Our Fight For Prosperity - Section B The Details

---

SECTION B. THE DETAILS Part 1 – Root Causes

     As we examine the details of these core US economic challenges and their direct consequences to us all, the path to a durable solution will become clearer, so we start with the key details of the root causes:

     Root Cause #1 Giant Congressional And Presidential Policy Failure - A Big Bucks Giveaway Means Most Americans Incomes Are 67% Lower: For over 40 years, US economic policy has been driven by a contrary philosophy that says supply is the key to economic prosperity, that the way to increase supply is through investment, and that investment is driven primarily by the wealthy who invest because their taxes are cut. 

     But there are a few basic problems with this supply-side approach. Supply side says make the investment, but what good is supply for which there is no income to pay its price, to create the demand? What good is supply when there is no interest in the product or service being offered? What good is supply when the prices for that new supply are higher than those from another source where it is already plentiful at a lower price? A lack of customers with incomes to consume, a lack of interest in the product or service offering from consumers, a price which is higher than what one must pay for an equal or better product or service, and what have you got? 

     Consumer demand is actually the key to the entire US economy. It is 70% of all economic activity by itself and thus drives almost all investment spending. But nearly all consumers are paying ever greater portions of our incomes, which have not kept up with overall economic growth, for basics like housing and health care due to Congressional and Presidential policy choices made over the past decades. How can the 90% of consumers with lesser incomes power our economy when the incomes we would use to do it have been poached and given to others? Policy choices made by politicians seeking election contributions and appreciation in the stock prices of the industries they regulate drive much of national political favoritism, often contrary to the interests of the greatest numbers of Americans. Private sector businesses with few customers, little revenue, and little to no profit do not need more supply-side investment – they need bankruptcy lawyers. That’s the story of the long-running deterioration of the America’s private sector economy. Profligate spending by 1% of us cannot power the US to prosperity. 

     RAND Corporation analyzed the practical effect of this Giant Congressional and Presidential Policy (Choice) this way:

“In a 2020 RAND Corporation study, RAND researchers developed a new method to measure income inequality. They found that, had income for workers below the top 10 percent of the income distribution grown at the same rate as the overall economy since 1975, workers in that group would have collectively earned $2.5 trillion more in 2018, 67 percent higher than their 2018 earnings. Furthermore, over the 43-year period from 1975 to 2018, the population below the 90th percentile would have earned $47 trillion more had their incomes grown at the pace of overall per capita economic growth.” 

“When comparing groups of workers at different percentiles in the income distribution, the only group for which actual income gains exceeded the economic growth rate was the group near the 99th percentile of the income distribution.”

“For workers at the 25th percentile of income, actual income in 1975 was $28,000 per year. Had income growth for this group matched the economic growth rate, their income would have risen to $61,000 by 2018, but it actually rose to only $33,000. Thus, instead of rising at the economic growth rate of around 120 percent, these workers’ incomes rose about 18 percent.”

     To read this eight page Rand study report on income inequality, see https://www.rand.org/pubs/research_briefs/RBA516-1.htmlThe supporting working paper provides a state-by-state analysis at https://www.rand.org/pubs/working_papers/WRA516-1.html

     “.....would have earned $2.5 trillion more in 2018......” GDP was $20.5 trillion that year. That $2.5 trillion would have added 17% to consumer spending and saving below the 90th percentile of incomes for just that one year. That’s some serious economic firepower. The 67% raise for all incomes below the 90th percentile would create demand for at least 10% to 12% more products and services all over America, together with 5% to 7% more savings in that one year. A closer analysis, holding labor’s share of our total US GDP closer to its original 1975 level, and including incomes through the 98th percentile, is shown at Our Congress And Its Supply Side Debacle in section F below. 

The direct consumer spending impact shown in that section F economic policy change scenario (at the bottom of this page) would be even greater than the Rand study indicates at around $3.5 trillion, a 17% boost to GDP, our total economy. In either scenario, steadily raising the federal minimum wage floor over the next decade to put it back in line with overall economic growth would provide a very solid foundation for steadily growing consumer demand. 

