With the national unemployment rate at 9% and one out of every six Americans poor, the United States must change the way it manages its economic policy.
All of history’s great recessions have been overcome with deficit spending to create jobs. This one won’t be any different. Although the strategy does not seem to be working, consider this: A majority of economists said from the beginning that not only was there a need for a larger stimulus, but it was necessary to reform the tax code and ask millionaires and billionaires to contribute more.
President Obama presented a proposal addressing this, insisting people who make more than $1 million per year must pay the same tax rate as everyone else. Cries of “class warfare” are already being heard from populists who should be advocating for measures that benefit the country. In reality, they are defending the interests of the 1% of Americans who in the last 30 years have gone from owning 10% of the country’s total wealth to controlling more than 20%.
This is the historical reality: Taxes on the “job creators,” as they call themselves, have never been lower in the United States. Before Reagan, their marginal tax rate was 70%, while under Dwight D. Eisenhower, it was 91%. Today, it is 15%. Even so, no jobs are being created. Something is wrong with this picture. As the president said, it is math.
You can’t close the deficit only by chopping down education, health care and social benefits. A balance must be struck. And the “Buffett tax” (named after millionaire Warren Buffett, who supported its creation), accompanied by certain cuts, is a reasonable solution to the deficit that worries so many people.