Obamanomics

Interesting article recently from Salon.com about Obama’s economic policy.  The author describes the policy and — surprisingly — conservative in some ways, but revolutionary in others.

A few choice excerpts:

… Obama’s budget projects that government spending by the end of the decade will drop to around 22.5 percent of GDP, which is about where it was under Reagan.

Interesting, given all of the hand-wringing over the stimulus and the amount on spending that it contains.

I loved this section:

The basic idea of Reaganomics was that the economy grows from the top down. Lower taxes on the wealthy make them work harder and invest more, and the benefits trickle down to everyone else. Rarely in economic history has a theory been more tested in the real world and proven so wrong. In point of fact, nothing trickled down. After the Reagan tax cuts, increases in the median wage slowed, adjusted for inflation. After George W. Bush’s tax cuts for the wealthy, the median wage actually dropped. Meanwhile, most of the income went to the top. In 1980, just before the Reagan revolution, the richest 1 percent took home 9 percent of total national income. But by 2007, the richest 1 percent was taking home 22 percent.

The emphasis is mine there.  It stills floors me that “trickle-down” economics is such a widely-accepted philosophy, given the mounds of credible evidence that shows it does not actually work for the best interest of America.

Obamanomics, by contrast, holds that an economy grows best from the bottom up. Obama’s program increases taxes on the top and uses the proceeds to raise the living standard of average Americans by giving them lower taxes, better schools and more affordable health insurance. That may not seem very radical, but compared with the last quarter century it’s revolutionary.

There’s quite a bit more good stuff there, so check it out when you get a chance.