Thursday, February 23, 2012

Want money to build up a comprehensive welfare system? Build industry

The complaint heard time and time again is that the money isn't there for things like universal healthcare. The money isn't there, it doesn't grow on trees. If you set aside the fact that our taxation system is completely skewed, with corporations and wealthy individuals not paying their fair share, they do have a point in that any new social programs would rely on the underlying tax base. That money does have to come from somewhere, but it's generated by productive industries selling products and bringing in money. That money is then allocated between wages and salaries, investment, and profits. By expanding our industrial base we can expand the available tax dollars for a bigger social safety net. Industry can either be oriented towards the internal market or the external one, but ideally, the industries we want would be geared towards making goods for export. By exporting goods, instead of importing them, we bring in money without giving it away. An increase in exported goods would bring in more money. Simple as that.

If we accept that building export industry is a good idea, the question becomes how are the companies going to get started? They aren't going to get started on their own. To really get off the ground, they would need some sort of public sponsorship. This, in turn, takes money, but money spent on building industry is ultimately money better spent than that spent on increasing consumption in order to stimulate the economy.

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