WEALTH AND MONEY PART XXVIII: THE WRONG WAY TO FINANCE INFRASTRUCTURE
On June 29th, 1956 President Dwight D. Eisenhower signed the Federal-Aid Highway Act of 1956 and the U.S. interstate highway system, the greatest public works project in world history, was born. This occurred only a few short years after America had invested millions upon millions of dollars in World War II and government debt was at an all-time high.
But dollars and wealth are not the same thing. Following the war America was the unquestioned industrial leader of the world. We had unprecedented capacity to produce true wealth – the products and services of an abundant life – and America flourished. Life wasn’t perfect. Racism was high and minorities suffered. But the majority of Americans were experiencing an unheard of growth in personal wealth and well-being, and in spite of the fact that we had recently undertaken the “greatest public works project in world history,” national debt was plummeting.
What must be understood is that following World War II, we were a people united. The universal benefits of Roosevelt’s “New Deal” were coming to fruition, post “Great Depression” regulations of the Wall Street banks were keeping the financial industry under control, and perhaps most important of all, progressive and corporate taxes were high. Our government could afford to do things. Roads, bridges, public water works, airports, seaports, and infrastructure in general were being built, and government debt was going down. All Americans benefited. The rich could still become rich, but not to the crippling level of inequality that is destroying our nation today.
The graph below, borrowed from http://zfacts.com/p/318.html (please take the time to read the short articles on this site) dramatically displays what happened to government debt when President Ronald Reagan introduced supply side, “trickle down,” “voodoo” economics in 1981. Progressive and corporate taxes were slashed, we were told giving all our money to the rich would magically make us all better off, and government debt quickly began to rise.
Tax cuts for the rich and corporations have only gotten worse since the time of Reagan. President Bill Clinton raised taxes during his administration, but Clinton’s destruction of the Glass-Steagall Act and other banking and financial regulations ultimately resulted in the economic collapse of 2007/2008 and the complete take-over of our government by the moneyed class. Following Clinton, President George W. Bush enacted even more tax cuts for the rich and “voodoo” economics now reigns supreme.
This brings us to President Donald Trump and his promise to rebuild America’s infrastructure. We are about to see an insidious vicious circle thrown into hyper drive. Forty years of tax cuts and financial deregulation have deliberately and methodically grown government debt by transferring ever more of our nation’s claim to wealth, money, to the richest .01%. All across America cities, counties and states are deeply in debt while at the same time their 60 year old infrastructure is crumbling.
We are told we are “broke” and can afford to do nothing to help ourselves – – – and the private “investor class,” that we created through endless tax cuts and deregulation, is moving in for the kill. Rather than paying for new infrastructure with the tax dollars we should have been collecting from this predator class all along, cities, counties, and states are instead being conned into borrowing the money from these “investors” at an average of 11.8% interest through “private-public” investment schemes. A one trillion dollar loan for infrastructure will cost the people of America 2.18 trillion dollars over 10 years and we will be ever more deeply in debt. Perhaps even worse, much of our public infrastructure will be privatized and we will be totally at the mercy of merciless, conscienceless billionaires who will stop at nothing to enslave working Americans.
We need a true political, economic revolution. The rule of the money changers must come to an end.
Part XXIX will discuss: Public Banking and Infrastructure