This video reminded me of why it doesn’t help the economy to give tax cuts to the rich and generally increase the wealth of rich while leaving behind everyone who isn’t part of the ruling elite. From just an economic perspective, there are three problems:
1) Increasing the wealth of the wealthy doesn’t necessarily increase investment. At some point, a person becomes so wealthy that further wealth becomes meaningless. This leads the super rich to gamble with their excess wealth which was one of the contributing factors to our recent economic crash. Financial gambling doesn’t make for a stable economy nor does it have any social value. So, if the government genuinely wants an economy that grows with stability rather than constantly crashing, they should create regulation and taxation that helps decrease wealth disparity so that excess wealth isn’t concentrated at the very top.
2) Most new jobs are created by small businesses, but the tax cuts for the rich mostly only help big businesses. Also, the bailouts help Wall Street while leaving Main Street to suffer. Why help the rich who helped break the economy while sacrificing the working and middle classes which are simply trying to get by? A lot of the working and middle class was in debt for the reason that wages were stagnating even as the rich were getting richer. So, if the government genuinely wants to stimulate job growth, they should ensure that wages grow as the economy grows and they should give bailouts to small businesses while breaking up corporations that are too big to fail.
3) Even ignoring all that, giving more wealth to the wealthy doesn’t stimulate the economy for some simple reasons. Assuming they don’t gamble it, the other choice the rich could do with excess wealth is simply to put it into savings. The middle and working classes, however, will spend any extra money they have which invests back into the economy. For good or ill, the US economy is based on consumerism and consumerism is based on working and middle classes that have money to spend. Let me explain why. A rich person spends several hundred or even several thousand on a pair of shoes. For the same amount of money, hundreds of working and middle class people could buy shoes. The purchase of hundreds of shoes stimulates the economy more than buying one pair of shoes even if it’s the same amount of money. So, if government genuinely wants to stimulate the economy, they should give tax cuts to the working and middle classes.
All of this assumes that those in power actually care about the economy as a whole and actually care about the average American. I suspect that this is a false assumption. It’s hard for me to believe that after all these decades intelligent people (including Democrats like Obama apparently) think that trickle down economics actually works. I think these people know that it just makes the rich richer. That is why they do what they do. Politicians are of the rich and have campaigns funded by the rich. Why would they help the lower classes? So, what if the economy collapses? The rich will always maintain their wealth. If the country gets bad enough, they’ll just move to a pleasant tropical island and take their wealth with them.
Here is another video that relates, but it’s from more of a libertarian perspective:
The author interviewed, Thomas E. Woods Jr, is criticizing the US military-industrial complex. Besides the moral argument, he mentions that military is not a very good investment. When we invest in military that is less that can be invested in other things such as education or infrastructure. Also, funding goes to defense research which uses up public tax money and wastes the most brilliant minds on discovering more efficient ways to kill people. Those same dollars and those same brilliant minds could be used for research to cure cancer or research into alternative energy.
Once again, the only people who benefit from the military-industrial complex are the defense contractors and the wealthy investors in these companies. Certainly, the average American who pays for these wars and dies in these wars aren’t benefiting. The only reason we have any interest in the Middle East in the first place is because of the oil that is there and those most interested in that oil is of course the big oil companies seeking profit from a dwindling resurce.
There were some comments below that last video which gave me some hope. Here is one from a user going by the name capitalist4life:
“I am a recovering neocon. I was converted through Dr. Paul’s gentle suggestion that our foreign entanglements may cause some foreigners to want to kill us. I found that reasonable and I became more anti-war as I saw Hannity and Limbaugh vicously attack that reasonable idea. The one thing that didn’t convince me was strong anti-war rhetoric. I had to be eased into it. Just keep that in mind. Don’t be aggressive and extreme. Gently ease our “conservative” friends into the anti-war way of thinking.”
But let me end with a different quote. One of the last truly moral Republican leaders was Dwight D. Eisenhower who, of course, is famous for warning about the military-industrial complex. He was far from being a pacifist liberal and for that reason his words are all that more important. He seemed to genuinely believe that politicians should serve all Americans and not just the wealthy. Here is what he said in a 1953 speech:
“Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. This is not a way of life at all in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron.”