The Economic Theory, Stupid

Who drives the economy? Grover Norquist and the Republicans would like you to believe that the economy is driven by those at the top. They say that it is the “job creators” that are responsible for growth. Lowering taxes for top income earners will result in wealth “trickling down. Since the 80’s with the inauguration of Ronald Reagan, federal tax policies have been in place to favor the wealthiest of Americans. Again the logic behind these policies was untaxed income would be used to create jobs, start businesses, as well as to create demand for products and services which would necessitate hiring. However, while enriching less than 5% of Americans, the majority of tax paying Americans actually suffered a decline in purchasing power. This decline was ultimately a major cause of the recent economic recession and the loss of millions of jobs. According to census data and data provided by the IRS, the very wealthy were not impacted by the recession, but as a result of this economic decline, over 47% of taxpayers did not have sufficient income to owe federal income tax. More important is the reality that 47% of households are either at or below the poverty level. This means millions of households can only to afford necessities. The effect of this is felt in the overall economy where there are too few people creating the demand for products and services that would justify increases in hiring. The other effect is the loss of tax revenue from the unemployed, under-employed, and those with very meager incomes is a significant cause of the deficit. Meanwhile, Norquist along with Boehner, Cantor, McConnell and company continue to block any legislation that would increase tax revenues. Additionally, the Republicans continue to block legislation directed at creating jobs by focusing on building, repairing, and maintaining roads, bridges, airports, and government owned buildings. The Republican plan and policy appears to be focused on blocking anything that might help economic recovery. One would think that at some point, those who have most benefited would begin to realize that they can not remain self supporting for very long. The top 1% have the wealth they enjoy because they have provided goods and services consumed by the rest. As “the rest” that can afford to purchase anything beyond necessities declines who will continue to fund the top 1%?