One of the most striking successes of the Occupy Wall Street movement has been the “We are the 99 per cent” idea, and more specifically in the identification of the top 1 per cent as the primary source of economic problems.
Thanks to #OWS, the fact that households the top 1 per cent of the income distribution now receive around 25 per cent of all income (up from 12 per cent a few decades ago) has been widely disseminated. The empirical work on tax data that produced this evidence, done most notably by Piketty and Saez, has been slowly percolating into the mainstream consciousness, but “We are the 99 per cent” has hammered it home with surprising speed.
Even more surprisingly, the analysis as it relates to the 1 per cent has been almost unchallenged by the organized right. Having spent decades denying the obvious growth in inequality, and of the wealth and power of the super-rich, the right has implicitly conceded to reality on this point.
Their response to ‘We are the 99 per cent’ has been the snarky claim that ‘We are the 53 per cent’. This line is based on the lame and long-refuted WSJ ‘lucky duckies’ talking point, that low-wage workers ‘pay no income tax’. It is, of course, true that many workers don’t pay the tax called the Federal Income Tax’ , but they do pay the Social Security payroll tax, which is a tax on wage incomes, not to mention sales taxes and many others. By contrast, capital gains, the preferred income source of the ultra-wealthy, are not subject to payroll tax and attract only half the standard rate of the Federal Income Tax.
What’s more interesting to me is the 53 per cent number, redolent of the Buchanan-Nixon plan to ‘tear the country in half and take the bigger half’. It stands in stark contrast to the hypocritical complaints of Republican politicians about class warfare and turning Americans against each other. The fact that anyone could see this slogan as clever politics is an indication of the costs that are eventually incurred in the creation of a hermetically sealed thought bubble like that of the US right.
Coming back to reality, I’d like to think a bit about the relationship between the 1 per cent and the remaining 19 per cent of the population in the top quintile (that is 20 per cent). Most if not all of the bloggers here at CT fall into the latter group. Given our lamentable lack of market research, I can’t say much about readers, but a reading of the comment section suggests that most of our readers also belong to this group.The top quintile as a whole commands the great majority of US income, and virtually all financial wealth – few households outside this group own much beyond their homes and perhaps some money in a pension fund. It follows that any significant improvement in public services, or in the position of the unemployed and poor, must be funded by higher taxes on the 1 per cent, the 19 per cent or both.
The 19 per cent also have a disproportionate political weight, since they are much more likely than Americans in general to register, vote and engage in political activity. So, it makes a big difference whether, as as implied by ‘We are the 99 per cent’ their interests are aligned with the mass of the population or with the top 1 per cent.
Until quite recently, I would have (and did) argued against this view. The top quintile as a whole has done very well over the past few decades, and (despite some silly claims to the contrary), high-income earners have mostly voted Republican, in line with their economic interests. Certainly there are plenty who don’t vote their interests, but that is also true of many people in the top 1 per cent, not to mention bona fide billionaires like Buffett and Soros.
There was always an argument in terms of enlightened self-interest or class-interest, that it was better to give up a bit of (pre-tax and post-tax) income to maintain a stable and relatively egalitarian society. But in an individualistic society like that of the US such arguments don’t go very far.As far as policy is concerned, my implicit assumption, formed in a relatively egalitarian society, was that taxes imposed only on the very rich might be satisfying but couldn’t raise a lot of money. So, for example, I dismissed Obama’s focus on ending the Bush tax cuts for incomes above $250k (roughly, the top 2 per cent). In the ‘Trickle Down’ chapter of Zombie Economics, I looked mainly at the top 20 per cent (or sometimes 10 per cent) of the income distribution rather than the top 1 per cent.
I’m now much more sympathetic to the ‘99 per cent’ analysis. First, a closer look at income growth figures suggests that, while the 19 per cent have enjoyed rising incomes, they’ve only barely maintained their share of national income. The redistribution of the past three decades has gone from the bottom 80 per cent to the top 1 per cent.
That suggests the possibility of a policy response in which the main redistributive thrust would be to reverse this process. This would almost certainly involve higher tax payments, but this would be offset by the restoration of public services, which are in economic terms a ‘superior good’, valued more as income rises. The top 1 per cent can buy their own services, and are largely unaffected by public sector cutbacks, but that’s not true of the 19 per cent.
