Considering that the long-term unemployment rate is at 13 percent and the collapse of the housing bubble means consumers have not much more borrowed money to spend, Rall isn’t out on much of a plank when he says yes.
He is right about some bigger issues.
First, both Hillary Clinton and Barack Obama are “nibblers” on this issue. That is, neither one will be an FDR and propose transformational change. Neither one is likely to stand up to DLCers in their own party (hell, Clinton IS one, or the Slickster was) to roll back the deregulation of the 1990s, much of it passed by hugely bipartisan majorities.
Second, this isn’t going to be fixed overnight. Not even here in Texas, where the effects of the imploding housing bubble have been fairly mild.
Hardy Browder, the finance director for the city of Cedar Hill, expects property tax revenue growth for the next two years to be below the average of the past several years.
Third, Rall says the dreaded “stagflation” of the late 1970s actually wasn’t as bad as this will be. He says unemployment was relatively low during the Carter years and that wages outpaced inflation.
Off the top of my head, I’m fairly sure he’s wrong on wages for the last two years of the Carter administration, which is the part that matters, but I’ll give Rall half a pass. Only half, though.
The biggest problem, though, beyond the tapped-out borrowing, is that median family income has actually DROPPED over the past seven years. It’s gone down a tick, from $61,000 to $60,500.
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