How to fix our economy in two easy steps

Our economy sucks right now. We all know it. Unemployment is too high, consumer demand and confidence are too low, our economy is getting better but at about the same speed glaciers move through a mountain valley. We want things to get better faster but no one seems to know how to make that happen. Well actually lots of people know how to make that happen. We know exactly how to decrease unemployment and increase demand. We have done it many times in the past and it has worked exceptionally well. So why aren't we doing it now? Because the Republicans want us to suffer because they think it will help them win elections.

I am assuming that most of the people reading this blog have heard of Keynesian economics. But if you haven't or don't understand what it means let me sum it up for you. When our economy faces a drop in demand businesses sell fewer products, selling fewer products means then need to make fewer products and so they lay off employees that they don't need. People that are laid off have less money to spend and so they spend less money which further reduces demand and causes our economy to falter. The way out of this downward spiral is to increase demand. To increase demand you have to get money into the hands of consumers. Private businesses could do this by hiring more people but they won't because with less demand for their products it would make no sense for them to bring on additional employees. So it is up to the government to put extra money into the economy with spending programs. This does not mean that the government should just hand out cash, no, it means it should spend lots of money on things like infrastructure (Eisenhower and Obama), it should spend vast sums of money on advancing our national defense (Reagan), heck, even spending huge sums of cash on an unnecessary war (Bush) will get the economy going by introducing massive sums of cash into our economy. Cutting government spending has the opposite effect, it takes money out of the economy, creates higher unemployment, pushes demand down, and during bad economic times makes things much worse. The problem is that presidents like Reagan and Bush and Obama have stimulated the economy with deficit spending. Reagan and Bush seemed to see no problem in spending like crazy on the backs of future generations. Obama would like to pay for his spending by Republicans are so enamored with running up huge debts that they won't let him pay for his spending in the only way reasonable, by increasing taxes. So the Republicans have suddenly found "fiscal" responsibility and refuse to let our government do the spending it needs to while they also refuse to let the government raise taxes from their ridiculously low levels to help pay off our debt. Most 5 year olds in a candy store with a credit card would be more fiscally responsible than today's Republicans but they keep claiming they know how to fix our economy while hoping that all of us are stupid enough to believe their outrageous, self serving lies.

So how do we fix things? Easy, raise taxes on the wealthy so that they are paying 40 to 45% (still very low rates historically) into income taxes. Make sure that this covers all of their income with no lower rates for investment income. Take half of this new tax revenue and put it into spending on roads, schools, the electric grid, defense technologies, and all of the other things that out nation really needs. This will create jobs and consumer demand which is the only thing that can fix our economy. Take the other half and put it towards reducing the deficit. We won't spend a dime that we don't have and we will be reducing our deficit at the same time. Easy as pie. That is of course unless you are a Republican who thinks a bad economy increases your chances for re-election.

So there you have it, 2 steps to a brighter economy, raise taxes and then spend the money. Sadly you probably won't get to see this easily obtainable brighter future as it seems the Republicans are thrilled with having a terrible economy.