Another important factor is the growth of economic insecurity. The myth of the US as a land of opportunity for upward mobility has been replaced by Barbara Ehrenreich’s Fear of Falling (another good source on this is High Wire by Peter Gosselin). Even if people in the top 19 per cent are doing well, they are less secure than at any time since the 1930s, and their children face even more uncertain prospects.
Finally, there is the alliance of the 1 per cent with the forces of rightwing cultural tribalism. The 1 per cent can only rule by persuading lots of people to vote against their interests, and that requires a reactionary and anti-intellectual agenda on social, cultural and scientific issues. As a result, educated voters have increasingly turned against the Republican Party.
I don’t want to make too much of this last point. As Allan Grayson said during his memorable takedown of PJ O’Rourke recently, the 1 per cent own the Republican Party outright, but they also own much of the Democratic Party, and can rule satisfactorily through either. Also, having a college degree isn’t the same as being educated – Tea Party supporters are more likely than the average American to have a degree, and college-graduate Republicans are even more prone to various delusional beliefs on issues such as climate change.
Nevertheless, taking account of all the factors listed above, even the most comfortably affluent members of the professional class, looking at the alliance of plutocrats and theocrats arrayed to defend Wall Street could reasonably conclude that it was in their own interests to support the 99 per cent and not the 1 per cent.
We are therefore (surprisingly to me) suddenly back in a situation where a progressive movement can reasonably claim to act in the interests of a group that is (I’m quoting Erik Olin Wright from memory on the Marxist conception of the working class0
(a) the overwhelming majority of the population
(b) responsible for nearly all the productive activity (as against the 1 per cent’s incomes drawn from a parasitic financial sector)
© economically desperate or at risk of becoming so.
Can all of this be sustained? I don’t know, any more than anyone else. But #OWS has already achieved things that most people would have regarded as impossible a month ago, and for the moment at least, the momentum is still growing.
(Hopefully links to come when I get a bit more time)
John Quiggin 
John, can you comment on how much this analysis applies to the current Australian society? ISTM that we are still a bit more egalitarian; and given the recent threats of shareholder resistance to ballooning executive payouts we have a reasonable chance of staying that way.
I think that’s right, but we have tended to follow the US path with a lag, and need to resist that.
Roubini has a piece on a related issue
http://www.project-syndicate.org/commentary/roubini43/English
Tapen
Is there an overall picture of Australia’s wealth distribution? It’d be interesting to compare Australian companies to US General Electric, which apparently paid $0 in federal US taxes in 2010:
http://www.bnet.com/blog/financial-business/ges-scandalous-tax-breaks-are-rooted-in-politics/12187
Mining companies that can bring down a Prime Minister probably need only a morning smoko break to work out how to get out of paying tax.
As much as capitalist deny it, the symbol of capitalism is falling apart. The future of America looking very grim unless the top 20 percentile willing to cooperate (which will be extremely unlikely).
Professor Q, as much as I hate to be pessimistic, I don’t really think this soon-coming crash of Capitalism can be avoided simply because the top percentile have too much power right now and they have endless greed (you can see it from the case of arrests in Occupy Boston protest in a what they call it “democracy” country). America can only hope that when the future generation comes into power (America by that time would most possibly be in deep depression), they will see this mistake and attempt to put forward a better economic and political system to recover.
http://www.businessinsider.com/what-wall-street-protesters-are-so-angry-about-2011-10#lets-start-with-the-obvious-unemployment-three-years-after-the-financial-crisis-the-unemployment-rate-is-still-at-the-highest-level-since-the-great-depression-except-for-a-brief-blip-in-the-early-1980s-1
I don’t think it’s greed per se, although that certainly worsens matters.
The problem is that capitalism itself, in the aggregate, is a collective action problem – a prisoner’s dilemma and race to the bottom. In the words of Roubini, “cutting jobs weakens final demand… because it reduces labor income… Because a firm’s labor costs are someone else’s labor income and demand, what is individually rational for one firm is destructive in the aggregate.”
Hyman Minsky, I think, knew how to deal with this, but governments seem to only feel they’re in a position to offer a fraction of a solution.
In theory, yes that is correct but you need to look at the reality of the system itself. People are proven to be less resistant when they get a wage cut in the way of limited wage rise when inflation exist compare to a direct wage cut when both ways are similar (only difference is you will have more current spending power before price rises). Now when you put it in the place of executives, more labour cost means less profit mean less bonus. Even if they understand that cutting job will mean less demand for the total economy (which I’m pretty sure a lot of them do). They will not do it simply because of greed for bonus and fear for losing the job due to not meeting shareholder demands. If the US government fails to act on this, it will only be time until America faces prolong recession/depression similar if not much worser than Japan.
