The Tax-Cutting Conservatives Are Sinking the U.S.
The inability to agree on a reasonable solution for the American debt crisis has lead to the country’s first-ever credit rating downgrade, which means less advantageous interest rates when it comes to money borrowing. In simple terms, the U.S. is no longer seen as an exemplary loan customer; rather, it has become slightly untrustworthy in the eyes of the international lenders.
Paul Krugman, who recently received something that usually, with a little carelessness, is called the Nobel Prize in Economics, says in plain language what the credit rating institution Standard & Poor’s expresses in the language of accounting: Those who were continuously stubborn, formed an opposition and finally reduced the country to a compromise that threatens to throw the world into a deeper economic crisis are the anti-tax conservatives.
It may almost seem absurd. The tax burden for an average person in the U.S. is only about 25 percent, compared to Sweden’s nearly 50 percent; however, the biggest portion of the difference is consumed by medical insurance, college tuition and other things that we pay through taxes. Big corporations and those who own them — those who have some say when the House and Senate vote on a series of emergency measures — pay, on the contrary, ridiculously low taxes. The 400 richest individuals, with an average annual income of $345 million, saw their federal income tax diminish through new deductions and loopholes from 26 percent in 1992 to 17 percent in 2007. They want to continue to take most of those deductions and loopholes, and they make sure that the Republicans arrange it for them.
Ronald Reagan had in his day a chance to give a name to “Reaganomics," which in simple terms was based on the idea that if the rich were allowed to get richer, other parts of the population would also enjoy the wealth, which would then “trickle down” to them — in other words, crumbs from the table of the rich. When George W. Bush kicked off his big series of measures in the beginning of the 2000s, the lowering of taxes for the rich was an important element. More money to those who succeeded in making their way in life would spur many others to try, and the number of job openings would probably increase as well. Low-income American individuals were attracted by favorable housing loans with the house as security. It was important to teach people the principle of ownership.
We know how it went: George W. Bush's buddies in corporations like Enron and Lehman Brothers made sure they lined their pockets with everything they could before the economy crashed and the banks got bailed out with a series of emergency measures, when even people's pawned homes did not suffice to cover credit losses. All of that paved the way for (by American standards) a leftist-liberal president who now gets spanked for the lowering of taxes, assistance to the banks and 10 years of expensive wars all over the world.
The U.S. military expenses represent approximately the same portion of the budget as the expenditures for Medicare and Medicaid, the health care subsidies to retirees and low-income individuals; however, the latter are the ones who are being threatened by cuts.
The U.S. crisis makes the world’s economic situation even more fragile than it was already; however, nothing indicates that there is any political will to force the richest, or the banks, to assume the slightest responsibility for what they did. During winter and spring, we have seen an increase in labor union resistance to cuts in the U.S., especially at the state level. If anything good can result from the recent developments, it would be a continued increase in the strength of the resistance movement.
Paul Krugman, who recently received something that usually, with a little carelessness, is called the Nobel Prize in Economics, says in plain language what the credit rating institution Standard & Poor’s expresses in the language of accounting: Those who were continuously stubborn, formed an opposition and finally reduced the country to a compromise that threatens to throw the world into a deeper economic crisis are the anti-tax conservatives.
It may almost seem absurd. The tax burden for an average person in the U.S. is only about 25 percent, compared to Sweden’s nearly 50 percent; however, the biggest portion of the difference is consumed by medical insurance, college tuition and other things that we pay through taxes. Big corporations and those who own them — those who have some say when the House and Senate vote on a series of emergency measures — pay, on the contrary, ridiculously low taxes. The 400 richest individuals, with an average annual income of $345 million, saw their federal income tax diminish through new deductions and loopholes from 26 percent in 1992 to 17 percent in 2007. They want to continue to take most of those deductions and loopholes, and they make sure that the Republicans arrange it for them.
Ronald Reagan had in his day a chance to give a name to “Reaganomics," which in simple terms was based on the idea that if the rich were allowed to get richer, other parts of the population would also enjoy the wealth, which would then “trickle down” to them — in other words, crumbs from the table of the rich. When George W. Bush kicked off his big series of measures in the beginning of the 2000s, the lowering of taxes for the rich was an important element. More money to those who succeeded in making their way in life would spur many others to try, and the number of job openings would probably increase as well. Low-income American individuals were attracted by favorable housing loans with the house as security. It was important to teach people the principle of ownership.
We know how it went: George W. Bush's buddies in corporations like Enron and Lehman Brothers made sure they lined their pockets with everything they could before the economy crashed and the banks got bailed out with a series of emergency measures, when even people's pawned homes did not suffice to cover credit losses. All of that paved the way for (by American standards) a leftist-liberal president who now gets spanked for the lowering of taxes, assistance to the banks and 10 years of expensive wars all over the world.
The U.S. military expenses represent approximately the same portion of the budget as the expenditures for Medicare and Medicaid, the health care subsidies to retirees and low-income individuals; however, the latter are the ones who are being threatened by cuts.
The U.S. crisis makes the world’s economic situation even more fragile than it was already; however, nothing indicates that there is any political will to force the richest, or the banks, to assume the slightest responsibility for what they did. During winter and spring, we have seen an increase in labor union resistance to cuts in the U.S., especially at the state level. If anything good can result from the recent developments, it would be a continued increase in the strength of the resistance movement.
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