There are two major parties in this country. And both of them are Republican parties.
There’s a traditional, old-line, conservative Republican Party, which now operates under the name the “centrist” Democratic Party of Barack Obama. And there’s the new Republican Party that’s a Tea Party confection.
Both variants of Republican, though different in many ways, share some basic economic views. They accept the present situation in which the overall economy largely operates to serve the interests of Wall Street and its banks. They believe that it’s natural and inevitable that for there to be overall growth in the economy, all, or virtually all new wealth generated by such growth, must gravitate upwards in order for their to be any job creation. They are also incapable of distinguishing between jobs and good jobs, assuming both have equal worth.
A Democratic Party of true progressives, who put people above investors, the middle class above economists’ warped definitions of “growth,” is not merely missing in our present politics, it will never again emerge — except in the form of lies at election time.
I don’t need a Democratic Party like this. I won’t bother voting for it in the future. “But the other guys are even worse” argument will no longer get me to the polls.
I’ll only vote for a true progressive party. Here’s what some of its economic policies might look like.
1. Equal tax rates on all income, the earned and all forms of the unearned, with the new revenues generated (overwhelming from the richest) NOT going toward deficit reduction or entitlement support, but reducing the tax burden of the working middle (today mostly in the 15 and 25 percent income tax brackets). The vast new spending this would generate would work to reduce deficits by itself; would lift more people out of poverty and thus lessen the need for much entitlement spending; and would also NOT reduce investment, but increase investment because spending generates investment, not vice-versa.
2. An equal Payroll Tax on all earned income (no cap) and on unearned income of all sorts. The extra revenue generated here would NOT go into the Social Security Trust, a bogus con that simply allows more government borrowing, but toward reducing the rates of all parties that would pay the new Payroll Tax rate of 4 or 4.5 percent, companies as well as individuals. This would not only spawn a huge spending burst, but generate incentives for more hiring by companies now over-burdened with the higher Payroll Tax rate they pay on their employees.
3. A transaction tax of one percent on securities transactions. This is NOT an attempt to generate revenue, as is true with the usual one-quarter percent securities transaction tax proposals. It is aimed at stopping the flash trading on Wall Street that wastes so much capital on gaming rather than doing what capital markets are supposed to do -— invest in productive enterprises.
4. Reintroduce a national usury limit. There was such a limit until the surge in inflation that came in train with the 1979 oil shocks. A new national usury law would thus have to be linked to the CPI and would change from year to year depending on prevailing inflation. It might be 12 percent today when official inflation is low and rise as the CPI rises. The overall effect of this law, applied retroactively, would be to release many American from debt peonage to credit card issuing banks, spawn new spending in consequence, and as an added benefit, make banks parties in fighting against the so-called “chained-CPI” that President Obama foolishly fancies because the phony low CPI numbers a chained-CPI would generate would hold down credit card issuing banks’ own permitted lending rates.
5. Allow student loans to be included in bankruptcy filings. The fact that they aren’t today is literally destroying the futures of countless young Americans and destroying their ability to make contributions to the economy and the country as a whole. As for the argument that this will lead to everyone declaring bankruptcy upon graduating college, that’s an incredibly stupid argument. So many negative consequences come with a bankruptcy filing that only an idiot would go this route without a real need to do so.
These are a few ideas for a new American progressive party to replace the present brain dead and moribund Democratic Party. NOTE: There’s no call for new new taxes here, only shifting the present overall tax burden in ways that animate the economy. This is trickle up economics that would benefit all Americans.