It seems forever that many Republicans have been pushing the notion of job creators. That is to say that if you just get rid of regulations and lower taxes on business it will create jobs and the economy will boom. Other Republicans have rightly called this theory of (supply side) trickle down economics “voodoo economics.”
Conservative Republican Governor of Kansas, Sam Brownback, has given this Republican wet dream of supply side economics a whirl with easily expected results.
As reported from the Kansas City Star July 1, 2016
“Kansas closed the books on another dreadful fiscal year Thursday. And when the numbers were released Friday, the damage was startling.
Just to balance the budget, the state had to withhold $260 million from public schools until next week. And grab every sales tax dollar it could find from the highway fund. And take money from the Children’s Initiatives Fund and Department of Corrections.”
The truth is that what drives economies is the demand for goods and services created when average citizens have excess cash to spend. In the boom days of the 50s and 60s when unions were strong in America they keep wages high and the economy was vibrant. But, now — when dozens of countries around the world have the manufacturing capability that was once exclusive to America, allowing the nation’s unions to demand high wages for their American workers, the foundation of the highly paid middle class — this driver of the economy is no longer available. So how can we drive the American economy today?
Since many countries have more than enough manufacturing capacity to satisfy their own consumer needs, America must depend to a far greater degree on internal consumer demand to drive the economy.
And since manufacturing jobs in large measure have been replaced by generally low wage service worker jobs, the only way to put excess spendable money in average workers pockets is to drastically raise the minimum wage. This will do for the average worker what powerful unions once were in a position to do.
But won’t that put millions of large and small companies out of business? The short answer is that it never has in the past. The only folks that notice any sort of infringement of wealth, and that is extremely mild, is a fraction of the one percent of the super wealthiest of Americans.
If say, tens of millions of American service workers were making the same sort of money that factory workers of old once made, the results could be expected to be the same. For one thing tax revenues would boom, providing the money necessary to fix the nations crumbling infrastructure, which in turn would create millions more high paying jobs. All this money in the hands of average workers would drive product demand to a degree that would more that offset the cost for business having to pay its work force a nice living wage.
Second not only would the tax base be greatly expanded but with previous low wage workers no longer dependent on the government for food stamps and other services, it would also help lower the national debt. In fact history has shown that it is a booming economy that is by far the fastest way to reduce the national debt.
So let’s power the economy, rebuild the nation’s infrastructure and lower the nation debt via a powerful living, minimum wage. It’s a win win situation for all if there ever was one.
Or we could keep going down the path of more and more Americans sinking into poverty until a 1930s America becomes the permanent norm.