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Voodoo Economics – Jobs, National Debt, and Disparity

Starting with the Reagan Administration, Republicans have long stood by the “trickle down effect”.  Under his administration, the overall income of the lower 90% of Americans has remained rather stagnant, and hourly wages dropped 4.5%.  Reagan took office during a recession, and a year later gave $750b in tax cuts over five years.  This was at a time when he took office, in the middle of a recession of skyrocketing unemployment as well as high inflation.

Provided by "The Rachel Maddows Show"

It is true that over the 1980s that unemployment went down, eventually, and after another recession, ending up at around 5%.  However, after President Carter dismantled the military, Reagan drummed up the deficit, significantly by focusing on Cold War efforts.  This can also offer the illusion that the unemployment rate is decreasing.  Even though the war efforts were in fact providing at least temporary jobs, what is to happen to those jobs when the war is over?  Weapons production jobs, steel, copper, clothing, etc. end up being contracted by the government.

So, socially it was a transition to American war-mode to supporting the war effort, that decreased the unemployment rate.  This all-around shift to the right along with anti-communism still lingers today, particularly with those who lived during the time.  The public’s malleability today is no longer the same.

The cost of lowering the unemployment rate is haunting us still to this date.  Reagan more than doubled the national debt due to an unfunded Cold War effort.

Now the consequences.  The top 1%, the job creators, enjoyed an increase in their budgets.  However, the increase in an individuals budget to reinvest in the American economy and create jobs resulted in corporate cutbacks, creation of lower hourly wage jobs, and increased the disparity between those with money and those without.

This shows a steady increase in disparity.  The social consequences are still here today and larger than ever.  It would also have to be assumed that because America cannot afford another war, like the Cold War, that Mitt Romney, Rick Santorum, or on a long shot Newt Gingrich, would in fact declare a war on the middle class through an abolition of unions.  It is already a GOP idea and on their agenda.  Which in theory, this would work.  But there is always a sacrifice.  The sacrifices in general are an increase of the deficit, an increase in disparity, and a new war whether it be tangible or not.

The war on unions, best characterized by Wisconsin, is attempting to suppress middle-class workers, whether you agree completely or half-heartedly with unions.  The end of the middle-class would probably solve our economic woes, however the disparity would surely increase, and quality of life in the states, would remain the same as it is now, it would be an offset to maintain the status quo.


March 20, 2012 - Posted by | Economics | , , , , , , ,

1 Comment »

  1. […] Voodoo Economics – Jobs, National Debt, and Disparity ( Rate this: Share this:TwitterEmailFacebookLike this:LikeBe the first to like this post. […]

    Pingback by Voodoo Economics « A Little Tour in Yellow | May 7, 2012 | Reply

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