To me this taxation argument is irrelevant. You can quarrel all you want about taxes or cutbacks we’re just not going to grow like we are accustomed to and the American middle-class will soon be an endangered species. American business has found it easier to out source their job costs, pollution issues and compliance challenges overseas to some third world nation where the costs and standards are lower than in the USA. And if they need someone to bail them out overseas they can always hire some American kids for the cheap in the military because the kids can’t find any other work stateside anymore.
Over the past two decades the sectors that promised to create jobs that would replace the lost manufacturing jobs, service and technology, have been outsourced to India. The manufacturing jobs, of course, went to China. In the meantime we have been reduced to third world status by exporting raw materials to China. The Chinese do their part by buying our now downgraded Treasury bonds.
It’s really that simple, no jobs, no growth as long as American corporations are allowed to shelter their profits overseas. The housing bubble, like the Internet bubble before it, artificially hid the lack of job growth. Frankly, I doubt the financial markets are capable of conjuring up another bubble to mask the true pain of job loss for the middle class. Worse, Obama doesn’t get it nor do the Republicans.