Dear Mr. President,
I know you are very busy so I'll keep this advice about a strategy to improve the US economy, relationship with congress and with American society, and establishing your ideas in American History. As you know, in 1934 Franklin Roosevelt asked his Secretary of Labor to 'draft a plan that might help Americans escape poverty in old age,' and only a year later, signed Social Security into law, intending to prevent future depressions. Franklin Roosevelt, Lyndon Johnson, Ronald Reagan and George W. Bush all supported these types of democratic advances because 'a sound system of social insurance enabled by government makes capitalism and its splendid innovations more balanced and sustainable.'
We can conclude that the next steps we need to take to succeed in the great depression would be those of geared towards social insurance. The Great Recession has more to do with the structure of the economy, not how business is going. In order for the economy to keep its flow, we have to absolutely need consumers to continue that process. All of the new technology that has come about has made it easier for employers to hire workers for lower wages, which increases the employer’s income, but in the end hurts our economy. These workers that receive low wages work multiple jobs to keep participating as a consumer in the economy, and when they can't, they simply keep on doing it and go into debt. But this is not 2007 anymore; we can't just make money off of our houses anymore.
Now, added to that, the unemployment rate has raised from 5% to 9.3%. With jobs no longer available, those receiving little to no wages have no power to participate in the economy. Tax returns from 1913 to 2008, examined by Emmanuel Saez and Thomas Piketty, have proved that in the '70s 'the richest 1% of Americans took in almost 9percent of the nation’s total income; by 2007, the top 1% took in 23.5 percent of the total income.' This proposes a large issue because the rich do not contribute to the economy as much as middle class Americans do; they often invest their money in other countries or big investors, thus expanding their wealth. As the economy continues, while the middle class doesn't have the power to participate in the economy and the rich simply decide to participate elsewhere, money does not flow into the economy- creating what we have now.
In the 1930's the economy was completely reconstructed and FDR's new deals helped balance and sustain the economy. Money from those with the highest incomes was used to balance the economy and America's middle class was then able to participate in the economy again. Here, we see ourselves in a similar situation, but he have not yet succeeded in expanding the economy for the middle class. We could raise wages by "extending the earned income tax credit all the way up through the middle class, and paying for it with tax on carbon. Or exempting the first $20,000 of income from payroll taxes and paying for it with payroll tax on incomes over $250,000." Perhaps we could also change the public university system, so that instead of paying before you attend, you attend and then pay back 10% of the income from your first ten years of your first full time job. This would keep money flowing into the economy, it supports a sound system of social security, and that is what the people want.
I hope this will help,
Your Adviser
References:
http://www.google.com/publicdata?
ds=usunemployment&met=unemployment_rate&tdim=true&dl=en&hl=en&q=unemployment+rate
"The NewLiberalism" Obama, the economic crisis, and the Democrats : The New Yorker http://t.co/aK6RKtj via @NewYorker http://t.co/RQQmse5http://t.co/RQQmse5
The Test : The New Yorker http://t.co/RQQmse5 via @NewYorker
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