Debt, the New American White Meat

Well Eric I wish it was that clear, I wish I could agree with you and say "no one saw any of it coming,"  I wish the people who saw it coming were taken seriously,  and I wish that you would not say it would be better if we raised "the taxes of wealthy individuals back to Reagan Era levels."


First people did see it coming.  Any economist, or self taught amateur economist, who is keen to the speculative bubbles of the past century, did see it coming.


In May 2006 Editor John Bellamy Foster  of Monthly Review wrote an article titled "The Household Debt Bubble," which beautifully describes the accumulation of debt starting around the 1970s until today in America. 

This accumulation was based on ever growing credit allowances and the enormous appetites of the consumer class.  Using your home's equity to buy three snowmobiles and a 32 and half foot Sea Ray was encouraged by the banks and carried out by many Americans.  The market was safely rising; it was a fool proof system of accumulation and spending.


Foster and many left thinking scholars saw this rising debt bubble and its proximity to the pin way earlier than most people think.  Three articles followed his first debt description, Nov. 2006's "The Explosion of Debt and Speculation," Dec. 2006's "Monopoly-Finance Capital" and April 2007's "The Finacialization of Capitalism," each dealing great blows to your argument that "no one saw it coming."


Income tax for the rich would be better if it did not go back to the era of President Ronald Reagan.  Still better than today's numbers, from 1982 to1989, the income tax for the rich (depending on the year "rich" changes, so I use that to describe the top income tax bracket)  was a mere 50 percent.

President  Jimmy Carter along with every president before him, since income tax was established, had this level at 70 percent or higher.  It even hovered around 94 percent for many years (way before corporate greed and million dollar bonuses).

Pres. Reagan also lowered the status of the top bracket to include people who are not as rich as someone making $250,000 a year.


What that means is, in 1982 if you were single, making $41,500 a year; you were paying the same income tax (rich bracket) as someone making $300,000 a year.  While in Pres. Carter's day, one year earlier, if you were single you had to be making over $108,000 a year in order to be included in the rich bracket.


The "great financial crisis" was foreseen by many.  It is a rude assumption to say that no one saw it till it hit them in their face.  That is what the banks would like you to think.  Scholars from around the country warned us about the growing American debt from risky speculative bubbles that are so interwoven in the capitalist market place.


Reaganomics was a joke.  The trickle down economy was great for the rich, but made the poor poorer.  To bring us back to his days would be like rewinding a yo-yo only to let it spin out of control in another  15 years.  This is not what anyone wants or needs.  We need an income tax bracket that is reminiscent of 50s, 60s and 70s, definitely not a clone of the Reagan years.