Hello, Genossen und Genossinnen. It's Sunday and I'm writing- aren't I newly consistenyly productive?:)
An important part of any theory of economic stimulus in a market economy is how to move the most capital through the most transactions, reflecting increased demand, triggering increased consumption and profit for business overlords. (honestly, doesn't sound so good, does it?). But this goal of capitalists can be used to illustrate the folly of budget cuts, particularly cuts to welfare and food assistance programs.
Put simply, the less money someone has, the greater the share of it they will need to spend on necessities. This means that providing for the poor, oppressed and unemployed, aside from questions of morality, is actually the best way, dollar for dollar to fuel the capitalist machine. (I'd like to fix that by removing profit motive form vital sectors of the economy, but let's shelve those plans for this discussion). I support three courses of action (Actually many but I'm going to talk about these three) to maximize economic action and help the needy.
Firstly and most importantly, as this will fund all other undertakings, fix the payroll tax. It's structured in a horribly regressive manner, having its greatest impact on the poor, while leaving income over a million dollars immune to taxation! Aside from questions of morality (remember-think like an economist here), this is terribly inefficient! Rich people spend proportionally less of their money on economic activities that immediately benefit the community- no matter how much money you have, at some point you will no longer need to spend more on foodstuffs, utilities and so on. Money sent into savings accounts or overseas investments is simply not being used to further the interests of the community- neither by the Socialist standard of providing for the public good, nor by the Capitalist standard of increasing demand. We need a tax system that reflects this, because moderate progressive redistribution is actually good for business, and redistribution is a way to remedy systemic abuses. Tax the Workers less, and tax the Capitalists more- it will increase demand, and may actually alleviate some suffering!
Second- Raise the minimum wage. If the original minimum wage standard had been maintained, it would now be at some 12 dollars per hour. 7.25 minus a regressive payroll tax isn't enough to support a family, while megastores with underpaid workers end up costing the government billions in assistance to the exploited and destitute. More money in the pockets of the Worker means less suffering, and more immediate demand for goods- (the promotion of consumption is unwise, but try explaining that to businessmen! Ultimately, we do want to help people, so I'm letting it slide here.)
Thirdly- Public Works, Public Works, Public Works!- I'm pretty sure my native St. Louis has enough potholes to employ the whole jobless population for at least a year. Furthermore- if we're not doing anything else to fight climate Change, why not some quality reforestation while we're at it? Put people directly on the government payroll, hire professionals in construction and agriculture to train, oversee, and manage with the goal of employing people to the public benefit. Train our wasted human capital to build proper infrastructure! We need a new power grid, better rail systems, electric car charging stations, and environmentally sustainable dams. (I'm also in favor of more tall, menacing towers and moats filled with homeless alligators and confused bull sharks, but this is my compromise proposal:).
Nothing remotely original, but it needs constant saying. If the myth of Austerity=>prosperity is being trumpeted, we need to make social justice worth the while of business elites. (I admit, I feel dirty advising anything on business-friendly grounds, but oh well).
Solidarität, Genossen und Genossinnen
Genosse Graham
P.S.- I'm considering reposting some old works in German- any advice on where to start?
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