To be honest with you, with the current power the wealthy and the Murdoch media holds in US; the US government is pretty much a defenseless kid.
Well, we will have to see whether the 99% can gain traction. Or when the chips are down will the US plutocracts behave any better than Assad?
Gee, once in a while the great unwashed wake up and reach for the pitch forks and torches!
Not to worry, the cleverer monkeys, stake through their hearts, decapitated, having been consumed by flame or not, will soon resurrect themselves from their crypts once more, and pull the wool over their eyes all over again.
Arab spring, British summer, US fall, no matter what, only a few of the one percent will lose, if any of them do; the rest will reinvent and recycle themselves and remain exactly where they are, at the top. Such is life.
Capitalism in its current form (its only form?) presumably relies on consumers consuming, and surely in a globalised system those consumers are also the workers – unless, of course, a bunch of wealthy Martians or Venusians turn up. If workers’ income falls below that required for a meal and a bed, then where do consumers come from? It is all too confusing for this mind…
“If workers’ income falls below that required for a meal and a bed, then where do consumers come from? It is all too confusing for this mind…”
Let me try to clear it up for you: they don’t.
Hi All the problems of over-accumulation don’t even necessitate a fall in wages below the level workers need to reproduce their conditions: just to a level that they can no longer consume enough commodities to realise a sufficiently attractive level of profits for capital invested. Since the general stagnation of wages since the mid 1970s ( I am not sure that Australia fits this pattern) demand has been increased through the expansion of credit. With the crisis of this architecture the crisis of over-accumulation has returned.
Yes, the growth in private debt was a panacea for stagnating real wages, with two rather unfortunate drawbacks: a) the fundamental value of assets became unpricable, b) the longer it lasted, the worse the crash had to be.
“Soak the rich” has always been a political message with some potency. One objection I have always had is that the notion is frequently marketed by pointing to the excesses of billionaires but the practical application has been imposed on people who are on good incomes but by no means super rich. If the left now want to redefine the world into two classes, the 99% and the 1% and they follow through on that division when it comes to their “soak the rich” policies then their message is likely to gain more political traction and will also probably do less economic damage.
Tax cuts now for the 99%!!
Or better yet, jobs for the ~20% unemployed and underemployed. They tried the tax cuts thing, resounding success that.
So John, I guess my question has to be – what does the pareto population want?
If you’re going to posit some sort of cohesive group that should be able to be either milked for more or be able to create more change in themselves, then I guess you’ve got to create some sort of a belief that they have anything in common – either within themselves as the top 20%, or within the bottom 80% that excludes them.
My understanding of how our current western society is arranged is that these top 20% and bottom 80% groups have so much variability internally that no actionable change can be managed.
I dunno, give me some sort of hope for change and I’ll be thrilled, but I just don’t see it.
I think the 1%/99% split has more obvious differences.
My reading is that one group is oblivious, and one group doesn’t understand.
Oh no. TerjjeP and Quiggin are in agreement. The natural order has been overturned. Maybe the world really is going to end in 2012.
If memories of Saturday morning plot arcs serve well, there’ll now be a denouement where Terje is unmasked *as* John Q, playing the part of a resolute defender of the indefensible to get these threads really cooking.
“And I would have got away with it too, if it wasn’t for you interfering kids…”
You get a scooby snack for that Dan
The fundamental issue that caused this problem I suppose can only be solved through government regulations and the ideology of socialism; which creates economic growth at the sametime give fair share of the economic growth to the whole society (which capitalism fails to share the economic growth to the whole society and ultimately end up in extreme poverty of the lower/middle class; communism also fails to create noticable economic growth because it kills off any means of incentives for people to get extra reward for improving their quality of work). But I have yet to see a country that operates REAL socialism.
It is an irony to see the comparison between monarchism and capitalism (democracy as they call it). People revolted against monarchism because the majority of the people lives in slump and hardly able to afford food; while we are seeing the samething happening in the symbolic country of Capitalism, the US of A.
The reason you don’t hear “soak the poor” is because many of the rich are rich because they ensure many of the poor are pre-soaked. Given that, rather than “soak the rich” why not “rinse the rich” to clean them out of ill-gotten GFC precipitating gains. Sounds much better.
