Wednesday, October 08, 2008

What Needs to Be Done

If the current crisis is of a scale comparable to the depression of the 1930's, it is possible that the Government has not yet done enough to resolve the problem.

What is the problem? The masses do not have enough money and credit to continue propping up the economy.

And why not? Because the rich and powerful have taken too much money and not left enough for everybody else. That's what happened before 1929 and happened again before 2008.

After 1929 the economy stayed depressed for a decade or more, in spite of FDR's attempts to solve the problem.

Starting in 1941, World War II created many jobs and made it possible to tax the very rich at almost confiscatory rates. A side effect was to cure the depression.

I am certainly not recommending another World War. But if the Government were to tax incomes above 1 million dollars at a rate of 90% and use the revenue to start a massive public works program, our crisis would be over.

In my opinion, the Obama Administration will not do that. Obama is not that progressive (liberal).

So, we will suffer for a long time.


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