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Economic Update: How US Workers are Really Treated

Published by Anonymous (not verified) on Tue, 12/10/2021 - 11:52pm in

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Video

A weekly show focusing on the economic dimensions of everyday life and alternative ways to organize our economy and politics, with Prof. Richard D. Wolff.

The Real Reason the Economy Might CollapseSkyrocketing wealth...

Published by Anonymous (not verified) on Mon, 11/10/2021 - 9:56am in

The Real Reason the Economy Might Collapse

Skyrocketing wealth inequality isn’t just wrong. It’s also weakening our economy. 

70 percent of the US economy depends on consumer spending. So American consumers need to spend enough money to buy most of the goods and services Americans are capable of producing. 

This means that over the long term their incomes need to keep pace with their productivity. 

But their incomes haven’t. Over the past 40 years, most people’s wages have basically stagnated, while worker productivity has soared. 

Where did the economic gains go? Mostly to the top. The wealthy now own more of the economy than at any time since the 1920s.

Here’s the economic problem: The wealthy spend only a small percentage of their income and wealth. Their spending is not enough to fulfill the consumer demand that keeps the economy churning.

Lower-income people, on the other hand, spend almost everything they have – which is becoming very little. Most workers aren’t earning nearly enough to buy what the economy is capable of producing. 

The result is a gap between potential output and potential consumption.

To fill the gap, the economy depends on people going deeper and deeper into debt so they can buy. Even in 2018, when the economy appeared strong, 40% of Americans had negative net incomes and were borrowing money to pay for basic household needs.

The Fed has had to keep short-term interest rates lower and lower to accommodate this buying. And the government has to spend more and more to fill the remaining gap. 

None of this is sustainable. At some point, widening inequality causes the economy to collapse. 

We’ve seen this before. Years ago, Marriner Eccles, chairman of the Federal Reserve from 1934 to 1948, explained that the Great Depression occurred because the buying power of most Americans fell far short of what the economy was producing. 

He blamed the increasing concentration of wealth at the top: “A giant suction pump had by 1929-1930 drawn into a few hands an increasing portion of currently produced wealth. As in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.”

While the wealthy of the 1920s didn’t know what to do with all their money, most Americans could maintain their standard of living only by going into debt. When that debt bubble burst, the economy tanked.

Fast forward 100 years and we see the same pattern. While the typical Americans’ wages have barely budged for decades, adjusted for inflation, most economic gains have gone to the top, just as Eccles’s so-called “giant suction pump” drew an increasing portion of the nation’s wealth into a few hands before the Great Depression.

The result has been an economy whose underlying structure is far more fragile than it may seem.

Remember the housing and financial bubbles that burst in 2008? We avoided another Great Depression then only because the government pumped enough money into the economy to maintain demand, and the Fed kept interest rates near zero. Then came the pandemic.

The Fed has had to keep interest rates near zero. And the government has had to pump even more money into the economy. While these programs have been crucial to staving off a pandemic-induced depression, they’re only temporary.

Over the long term, the real worry continues to be on the demand side. Widening inequality means not enough demand. 

America’s wealth gap is now more extreme than it’s been in over a century. Until this structural problem is remedied, the American economy will remain perilously fragile.

It will also be vulnerable to the next demagogue wielding anger, racism, and resentment as substitutes for real reform. 

Closing our staggering wealth gap is crucial to the survival of both our economy and our democracy.

The Real Reason the Economy Might CollapseSkyrocketing wealth...

Published by Anonymous (not verified) on Mon, 11/10/2021 - 9:56am in

The Real Reason the Economy Might Collapse

Skyrocketing wealth inequality isn’t just wrong. It’s also weakening our economy. 

70 percent of the US economy depends on consumer spending. So American consumers need to spend enough money to buy most of the goods and services Americans are capable of producing. 

This means that over the long term their incomes need to keep pace with their productivity. 

But their incomes haven’t. Over the past 40 years, most people’s wages have basically stagnated, while worker productivity has soared. 

Where did the economic gains go? Mostly to the top. The wealthy now own more of the economy than at any time since the 1920s.

Here’s the economic problem: The wealthy spend only a small percentage of their income and wealth. Their spending is not enough to fulfill the consumer demand that keeps the economy churning.

