Letter: Improving the economy

January 6, 2014 

There has been much talk about income and wealth inequality lately, a lot of it highly polarized. While few dispute the facts (income, and especially wealth, have shifted upward) there is very little consensus on whether that is a problem, or what to do about it if it is.

The USA has a consumer-based economy. That means that the majority of our economy revolves around providing consumers with goods and services. The vast majority of that consumerism occurs in the middle class and below. The wealthy simply cannot consume enough to keep the economy going.

In a capitalist society, absent all laws and tax policy (usually referred to as anarchy), people will do whatever maximizes profit, if such is possible under those conditions. Draconian regulation or the wrong sort will stifle the economy. There are always tradeoffs when considering government regulation, or lack thereof.

Improving the economy must consider how to improve and keep the consumer base vibrant. Whether "getting out of the way of business" or "incentivizing job creation" if it isn't expanding or improving the consumer base, it will not help us in the long run.


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