To the editor:
In his latest diatribe against government, letter writer Dean Burgess expresses some strange ideas about economics.
For example, he opposes repealing the tax cuts on the wealthy because they would raise only $58 billion each year. The fact that laying off 600,000 teachers, policemen, firemen, and other government employees saves less than that and adds to unemployment doesn’t seem to bother him.
He criticizes government for saving GM and its 250,000 jobs. He opposes any cuts in military spending, even the billions spent on needless wars and on military bases abroad, because that would put people out of work. He says that “we can’t invest when there are billions in rampant waste and criminal fraud” in programs to help the needy, while ignoring the criminal fraud and waste in military spending and in the private sector. He ends with, “No nation can tax and spend itself into prosperity.” But look at our own history.
During the “Roaring Twenties,” while government regulations were relatively loose, the top 1 percent, who had almost a quarter of all incomes, went on a wild speculative binge. In 1929, the bubble burst, the economy crashed, and the Great Depression ensued. Then, under FDR, the government put people to work in the WPA, the PWA, the CCC, the TVA, the Grand Coulee Dam, the Hoover Dam, and other public works. For three quarters of a century, we have enjoyed clean hydroelectric electric power from those projects.
Government also established regulations such as the Glass-Steagall Act to prevent banks from the kind of speculation that led to the Depression.
There ensued rapid economic growth, during which the middle-class thrived. By the 1970s, the incomes of the top 1 percent had dropped to under one tenth of all income, but they still were able to buy their yachts and mansions.
Unfortunately, memory is short. Several decades later, government dismantled the regulatory framework that had helped to stabilize the economy. The incomes of the top 1% again approached a quarter of all incomes.
Again, they went on a speculative spree, and again the economy tanked. The same bankers who helped to cause the recession are still there, engaging in the same speculations to get even richer. This time, the government did much less to put people back to work or to stop irresponsible speculation by the financial community.
Corporations and banks are awash in cash that they don’t invest because of lack of demand: the poor and middle classes don’t have money to spend. Meanwhile, the super-rich, who can’t possible spend it all haul in trillions, much more than the annual deficit. No wonder that recovery has been so slow, especially with government layoffs offsetting hiring by the private sector.
The propaganda of the super-rich, fueled by their millions, may well succeed in winning the November elections for their minions, so they can lower their taxes even more and increase the yawning gap between the few rich and the other 99 percent.
Gloucester and Exeter, N.H.