A Productive American Economy essays

A Productive American Economy essays America's economy today has plundered to a new low and unless we do something about the current trends, the situation will only worsen. In 2008, America experienced a tragic financial crisis and the blame was instantly placed on the shoulders of Wall Street. However, many economists, such as Robert B. Reich, argue that the cause of this economic meltdown did not come from people messing around with the stocks and corporate shares but rather from the actual structure of the country's economy. In the book, Aftershock, Reich discusses the structure of our economy in what he calls the basic economic bargain. At the root of a highly productive economy, the workers are not only employees but also consumers (Reich 28). The earnings from these workers are used to purchase the goods and services produced by other workers. But when the workers' taxed earnings no longer suffice for their most basic needs, then the basic bargain becomes broken. This causes the production of goods and services to be greater than what the consumers are capable of purchasing. The broken basic bargain attributes to the growing gap between the rich and the poor by allowing the wealthy to earn more while the working middle class pays more. Raising the tax rates on the wealthy will help repair the basic bargain and allow for the economy to Production of goods and services comes at a cost and those costs must be balanced out by an equal amount of demand. So the real problem is not just the fact that the vast majority of people have less purchasing power but there also needs to be more demand. The nation's economy is driven by the needs and wants of the everyday consumer. Jobs arise from the consumer sector, especially from services, which in turn spur up growth. During economic downturns like the one we are currently in, consumers purchasing investments such as real estate, automobiles, and other physical capital have s...