The economy does better than it would otherwise when the rich have control of the money

"The war on poverty follows the same time line as the "Reaganomics" so there is no real way to know which policy was the failure." Actually, Lyndon Johnson's "War on Poverty" is attributed to 1964 [1], whereas Reaganomics began with the election of Ronald Reagan. As I pointed out, reductions in social programs began under Reagan and continue until today, so to say that we have fighting a perpetual war on poverty in incorrect. Moreover, it was Reagan's policies that have continued to today that have broadened the income gap. The chart I showed, for instance, shows relative percent increases in distribution of income spiraling out of control beginning roughly after Ronald Reagan took office and dropped the top marginal income tax rate. Let's examine the core logic. We had tax rates between 70 and 91%, and yet the economy grew. Was it because of high tax rates? Not necessarily. Those tax rates, however, allowed the government to make critical investments which bolstered aggregate demand and, ultimately, made lives better for the average person, rather than merely the very affluent. It's interesting that you have opted not to defend your comments on inflation. "I've have been trying to find information on how tax policies helped the Russian Federation, but I have a life to live as well." If you didn't have enough time for an extensive debate, it may have been wise not to accept it. "I'm not sure what your trying to defend." The resolution was clear, and I clarified it for you last round, as well. You made the statement in our last debate that you believe that, when rich people have control of the vast majority of the money, everyone is better off. This debate was created so that you could defend them. I'm arguing that this policy has already been in place in the United States, and it has not worked. Moreover, we've had policies that were much different in the past -- three decades following WWII -- and yet, we had a stronger economy and less severe income inequality. I agree with former Labor Secretary Robert Reich when he says that the very rich would do better with a smaller share of a growing economy than a larger share of a stagnant economy. If the middle class cannot purchase the goods and services provided by affluent people -- and I've demonstrated that lack of demand is the core issue right now -- especially because middle-income people are likely to spend most if not all of their income (in comparison to the rich, who are more inclined to save a larger percentage of their income), businesses cannot grow, expand, and hire. "I can only assume you think government spending is necessary based on your arguments." I do, because it has worked historically, whereas austerity, by and large, has not. Austerity by definition shrinks aggregate demand and begins a vicious, self-reinforcing deleveraging cycle where lack of demand begets unemployment begets lack of demand begets more unemployment. "I also see some equality issues. The government consumes large quantities of money in order to provide any sort of service." As I've demonstrated, tax rates are near historic lows, yet businesses are still not investing. In fact, corporations are sitting on -- literally hoarding -- $2 trillion in capital [3] that they are not investing because the economy is so poor and demand is still so weak. With zero bound interest rates, it is actually a good investment to hold cash. The argument that I think you are tacitly alluding to is Say's Law -- the idea that supply creates its own demand -- which hinges on Say's Identity, that savings equals investment. Thus, if we take promote policies that promote savings, the theory goes, we are promoting investment. Again, there are a number of assumptions interwoven into this argument, and the fact that corporations are hoarding money amid a depressed economy is evidence to the fact that this theory cannot hold. Is there perhaps a point where taxes could be too high and thus stifle investment? Yes. But according to the EPI, the top effective marginal tax rate that will maximize revenue is 68.7% [4]. The publication also says the following [5]: "Analyses of top tax rate changes since World War II show that higher rates have no statistically significant impact on factors driving economic growth"private saving, investment levels, labor participation rates, and labor productivity"nor on overall economic growth rates." A Congressional Research Service study found similar results [6]. "Business have to pay large sums of money to comply with any form of regulation. All business pass the cost on to the consumer. They have to or they would not exist." As the EPI study from my last argument demonstrated, lack of demand, not lack of "regulatory certainty," is the primary issue businesses are dealing with right now. The business surveys echo this view. You haven't provided any evidence disproving these studies, but are merely making an assertion without any backing. As for "passing on the cost onto the consumer": Even introductory-level microeconomic models display consumers and producers sharing the cost of, say, a tax. But as I have demonstrated, lack of productive capacity is not the issue right now -- lack of demand is. Therefore, many businesses can simply absorb the cost of regulations. Also, please point to a regulation that you believe is stifling job creation. Merely saying that regulations kill jobs is one thing. I'd like to see if you can prove this assertion. "I think anyone that thinks the role of the government is to create wealth is nuts." Well, I don't believe that is the role of government. I think the role of government is to act as a vehicle that ensures equality of opportunity, that levels the playing field and provides people, no matter what point they started at, the opportunity to succeed. I believe in equality of opportunity, not equality of outcomes. That means that while I support a strong safety net and universal health care and education, as many European countries have, I do not believe that the government can magically turn me into Bill Gates. I will most likely never as wealthy as Bill Gates, and I do not have a problem with that. "The government might want to increase it's revenue, but it sole purpose is to hold us back." We fundamentally disagree on this, but just let me say that this is quite a cynical view of government. Do you have anything to back this up? "That really is the whole point of any economic model. It was to decide who gets use of limited resources." It is true that the core problem examined in economics is how to allocate scarce resources within a framework of unlimited wants. But how does this connect to your view that government is holding us back? Is your case that government inefficiently allocates resources, and the market can do it better? If that is your case, I'd like to introduce the concept of a market failure. Pollution is one. Factories can pollute and thus pose a negative externality on others. At the same time, they're exacerbating the looming threat of anthropogenic climate change. Yet. because this practice is profitable, it will continue, even if it ultimately makes our lives worse because, without a clean environment and livable Earth, it's difficult to imagine that we would be able to have this conversation. Though we're not to that point yet where the Earth is uninhabitable, some real damage has already been done. It's quite difficult -- and I would argue nearly impossible -- to address a problem of this nature by simply relying on the profit motive, self interest, and the free market. 1. http://www.ushistory.org... 2. http://robertreich.org... 3. http://www.ibtimes.com... 4. http://www.epi.org... 5. ibid 6. http://www.foreffectivegov.org...