US Economy: Ending tax cuts for top 2 percent a step in the right direction - by Dave Zweifel

As the US continues to suffer the effects of the Great Recession and the national debt keeps growing, the president’s sensible proposal to extend the infamous George W. Bush tax cuts to American families earning less than $250,000, but letting them expire on incomes above that mark, has the Republicans and some all-too-familiar “blue dog” Democrats emitting cries of anguish for the nation’s wealthiest 2 percent.
“Class warfare,” the GOP leaders shout, claiming that any tax increase in this economy would cause every calamity except, perhaps, stopping the earth from rotating.

Class warfare? Yes, there’s class warfare occurring in this country, but it’s not what the GOP and the blue dogs claim. It’s the other way around: a war being waged by the country’s privileged financial elite against the great American middle and lower financial classes with the help of politicians whose coffers are kept brimming by the privileged people. It began in 1981 with the introduction of Reaganomics and it has continued unabated, with the possible exception of Bill Clinton’s second term, ever since.

Taxes were cut, deficits soared and during all that time, the wealthiest 1 percent in the United States increased their share of the country’s financial wealth from less than 25 percent to more than 35 percent today. The bottom 99 percent’s piece of the economic pie dropped from 75 to 65 percent.

For more: Plain Talk: Ending tax cuts for top 2 percent a step in the right direction

rationalrevolution: Trickle Down economics was (and still is) a Trojan Horse - by David Stockman

For the complete report from the rationalrevolution click on this link

Trickle Down economics was (and still is) a Trojan Horse - by David Stockman

"The most important issue is that, even if you take the Reagan “Trickle-Down” policy at face value it’s still horribly flawed as a policy that will provide economic growth that benefits everyone. There is no realistic way for "Trickle-Down" economics to work and increase the income of the working classes of America. In fact I am certain that the developers of the theory of "Trickle-Down" economics were fully aware of this and that "Trickle-Down" has in fact worked as intended. This means that the intent behind implementing "Trickle-Down" was to benefit the wealthiest Americans at the expense of working class Americans. "Trickle-Down" hasn't failed, as many modern economists have suggested, it has succeeded in its goals, which is the increase of economic inequality and the shift of a greater portion of America's wealth into the hands of the wealthiest Americans.

The general economic policy of "Trickle-Down" that was put in place by Reagan has gone fundamentally unchanged since it was adopted by the country in the 1980s. The claim of Reagan was that "all boats would rise" by giving huge tax cuts for the wealthy. This did not happen. The majority of boats stayed the same or sank, while only between 5% and 1% of the boats actually rose. The effects of "Trickle-Down" policy are evident. As would be expected from the policy, the largest beneficiaries of the "Trickle-Down" system have been the wealthy.

Note EU-Digest: The trickle-down theory, which is supported neither by theory nor evidence continues to be applied by the governments in the US and Europe. It does not work and needs to be abandoned today, rather than tomorrow.

The Guardian: Britain - Stuart Jeffries and Stephen Moss on "who would gain from a recession in the UK"

For the complete report from The Guardian click on this link

Britain - Stuart Jeffries and Stephen Moss on "who would gain from a recession"

Recession is very good news for economic pundits and for debt collectors. Suddenly the terms "credit crunch" and "sub-prime mortgages" are on everyone's lips - and on every front page. Economists, who in the past had to play second fiddle to political analysts, are now in great demand - witness the deification of viewer-friendly economics guru Evan Davis at the BBC and the ubiquity of the corporation's business editor Robert Peston, despite his curious way with the English language.

Mortgage repossessions are expected to rise by 50% this year, according to the Council of Mortgage Lenders. In 2007, about 30,000 homes were repossessed and the CML expects that figure to rise to 45,000 this year. The signs that a sizeable minority of Britain's 12 million mortgage holders are starting to struggle with their repayments are already there: more than 500,000 have missed a mortgage payment in the past six months. Mortgage repossession is not the only form of debt collection that is likely to boom during a recession. According to credit action.org.uk, the UK's burden of debt grew by 9.3% last year, with personal debt standing at euro 1,882.77bn at the end of December, and Britain's level of personal debt rising by euro 1.34m every five minutes. Partly as a result, the money-advice website claims that more than 7,716 loan repayments go unpaid every day, that Citizen Advice Bureaus will deal with 6,600 debt problems each day, and that 305 people will be declared insolvent or bankrupt each day. In a recession, these figures will increase. The debt industry is sure to be in profit over the next few years.

Note EU-Digest: Britain is finally starting to pay the price for having chosen the US economic model in the days of Reagan and Thatcher. Fortunately for the EU the British are not tied to the Euro or the policies of the ECB, which so far have been far more successful than the British and American governments in containing inflationary spending . The Eurosceptics better take note of this before they criticize EU's policies. Britain needs Europe.