A rising tide lifts all boats; this is one of the favorite bumper sticker talking points from the right’s supply-side intellectuals. The American GDP for 1980 was $2.7 trillion for 2010 it was $14.5 trillion, no doubt about it, the tide has risen. Unfortunately, I don’t have a boat. The majority of the middle class don't have a boat and none of the poor have a boat. For us the rising tide has put us under water. Earnings for the middle class from the 1980s to present has been flat, we maintained our life styles and raised our children by borrowing money. We refinanced the mortgage, signed 5 year notes for cars and used the Visa card to buy toothpaste.
Now the bill has come due and many are under water. This problem exists for America and much of the world. A few countries saved during the good times, such as Sweden, Germany, China, and their debt problem is more manageable. The clash between debtor and banker is an ancient battle fought many times. Both made the same mistake, the banker made a bad loan and the debtor accepted a bad loan, both for the same reason, unrealistic future expectations. I can throw in words like greed, fraud, corruption, extortion and scam but that is just a rationalization to assign victims and villains. I’ll leave the black stabbing to politicians talking about rising tides. I want to talk of boats.
There are those floating high and dry in a yacht with the rest of us bobbing in the waves with soggy life vest. Storming the yachts like pirates with cutlass in teeth will not solve the problem. The yachtsmen demanding our life jackets as payment will not solve the problem. Looking at history both of those approaches end in disaster. As unpleasant as it sounds the least painful answer is to work together. The rich will have to give a little and historically the rich hate to give anything. The rest of us need to get out of the water and find a dry towel. Those debts that can be paid should be paid. Those debts that cannot be paid should be written off.
Debt crises go back as far as writing makes recorded history possible. Traditionally the rich have all the power and have insisted on bleeding rocks dry. At the end of WW1 Germany had a debt burden with no possibility of paying it, the insistence that it be paid created the political environment that culminated in WW2 (Germany did finally pay off the reparation debt in 2010). This is a typical result for historical examples were the rich and powerful maintain an unrealistic ultimatum of repayment in the face of a different reality.
Our government has been captured by the moneyed power and those few slim plans that have been aired fall to the bleed the rock side for solving this debt crisis. This won’t work because the middle class doesn’t have enough money (the poor have no money); the rich have most of the money which is why they are the rich. The top economic 20% have 60% of the money. The 40% of the money left to the rest of us isn’t enough to buy food and payoff the huge debt. This simple fact is why debtors and the owners of that debt must work together with suffering from both sides.
Don’t know if the 60% - 40% is factual. It would seem that any good book keeper could figure this out with the appropriate data, instead it's another factoid heavily manipulated by all sides. I do have trouble understanding the argument that the rich can’t afford to pay taxes, or that taxing people with most of the money would not be worth the trouble.