Lower-income people, on the other hand, spend almost everything they have – which is becoming very little. Most workers aren’t earning nearly enough to buy what the economy is capable of producing. 

The result is a gap between potential output and potential consumption.

To fill the gap, the economy depends on people going deeper and deeper into debt so they can buy. Even in 2018, when the economy appeared strong, 40% of Americans had negative net incomes and were borrowing money to pay for basic household needs.

The Fed has had to keep short-term interest rates lower and lower to accommodate this buying. And the government has to spend more and more to fill the remaining gap. 

None of this is sustainable. At some point, widening inequality causes the economy to collapse. 

We’ve seen this before. Years ago, Marriner Eccles, chairman of the Federal Reserve from 1934 to 1948, explained that the Great Depression occurred because the buying power of most Americans fell far short of what the economy was producing. 

He blamed the increasing concentration of wealth at the top: “A giant suction pump had by 1929-1930 drawn into a few hands an increasing portion of currently produced wealth. As in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.”

While the wealthy of the 1920s didn’t know what to do with all their money, most Americans could maintain their standard of living only by going into debt. When that debt bubble burst, the economy tanked.

Fast forward 100 years and we see the same pattern. While the typical Americans’ wages have barely budged for decades, adjusted for inflation, most economic gains have gone to the top, just as Eccles’s so-called “giant suction pump” drew an increasing portion of the nation’s wealth into a few hands before the Great Depression.

The result has been an economy whose underlying structure is far more fragile than it may seem.

Remember the housing and financial bubbles that burst in 2008? We avoided another Great Depression then only because the government pumped enough money into the economy to maintain demand, and the Fed kept interest rates near zero. Then came the pandemic.

The Fed has had to keep interest rates near zero. And the government has had to pump even more money into the economy. While these programs have been crucial to staving off a pandemic-induced depression, they’re only temporary.

Over the long term, the real worry continues to be on the demand side. Widening inequality means not enough demand. 

America’s wealth gap is now more extreme than it’s been in over a century. Until this structural problem is remedied, the American economy will remain perilously fragile.

It will also be vulnerable to the next demagogue wielding anger, racism, and resentment as substitutes for real reform. 

Closing our staggering wealth gap is crucial to the survival of both our economy and our democracy.

The Democrats’ One Chance to Cut Child Poverty in HalfThe Biden...

Published by Anonymous (not verified) on Thu, 07/10/2021 - 11:57am in

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poverty, Video

The Democrats’ One Chance to Cut Child Poverty in HalfThe Biden administration has a plan that is estimated to cut child poverty in half. And it’s already in place.

It’s called the Child Tax Credit.

Here’s how it works. Parents of children aged 6 and younger across the country are receiving direct payments of up to $300 per month per child, or $3,600 per year per child. The payments drop to $250 a month for children between the ages of 6 and 17, and phase out for families with higher incomes.

It’s an historic expansion of the original credit that’s already helping millions of working families.

The direct payments are coming because the Child Tax Credit is a refundable tax credit. Normal, non-refundable tax credits simply cut your taxes. But a refundable tax credit, like the Child Tax Credit, helps you even if you don’t earn enough for it to reduce your taxes — so it’s a direct payment to you.

Say you owe $3,000 in taxes. A non-refundable tax credit of $3,600 won’t be worth $3,600 to you. It would just reduce your taxes to zero. So you wouldn’t get the full benefit. And if you don’t owe any taxes to begin with, a non-refundable tax credit wouldn’t do you any good at all since you can’t reduce your taxes to less than zero dollars.

But a refundable tax credit would help you. You’d get the money no matter what, the full $3,600. That’s why this expansion is such a big deal: it ensures that the money gets to lower-income families.

The early results show that this policy is a game-changer. Over 3 million more households with children now report having enough to eat  after just the first two payments. More report being able to make rent, stay in their homes, and afford basic necessities. And 3 million children have been lifted out of poverty.

It’s reduced racial disparities, as well. Hunger has fallen by one-third among Latinx families and by one-quarter among Black families.

It bears repeating that if the credit is made permanent, and reaches everyone it should, it could cut child poverty in half.

