I see myself as an F.D.R. Democrat and since the 1980s I've watched the Democratic party leadership morph from progressive classic liberal policies into what we now call "New Democrats" which essentially is a wing of neoliberalism. New Democrats signed on to the "Washington Consensus"which was (and is) the doctrine of globalization. A creed of faith in unregulated markets operating in an ethical and efficient manner if the state does not interfere.
A misguided faith in believing the poor and the rich have no conflicting interests.
That privatization, deregulation, and open capital markets promote fairness & economic development for all, that governments should balance budgets and fight inflation and do didly squat beyond that.
We all have observed this is complete bullshit.
The Washington Consensus is clearly just another Trojan horse "gift" that attacks the middle class. Not unlike Trickle Down economics.
(Take from the poor and give to the rich). The absurdity of believing unrestrained capitalism, if allowed to do what it will, free from any oversight or regulation, free from the shackles of environmental protection or labor laws, somehow will behave ethically and benefit everyone is simply beyond the pale. But many people buy it.
We know why it's sold...but consumer beware...this doctrine is toxic, it is a cancer.
Conservatives of course embrace this sort of thinking, and neither you nor I should be the least bit surprised by that. After all the main premise of conservatism is to maintain or increase the existing social hierarchy.
The truth is that people with power and wealth very often believe that alone gives them "divine" rights to control or dominate society.
When politicians who claim to be acting on behalf of social or economic fairness embrace this toxic policy; we should not only be surprised, but outraged. This is the problem, largely created as a result of the huge importance of money in politics. The larger the role of money in political campaigns & the general machinery of the state; the more policy is defaced to resemble what those who supply the money want it to be. This is not anything like Democracy. It is Fascism, or Oligarchy. But it is not Democracy.
Look, as a nation, as a people, the bottom line of economics is that people need to eat and be sheltered every day. This is a constant. As the brilliant economist Jamie Galbraith has said "Policies that guarantee that they can do so{eat & afford shelter}, and with steadily improving diets and housing and health and other material conditions of life over long time spans, are good policies. Policies that foster instability directly or indirectly, that prevent people from eating in the name of efficiency or liberalism or even in the name of freedom, are not good policies. And it is possible to distinguish policies that meet this minimum standard from policies that do not."
Let's take four major financial securities: stocks, bonds, derivatives, and foreign currency purchases (forex). A European study a few years ago involving just 11 countries, whose collective economies are about two-thirds the size of the U.S. economy, concluded that a miniscule financial tax of 0.1 percent on stocks and bonds plus a virtually negligible 0.01 percent tax on derivatives results in an annual tax revenue of US$47 billion. In an equivalent size U.S economy that would be about US$70 billion in revenue a year.
Wealthy investors buying of stocks and bonds is essentially no different than average folks buying food, clothing or other real "goods and services." Why shouldn't investors pay a sales tax on financial securities purchases? In the U.S., average households pay a sales tax of 5 percent to 10 percent for retail purchases of goods and many services. (Many of which are necessities for existence).
So why shouldn't wealthy investors pay a similar sales tax rate for their retail financial securities' purchases? Why not indeed?
(The answer is simple, it's because they have bought influence to insure very favorable tax treatment compared to everyone else).
Remarkable.
Well some may argue that wealthy stock and bond buyers should not have to pay that much. It would stifle raising capital for companies. Okay. So let's lower that to half the amount, to a meager 5 percent tax on stocks and bonds and 0.5 percent on derivatives. That reduces the US$7 trillion tax revenue to a still humongous US$3.5 trillion annually!
China is about to propose a tax on currency trading (Forex). If the U.S. imposed such a tax. on currency, or forex, trades which is about US$400 billion each day! (Not all trading is U.S. currency trading, of course. However, the U.S. dollar is involved in 87 percent of the trading.) A meager 1 percent tax on U.S. currency trades conservatively yields approximately US$3 billion a day. Assuming a conservative 220 trading days in a year, US$3 billion a day produces US$660 billion in financial tax revenue from U.S. currency financial transactions in a single year.
Nearly every civilized country in the world except the U.S. provides a version of single payer medical care for it's citizens. (it costs about half as much as the private insurance we require in the U.S. for the same coverage). Ask yourself how much of this US $3.5666 trillion a year tax revenue would be needed to fund a single payer-Medicare for All program in the U.S.?
No country has higher health care costs than the U.S.
The U.K. spends 9 percent of it's GDP, Japan about 10 percent, France and Germany 11 percent, for example. The U.S., in contrast, pays 17 percent plus of its GDP on health care.
The most recent U.S. GDP is about US$18 trillion a year, 17 percent of US$18 trillion equals just over US$3 trillion a year.
If the U.S. spent, like other advanced economies with single payer, about 10 percent of its GDP a year on health care, it would cost US$1.8 trillion instead of US$3 trillion a year. The U.S. citizens would save US$1.2 trillion dollars.
Where does that US$1.2 trillion go in the current system? Not for health services for its citizens. It goes to health insurance companies and other "middlemen," who don't deliver one iota of health care services. They are the "paper pushers" who skim off US$1.2 trillion a year in profits that average returns of 20 percent a year and more. They are frankly just. irrelevant economic parasites. What economists refer to as "rentier capitalists".
What are rentier capitalists?
People who don't produce anything but suck profits and wages from those who do actually produce something.
A true financial transactions tax, that is still quite reasonable at tax rates of 0.25 percent to 2.5 percent, can pay for all of a single-payer health care program in the U.S. and still have hundreds of billions left over -- US$641 billion to be exact (US$2.41 minus US$1.8 trillion).
That US$641 billion residual could then be used to better fund current Medicare programs. It could eliminate the current 20 percent charge for Medicare Part B physicians services and provide totally free Part D prescription drugs for everyone over 65 years. The savings for seniors over 65 years from this, and the tens of thousands of dollars saved every year by working families who now have to pay that amount for private company health insurance, would now be freed up with a single payer system, to be spent on other real goods and services. Everyone, literally everyone would be far better off.
(Except the renteirs themselves, who would be forced to find more honest work).
A financial transaction tax and single payer program would consequently have the added positive effect of creating the greatest boost in real wages and household income, and therefore consumption, in U.S. economic history.
More consumer demand would ultimately mean more real investment.
Everyone would enjoy some degree of prosperity.
Yes, there would be naysayers claiming the wealth speculating in stocks, bonds, derivatives, forex and other financial securities would decline if the profits were taxed. . But so what? If rich and wealthy investors don't like that, well as Marie Antoinette allegedly said : "Let them eat cake" (or some other four letter word).
This is good policy. It would, in the long run benefit everyone. Even those 1%ers who don't want their securities purchases taxed, it would benefit them too because more capital in the hands of the consumers means higher demands. The capital would flow to them eventually anyway, it just would pass through a lot of hands along the way.
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