     It’s not an instant solution as there truly isn’t one single solution for these past decades of economic policy failures. But this basic economic policy change would begin to reawaken broad prosperity and sustainable economic growth driven by the 70% of our economy which is in our individual hands, consumer spending power. As free individuals making personal choices for ourselves and our families, we drive the future we wish to create, not one driven by our federal government’s unsteady and arbitrary hand. By gradually restoring buying power with increasing incomes in the hands of We, the many Americans, we can gradually and steadily accomplish this task ourselves with modest inflation. 

     The alternative is to continue with the failed policy choices of Congress and our line of Presidents. We know where that goes, we’ve been on this track for 45 years. It has moved us ever downward with spiraling debt we already spend $1 trillion for every year, and ever-growing dependencies, a track to nowhere for millions of people. The end of this track looks just like the October-November 2025 federal government shutdown, a hack and slash approach to spending, which imposes overnight nightmares on millions of Americans involuntarily enrolled in forced dependencies with no financial backup of their own. I know that feeling – you can read about all across this website – a direct result of government programs used to hide still more government programs. Remaining on this path of failed policy choices will move our nation and almost all of us ever closer to financial disaster and a debt debacle. 

     Congress and our President could take the necessary steps tomorrow to put America and all of us back on a sustainable path for the long run. But they simply don't pay attention to this basic economic reality for everyday Americans - it's just not important enough to them. Reelection matters and the modern parody of governance called politics is what they actually know, so they use the stupid political tricks of distraction – mid-decade redistricting and meaningless national political conventions with no tangible result - instead of doing the basic legislative work needed for a sustainable economic future and getting it done on time. 

     That’s our Congress and modern line of Presidents. That We can change. We will have to make We, The People, and our requirements for a sustainable, viable economy and nation far more important for their successors.

     Root Cause #2 Giant Congressional And Presidential Policy Failure - Health Care Costs Drive People To Their Graves Four Years Early: Our US out of trend rise in health care costs also began in the 1980s. Today, the US has the world’s most costly health care, more than double other high income nations, with four years shorter life expectancy than those lower cost peer nations. This means less is spent on everything else as almost 9% of our total economy is wasted on overpriced health care. A few among us benefit from the much higher incomes which result from overpriced health care. Most Americans are forced to spend less on everything else, and American businesses are less competitive because they bear much of this cost for their insured employees and must pass it along in their prices. That's over $2.5 trillion per year which Congressional and Presidential policy actions and failures have gifted to the health care industry in excess profits, to cover the industry's gross inefficiencies, and to support low health care industry productivity. See https://banbrainhacks.org/a-healthy-america%3F

     Root Cause #3 Giant Congressional And Presidential Policy Failure - Housing Costs Keep Soaring Through The Roof: Congress wrecked the housing finance industry in the 1980s. It deregulated interest rates and those funds flowed to Wall Street funds, out of the local communities where the funds had been invested in housing. A 5 to 7 million unit housing shortage has resulted over the past 40 years. We still haven’t come close to catching up with this problem. When housing is scarce, as it is in most places with strong employment and income growth, its drives the price of this essential much higher than it would otherwise be. More spent on housing means less for everything else, suppressing economic and job growth all over America. You can see this clearly in the chart entitled Real Private Sector Growth Reduced To Zero at the bottom of this page.

     Root Cause #4 - Reckless federal borrowing to game tax cuts which mostly benefit a few wealthy people, has grown the national debt by 42 times in 45 years.This extreme pace of federal borrowing has recently been accelerating at a rate compounded by still more tax cuts which mostly benefit a few people. A world record breaking pace of $1 trillion in under four months was added to our national debt in late 2025. This is the fastest pace among all nations other than during the 2020-21 Covid pandemic emergency. There is no current emergency, other than accumulated reckless refusals in Congress and our line of Presidents to fix national problems such as our national minimum wage floor, health care, housing finance, and reckless federal government finances.

     Here is yet another $1 trillion problem of reckless government finance. Our national debt has spiraled from $0.9 trillion in 1980 to over $38 trillion in 2025. Our federal government now spends the first $1 trillion (about 20%) of income tax revenue it collects from us to make interest payments on this accumulated debt. What would $1 trillion buy today if we could spend it on things which might be useful to us all?

