With a correct tax program, there would be no government deficits, There would be a tax surplus

[Better Believe It]

Our Epic Recession: How Did it Happen, and How Bad Will It Get?
By Carl Finamore
July 6, 2010

Too much money in the hands of too few fundamentally led to the crisis, according to Jack Rasmus, a former elected union official turned college professor and writer, whose latest book, Epic Recession, Prelude to Global Depression, has just been released by Pluto Press.

The current situation is nothing more than a holding pattern, a stalemate that only temporarily avoids descent into depression. The fragile banking system was beefed up but little has been done to rebuild the deteriorating condition of worker consumers in this country and no recovery is possible without this being addressed.

Not surprisingly, the former labor organizer offers a political theme in his final chapter recommending solutions. In it, he expresses more confidence in a rejuvenated union movement that champions working class economic and social reforms than he does in the politicians in Washington who have amply demonstrated their class bias favoring banks and investors.

The book contains descriptions of several other epic recessions in our past such as in 1907-1914 and in 1929-1931 where little or no government spending on jobs led to what the author calls severe “consumption fragility,” setting the stage for long-term stagnation on the road towards a full blown depression.

These economic catastrophes were only averted by massive government spending leading up to WW1 and WW11.

For Rasmus, turning the economy around today means learning from these experiences by, first, closing the widening gap in wealth between the top and the bottom and by, secondly, investing that surplus directly into productive sectors of the economy.

It starts with substantial tax reform of capital income.

For example, the huge state deficits of California and New York could be wiped out today by applying a one percent tax on the top one percent of their wealthiest residents. Many European countries do this.

With a correct tax program, there would be no national, state or municipal deficits. In fact, there would be a tax surplus resulting from more working people employed and earning a decent living.

It would shift the side-tracked political discussion in this country away from using existing deficits, mostly induced by war spending and bank bailouts, as an excuse to halt government spending on jobs and social programs.

“These are key political points,” Rasmus told me, “that must be raised and discussed more, otherwise folks will think the only alternative is to cut the deficit which means immensely more pain for the working class and, inevitably, a descent into depression”

Please read the full article at:

http://www.inthesetimes.com/working/entry/6178/epic_recession_how_did_it_happen_and_how_bad_will_it_get/