Tuesday, December 14, 2010

Small is better

Why would giving the government more money even anything out? 
If the "have nots" are not getting paid enough for some to consider it fair, giving more money to the government certainly does not help out the working middle class. Or does it?

Why would it not? For an economy to grow and prosper, the growth has to come from the lower levels of the population.

The philosophy of 'trickle down' economics has proven a failure backed by lies, damned lies, and statistics. Put more money in the hands of the wealthy and the GDP grows along with the deficit; the proportion of the economy controlled by the wealthy increases, and middle class disintegrates. If you only look at GDP, it's a success.
Before the GFC, the Reagan, Bush 41 and Bush 43 administrations accounted for about 2/3rd of the national debt.

Bush 43 nearly doubled the nominal amount again in his last days in office by signing away $650 billion in TARP funds, and committing the government to another $450 billion. Obama has not expended $450 billion of the TARP funds.



We are all suffering because of these administrations. The service on the national debt is the largest segment of the national budget. This is, effectively, wasted money that goes largely overseas instead of building roads, schools and other infrastructure within the US. This pressure sets people against one another because the damage is visible to everyone every day.
For those who supported these administrations, the only refuge from what is self evident is ideology. It is like the famous definition of insanity: To do the same thing over and over and expect different results.

For sustained economic and social growth, the middle class must look to the lower economic class for support.
Small business needs small customers, in other words. Otherwise, when inevitable changes come in technology or markets and large business changes, the effects are too damaging to too many people.
The most resilient large businesses in an economic downturn are those that deal directly with the small customers for the same reasons. It's not rocket science. These are self-evident facts.
However, if enough small customers and small businesses cannot earn, then all business will suffer.

It may sound insane in this raging ideological debate, but the answer may be as simple as spending more on welfare, unemployment, and Medicare until the small businesses re-emerge to bolster the economy.
The idea of abandoning education is nonsense. That is a strategic mistake that cannot be underestimated for the harm it will cause.
The idea of abandoning health care is similar. If the population is not healthy, it cannot work. Already more and more people are out of work because of health issues - to some degree because of the stress of the economic downturn. 

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