Headline Rewrite: Spending Cuts and Tax Breaks for the Rich Could Prompt Recession Next Year

I like how the headline on the article linked below cites only “tax increases” as the problem with next year’s budget.  While there are some issues with taxes that will affect the middle class, the real issue are staring us right in the face in the text of the article:  spending cuts and tax breaks for the wealthy. If we let the Bush tax breaks for the wealthy expire, we would have $221 billion dollars to put toward other things.  $221 billion dollars, folks.  You could take half of it and put it toward economic stimulus and jobs, and put the other half toward the national debt, and that would go a long way to working on our problems and preventing another recession. So ignore the right-wing propaganda headline, and click on to read about the real problems:  Looming Tax Increases Could Prompt Recession Next Year: Accounting Today.

The Rajan Theory: Rising Inequality the Root Cause of the Great Recession

Kiersten Marek:

Rising inequality = root cause of Great Recession.

Originally posted on Job Market Monitor:

As noted by The Economist, “[s]everal prominent economists now reckon that inequality was a root cause of the financial crisis.” Indeed, in recent years there has been a proliferation of analyses supporting this view writes Till van Treeck in Did inequality cause the U.S. financial crisis? published on boeckler.de.

The explanation is straightforward: As the benefits of rising aggregate income over the past decades were confined to a rather small group of households at the top of the income distribution, the consumption of the lower and middle income groups was largely financed through rising credit rather than rising incomes.

This process was facilitated by government action, both directly through credit promotion policies and indirectly through the deregulation of the financial sector. But with the downturn in the housing market and the sub-prime mortgage crisis starting in 2007, the overindebtedness of the U.S. personal sector became apparent and the debt-financed private…

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BREAKING: Bush Opposes Taxing the Rich

What a surprise.  George Bush wants all the tax breaks to stay in place for the 1%.  “Leave capital in the treasuries of the job creators,”  he says in the article linked below.  Here’s a concept:  what about letting the middle class be job creators?  What about helping small businesspeople feel economically strong enough to expand and carry out a plan that would involve employing other people?  That would mean the wealthy paying a little more in taxes so that the middle class could see some relief.  The Buffet Rule legislation could move us in that direction.  But first, a word from our primary sponsor of the Great Recession:  Bush wishes his name wasn’t attached to tax cuts – Apr. 10, 2012.