Not such an irony if you recognise that the US was founded with a faux revolution, rather than a real revolution. Those who did the taking over were already running the country, albeit as a subsidary of British Inc. In the case of the US it was, effectively, a management buyout sans payment for the buyout. The French revolution, and the British Civil War, were different. The pattern set in the US ‘revolution’ has been repeated many times since – management managing to walk away with what was shareholder value. Current affairs are simply keeping the tradition alive!
Let’s not get carried away.
Like Buffett and Carnegie, Terje will trim a few glutenous capitalists (the 1%) to permit the rest to carry-on much as before. Several shareholder activist groups are seeking the same from their own executives.
But lets not get too sideswiped by this. The Commonwealth Bank, after this sacrificing ploy, still pays its new CEO, Ian Narev, $2.5 million base annual salary plus bonuses. His predecessor, Ralph Norris, received $3.2 million base salary.
Whatever concerns the homeless and unemployed had over executive pay over $3 million, they are hardly alleviated by paying $2.5 million.
Most executives of capitalist corporations are around the $1,000,000 per annum base pay, plus copious fat feed to them through bonus and share options etc.
“Their response to ‘We are the 99 per cent’ has been the snarky claim that ‘We are the 53 per cent’. This line is based on the lame and long-refuted WSJ ‘lucky duckies’ talking point, that low-wage workers ‘pay no income tax’. It is, of course, true that many workers don’t pay the tax called the Federal Income Tax’ , but they do pay the Social Security payroll tax, which is a tax on wage incomes, not to mention sales taxes and many others. By contrast, capital gains, the preferred income source of the ultra-wealthy, are not subject to payroll tax and attract only half the standard rate of the Federal Income Tax.”
Whether or not SS, Medicare and state unemployment payroll taxes should be included as taxes at all is debatable, insofar as these are largely contributory-based insurance programs that are essentially off-budget. Whereas taxes are normally considered to be the means by which governments raise general revenue for expenditures unrelated to the means through which it is collected.
But even besides that, the fact remains that in the United States payroll taxes, sales taxes, and taxes on alcohol, tobacco and fuel (which tend to be less progressive than income taxes) are relatively low, particularly compared to European countries. Income tax is a larger share of government revenue, and the proportion of income tax paid by low and middle-income earners is very low. Moreover, investment income is often double taxed due to a lack of imputation credits for corporate dividends. So the broader point, that the US tax system is relatively progressive, remains. The OECD has confirmed in recent times that the US has the most progressive tax system of any developed nation.
Moreover, it is a bit silly for leftist commentators to complain about the cost to struggling working Americans of funding programs like Social Security. Which side of politics created these programs in the first place? Which side has most stridently defended such programs for so long? Which side has fiercely resisted attempts to means-test, impose any cuts, or allow workers to opt out of such programs? Which side has made a perennial campaign theme out of scaring old folks about their entitlements being taken away? By your own reasoning, it is only the continued existence of New Deal and Great Society entitlement programs that prevent the US tax system from being even more progressive than it already is. That is a telling admission. Personally, I think it is absurd, obscene and unsustainable that struggling working families should be forced to subsidise wealthy retirees with a couple of yachts in Florida. But most American liberals are stridently opposed to means-testing.
Glutenous capitalists! Sounds like my vegetarianism won’t stand in the way of me eating the rich 😛
However, I agree with you. The notion that wealth needs to be distributed close to as unevenly as it is or… or… just doesn’t hold water. In fact the global economy would be a lot healthier were quasi-clever people not handsomely rewarded for finding ways to externalise risk via “financial innovation”.
Freelander, one of the signatories of the US Declaration of Independence, John Jay, the first Chief Justice of the Supreme Court, allegedly had a favourite aphorism, ‘Those people who own this country are going to run this country’. It’s never changed. It also explains the hideous savagery of US policy in the Middle East, and the continued sadistic brutalisation of the Palestinians.