Yet the Republican Party — the so-called “party of family values” — is dead set against it. That’s because the program works.

Every single Republican in Congress voted against the American Rescue Plan, which contained the initial expansion of the Child Tax Credit. You can bet they’re all going to vote against making that expansion permanent as part of the Democrats’ $3.5 trillion budget plan. It’s obvious: they do not care about helping working families.

Democrats must get this done, no matter how staunch the Republican opposition. In the richest country in the world, it is inexcusable that millions of our children are living in poverty.

For decades, almost all economic gains have gone to the top, leaving working families behind. This historic expansion of the Child Tax Credit is a crucial step towards righting this wrong.

Poverty is a policy choice. Congress must make the Child Tax Credit permanent.

The Democrats’ One Chance to Cut Child Poverty in HalfThe Biden...

Published by Anonymous (not verified) on Thu, 07/10/2021 - 11:57am in

Tags 

poverty, Video

The Democrats’ One Chance to Cut Child Poverty in HalfThe Biden administration has a plan that is estimated to cut child poverty in half. And it’s already in place.

It’s called the Child Tax Credit.

Here’s how it works. Parents of children aged 6 and younger across the country are receiving direct payments of up to $300 per month per child, or $3,600 per year per child. The payments drop to $250 a month for children between the ages of 6 and 17, and phase out for families with higher incomes.

It’s an historic expansion of the original credit that’s already helping millions of working families.

The direct payments are coming because the Child Tax Credit is a refundable tax credit. Normal, non-refundable tax credits simply cut your taxes. But a refundable tax credit, like the Child Tax Credit, helps you even if you don’t earn enough for it to reduce your taxes — so it’s a direct payment to you.

Say you owe $3,000 in taxes. A non-refundable tax credit of $3,600 won’t be worth $3,600 to you. It would just reduce your taxes to zero. So you wouldn’t get the full benefit. And if you don’t owe any taxes to begin with, a non-refundable tax credit wouldn’t do you any good at all since you can’t reduce your taxes to less than zero dollars.

But a refundable tax credit would help you. You’d get the money no matter what, the full $3,600. That’s why this expansion is such a big deal: it ensures that the money gets to lower-income families.

The early results show that this policy is a game-changer. Over 3 million more households with children now report having enough to eat  after just the first two payments. More report being able to make rent, stay in their homes, and afford basic necessities. And 3 million children have been lifted out of poverty.

It’s reduced racial disparities, as well. Hunger has fallen by one-third among Latinx families and by one-quarter among Black families.

It bears repeating that if the credit is made permanent, and reaches everyone it should, it could cut child poverty in half.

Yet the Republican Party — the so-called “party of family values” — is dead set against it. That’s because the program works.

Every single Republican in Congress voted against the American Rescue Plan, which contained the initial expansion of the Child Tax Credit. You can bet they’re all going to vote against making that expansion permanent as part of the Democrats’ $3.5 trillion budget plan. It’s obvious: they do not care about helping working families.

Democrats must get this done, no matter how staunch the Republican opposition. In the richest country in the world, it is inexcusable that millions of our children are living in poverty.

For decades, almost all economic gains have gone to the top, leaving working families behind. This historic expansion of the Child Tax Credit is a crucial step towards righting this wrong.

Poverty is a policy choice. Congress must make the Child Tax Credit permanent.

Music Video: "Shore leave" (Tom Waits Big Time Movie Cover)

Published by Anonymous (not verified) on Thu, 07/10/2021 - 7:30am in

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Video

This is our re-imagined animated experimental rock cover of the song "Shore Leave" by Tom Waits.

This version of the song is based on a performance from the Tom Waits movie Big Time.

If you've been following our YouTube channel you may have seen the animated shorts we've been posting for this as it was being made.

Subscribe to Lorenzo's Music on YouTube - https://youtube.com/lorenzosmusic

I was animating the song one line at a time with the open-source software Blender using its grease pencil tool for the 2D animation design and posting them as YouTube Shorts as they were being animated.

You can check out how the whole idea for this project started here - I STARTED WITH A SIMPLE BEAT AND IT TURNED INTO SOMETHING BIGGER...

