A Faltering American Dream

The research for this book grew out of frustration caused by trying to learn what positions candidates held during federal election campaigns. Aside from televised debates, the candidates railed mostly on guns, abortion, events like the Benghazi tragedy, e-mail accounts, and interview gaffs. There was a continual drum beat of trivia about what candidates said or refused to say, often of questionable truth and usually out of context. Their supporting PAC’s spent millions on TV propaganda designed to simply make you like or dislike a candidate.
What is obvious to most of us voters is that our nation has more pressing problems than the candidates and their supporters seem willing to address in enough detail to understand. Our middle class of well-paid manufacturing workers is shrinking and good-paying jobs are scarce. Poverty is increasing and unemployment remains high seven years after the 2008 financial crisis. Getting into college has grown prohibitively expensive. The federal government is so heavily in debt that its departments are being cut so that their traditional funding and services are subpar and subject to political attack. These are the kind of issues voters need to hear about in election campaigns, along with party positions on how to rectify them.
Current inadequacies of government are closely related to government tax and spend policies and inadequate tax revenues from our vibrant economy. These are the elements of governance which affect us most importantly, which underlie almost all current issues, and which are fought so bitterly from rigid party positions in the Congress. And it is intransigence of those party positions that have reduced Congress to a largely non-functional body in which aspirations of political power trump compromising work on serious national problems.
In the coming elections of 2016, it is government funding, tax policy, economic growth, and job creation that should dominate the campaign debate. This book grew out of my desire to dig into and gain a deeper understanding of these politico-economic issues.
To compare the historic record of economic accomplishment by the two parties when in power, I have used straight-forward comparisons. I have compared economic strengths and weaknesses of each party when in control of the White House over many terms of office, and I have compared our tax and spend policies with those of our competitor, developed nations.
The American economy is the central concern around which the issues discussed in this book revolve. As research for this book progressed, several major themes emerged as central to, and involved in, almost every aspect of our political and economic life.
One theme arises from what I think we should recognize as the Great Turning Point. It was that point in time when the national debt, as a percent of GDP, ceased going down during thirty-six post-World War II years and started the inexorable increase we still experience today. World War II was the last time war was declared by Congress and taxes specifically adjusted upwards on both citizens and businesses to help meet the costs.
A lack of political will to raise taxes in support of even traditional government responsibilities has emerged as a systemic weakness in our form of elected government. Tax-payers don’t like taxes, only the security and benefits they bring. Unfortunately our elected officials have to pay attention to that siren song of low taxes just to get elected.
A second theme documents how federal revenues became insufficient after that Great Turning Point and is central to any understanding of how increasing national debt happens. Therefore, we glance at two economic theories, each forming the basis of a political party’s tax and spend policies. Two great American experiments have been tried by Presidents, based on those two contending theories, one Democratic and one Republican. I describe each of them. One of them consistently has been associated with insufficient tax revenues and mounting debt.
Another theme is a challenge to the widely held notion that costs of governance increase primarily through the effects of inflation and population increase. Actually, costs of governance did parallel these factors fairly well for much of our post-WWII history. It is no longer true. This fact is carefully documented here because of its importance to a national understanding of what new taxation policies must take into account.
Unequal distribution of income and wealth in the U.S. has long been known and recently brought to wider attention by Thomas Piketty in his important book “Capital in the
the Twenty-first Century”. Because of the impact on our nation of this unequal distribution of wealth, I describe in some detail its magnitude and how it happens. I recognize this accumulation of wealth at the top as a diversion of American financial assets out of the productive consumption and investments in goods and services sectors of the economy into financial sectors where there are relatively few jobs and little value added in the economy.
A theme that is seldom mentioned in economic discussions is emphasized in this book. It is recognition that the most fundamental requirements for a stable society is a government capable of providing a distribution of national assets and jobs that does not allow a class of unemployed, poorly paid and poverty-stricken citizens to become a violent menace. I coin and use a term for it, a reasonably satisfied citizenry. It is a citizenry not motivated to violent change. If a reasonably satisfied citizenry is not maintained, world history and much of the middle east of today tells us it is dangerous to a nation’s government and national integrity.
The last theme, without question is the most fundamental and important. It is the corruption of American governance by the influence of money-oriented interests with their special goal of money accumulation. The current use of money in American political elections enables and protects the wide inequality of ownership of America’s financial assets and other wealth. This inequality is detrimental to the American dream where everyone has a chance to ‘make it’.
Nothing new in this theme, but I spend much effort describing the unprecedented amounts of money involved in American politics and offering a clearer picture of who supplies it and the places and ways in which it is used. I end up focusing on it, emphasizing the issue’s importance to our American egalitarian value system.
Because of the increasingly unequal distribution of money in the U.S., you will get strong arguments in this book that some redistribution of America’s financial assets must be undertaken, not to punish talented, successful people but to reclaim some of America’s working capital back into American jobs. In the post-WWII decades, public investment in basic research, infrastructure, and education was associated with American scientific and economic leadership. From this public investment came private innovation for market place products that helped create a ‘golden age’ of American economic expansion.
This book is not a litany of what is wrong, it illuminates troublesome issues but goes on to offer hope with suggestions for practical solutions to many of our national problems.