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The Forgotten Truth That Conservatives Created The Welfare State

more from Ray
Wednesday, March, 9th, 2011, 2:00 pm

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The conservatives have been trumpeting this theory that tax breaks for the wealthy will raise the middle class standard of living.  The disparity of income in this country has increased because of this backwards theory of economics. 

Wages have been kept down because corporate executives are withdrawing larger and larger salaries as the economy expanded, rather than increasing the pay and benefits of their employees. As the economy grew over the last thirty years the capital growth was not seen by the average middle class family, it was consolidated by the top 2%. 

This does not promote a healthy economy.  A top heavy economy will topple.  Too few people controlling an overwhelming majority of the capital has too much control of the economy.

In a recent report by CNBC  titled:

Welfare State: Handouts Make Up One-Third of U.S. Wages

 ”Consumption supported by wages and salaries is a much stronger foundation for economic growth than consumption based on social welfare benefits.” said Madeline Schnapp, director of Macroeconomic Research at TrimTabs

The economist gives the country two stark choices. In order to get welfare back to its pre-recession ratio of 26 percent of pay, “either wages and salaries would have to increase $2.3 trillion, or 35 percent, to $8.8 trillion, or social welfare benefits would have to decline $500 billion, or 23 percent, to $1.7 trillion,” she said.

My favorite quote is “consumption supported by wages and salaries is a much higher foundation for economic growth….”

Unfortunately, the conservatives have not pushed for the very thing Ms. Schnapp stated,  but progressives have.  We have been the last bastion of hope for the working class and a living wage  in this country.

The need for a “welfare state”  was created by conservatives and their corporate donors. They kept wages low and increased their own salaries instead. 

What this country needs to do is increase taxes on the very wealthy, like CEOs,  thereby creating a financial incentive to leave profits in the business and raise wages or re-invest rather than withdrawing the profit as salary. When the conservatives lowered taxes on the wealthy it created an incentive to take a larger salary, thus leaving little behind for employee wage increases, better benefits or expansion.

As the wages remained flat for middle class families, the need for social programs increased.  Healthcare costs continue to rise along with housing and food, but the median pay of the workers have been stagnant.

Time for a new outlook, time for a progressive outlook!  We tried the conservative way. It failed, at least for 98% of us, it worked for the top 2%.

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The Forgotten Truth That Conservatives Created The Welfare State was written by Ray for PoliticusUSA.
© PoliticusUSA, Wed, Mar 9th, 2011 — All Rights Reserved