I haven’t gone rogue here. This is a plan that’s been around for a couple of years now. It bears no resemblance to the plan purportedly being advanced by Romney/Ryan. There are plenty of tax cuts for the wealthy in the plan being advanced by Willard Mitt, but there are no matching sticks for the carrots dangled–Corporations and high-income individuals get a lot of money back but are under no pressure to use it to create jobs. And to be fair, the Dem plan isn’t much better–they plan to raise marginal tax rates on the wealthy. But there’s no plan to actually grow a class of working citizens that can pay taxes going forward. Better than fifty-eight percent of the jobs created under Obama in the recovery pay subsistence wages–if you used to make $40 an hour as a welder, you’re going to have to make do with $10 an hour as a retail clerk. Per Robert Scheer, the Democrats are working to put income floors under the poor–they aren’t working to bring back Middle class jobs. They’ve apparently accepted the logic of the Bureau of Labor Statistics, which predicts jobs growth only in low paying fields like Retail and ‘Hospitality’.
Let’s be honest with ourselves–a country whose workers are making Wal Mart level wages cannot pay the taxes necessary to support a trillion dollar military establishment. They can’t pay enough in taxes to keep the Baby Boomers on Social Security in Ensure and Early Bird Specials. Increasing disparity of income is also indicative of future social unrest– you know, like Egypt. Heck, people making subsistence wages CAN’T SUPPORT THEMSELVES. Every Wal-Mart job comes with a $2,000+ drain on the local economy for EACH EMPLOYEE in income support, Section 8 housing, and subsidized student lunches.
For the past eight years I’ve been a reader of Paul Craig Roberts. He is an economist and was Assistant Treasury Secretary under Reagan, and an old-style Country Club Republican. He later went on to write extensively for the Wall Street Journal, where he served as an Associate Editor. But along about 2003-2004, Mr. Robert rode off the reservation. He began to write about the scourge of offshoring of US jobs. He testified to the US-China trade commission about the destruction of US manufacturing ongoing as a result of offshoring. Between 2001 and 2006,
U.S. manufacturing lost 2.9 million jobs, almost 17 per cent of the manufacturing work force. The wipeout is across the board. Not a single manufacturing payroll classification created a single new job.
The declines in some manufacturing sectors have more in common with a country undergoing saturation bombing during war than with a “supereconomy” that is “the envy of the world.”
Mr Roberts posted his proposal to save the US economy here. It would not add a penny to the deficit. Paul Craig Roberts has proposed a VAT tax on corporate profits based on where value has been added to products. Companies that use offshored labor would pay a high VAT; companies that have all domestic labor would be exempt. Roberts also exposes a dirty secret about off-shoring–cheap labor does NOT hold down consumer prices. Instead, the savings from paying foreigners pennies on the dollar for work that Americans used to do goes to fatter dividend checks for the 1% of Americans who own the bulk of US stock.
Needless to say, this proposal isn’t up for discussion. Republicans HATE it. The Chamber of Commerce is fighting any attempt to restrict off-shoring, and MSM is guilty as well–Reuters has moved its financial reporting to India. Per Roberts, if we can’t stop the wars and fix off-shoring, the US will be a third-world country in a matter of a decade.
Read Paul Craig Roberts’ column about the August jobs report here. By his math, 81% of the jobs in the new jobs report are low-wage retail, hospitality, or medical support services (LPNS and nurses’ aides). Everything else is going offshore. There will be no recovery as long as jobs that pay middle-class wages are being sent to Mumbai.