Thursday, August 11, 2011

The Hidden $100,000 Tax on Americans

Here is a post by Paul Krugman looking at the waste caused by this Little Depression that has been going on since 2008. That's nearly 4 years. The cummulative lost production is nearly $2.8 trillion. And the US population is 308 million. That is almost $100,000 per person of lost dollars because of this Depression of 2008. When the Republicans go on and on about "taxes", why don't these consider the tax of lost production? That $2.7 trillion would have built a lot of schools, paved a lot of roads, built a lot of bridges, etc. Just by itself the $2.7 trillion is enough to pay off most of the outstanding mortgages in America and end the home foreclosure crisis.

Here's the post by Paul Krugman on his NY Times blog:
The Waste

Click to Enlarge

FRED now makes it easy to compare potential GDP, as estimated by the CBO, with actual GDP; data here. To make it easier to interpret the numbers, I like to compare nominal (current dollar) values rather than stuff in 2005 dollars; that’s what is shown above.

If we believe these estimates — and I see no good reason to believe that CBO is overstating the output gap — we’re now sacrificing output we should be producing, goods and services that we have the capacity to produce but aren’t producing due to insufficient demand, at the rate of more than $900 billion a year. By the way, the cumulative loss since the recession began is almost $2.8 trillion.

So next time someone tells you that it would be irresponsible to engage in more stimulus, monetary, fiscal, or both, ask: in what universe is wasting almost a trillion a year, not to mention the human costs, a responsible thing to do?

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