     In today’s dollars, $1 trillion is 1.4 times the total construction cost of our 48,000 mile nation-wide interstate highway system if it were built in a single year. So, after we built the entire interstate highway system, which most people use every day, from scratch in one year, we would have 20 years’ worth of mass transit infrastructure investment funds left over each year to pay for reduced travel times for every American who encounters urban or suburban traffic delays while commuting by car, bus, or rail. That’s $1 trillion spent one time. 

     By comparison, this $1 trillion spent on interest must be paid every year forever, of course, so our children will be forced to bear this burden forever. Reckless federal government finances are Congress and long line of modern Presidents “easy answer” to their own refusal to fix the structural problems discussed here which impact American families every day, and to their refusal to reform key elements of our highly militarized approach to dealing with other nation-states, discussed in Acts Of War beginning at https://banbrainhacks.org/war-power-and-limitations  and by World War II American General turned US President Eisenhower in the video link to his Farewell Speech at the bottom of the home page https://banbrainhacks.org/project-mindbreaker

B. THE DETAILS Part 2 - Real Consequences

The Details - Real Consequence #1: Congress And Presidents Give Away What Little Private Sector Growth There Is To A Very Few Americans....

     Since the 1980s, the trend to lower tax rates on the highest incomes and wealthiest Americans has increasingly accelerated a pattern of investment in speculative financial instruments which can bubble into busts; in simplistic industry rollups which reduce price competition and provide barriers to more competition; and in financial engineering of companies which strips away their business assets and equity, which are used to pay dividends while adding burdensome high-priced debt and operating leases, which reduces cash flow to invest or save for the inevitable rainy days which businesses experience just like families do from time to time; and attempts to flip these American businesses to another buyer every few years while making no investment in improving the products or services offered as these companies are overrun by more productive or innovative competitors from around the world. 

     Much innovation for long-term growth in keystone US industries has been replaced by short-term pressures on earnings growth, giving us quality problems which advantage competitors, such as those which crippled Boeing’s 737 Max commercial jet sales worldwide; anti-competitive consolidations which increase pricing power by creating monopolies and near-monopolies for essentials like municipal fire engines; contracting with competitors and paying them not to compete, such as existing pharmaceutical manufacturers paying to keep medications free from price competition to boost profits and paying doctor prescribers to use higher cost medications when lower cost substitutes are available, as well as other industry barriers agreed by members of Congress or Presidents who have financial stakes in industries they regulate. 

     These techniques hollow out the buying power of consumers and the financial strength of many of America’s private enterprises. They starve critical investments in innovation essential for future growth of the entire American economy. For example, as the rest of the world continues the journey from petroleum-based energy to sun-powered renewables like wind and solar, to more robust hybrid grids, and to interconnected power supply essential to lowering costs over the long term, our role in this critical global transition is ever more diminished by Congressional and Presidential policies. Since energy is present in every single thing we do and buy, it is a globally essential good. By this policy choice, we are consciously choosing to be left behind in this key global industry dominated by others. 

     At the same time, these anti-competitive techniques and anti-innovative policies add to incomes and to wealth for a select and favored few. They are now taxed at much lower rates than when economic growth was far stronger and benefited far more Americans year after year, despite the ups and downs of our economy and business cycles. With concentrated wealth comes reduced buying power for the other 90%. That’s the core of the supply-side economic policy failure – a loss of demand from reduced spending power among 90% of us - which has driven American private sector growth to less than zero, while hollowing out and bankrupting many American businesses over the past 45 years, since it was peddled to America in the early 1980s. You can see this basic mathematical analysis of the US economy since the 1960s which leads to this conclusion in section F at the bottom of this page.

Real Consequence #2 - Congress and Presidents Address The American 90% - By Creating More Self-Serving Political Dependencies

     By passing dependencies into law which provide the coercive power of the potential for loss of income or benefits, both political parties in Congress and our line of Presidents have burdened our nation and all Americans, including the 1%.  Rather than providing the tools for economic and personal freedom, empowering more American innovation, initiative, and enterprise, and providing for a livable income floor for workers which grows with our economy to share prosperity broadly, Congress and Presidents have acted to create less independence for people and for businesses in our country. These policies range from government subsidies and favoritism bestowed on some to coercion and manipulation by threats to remove government support for others – both these types of policies are simply efforts to abuse dependencies and coerce continued political support. 

