I have said this aloud, and not blogged it, but here it is:
To have an economy that grows steadily instead of doing the roller-coaster that we have seen throughout the entire time of the Bush regime -- for the economy to steadily grow all classes must grow together. Unemployment has to be low. Workers must get paid enough so that they can buy the things that companies make and that stores sell so that there are profits to bolster the market.
When you only have an investor class, and it is bolstered by lower taxes and by the enforced savings of 401(k) contributions of a large segment of workers, you have a situation that is going to be unstable. There will be no one out spending all their money to keep the economy healthy. There will be no workers contributing growing amounts to help an economy flourish when workers are stomped down and unemployed.
Jeez -- you people need an English major to tell you this?
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I have only one quibble with this -- a 401(k) or 403(b) (the nonprofit version) is not savings. They are investments and are speculative. You can lose everything you have in a 401(k)/403(b). They are investment plans and aren't insuranced as savings accounts are.
But you are right: if people don't have money, they can't spend it.
The point is that 401(k)s are investments that are inflating the market, as well as withdrawing money from spending. They, along with the useless money the rich get from their tax status, inflate the market to a level that the base, with its worse-paid workers, are not able to sustain. If everyone were growing together, it would not be this bad.
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