really don't judge a book by its cover...But...
That absolutely ridiculous picture of you speaks a 1000 meaningless words...
My friend Stopgap, your posts are always so spot on. I love you.
Congress and the Senate also got to rub their noses in it.
I will never understand Liberals. I guess that's why I read the comments here. I try. They are furious because the government is letting you keep a little more of your own money yet they love Bill Clinton a man that took advantage of his position and power to take advantage of a young girl in a government work place. They make of of people from Kentucky or S. Dakota because they believe they are uneducated and stupid but worship the options of movie stars I guess because a person who works in a make believe world of power and corruption is much smarter than a farmer who feeds them. They worship Hilary even though against a court order she destroyed 30,000 emails her cell phones and computers so no one would find out how corrupt she is yet hate Trump who has done nothing but helped Americans better their lives. They hate Everyone who believes in God but fight so hard for Muslims.
Gee, "Door Knobs" Thanks for the kind words, but as I am sure you are aware, when it comes to vying for my affections you'll have to get in line behind, Ou…2, Disney Reynolds and Kend, who can't seem to get enough of me.
By the way Kend, Don't let us keep you away from missing even one minute of Fox News. We would't want you to miss a single talking point. However, your last post still doesn't qualify you for an in person, Trumpalooza ass kissing session. But keep trying, you may get the presidential "Trump Brown Nose Trophy" yet. A good brown nose is an essential accessory to be worn with a MAGA hat.
I do hope you know that the Muslim and Christian religions believe in some version of the same god..
You know, the god that came from both their "mother" religion..
You know, Judaism..
You know, the angry, brutal, violent, spiteful,vengeful god of the old testament.
You know, the god that would smite down anybody and anything that stood in his path...
You know, that god!!
Liberals don't want solutions, they want issues. President Trump knows how to get things done. He gets solutions. Solutions take away the liberals issues and they hate it. President Trump has found his footing. Look for even bigger solutions in 2018, when he takes on the infrastructure issue and solves it.
There is no truth in anything you said, Kend.
man, Tom, you hit it with this article. this is the direction to follow in the middle of a recession. you rock!
only thing different now, though, is that the stock market is rolling along at such a spate that no one cares about the possibility of something bad happening in the future. we want to live in the present. oooooopps!