Remembering The Greatest Economic Crash In History.

Looking back at the market crash of 2008, it’s difficult to believe that it represented a greater loss of stock and home equity than any previous crash in American history. Though we may be impatient for a full recovery of jobs and middle class incomes, we should take a few moments to recognize that the quick action by Congress and the Federal Reserve did, in fact, work. The same can be said for President Obama’s automotive bailouts and economic stimulus which were opposed and derided by Teapublicans.

So you have not yet been able to find the job you want? Or you feel that you are being undervalued and underpaid? Your frustration is understandable. But, when compared to the aftermath of lesser crashes, it could have been a whole lot worse. We were not relegated to soup lines and work camps as our parents and grandparents were following the stock market crash of 1929. But had President Obama not ignored the Teapublicans’ call for austerity measures, we well might have been.

To fully appreciate what I mean, you need to look at the extent of the losses in 2008.

The Dow Jones Industrials lost 778 points in one day – the greatest single day loss in history. It’s estimated that the market crash resulted in a $1.2 trillion loss of market equity. Looking at it another way, the Dow lost 33.8 percent for the full year – surpassed only by the bear markets of 1907 and 1931. Further, GDP contracted for more than a year. Unemployment rose from 5 percent to 10 percent before it began to drop. According to, $3.3 trillion in home equity was stripped from homeowners in 2008 as home values fell by 30 percent. Income levels fell, causing the net worth of households and non-profit organizations to fall by roughly $15 trillion. And the impact of the crash on retirement funds is virtually immeasurable. Indeed, those who were nearing retirement may never fully recover the money lost in their IRAs, 401ks and their defined benefit pension funds.

Despite all of that, our economy recovered remarkably quickly. If you don’t believe me, just look at the economies of many other advanced nations that are struggling with stagnation who mistakenly followed the advice of conservatives. By contrast, the GDP of the US is growing, our deficits have fallen at a dramatic rate and our national debt is now less than 3 percent of our GDP – and it would be much lower if Teapublicans hadn’t fought to give more tax breaks to corporations and the one percent. Certainly, income inequality is skyrocketing, but it was expanding long before the crash as a result of the Bush tax cuts. Yet rather than do something to address the issue, the GOP-led Congress has, instead, voted to eliminate estate taxes for the wealthiest 5,000 families in America!

Remember that the next time you hear someone claim that the GOP is the party of fiscal responsibility. It was GOP policies that led to the Great Recession. And, once again, it was Democratic leadership that led us out of it.

Abolish The IRS?

Tea Party favorite, Sen. Rand Paul, is featured in a TV commercial calling for viewers to sign a petition to abolish the IRS. Paul and his fellow Tea Party parasites are capitalizing on what they falsely call an unconstitutional attack on conservatives to get what they really want…a flat tax.

The flat tax is a horrible idea that has long been pushed by the wealthy and conservatives. It doesn’t sound bad; you just total up the income you received for the year and pay a flat percentage of that income. No accountants or tax preparers needed. But since everyone would pay the same percentage, the flat tax would be a huge victory for the wealthy and an unprecedented attack on the poor.

The very conservative Heritage Foundation recommends that the tax rate be set at 28 percent. It would eliminate payroll taxes, estate taxes, excise taxes and taxes on savings. It would give a modest tax credit to the poor. The only other tax deductions would be for higher education, gifts and charitable deductions.

Of course, the poor and modest income households don’t make enough to have savings. So eliminating a tax on savings only benefits the wealthy. Likewise, only the wealthy would benefit from eliminating estate taxes. The wealthy would certainly benefit the most from the charitable deductions. And since the top marginal tax rate is now 39.6 percent, the flat tax would give those making $400,000 and up a tax cut of 11.6 percent!

The real effect of the flat tax proposal would be to dramatically cut taxes for the wealthy and raise taxes on those who can least afford it.

The flat tax is just another Trojan horse concocted by conservatives to benefit their wealthy masters. It would move even more of the tax burden onto the middle class and make the plight of the poor utterly hopeless. A better idea is to rid our current tax code of the deductions, tax shelters and subsidies created by conservative politicians to help their campaign contributors avoid paying their fair share of taxes.

A flat tax will simply help them avoid taxes altogether.

Since no one actually likes paying taxes, the IRS has few friends. Yet, without the IRS, who would track down the thousands of tax cheats? With no enforcement, thousands more would be encouraged to avoid paying taxes. And, though a flat tax may sound like a good idea, if it ever happens, the American dream will become a nightmare for all but a very few.