     Specific current and recent examples of these dependency oriented policies include income replacement to bail out farmers from tariff impacts resulting from anti-competitive trade barriers, government food and rent subsidies to support lower income workers whose compensation has been deliberately suppressed by government policy choices when compared to overall economic growth, and funding freezes for vital infrastructure projects required to replace or expand infrastructure essential for further economic development. 

     If the vast majority of Americans were provided instead with competitive floors established by law - trade policies which help support prices by encouraging export volume growth for farmers, reduced trade barriers for other American exporters; health care reform to cure anti-competitive practices and access issues; housing finance reform to diminish community and regional supply imbalances; a basic living standard wage floor for workers; and highly functional infrastructure for transport and utilities, we would not need government to prop some of us up with its dependencies. We could avoid still more decades of accumulating national debt with only the burden of future interest payments stretching to infinity to show for most of that debt. But while our National Political Class plays at recess, like Nero sawing on his fiddle while Rome burned, we are stuck with the mess we have, being made still worse as our national debt spirals ever higher.

     That's the American Dream fading for most of us - the real consequences of enduring Giant Congressional And Presidential Policy (Choices) failures reinforced by a long line of Presidents running the federal Executive - both in their actions and in their failures to reform. 

B. THE DETAILS Part 3 - Fixes We Can Put In Place

     Simply put, the cumulative effect of increased consumer spending and saving would create more sustainable private sector economic growth to drive essential private sector American jobs and investment. That virtuous cycle of private sector job creation would in turn spur still more demand as it generated about $600 billion more federal revenues to help balance the federal government's budget - currently over $1.8 trillion in the hole every year. 

     Done a decade or more ago, the key policy changes described here would have avoided adding about $10 trillion to our ever spiraling national debt over recent decades, which is up from about $0.9 trillion in 1980 to $38 trillion in 2025. Wring out the excess health care costs, now around $2.5 trillion each year, and put those funds to better use in the private sector, and we have a strong economy. Make our police powers more accountable for their actions and compliance with our rule of law; line up spending with rational defense and justice objectives; stop padding reelection campaigns with unneeded, obsolete, non-functional and unsupportable equipment, and we could have a modest surplus to pay down debt, instead of another decade older and another trillion of interest payments from debt, left by their parents neglect to remove our techno-squandering Congress and line of modern Presidents, the ones World War II General turned President Eisenhower warned us about in 1961, click the black action bar at the bottom of the home page https://banbrainhacks.org/project-mindbreaker

Even the 1% of high flying Americans would be better off with these policy reforms in place because their means of production stock investments could pay off. Instead of chasing another speculative bubble which pops again, sustainable growth would bring sustainable returns based upon performance, not short-term financial engineering or currency depreciation which increases the earning power of off-shore subsidiaries while the US declines and falls ever further behind, borrowing money at ever faster rates, and starving our own economy of investment while handing our competitive position in global industries to better-positioned competitors willing to invest in innovation and growth. 

These Giant Congressional and Presidential Policy (choices) have real consequences - we are living with them every day. 

This ends section B - The Details. To continue reading Our Fight For Prosperity, go to https://banbrainhacks.org/our-fight-for-prosperity and continue with the contents described below:

Section C. ECONOMICS 101 - PRACTICAL ECONOMICS FOR REGULAR FOLKS: What Works And What Doesn't includes practical examples of economic systems which have and have not worked over the past century in Part I: The America Model That Has Worked Repeatedly, Albeit Imperfectly, and Part 2: The Soviet Model That Pretended To Work, And Failed Perfectly

Section D. ECONOMICS 102 – PRACTICAL ECONOMICS FOR REGULAR FOLKS: Basic Facts About Our American Economy provides a series of Links to some basic information about three basic kinds of economies and some of the information sources used to develop this webpage and the other economics related webpages which follow, so you can review and consider this information for yourself.

Section E. CONGRESSIONAL POLICIES AND TAX RATES DRIVE BEHAVIORS - For Better And Worse includes a discussion of the three illustrations and downloadable pdf which are in section F, duplicated below and on the Our Fight For Prosperity page.