If history is to be our guide, then why aren’t we doing what’s already historically proven to work? The refusal by congressional Republicans to raise the taxes of the rich in these hard economic times makes as much sense as pouring water into the ocean. And this refusal goes against all that history has taught us.
According to a report written by Larry Beinhart, “History shows that when spending is cut — in the name of balancing the budget — recessions immediately follow. It makes sense, therefore, to look back at government tax and spending policies during the Depression and what the results were. ” Mr. Beinhart writes in detail some very interesting historical facts:
- 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.
- 1936 — The top tax rate is raised again. This time to 79 percent. GNP grows a record 14.1 percent; unemployment falls even further.
Middle class Americans have carried this country on their backs for far too long. Since Ronald Regan took office in the 80’s and introduced the concept of trickle down economics, the concentration was placed on making the rich pay less in taxes while providing them with unlimited loopholes, in the hopes that when they succeed, the middle class will succeed. That concept has failed and over the last 30 years, the rich continued getting richer while the middle class fell more and more into poverty.
So here we have our lesson in history. At a time when this country went through what is now called The Second Great Depression, all Americans, especially the rich, bore the responsibility, each paying according to his/her means. Today however, the lie of the sucess of a trickle down theory to boost a failing economy is still engraved in our minds, and the congressional Republicans are determined to keep it that way.
Read Mr. Larry Beinhart’s Report here.