When gold was discovered at Sutter Creek in 1849 an emerging trend in immigration to the US and western migration spurred by the success of this relatively new democracy had a significant uptick. This trend initially peaked in 1890 only dipping slightly during the Civil War. However, unprecedented immigration was invigorated in at the dawn of the 20th Century. The freedom of African-American's, the emergence of immigrant ingenuity, western expansion and the stability of our Democracy, paved a way over revolutionary sacrifice, the genius of our founding fathers, the blood, sweet and tears of slaves, immigrants, natives and citizens, through an aptly named American Century.
In 1917 in the middle of WWI the Top Marginal Tax Rate skyrocketed from 15% for people making $2 Million to 67%. Through 1921, after the war, the rates fluctuated between that and 77% and $1 Million to $2 Million. During this period the stock market remained relatively steady as did the average income after a modest gain. Housing costs continued a decade long sharp decline.
Between 1922 and 24 the Top Marginal Tax Rate dipped a bit to around 50%, and more significantly the rates effect increased among more people, because the rate effected people making above between $200,000 and $500,000. A steady uptick in the Dow occurred during this time, and average income remained steady as home value increased.
The roaring 20's were synonymous with a rising Dow, Prohibition encouraged speakeasies, bank robbing folk heroes, relaxed economic regulations, and between 1925 and 1931 the Top Marginal Tax Rate plummeted to around 25% for people making $100,000 (a bigger piece of the population pie). As we all know it literally all came crashing down in 1929, resulting in a significant dip in average income, an unprecedented increase in unemployment, a steady decline in home value and our nations first (and hopefully only) Depression.
Migration virtually stopped, between 1932-1935, as the Top Marginal Tax Rate shot back up to 63%. While the number it effected plummeted, because it only effected people making over $1 Million again. In '36-'41, as Hitler and Japan plotted and then executed war plans, it bumped up to around 80%, but only for people making above $5 Million. During this time the Dow went up and then down modestly. Average income had a virtually steady increase, as did the housing values. With the promise of social security and the New Deal a plan was in place to improve the quality of the American life.
In 1942-1947 WWII and the aftermath demanded more sacrifice from a people who had helped engineer a steady modest recovery. The Top Marginal Tax Rate increased to 88%, but more significantly, it applied to people making $200,000 or more. The national debt increases by 70% of GDP. A Military Industrial Complex was born and our nations place in the world skyrocketed because of it. The rest of the world was decimated, and we stepped into a vacuum. The Dow had a steady sustainable climb. A modest decrease in average income was experienced and unemployment skyrocketed, because employees were fighting a war, but people rallied making unprecedented sacrifice and unity. Home values skyrocketed and immigration was again on the rise.
Between 1948 and 1963 a picture of an idealistic environment for middle class white Christian American's emerged. Despite the Cold War, the Korean War, the CIA laying down ground work that would lead to inspiring terrorists in the middle east, and McCarthyism inspired oppressions of freedoms of thought and expression granted by the constitution, the iconic picture of America emerged. The Kennedy dynasty has its pinnacle and transitional moment. In part due to newly found American ingenuity, the GI Bill and stabilizing forces of Union Membership. In contemporary political terms it reflects the impression we have of what the Right envisions as the America they want to live in. During this time The National Debt declines by 70% paid by the Top Marginal Tax Rate remained between 82% and 92%, with it maintaining at 91% for more then a decade. This also effected people making just $400,000 and above. Modest fluctuation in housing values occurred, while the Dow continued its steady trend up along with the income of average American's. Unemployment did fluctuate between 2% and 7% while immigration continued a modest trend upwards.
Between 1964 and 1981 the Top Marginal Tax Rate dipped a bit to around 70%, but for a wider range of people at the $200,000 and above level. This period marked a painful cultural change that obliterated our picturesque post WWII reality. So called Dixiecrat transitioned over to the Republican party, spurned by a truly grassroots civil rights movement, as well as, socialized medicine for elderly and the poor. Nostalgic for war and with growing mistrust for Communism in the wake of the Cuban Missal Crisis and the emergence of a "Red"China we entered unwisely into the Vietnam Conflict. Resulting in a lost generation of youth, but a new peace and youth movement that redefined the left in America. The recovery from the Vietnam and the same of the Nixon era gave birth to a new radical extreme in the punk rock movement and black power on the left and a more fearful extreme sentiment in the "silent majority"of Christian Middle Class Whites. During this period the Gross Domestic Product went from $500 Billion to over $2 Trillion while the Dow seemed to plateau. Average incomes moved up and down, while Paradoxically going no ware. Housing stagnated, but remained affordable. In fact this period would mark the last time average families could pay there bills and save for their future without significant home, health care, credit card of educational debt. Despite a higher fluctuating unemployment rate, immigration continued to rise. Carter as President warned of our excesses of consumption, moral and ethical erosion, all values that helped us achieve glory during WWII and were crucial in our three decades of economic success and stability. But for these 15 years, we seemed to not realize we had it so good.
