Friday, May 13, 2011

Deficit Reduction Solution

Want to get rid of most of the deficit in a real hurry?  It is simple.  Get out of Afghanistan.  Get out of Iraq.  Eliminate the Bush tax cuts.  Do those three things and most of the deficit disappears as shown in the two figures below.  Getting rid of only the Bush tax cuts stops the deficit from increasing as a percent of GDP.

Hat Tip to Chris Gerrib for the link.

Tuesday, May 10, 2011

What 30 Years of Reaganomics Has Done For You

In general, no matter what we do, the economy continues to grow.  We have our recessions, but over the long term, the economy, as measured by GDP, continues to increase as shown in the figure below.

From here.

It shows about a 2.1% annual growth over the last 60 years.  Republicans and Democrats have both contributed to this growth, one better than the other at times, but in general it just keeps growing with a few bumps along the way.

Since we all contribute to the growth, I think we all should benefit from the growth.  From 1950 to 1980, the GDP roughly doubled.  The next figure shows how much our income grew during this period.

 Not too bad.  Income growth is about the same as GDP growth.   The people in the 99 to 99.99 income percentile didn't do as well as the others, but their income is pretty high anyway so they probably did not suffer too much.

Then along came Reagan.  He essentially said, taxes are too high.  It is stifling the economy and stealing money away from those who create jobs and wealth.  We need to cut taxes and shrink government.  Get it out of peoples' way.

Well, we already know what happened to the economy when he did that.  It kept plodding along with about a 2.1% annual growth.  At least he didn't hurt it, but he didn't help it much either.  Over the next 28 years, 1980 to 2008, the GDP roughly doubled again...but what happened to incomes?  Well, let's take a look.  The next figure adds the time period 1980 to 2008 to the figure above.



The lower 90% of all Americans saw their income increase an average of 1%.  ONE FUCKING PERCENT!  Even the people in the 90 - 95 percentile and the 95 to 99 percentile did worse from 1980 to 2008 than they did between 1950 and 1980.  Let me say that again.  99 PERCENT OF THE PEOPLE SAW THEIR INCOME INCREASE MORE BETWEEN 1950 AND 1980 THAN  IT DID BETWEEN 1980 AND 2008.

Who made all the money from the increase in the economy?  Remember, the economy continued to grow at an average of 2.1% per year.  Why, it was the top 1 percent, the one percent that the republicans cater to.  In fact, the top 0.01 percent saw their income increase 403%.

So, let's recap.  99 percent of the people saw their income increase significantly less between 1980 and 2008 than they did between 1950 and 1980 thanks to republican economic policies started by Reagan.  The bottom 90% of people saw their income increase by only ONE PERCENT, while the top ONE HUNDREDTH OF ONE PERCENT saw their income increase 403 percent.  That is a 40,300 percent greater increase than the bottom 90% of the people.

40,200 percent greater increase than the bottom 90% of the people

 And the republicans want to give them more tax cuts.  Are they out of their fucking minds???

I'd like to give a hat tip to Pat Cunningham over at Applesauce from providing the link to 9 Things The Rich Don't Want You To Know About Taxes.  This was number 1.  There are 8 more interesting things.  Go read them if you have time.