@Mulga Mumblebrain
I agree. US foreign policy is hardly of any benefit for the majority of Americans. The manage to sell what they do under the banner “My country right or wrong”. Too many ordinary Americans have been willing to swallow the bull and waste their lives ‘defending their country’. Problem is, they haven’t been defending their country, rather they have been pursuing the interests of various small elites. The US has not had to defend itself, really since WWII. Even 911 was better treated as a crime, not an act of war. How can a rag tag bunch of ‘terrorists’ whose international operations have sometimes resembled the activities of keystone cops be a group capable of ‘declaring war’ on the country that spends as much on defense as the rest of the world combined. Rather than eliminating the threat from terrorism, alot of the US actions since 911 have been the greatest recruitment tool terrorist could hope for. But maybe that was the plan. After all, no cold war, the peasants might start to think that there is no need to spend up large on security. If 911 hadn’t happened they would have to have invented it.
Americans are not nearly as wealthy as they were. Redistribution will help but cannot fix this problem. Global competition is intense and oil has peaked while the American population still grows. It will be very difficult to adapt effectively to lower wealth if the 1% is thought of as the only problem.
@stockingrate
Care to justify this claim? US national income per person has risen substantially over the thirty years since 1979. That was the peak in oil consumption per person, and US consumption per person has fallen more than for the world as a whole.
By contrast, median household income has barely moved – that’s all due to upward income redistribution.
Chris – you should read what I wrote not what you imagine I wrote. I offered analysis of a position not advocacy for it.
Terje: Cool. How much should we smash the rich? And who’s in the firing line?
@John Quiggin
What data are you using?
Using current dollars may appear to show a “substantial” rise but not so in constant (2005) dollars.
American personal disposable per capita income (constant dollars) was:
$18,897 (1979) and $33,025 (2010)
See: row 81, Table 673 at:
census.gov/compendia/statab/cats/income_expenditures_poverty_wealth.html
This is an annual growth of around a mere 1.8% pa. and of course if the distribution of this wealth becomes more adverse, it is possible that some Americans can in fact be worse off even over this huge timescale. 1.8% is not a substantial rise.
You can easily see that all Americans were definitely worse off for the years: 2008-2009. This burden would have been disproportionately shared amongst Americans.
It is not clear in all this how the impact of household debt is factored-out.
You never make sense. But for clarity’s sake:
Do you support the continuation of:
or moving some of the practical application onto the “super rich”?
@Chris Warren
Just a disagreement on terminology. Against a claim that Americans are “not nearly as wealthy as they were”, I’d say a 75 per cent increase is “substantial”, even if the rate of increase has been slower than in the post-1945 boom. YMMV.
As I already said, the problem is distribution, not the absence of growth in income per person, let alone the decline claimed by stockingrate.
@Monkey’s Uncle
A lot of effort to respin an unsalvageable talking point. Fortunately Paul Krugman has already taken out the trash on this one
http://krugman.blogs.nytimes.com/2011/10/13/buffetts-buffetts-everywhere/
This may be somewhat off-topic.
I notice Sinclair Davidson has a piece on the ABC Drum yesterday, talking up the Laffer curve. Sigh! I thought it was dead and buried by reality.
Davidson is not the only one peddling the Laffer-Bull Laffer Curve. I recall the fragrant Julie Bishop pushing it a few months ago, but, of course, she would not have any idea of the con’s history or its stupidity. Davidson, naturally, is another kettle of fish, a hardcore ideologue. It just goes to show that the Right has learned nothing, can learn nothing, from the comprehensive failure of market fundamentalism. They intend to continue ripping off the rest of humanity, including future generations, to feed the insatiable greed of the parasite caste, come what may.
Chris – leftwing policy would be made more consistent with leftwing propaganda if the tax burden was moved off the top 20% and focused more on the top 1%. However this is not what I personally advocate. I think we should be cutting tax rates for everybody. I think increasing the tax free threshold is a good place to focus the effort to start with but I also think the top income tax rate is too high. I think these tax cuts that I advocate should be funded by freezing the size of government rather than continuing to grow it in line with private sector growth. To do that in practice means economic reform.
@John Quiggin
It is preferable to always attach a baseline to statements like 75% increase. 75% is anemic over 75 years, hardly functional over 31 years but would be substantial over 10 years.
It seems clear that this much vaunted “capitalism” only produced average annual growth in people’s disposable incomes of less than 2%. Presumably a redistribution of economic growth to capital, has warped society to create massive chasms between social strata and in levels of access to financial security, food and basic services. Given that so many working class jobs were exported this relative impoverishment has now reached such an extent, that the only option for the people who feel, but do not understand, their predicament, is to Occupy Wall Street to show their grief. They are a surplus population just wandering the streets all across America crying for social justice.
