When Mohamed Bouazizi set himself on fire in protest of police persecution in Tunisia, I don’t think anyone would have suspected that the Arab Spring had started. How does a street vendor’s action topple regimes in Egypt and Libya?
When the Tea Party started, I don’t think anyone would have believed that the world’s largest economy would come to the verge of a default on its debt due to a new debate on excessive government spending.
Continue Reading Below
There are protests all over Europe, there were riots recently in London, and with 700 people arrested in a Wall Street protest this past weekend, are we facing our own Arab Spring?
The rich are getting richer and the poor are getting poorer. Unemployment is not likely to go down substantially for years, but whose fault is it?
Our policy of low interest rates benefits the banks and the rich -- the two groups vilified by the same people who are making the policies.
Mortgage rates are at a historic low, but they could go to zero and home sales would not increase significantly. People don’t have money and can’t get credit -- except for the rich. The rich can get refinancing and easy money, the poor can’t. Seniors who need yields for income no longer have it.
Home ownership had gone from its long-term average of 64-65% to 70% through lax lending standards; encouraged by the government, it currently stands around 67%. Until we revert to the mean home ownership will not stabilize and neither will prices.
The corporate tax rate is the highest in the world but who really pays that rate? It’s the small- and medium-sized businesses that pay it. The bigger businesses take advantage of the 72,000-plus pages of tax codes and regulations to hide money legally. Small businesses can’t afford that.
An LLC in NYC pays around 50% in tax. The deck is stacked against the small business and against the poor by the government’s own policies. Now the guys who made these policies are in turn running against the policies that they made.
The current administration is trying to find anyone with a lower approval rating, and that is hard to do, especially since it is their policies that are creating the divide to begin with. The jobs plan is a re-election plan, it extends money to workers and to the states to save jobs-by their own admission-in the short term.
Conveniently the jobs would be saved until after the next election and then we will spend the next decade paying off the bill with a tax on the rich -- which by the way is somehow magically also being used to pay off the debt. I wish I could count my income twice in the same fantasy world our government lives in.
Solution? We need an energy plan, a real jobs plan and an overhaul of the tax system.
Build infrastructure that matters -- pipelines and electric grids that both create short-term jobs and open up commerce. Overhaul, don’t band-aid any longer, the tax code to make it fair to all, not just big business and the rich. And, by lowering overall rates by closing loopholes you will get the revenue raise so desired.
Raising rates on corporations, though popular in some circles, will only hurt small businesses that actually pay the higher rates.
To close this divide we need jobs, and demand, not class warfare. And, if we don’t create demand and jobs, we could be inviting our own Arab Spring.