America’s Economy in Crisis
From 1790 to 1970 America’s workers experienced the longest continuous period of wage growth of any country, making America the envy of the world. Starting with mechanized textile manufacturing in 1790, America’s rapidly increasing industrialization was fueled by its classical free-market economy. In 1965, the U.S. fully adopted Keynesian economic principles giving the Federal Reserve enormous power and control over the economy. Keynesian principles are guided by a lender/consumer debt-driven philosophy. The Fed’s absolute authority changed America’s free-market economy into a highly regulated government-controlled form of capitalism.
In 1966, bank credit cards were introduced to the general public and went national in support of Keynesian philosophy. Along with other forms of unsecured credit, these devices quickly became a burden on consumers. Uncollateralized debt also became problematic for banks, so they adopted FICO scoring to help mitigate risk. When FICO scores prevented poorer communities from obtaining credit our government’s solution was creating endless welfare programs.
In the 1970’s, as consumer debt increased so did corporate profits and salaries; however, workers’ wages became stagnant creating income inequality. Politicians told us if we wanted to improve our quality of life then our spouses needed to work. As women entered the workforce household incomes did increase but it also added more financial burden to families. Most families needed a second car to help ensure their new lifestyle changes would be successful. Mother’s needed affordable childcare that was safe and reliable. Both parents needed work clothes and other necessities for employment. Even though the 1970’s was marked by high inflation and high unemployment, labor unions made some progress in improving the wages and benefits of their members.
In the 1980’s, computers and other advancements in technology increased the efficiency of workers. Workers doing more in less time gave corporations the means to significantly boost profits which continued to increase at an exponential rate over the years. As a reward for their hard work corporate elitists gave themselves extravagant salaries, while workers’ wages continued to remain stagnant further widening the income inequality gap. Despite improvements and efficiencies, the average worker found themselves needing to spend 20% more time on the job each week just to make ends meet.
The gains labor unions made on behalf of their members in the 1970’s and early 1980’s was quickly wiped out by hostile corporate takeovers. Corporate raiders bought up vulnerable companies, fired workers, cashed in the workers’ pension plans, and pocketed the money reaping enormous profits. Although these tactics started in the mid-1980’s due to failed government oversight of Wall Street, they still continue to this day with little to no intervention. Economists claim corporate raiding is a necessary evil that serves as a counterbalance to the poor management of publicly traded companies.
Since the 1960’s corporate executives’ compensation grew 1,000% while the American workers’ pay increased by less than 15%. The average yearly salary of America’s 3 million corporate executives has increased to more than $21 million while the pay of American workers has stagnated over the last 50 years. Half of America’s workforce, 80 million people, earn $35,000 or less per year. It appears from their actions that politicians and corporate elitists despise the American worker as demonstrated by business elites looting workers’ private pensions plans, stagnant wages, and the ever-increasing income inequality. Corporations gave up millions of American jobs overseas to other countries while politicians allow tens of millions of foreigners to enter the U.S. illegally further adding to income instability and suppressed wages. Corporations tired of workers’ demands for better wages and benefits have essentially waged war against the American workers with politicians happily appeasing their corporate elitists.
President Clinton signed the North American Free Trade Agreement (NAFTA) into law on 8 December 1993. By consequence, it seems as if it was corporate retribution against American workers. NAFTA not only undermined wages and workplace safety in the U.S., but America also lost 415,000 high-paying auto manufacturing jobs to Mexico and 290,000 high-paying aircraft manufacturing jobs to Canada. Corporations seeking even higher profits looked for ways to abandon the American worker by exporting millions of jobs overseas to China, India, Indonesia, etc., but it doesn’t end there. The EPA and now Climate Change has cost America millions of jobs and trillions of dollars in lost revenue. Currently, there are nearly 30 million undocumented workers in the U.S. depressing wages and further adding to the economic instability of citizen workers. If nothing is done to stop the current border crisis, more than 10% of America’s population will be illegal immigrants before the end of President Biden’s term in office.
Corporations have been lobbying Democrats for unilateral control over replacing America’s highly skilled tech workers with foreign workers at lower salaries. If passed, President Biden’s Build Back Better (BBB) Act will give corporations the power to issue work visas without government oversight. While politicians continue to curry favor with wealthy elitists at the expense of American workers, our economy is struggling with the burden of poor political decisions. If we want to fix our failing economy, end income inequality, and pay off the federal debt we must reign in Keynesian policies and change our current tax structure.
My USCF economic recovery plan in conjunction with the Currency Usage Tax (CUT) will fix America’s economic problems within a few short years. CUT is a simple flat consumption tax that removes the burden of taxation from workers and businesses while paying off the national debt in less than 5 years. When we start paying down the federal debt our economy will begin to stabilize and become more productive. Only then will our government finally have the resources needed to bring resolution to our many other problems and start healing America.
Read about America’s Debt and Taxation.
Return to America is Broken.