The result; Regan, the ending Cold War, but also decline of an affordable sustainable living in America. '82-'86 the Top Marginal Tax Rate dipped to 50% for the first time effecting people making $85,000 (although most of the time it was around $160,000). GDP reached 4.7 Trillion, the Dow past 1000, while Average incomes dipped and then went back up to the previous level, housing value had the inverse pattern. Unemployment was above 10% during this period, but then had a steady decline, which coincided with an unprecedented decline in Union jobs. Immigration spiked, almost reaching that centuries first decade. Regan was a skilled communicator that was able to make you feel proud of a progress that other then Nuclear disarmament, was simply a illusion. The Plutonamy was afoot, and the same people that pined for the America they remembered, "the silent majority, were voting and protesting against policy that would insure their own interests and vision of America.
'87-'92 Regan exited and Bush I enters. Like the Kennedy's the Bush's have been part of the elite in controlling our nation for over 100 years. So in order to improve the bank accounts of his friends and family the Top Marginal Tax Rate dips to 28% for the first time since events like this lead to a great depression. To maintain revenue, that is of course ends up paying for the first gulf war, the people that pay this this tax rate is lowered to unprecedented levels of $30,000 dollars or above. All the suddenly middle America is paying the Top Marginal Tax Rate for the first time. A steady decline in average income continues as unemployment spikes again. But no bother, GDP is at 6 Trillion.
So then Bubba brought us "it's the economy stupid." And Moderate/Liberal Democrats shed their label and played the role of economic conservative. The Top Marginal Rate bumped modestly up to almost 40% in 1993 and in 1994 the people who paid this jumped up to $250,000 or above. By the end of his term it steadily grew to just below people who $300,000 or above. The national debt decreased over 10% of GDP, which rose to 9 million. Unemployment dropped below 4% for the first time since 1970. The Dow also reached 10,000 during this period and average personal income reached record levels. Immigrants and their descendants since 1970 now equaled the population of people born in the US and their descendants since 1970. Home value did drop and then stabilized, but despite the value of an average paycheck could not get you even close to basic necessities when compared with the 50's-70's.
As scandal broke out in the Clinton White House, people in the white house, who are key players in the Plutonamy relaxed regularity reform, creating an environment that created credit derivatives ect..., setting up the possibility for the economic rescission, orchestrated during the Bush II years, after an untransportable, and possibly unconstitutional election, that was decided by the supreme court, despite a clear majority of American's having voted for the other candidate. From 2000 to 2008 the downward debt trend left Bush II with an inherited federal budgetary surplus. Yes the tec bubble crashed and 9/11 occurred, but an opportunity for unity was squandered in favor of the Plutonamy. The Top Marginal Rate dropped to 35%, and the income level continued its steady upward trend above $300,000. While a 25% rate remained for $85,000 and a 33% for $200,000. In part because of a convincing argument to fight a war in Afghanistan, and even more so because of a misleading argument to fight a war in Iraq the national debt grew by 20% of GDP which grew to over 14 Trillion. The Iraq war cost us 3 Trillion dollars so far. After the tec bubble crashed the Dow made steady gains spurred by mortgage back securities and credit default swaps that where the product of a housing bubble. This occurred because of continual efforts after the Clinton by Bush II to continue loosening regulation. In 2008 it all came to a head (as we all know) with both an end to the unprecedented home values, crashing and Wall Street collapsing worse then in the 80's and almost as bad as 1929. Bush II began taking unprecedented actions that were contrary to his political beliefs and the beliefs of his appointees in charge of over seeing our economy in the government, all members of the Plutonamy elite. He had already created an unprecedented big government through his military policy and government debt, but now he was taking unprecedented bailouts and government take overs of banking and wall street. Unemployment began to rise as average incomes fell. The Dow drops from 13,000 to 7,000.
In steps Obama. He takes the Bush II solution mid stream and continues the policy, while making it more efficient, but not pushing it as far, or executing it as effectively as some thought necessary. Unemployment, a lagging indicator, rises above 10%, it now is at 9.7% (and most economist see it staying here for a while, although there has been a resent trend of job growth). As I write this the national debt is 12.7 Trillion When Bush II entered office the national debt was in decline at $5,727,776,738,304.64. When he left office it was $10,626,877,048,913.08. The Obama/Bush II bailout has increased the debt rate Bush II had already made increased the Bush rate by 2 and a half times. The effort to stabilize the economy cost 2.8 Trillion dollars. The housing market has stopped plummeting. The Dow is above 11,000 now. GDP has begun growing again. Obama and Bush's efforts have done what it set out to do. Stabilizes the economy. Newsweek just wrote an article on how America's Back (now they did also have a cover claiming Victory at last in Iraq...and we are still there), but this is a queasy proclamation. My skepticism remains because the same people that created this environment during the Clinton years and the ones that failed to recognize the problem during the Bush II years are with two exceptions the ones advising the President on economic policy. Fredrik Zakaria wrote a few years ago about America's ability to rise to the occasion in a crisis, but that we lack the will to plan well for the future, even if it is known. This is one of those moments. We are making it through our unique set of skills as a country, leading the way for the world. But it is not perfect and we may miss on opportunities to fix things now, that would benefit our stability in the future. A future that will include a dwarfing immigration effect, that requires a path to citizenship, so we can collect their taxes. I wanted to like Ron Paul's view of no IRS...but I just can't find secondary evidence of the IRS's unconstitutionality, and I don't see it as something that has harmed the average American, accept when some rich Plutonamy member gets in power and bails out his buddies.
