Part one
According to the book written by Robert Reich which is entitled Beyond Outrage, increasing income share and wealth going to the top individuals in the country is one of the most damaging rigs in the economy. Robert argues that nothing good can happen in Washington unless all the citizens are organized and energized to ensure that Washington acts while putting public good and interest first. The very first step will be to ensure that everyone sees the bigger picture. Reading through the book, dots can be connected as one can see that increase of wealth and income high class level has made it hard for the middle and lower class individuals to get jobs. Also, growth has only been experienced among those with high income levels when compared to the middle and lower income individuals. This has not only affected everyone economically but also undermined democracy causing United States citizens to become more and more cynical about the public life (Reich). As a result, many Americans have turned against each other with increased crime rates due to unemployment. The effects of America’s economy working for the powerful people and ever-few privileged have been felt by everyone.
When the economy of a country is being controlled by the rich only in the country, the less fortunate are not protected. Laws and regulations will be passed so that the wealthy can protect their property and wealth they have amassed together with ensuring they continue getting more to their side. For instance, the Organization for Economic Co-operation and Development stated that United States needs to increase their taxes. This is because the GDP to tax rates for the country are the lowest among the countries in the OECD area. However, taxes have not been increased on the contrary; taxes want to be reduced to favor the wealthy American citizens as they will be the biggest beneficiaries as less tax will be paid.
Part two
The conservative policies employed by the government have transformed the national from the largest creditor to the largest debtor country in just a few years. The situation has been getting worse every year. Issuing of epic cash amounts of mortgage backed debt has destroyed the country’s economy. This is destructive way as the economy of the country weakens. The politicians in the country thought that they were going to make everyone in the country a home owner but this has naturally led to an economic disaster. Citizens in the country were allowed to acquire loans including those with lower credit scores. Due to the mortgage backed debts, households stopped saving making the savings rate to drop significantly. This caused a surge in the household debts. The budgeting policy used became a drag to the economy as household increased their spending lessening their savings which made them go into debts like never before.
Failure to introduce a progressive tax system to protect the poor has led to economic consequences. The lower and middle groups income are left with little to spend and save due to the fact that they are subjected to the same tax rate as those in the high income level. With less disposable income, consumption is reduced. Therefore, it is hard for household to buy as much which reduces the demand for products and services in the country. The lower and middle class earners are the majority in the country. If they do not increase their spending, demand drops making companies to reduce their production to the point where demand equals supply. As a result, the country will be operating below its full potential leading to balance of trade deficits which harm the economy.
Work Cited
Reich, Robert B. Beyond Outrage. New York: Vintage Books, 2012. Print.
