This leads to the logical conclusion that redistributing wealth is going to improve the economy - the middle class gets more money, spends more money and this drives the economy. Why are so many middle class Americans voting Republican? I can't explain it, but it is not in their own best interests.
The following post from Alter-net illustrates how this worked during the Great Depression of the 1930s. You can read more by clicking on the link.
Link
AlterNet / By Larry Beinhart
The Astonishing Stupidity of Not Raising Taxes on the Rich When Budgets Are Tight
History shows that when spending is cut -- in the name of balancing the budget -- recessions immediately follow.
March 1, 2011
The current economy is routinely and universally referred to as the worst recession since the Great Depression.
It makes sense, therefore, to look back at government tax and spending policies during the Depression and what the results were.
1932 -- Hoover raises the top tax rate from to 25 to 63 percent.
1933 -- Roosevelt comes into office. He begins spending at the same time that new tax hike comes into effect. The Depression bottoms out.
1934 -- Recovery begins. The GNP rises 7.7 percent, unemployment falls to 21.7 percent.
1935 -- New government spending on public works and rural electrification. A push to strengthen labor and raise wages. New taxes through the creation of Social Security.
The GNP grows another 8.1 percent, and unemployment continues to fall.
1936 -- The top tax rate is raised again. This time to 79 percent.
GNP grows a record 14.1 percent; unemployment falls even further.
1937 -- Roosevelt is afraid of deficits! He cuts spending for 1937.
There's a new recession. It continues for a year.
1939 -- The U.S. borrows, resumes deficit spending, this time on a military build-up. The recession ends.
1941 -- America enters World War II.
The Astonishing Stupidity of Not Raising Taxes on the Rich When Budgets Are Tight
History shows that when spending is cut -- in the name of balancing the budget -- recessions immediately follow.
March 1, 2011
The current economy is routinely and universally referred to as the worst recession since the Great Depression.
It makes sense, therefore, to look back at government tax and spending policies during the Depression and what the results were.
1932 -- Hoover raises the top tax rate from to 25 to 63 percent.
1933 -- Roosevelt comes into office. He begins spending at the same time that new tax hike comes into effect. The Depression bottoms out.
1934 -- Recovery begins. The GNP rises 7.7 percent, unemployment falls to 21.7 percent.
1935 -- New government spending on public works and rural electrification. A push to strengthen labor and raise wages. New taxes through the creation of Social Security.
The GNP grows another 8.1 percent, and unemployment continues to fall.
1936 -- The top tax rate is raised again. This time to 79 percent.
GNP grows a record 14.1 percent; unemployment falls even further.
1937 -- Roosevelt is afraid of deficits! He cuts spending for 1937.
There's a new recession. It continues for a year.
1939 -- The U.S. borrows, resumes deficit spending, this time on a military build-up. The recession ends.
1941 -- America enters World War II.
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