Economic Update: Native Americans & US Socialists

Published by Anonymous (not verified) on Tue, 05/10/2021 - 9:23pm in

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A weekly show focusing on the economic dimensions of everyday life and alternative ways to organize our economy and politics, with Prof. Richard D. Wolff.

The Secret to Actually Taxing the RichTaxing the rich doesn’t...

Published by Anonymous (not verified) on Thu, 30/09/2021 - 5:04am in

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IRS, tax, Video

The Secret to Actually Taxing the Rich

Taxing the rich doesn’t just entail closing tax loopholes and instituting a new wealth tax. It also means ensuring they pay what they owe in the first place — and that means boosting the Internal Revenue Service’s funding.

The richest 1 percent of Americans evade $163 billion every year in taxes. How do they get away with it? Because the IRS doesn’t have the tools and resources available to audit these wealthy tax cheats.

Over the past 10 years, the IRS budget has been reduced by roughly 20 percent. And as of last year, the IRS had 9,510 auditors — down a third from 2010. The last time the IRS had fewer than 10,000 revenue agents was 1953, when the economy was a seventh of its current size.

The result? Millionaires in 2018 were about 80 percent less likely to be audited than they were in 2011, and now the poorest taxpayers are audited at about the same rate as the top 1 percent

When asked by Congress why this is, the IRS said that auditing poor taxpayers is a lot easier because it’s done by relatively low-level employees. These audits are “the most efficient use of available IRS examination resources.”

Beefing up IRS enforcement is a critical part of cracking down on wealthy tax cheats and ensuring the super-rich pay their fair share. 

Every $1 invested in the IRS budget produces $4 in revenue.   

Imagine what programs we could fund, how many people we could help, if the IRS was able to recoup that $163 billion that the top 1 percent shorts the government every year. Fully funding the IRS should be a no-brainer.

(Please sign up for my new newsletter here: https://robertreich.substack.com/p/thanks-for-joining-me?fbclid=IwAR3E_BOfMgapUkC4aSaZffPWJQPqLe7zNZM5QKa-PTs4ZKn_7N9rT_G4Zfw

The Secret to Actually Taxing the RichTaxing the rich doesn’t...

Published by Anonymous (not verified) on Thu, 30/09/2021 - 5:04am in

Tags 

IRS, tax, Video

The Secret to Actually Taxing the Rich

Taxing the rich doesn’t just entail closing tax loopholes and instituting a new wealth tax. It also means ensuring they pay what they owe in the first place — and that means boosting the Internal Revenue Service’s funding.

The richest 1 percent of Americans evade $163 billion every year in taxes. How do they get away with it? Because the IRS doesn’t have the tools and resources available to audit these wealthy tax cheats.

Over the past 10 years, the IRS budget has been reduced by roughly 20 percent. And as of last year, the IRS had 9,510 auditors — down a third from 2010. The last time the IRS had fewer than 10,000 revenue agents was 1953, when the economy was a seventh of its current size.

The result? Millionaires in 2018 were about 80 percent less likely to be audited than they were in 2011, and now the poorest taxpayers are audited at about the same rate as the top 1 percent

When asked by Congress why this is, the IRS said that auditing poor taxpayers is a lot easier because it’s done by relatively low-level employees. These audits are “the most efficient use of available IRS examination resources.”

Beefing up IRS enforcement is a critical part of cracking down on wealthy tax cheats and ensuring the super-rich pay their fair share. 

Every $1 invested in the IRS budget produces $4 in revenue.   

Imagine what programs we could fund, how many people we could help, if the IRS was able to recoup that $163 billion that the top 1 percent shorts the government every year. Fully funding the IRS should be a no-brainer.

(Please sign up for my new newsletter here: https://robertreich.substack.com/p/thanks-for-joining-me?fbclid=IwAR3E_BOfMgapUkC4aSaZffPWJQPqLe7zNZM5QKa-PTs4ZKn_7N9rT_G4Zfw

Economic Update: Socialism & Worker Co-ops

Published by Anonymous (not verified) on Wed, 29/09/2021 - 1:15am in

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Video

A weekly show focusing on the economic dimensions of everyday life and alternative ways to organize our economy and politics, with Prof. Richard D. Wolff.

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