Any economic system should be able to provide its population with at least 2% annual growth in disposable income. The only economic system that structurally could fail to do this, is capitalism. Presumably the amount of capital in America (in 2005) dollars has grown at higher rates. If so, this is the classic Marxist phenonema and the final outcome is unavoidable, irrespective of how much stimulus our Keynesians flood into their play-ground.
The whole understanding of the Occupy Wall Street phenomena must be based on the long-run failure of capitalism to provide decent, equitable, disposable incomes to the bulk of the population in the long-run.
75% over 31 years – aggravated by a redistribution from the poor to the rich – plus growing macroeconomic instability over 40 years, plus increasing per capita debt over 100 years, is teaching people a thing or two about the reality of capitalism.
@Chris Warren
Others think the post 70’s slowdown was more about diminishing returns to technology than economic distribution. That sounds more credible to me.
@Chris Warren
“Any economic system should be able to provide its population with at least 2% annual growth in disposable income.”
I’m not sure about that claim at all – subsistence and nomadic societies can’t and don’t, old-school feudal societies can’t and don’t – and that’s Marx’s position. Heck, Marx saw the increase in production which capitalism resulted in as astonishing – he just saw that it was prone to structural instability. Which it is.
As for Marxism per se – my view is that power imbalances would simply re-emerge in some other configuration.
I believe that reformist and redistributive social democracy is the least worst option for organising our societies.
@TerjeP
Obviously such eccentric tax cuts would destroy society.
There is no such thing as private enterprise, except for a few family businesses. All companies only survive by obtaining their market from the public arena. The word “private” is a misnomer. This only indicates where profits go.
It is strange that those on $180,000 only pay 30% tax + GST. Those on twice this only pay 37.6% + GST, and if you get 10 times this – you only pay 43.5% + GST, although at this point you can usually divert most of your millions into trusts and family homes, or travel the world in fancy yachts, (tax free forever).
On the other hand if you are earning less than 6,000 – you still have to give 10% to government through GST.
So the key is to reduce the GST and insert several new tax brackets above the current top bracket of 180,000.
It would probably increase retail employment, and improve the economy generally, if extra tax from those over 180,000 funded cuts in tax rates for those under 37,000, leaving them with more cash-in-hand.
People in these lower brackets probably spend more of their cash in Australia.
An additional mechanism would be to insert new tax brackets for company and trust incomes.
@Dan
Yea – a bit of further qualification would help.
Any modern economic system should ……
If everyone is free and equal, there is no reason why they should not choose to have a mere 1% growth and a lot more leisure time.
@Sam
Diminishing returns on investment (ie technology) may be implicated.
Economic redistribution can be seen as a consequence, an excercise by which the wealthy maintained their profits – given diminishing returns on their investments.
The fact that American capitalists have increased their profit share of national income from 7.2% in 1982 to 12.7% in 2010*, seems more an excercise in redistribution (after the slowdown you speak of), than anything else.
Although the global economy (NAFTA and etc) and other factors (eg US union busting) may have complicated the picture.
[* Table 673, at
census.gov/compendia/statabcats/income_expenditures_poverty_wealth.html ]
Try this… there was a missing backslash ….
census.gov/compendia/statab/cats/income_expenditures_poverty_wealth.html
or…
census.gov/compendia/statab/2012/tables/12s0673.xls
@Chris Warren
Fair enough. Going somewhat against my previous argument, it’s quite likely that financialisation of the economy led to a wastage of productive resources. For instance, laying transcontinental optic-fibre lines that shave 6 milliseconds of transit time, just to enable high frequency trading. Another example would be the best mathematicians and engineers going to work for Wall st, rather than inventing new technologies.
These effects aren’t directly caused by an increase in inequality, but all these ideas come from the same wellspring of economic rationalism.
This will not work. The US government is already having troubles paying public debt and is on budget constraint; further tax cut would simply means the government will have to significantly cut spending on roads, infrastrures etc. These spending creates jobs (whether if those jobs created can support rent or food is another story). Giving further tax cut will not fix the fundamental issue of low demand and spending power unless the majority of the population receives signifcant rise in income consistently which tax cuts will not provide because the proportion of their income taxed is very insignificant in the first place. Of course if the US government ignores the debt and deicide to go to war with the world when it becomes “impossible” to repay then be my guess and give out tax cuts.