Obama insists he plans on moving toward a sustainable budget (I would push for a balanced budget...a pay-go) and reducing the deficit (a must). I would suggest politically Obama must make concrete steps to reducing the budget and the deficit by the summer of 2011. I would end the policy of keeping the military budget off the table. With what we budget for the military every year, we could feed every child in the world for 5 years. That alone could be our defense. But I still think a smaller, smarter military is needed. One that improves the quality of our intelligence and cyber security, but decreases our role in manipulating foreign governments. One that changes the good offense is a good defense to a good defense is a good defense, with smart intelligence and diplomacy, as well as, reduces our budget. We are projected to spend $100 billion on education this year (the key to equality in opportunity, freedom in a democracy, American ingenuity, social, cultural, values, health, ethical and moral efforts and our economic future), $500 Billion on the treasury (including interest on our debt), over $700 billion on our military, and almost $800 billion on Health and Human Services (which is why we implemented a new health care policy that will reduce the deficit, increase efficiency...but the law does not address changes in provider compensation, it does not cover everyone, it does not provide a strong alternative insurance while it creates a health care insurance mandate and it does not adequately address social security, medicaid and medicare budgetary issues...despite all that it is better and less expensive then before, in part because it is a Republican plan...even though they don't remember that). If these issues are not addressed then eliminating all ear marks, and cutting all other government budgets in half will only add up to $400 billion in savings. But taking action before the summer of 2011 could jeopardize new found economic stability.
What can and should be extracted here, is the 1950's America that the Republican's, Christian Conservatives and Fiscal Conservatives want (all on the Right), requires a substantial sacrifice in Taxes from people making over $400,000. A tax rate of 91% will do it. I am in full agreement that large businesses should have a lower rate then this, but it should be conditional on keeping American jobs and utilizing American small businesses, which are the backbone of our nation. Businesses should not maintain monopolies and banks should not be to big to fail. Banks must raise thetr capital %. Wall Street, Banking, The Treasury, the Fed and Real-estate need independent regulatory commissions that cannot share personnel with these industries and provide competitive wadges with these industries. There should be clear transparent reforms in place, and the reforms that existed pre 1997 should be reinstated. The first area that Republicans should work on reducing budgetary is our military.
The Democrats, Liberals, progressives should consed that a balanced budget (pay go) is necessary and they should work to accomplish this by reducing health and human resources experiences. I think they basically agree with this. I would suggest keeping housing and energy stipends and food stamps. Raising taxes to meet social security benefits. Continuing reform on heal care as I suggested above. But eliminating completely unemployment pay. If we improve the efficiency, quality and access of medical care along with education we will be able to address all the basic needs and reduce the budget. Most of all they need to stop playing the Republicans slim-ball games, but take from the Republican's what they do best, grow a pare and get 'er done. Who cares if you get reelected, as long as you did the job while you were there.
Post Script: I was listening to two stories today, one from a source I find reliable...NPR and one I don't Howie Car. On both I was introduced to Tea Party activist: One who has lost his contracting business and been severely effected by the housing bubble crash...I totally get this...it almost killed my mom's architecture business. The second is a former representative of NH, who set term limits on himself. I totally get where these two men are coming from. I am just as angry, at just about the same things. I think the media across the political spectrum has failed. The fact that there is a political spectrum is a failure. One characterizes Tea Parties as the extremely crazy right. The other takes credit for inspiring...it is just as bad as Washington's take on them. Republican's thinking they created this movement, Democrats seeing them as the Republican base on steroids. It doesn't help having Sarah Pailin at your rally, but if you are to trust the polls (I don't)...Tea Partiers think she is unfit to run for office. But these two men believe as I do, that the system is broken. And I for one support an effort to improve the tax code, we should reduce entitlements, we need to have a pay-go system, we need to end the new bubble before it pops (our national debt), and most importantly we NEED term limits. The difference between me and the first guy is he was not paying attention till it effected him. And the difference between me and the second guy is I don't blame Obama...he is trying to make a smarter, smaller government...but he has sucky tools and people to work with. I don't see the health care bill as the problem (despite that I am sure both these men see it as the icon of the issue). Again my problem with it is that Washington failed to fully inform itself and remove special interests. Republican's failed to be honest partners in the process and we ended up with a surprisingly good bill, that leaves everyone feeling pissed off, but not at the right things, like the fact that the bill doesn't fix all the problem more correctly...their just mad at the process and the price tag...despite is reducing our debt. But if we want a better future, we need to decide to both reduce spending and raise taxes for those who can afford it. Otherwise we are doomed to fail, despite our American resilience.
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