Our Poor Economy

Politicians, especially so-called conservative ones, love to talk about the national economy as though it were just a giant version of "Mom and Pop" back home. It makes great political talk because it's something everyone understands. Unfortunately, it is just a fraud. National economics has nothing to do with Mom-and-Pop economics.

Along with this foolish comparison goes the myth that Mom-and-Pop always operate on a balanced budget. Perhaps some do, but the majority of Americans have been living on increasingly high levels of debt for the last three decades. That's what hit us in the face in 2007; credit dried up.

The national economy is very complex. Contrary to the Mom-and-Pop economy, the delicate relations of employment and distribution of wealth lie within the national economy, played out by different factions of the population. Business opportunities and job creation absolutely depend upon a large population of people who have money and want to consume. When the distribution of wealth tips largely in favor of a small portion of the population, the remaining population is left with little money to spend (and no availability of credit). There is no point in businesses expanding and creating new jobs. It doesn't matter how many tax breaks or other benefits the Republicans give their rich friends, there is no point in creating jobs when the bulk of Americans have no ability to consume!

Ironically, in the situation where the majority of Americans have little money for consumption, government spending is the one factor that can stimulate consumption and lead to job creation. This, of course, means going further into debt and is precisely what our conservative Republican wizards are not inclined to do. They would rather cut government spending --- i.e., put thousands of government employees out of work to further reduce employment and reduce money available for consumption --- and balance the budget. 

Of course, taxing the super wealthy is the last thing we would want to do even though that might balance the budget and put more buying power in the hands of the majority of Americans. This is supposedly all because they are the honored entrepreneurs who will create jobs for us. But the brutal fact (if Republican politicians would only look at it) is that these same honored entrepreneurs would far prefer to expand business and create jobs off-shore where wages are lower, resources are cheeper, and people are still able to consume. They know the situation in America and they know that the meager share of wealth they have left the poor slobs in 95% of the population is not enough to stimulate thriving businesses.