THE Great Depression and its aftermath demonstrate that there is only one way back to full recovery: through more widely shared prosperity. In the 1930s, the American economy was completely restructured. New Deal measures — Social Security, a 40-hour work week with time-and-a-half overtime, unemployment insurance, the right to form unions and bargain collectively, the minimum wage — leveled the playing field.
In the decades after World War II, legislation like the G.I. Bill, a vast expansion of public higher education and civil rights and voting rights laws further reduced economic inequality. Much of this was paid for with a 70 percent to 90 percent marginal income tax on the highest incomes. And as America’s middle class shared more of the economy’s gains, it was able to buy more of the goods and services the economy could provide. The result: rapid growth and more jobs.
By contrast, little has been done since 2008 to widen the circle of prosperity. Health-care reform is an important step forward but it’s not nearly enough.
What else could be done to raise wages and thereby spur the economy? We might consider, for example, extending the earned income tax credit all the way up through the middle class, and paying for it with a tax on carbon. Or exempting the first $20,000 of income from payroll taxes and paying for it with a payroll tax on incomes over $250,000.
In the longer term, Americans must be better prepared to succeed in the global, high-tech economy. Early childhood education should be more widely available, paid for by a small 0.5 percent fee on all financial transactions. Public universities should be free; in return, graduates would then be required to pay back 10 percent of their first 10 years of full-time income.
SHOOT: The writer has a point, prosperity must be shared in order for it to be more sustainable. But there also needs to be a rethinking, a reworking of economics, and even capitalism. According to the laws of the universe, energy is required to make a system work. If the underlying energy systems aren't there, the system contracts. As we know, the resources on our planet are infinite in spite of the apparently infinite needs and wants of consumers. So I think another option is to re-configure the way we live, away from consumption, away from unbridled capitalism, to a more socialist [but not communist model], which is based on communities working together, co-operatively producing and co-owning the fruits of their production, along with multi-disciplinary living arrangements which don't require commuting [in other words, walkable communities]. In short, a less individualistic approach. Further, all communities need to start plugging into or resurrecting their organic systems. That means streams must be rejuvenated, patches of land planted and made productive, pollution contained etc.
These tough choices can be exercised now, or later, when we have even fewer choices, and fewer resources.