THIS IS THE fourth installment in a series about the deficit, which began here, with a simple, practical, plan to deal with the deficit and create a surplus.
The last two installments have been about areas in which we've been seriously misled during the last thirty years or so.
I've listed three.
Contrary to what we've been told:
- How much freedom—liberty—exists in a society depends on how much wealth and power the common citizen has and can use to protect themselves from the power of wealthy individuals and corporations. [read more]
- A democratic republic such as ours is not the enemy of its citizens—it's the expression of its citizens: our way to jointly establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity.
The size of a democratic republic is irrelevant, so long as it is doing that job and nothing else. [read more] - The way to make the economy work best is not to enable wealthy individuals and corporations to suck up all the money and power in the country, but to make sure that the money circulates so that the economy can thrive for everyone.
This is the topic of today's post.
We've been fed a lot of nonsense about the economy in the last thirty years.
We've been told, over and over, that democracy is tied to the idea of a Free Market (capital-F, capital-M) which almost always means a market that allows huge corporations and the wealthy to call the shots.
We've been told that the way to make the economy work best for everyone is to make sure that more and more of the money and power is concentrated at the top, and that less and less of the resources for living are available to the average citizen.
And we seem to have had trouble seeing through that.
But consider two scenarios:
- All the billionaires in the country wake up one morning to find that their money is gone, but everyone else has lots of cash.
What would happen?
There would be a certain amount of upheaval, certainly.
But in the long run, the economy would survive.
Normal people would keep right on selling each other stuff, businesses would be able to sell their inventories, place orders for more goods, and sell those.
Their suppliers would be able to profit from the orders, pay their employees, and order from their suppliers, etc.
The economy would recover.
Soon, some of the businesses, and some of their owners, would do very well, and we would start producing a new crop of billionaires. - All the billionaires in the country wake up one morning to find that they now have all the money in the country, and that the rest of us have none.
What would happen?
Normal people would starve, banks would foreclose on houses, businesses would not be able to sell their inventories or place orders for more goods.
Their suppliers wouldn't be able to profit from their orders, pay their employees, or order from their suppliers, etc.
The economy would grind to a halt.
Soon the businesses and the owners themselves would go broke.
There may, indeed, be some top-down effects in the economic world, but economics, like most everything else, is fundamentally a bottom-up proposition.
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The people who do the actual work—both the creative work and the drudgery—which makes the economy function are in the bottom 98%.
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The people who buy the goods and services—who spend the money that drives the economic system and provides the billionaires' profits—are in the bottom 98%.
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The people who reap those profits—who use them to live the good life and wield the power wealth provides—are in the top 2%.
Wealth flows from the bottom upwards.
The super-wealthy are dispensable as far as the system is concerned, the rest of us are not.
When we allow all the resources to be siphoned off at the top, we destroy the economy as a whole.
The poor feel it first, the middle class second, but eventually even the wealthy will suffer as well.
A falling tide leaves all ships aground.
The Next Installment:
Some strategies for dealing with the deficit...
