Gush-up

The unsuccessful experiment has been going on for over 30 years in the United States and yet legislators are willing to take the country over the financial cliff rather than admit trickle-down economics is a myth.
With trickle-down economics, the middle class in the United States continues to shrink while those at the top of the heap keep heaping up more wealth.  The wealthiest one per cent now own a third of the nation’s wealth and earn 20 per cent of the nation’s annual income.
The trickle-down gurus like to argue that the wealthy produce jobs.  In fact they hoard most of their cash and produce very few good jobs. Take for example the six heirs to the Wal-Mart empire. They sit on $69.7 billion.  Very little of that wealth gets recirculated within the American economy. They don’t use American workers to produce their goods, preferring cheap overseas labour. They employ thousands of Americans in low paying jobs that certainly aren’t stepping stones to vault them up the economic ladder.
Another example is the Apple Corporation. It’s been hoarding over $30 billion dollars in cash over the last number of years. They’re not re-investing it to create wealth for middle-class America.  They’re just moving it around the stock market helping them and the bankers get richer.  And like WalMart most of their good jobs have been outsourced.
So it shouldn’t be surprising that after 30 years of tax policies that favour the rich,  the United States is facing a financial cliff.  The low-tax policy has broken the back of the American Government. The fact is the rich never did generate enough jobs to replace and increase the tax revenues as promised by the trickle-down theorists.
It’s not trickle-down economics, it’s gush-up economics.
Copy-cat Alberta took the Ronald Reagan leap 11 years ago.  Our government chose to gut its most stable source of revenue—personal and corporate income taxes in favour of flat tax and low corporate rates.
The Pembina Institute estimates that this single decision takes away approximately $5 billion dollars annually from Alberta’s revenues, or over the last 11 years we have left $55 billion dollars on the table.
We are now so dependent on the external price of oil that a $1 or $2 change in its price throwing our province into an immediate deficit position.
Who’s gotten that $55 billion?  It’s not been the middle class.  Most Albertans are much deeper in debt than they were 11 years ago.  It’s not been those areas Albertans hold dear to their hearts–education and health services.
Imagine if we had kept the $55 billion.
Lest we have forgotten it was governments around the world, including ours, that had to bail out big industry and/or big banks to preserve some semblance of financial order.  The same guys that have benefited the most from low taxes and regressive tax schemes.
The hard Right has successfully convinced a lot of us that the government is bad in all cases. That the government is irresponsible and mishandles money.  It’s true they might not always do a good job, but the banking industry and big corporate have proven they do an absolute awful job.
It was Canada’s Action Plan, a substantial investment in public works and home improvement projects, that saved Canadian jobs and personal wealth when all other countries were in financial disarray. Harper knows it and that’s why two years after the program ended, he is still buying ads to tell Canadian about Canada’s Action Plan.
A quick read in history confirms that both the United States and Canada have shown their strongest growth during times when governments have spent heavily on public works projects. That makes intuitive sense.
Prosperity and wealth multiply the more hands the same money goes through.  With government projects, money goes through many hands.  In contrast, tax breaks for the very rich stagnates great wads of money among few.