These are perhaps the two biggest problems with the American economy right now. Were the American people not in debt and/or living with unemployment, I think the wealth disparity could be stomached a lot more easily. As for the Occupy Wall St. protests, the problem is that they eventually have to focus this incredible energy and dissatisfaction towards specific goals. I suggest they focus on these two goals, easing debt and creating jobs.
My suggestion for easing debt is simple and straightforward: forgive our debt. The US government, under both Bush and Obama, have used taxpayer money to bail out Wall St. This was a huge redistribution of wealth UPWARDS. I think Wall st. has benefitted enough, and now it is the people's turn to see the fruits of our "investment". You want to help homeowners? Forgive their debt. You want to help the unemployed? Forgive their debt. You want to help minorities, or the poor, or the sick? Forgive their debt. I am fully behind a re-redistribution of wealth which will benefit the 99% and would lead to more job creation and a stronger overall economy just by itself.
The other issue, employment, still needs to be addressed however. We are unable to compete globally in manufacturing when those jobs can be done for 40 cents an hour in China and elsewhere. Without manufacturing jobs, we are left only with a service industry which by itself creates less full-time jobs, pensions, health insurance... the whole gambit. We need to invest in our country and in its people, and this requires government spending, which is politically virtually impossible when we have been dug into such a hole of debt. There are jobs out there for scientists, but we can't all get them, and for many of us it is too late to learn, and we are still not investing enough in science for those of us for whom it is not too late, i.e. our children.
So my two questions are (and feel free to comment on anything you read here), do you agree or disagree with the idea of debt forgiveness, and what ideas do you have for solving the unemployment problem? Or do you just think we are royally screwed as a country and there are no feasible solutions?
I don't know why but people seem to be misunderstanding what I was saying here. I was NOT suggesting that we don't pay our national debt to other countries, e.g. China. That would be a gross abdication of our responsibilities on the world stage. You are right though, if we worked at it we could pay off our national debt, and indeed we should.
I agree with you that writing down mortgages to their fair market value would be a great thing to do. Since complete forgiveness of all debts would be a much harder sell, I'd be more than willing to see this more modest step taken, and I think it would be excellent if it actually got done, but I am pessimistic that even this would be accomplished.
I also agree with everything else you've said. Excellent points, thanks!
Do you not even see the evidence of the decline of the middle class in your very own statement? You need to pinch pennies, buy a smallish house and have both adults working in order to make ends meet. You, and I and everyone in the bottom 99% saw very little (1-3%) real wage increase since 1979. Meanwhile costs have skyrocketed (education, healthcare, food). Meanwhile, the richest people saw their incomes increase almost 275%. Now you are going to sit here and tell people that they're wrong to feel that the system has cheated them?
It is a fact that income inequality was very high right before the stock market crash in '29. It is a fact that it was very high right before the crash of 2008 and continues to be high right now. And you know, since the collapse in 2008, the most wealthy among us became even wealthier. The richest 40 people in congress saw their wealth increase by 25%. It seems to be a pattern. As income inequality rises, the stability of the economy declines. It's in everyone's best interest to preserve a reasonable distribution of wealth in the US.
You do realize that "redistribute wealth" is a Republican buzz-phrase that is meant to polarize people, and carries little to no actual meaning? Capitalism itself is a mechanism to "redistribute wealth" to the rich.
Also, I never said anything about tax money forgiving personal debt. I said that banks should write down mortgages to their fair value since they are the main reason why housing prices were inflated in the first place.
"but you should give me my slice of the pie" - I have a joke for you
A CEO, a blue-collar laborer and a welfare recipient are sitting at a table with a plate of 10 cookies in front of them.
The CEO reaches out and takes 8 of the cookies and turns to the blue collar employee and says "Look out for that welfare guy, he wants one of your cookies".
Obviously if the government is forgiving the loans, they would no longer be federally insured.
I see a problem here:
> everyone in the bottom 99% saw very little (1-3%) real wage increase since 1979
> Meanwhile costs have skyrocketed
The "real" wage increase computation includes inflation. It's not fair to depress the wage increase number by correcting for inflation, then complain about inflation. The nominal minimum wage has about doubled since 1979 per
Imagine an "average person" with maxed out credit cards and a back breaking mortgage based on pre-crash property values. If you forgave all that debt, what would they do? Would they live within their means, or would they build their debt back up to the limits? I know plenty of people who would do the latter. Even more sneaky, I think many well meaning people would be forced to build debt up again because they are underemployed, can't sell off their supersized house, or whatever.
How would your debt forgiveness be implemented? Would tax money subsidize individual debt payments? Or would all creditors take a voluntary haircut, and the economy restart on a smaller capital base? What happens to individual savings? If my bank forgives 10% of your debts, does it write down my savings by 10% to compensate? I'm not sure I like that.
Innovators are in pretty good shape in the USA right now. Get a patent, start a business, make some money. No problem. That's another 99-1 percent split, between creators and consumers.