1/7/09

Grow the Middle Class

Yglesias, arguing against the Heritage Foundation's proposed war on the poor:
...the idea of tax-side stimulus is to put money in the hands of individuals with a high propensity to spend the money — thus giving businesses more customers and creating labor market demand so that unemployed people can find jobs. Extending tax measures that overwhelmingly benefitted the wealthiest taxpayers doesn’t fit the bill...
Indeed. As Robert Reich once remarked, it doesn't make any sense to give money to the rich hoping that they use it to buy things. That's what it means to be rich: you can already buy whatever you want.

After the last eight years, can anyone still seriously tout trickle down economics with a straight face?

Reich, from a September post:
Unless or until America's broad middle class has more money in its pockets -- because we get a more progressive tax system, because unions become more powerful and push prevailing wages upward, because employers finally understand what Henry Ford understood a century ago (unless workers have enough money to buy the products they're making, the products won't sell) -- this downturn is likely to last a long time.

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