It's really not hard to fix at all. Repeal ALL of the economic policies of the past 30 years favoring such a disparity of wealth and return the tax structure back to where it was in the 1950s and early 1960s. The economy would turn around almost instantly.
Our problems are structural and can be solved, but the problem is with our politicians who lack the political will to do anything.
It doesn't take a rocket scientist to figure out what in the hell went wrong:
There is a finite amount of wealth in any system, and when too much of it is in the hands of the upper echelons, an insufficient amount is money left in customers' pockets to support the growth of commerce and industry. We are now in only the very first stages of experiencing the pain of this imbalance although we have actually been suffering from it for quite a while, perhaps a quarter-century, since the effects of Reagan's "supply-side" policies began to take hold. The growth of unsecured credit has effectively masked the pain of it for the majority of Americans by permitting a larger portion of the population to make purchases in greater quantities than their level of income would normally allow. The credit crunch has revealed, rather than caused, the ravages of the disease itself, sort of like an anesthetic pancake makeup that hides the pain and disfigurement caused by melanoma.
It is easy to see how we got into this mess. The rich have always gotten richer like the old saying says, but this has accelerated tremendously since the election of Ronald Reagan. His policies attempted to remove the burden of paying for our society's governance by reducing taxes even as he tried to curtail the provision of government programs and services that met the needs of our poor and middle classes. He also greatly encouraged highly speculative investment while reversing gains in worker rights and fighting a war against unionization and anti-trust. This caused vast quantities of cash to flow toward the least productive activities, even while embarking on an internationalist policies that depressed American wages by transferring jobs, and even entire industries formerly dominated by American firms, overseas, even while requiring American workers to compete against much lower-wage workers in third-world countries. The percentage of America's wealth in the hands of the wealthiest Americans increased rapidly even as the lower, oh, 80% of our population saw our standard of living fall, a condition that persists to this day. Indeed, under Bush, it has been only the top 2% or so that have prospered while the rest of our incomes, and net worth, have actually declined.
Bill Clinton only slowed down this rightward-flowing flood of money away from workers and into the hands of the economic aristocracy. It has never stopped, and it accelerated rapidly after Bush was installed into the White House. The economic events we are seeing now were inevitable, with the only question being precisely when the breaking point would finally occur. This happened last September, and now we're trying to figure out what to do about it.
Aye, that's the rub! First of all, we need to recognize what has caused this problem. When we understand that the problem is the overconcentration of wealth, we must avoid any policies that make this problem worse. Tax cuts make the problem worse, and so they must be ABSOLUTELY shunned, and indeed taxes must be judiciously increased. We must devise some effective mechanism by which not only income, but actual WEALTH, can be distributed more equitably. This is our only path out of this mess.
Wealth will ALWAYS be redistributed; it's just a question of whether a handful of people benefit or the masses benefit.
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