Superb!!
Your article is written so well that it is hard to improve upon it.
I will simply add that for those who want to learn more about this viewpoint should listen to Thom Hartmann's radio show and/or read his books.
(I am in no way connected to him, other than that I agree with 99% of what he says.)

Amazing !

An independent writer has crafted an explanation of the debt issue that is more valid than the writing of well known syndicated columnists.

The national debt is not paralyzing the American economy.

The disparity of wealth that has been expanding for decades has concentrated so much money at the top that the majority of Americans are no longer a functional part of the economy.

The average working American is now unable to afford the essentials of life due to a lack of growth or actual loss of income.

Essentials like housing, higher education and health care are now out of reach for many Americans. Even a reliable car to get to work is a problem for many.

And when a person is "broke" they cannot participate in the larger consumer economy. Thus, economic activity is paralyzed because many people do not earn enough to be part of the "American dream".

Not only has the disparity of wealth been expanding for decades, but the wealthy and many corporations now pay less taxes than in past. And there are $Billions in taxation lost every year due to offshore incorporation and offshore banking.

By restoring higher tax rates and closing tax loopholes for the wealthy and corporations the debt could be gradually balanced.

And it is also time to end the $4 trillion dollar corporate imperial wars and occupations in Iraq and Afghanistan that appear to have no end. And why not cut the bloated "defense" budget ?

The disparity of wealth and the diversion of taxes into an imperial military are much greater problems than the debt.

Yes, I agree too. This article reminds me of reading about the introduction of rabbits to Australia.

It did seem like a good idea at the time, a fast growing food supply; of course, it got out of hand.

When Mr. McDonald started the Diners Club card, it certainly sounded like a good idea. To pay back quickly what was borrowed. Then , of course, like those rabbits, credit and debt, morphed into the monster that ate Australia, and now that same monster is eating us.

Credit led to buy now and pay later. The mindset passed onto the banks , Congress and the military, and now, look what we have done to ourselves.

Guns and butter, guns OR butter; some people will be putting barrels into their mouths thinking that dying is the only way to live.

Without equality, there is no liberty, without liberty, there is no life, and without life, there is no nation, nor any world. When only a small portion of the world can "eat, drink and be merry, " it might be supposed that the rest of us will die, but perhaps, without food and drink and EQUALITY, we the People, will merely become "scary." The concept of "merry" PEOPLE will ironically come after the "scary" part.

So, pay attention Debt masters of the Universe; we have our own "life, liberty, and pursuit of happiness" to fulfill....OURS, not yours. We refuse to be the lever of the seesaw that you have concoted to save yourselves!

You, Mr. Link, are one smart and perceptive gentleman. Great wisdom lies in simplicity. You have mastered that far better than most of the professional writers in the business. I hope a good many Americans will take the time and effort to read what you have so clearly written.

Keep up the good work!

I don't remember where I read it, but an interesting article contrasted the U.S. with Denmark. Denmark does not have a well-developed industrial component and few natural resources, but it has high income taxes and a VAT.

The distribution of incomes in Denmark is not flat, but it is relatively flat compared to the U.S. Of course, health care for everyone is provided, as are other social services.

The interesting thing is that the standard of living in Denmark is about the highest in Europe, and higher on average than in the U.S. The lesson is that an elaborate social safety net financed by high taxes seems to be good for the Danes. Why would it not do the same here?

The Dawning Age of Obama as a Potentially Teach-able Moment for The Left

Five Key Lessons Beyond the Gnashing of Radical Teeth
By Paul Street

...

LESSON # 3: THE BIPARTISAN NATURE OF AMERICAN EMPIRE AND INEQUALITY, INC.

Among the different reasons to be glad the Democrats won the elections last year, one merits special ironic consideration. It is that the Democratic Party (once aptly described by former Richard Nixon strategist Kevin Phillips as "history's second-most enthusiastic capitalist party") is best exposed as a leading institutional agent of empire, inequality, and "corporate-managed democracy" (the late Alex Carey's useful term) when it holds top offices. Democrats find it easier to deceptively and co-optively pose as the "party of the people" [20] and a progressive alternative to corporate-imperial rule (and the Republicans) when they are out of power. They are more clearly revealed as disingenuous and inadequate tribunes of the ordinary working people they so passionately (during campaign seasons) claim to represent when they hold the balance of elected office and then (quite naturally given the corporate and military's domination of the political and policy processes in the U.S.) fail to deliver on popular hopes and dreams they've ridden and/or raised on the road to office. They are less able to hide their essential identity as the other business and empire party when they sit atop the political system. That's when the hot rubber of their populist- and peaceful- sounding campaign rhetoric hits the cold pavement of corporate-imperial governance. As the clever Marxist writer Doug Henwood noted in the spring of 2008: "There's no doubt that Obamalust does embody some phantasmic longing for a better world - more peaceful, egalitarian, and humane. He'll deliver little of that - but there's evidence of some admirable popular desires behind the crush. And they will inevitably be disappointed." Further:

"There's great political potential in popular disillusionment with Democrats. The phenomenon was first diagnosed by Garry Wills in Nixon Agonistes. As Wills explained it, throughout the 1950s, left-liberals intellectuals thought that the national malaise was the fault of Eisenhower, and a Democrat would cure it. Well, they got JFK and everything still pretty much sucked, which is what gave rise to the rebellions of the 1960s (and all that excess that Obama wants to junk any remnant of). You could argue that the movements of the 1990s that culminated in Seattle were a minor rerun of this. The sense of malaise and alienation is probably stronger now than it was 50 years ago, and includes a lot more of the working class, [who are] ...really pissed off about the cost of living and the way the rich .are lording it over the rest of us."

"Never did the possibility of disappointment offer so much hope. That's not what the candidate means by that word, but history can be a great ironist."

Most serious middle-aged and senior leftists don't require an education on how little to expect from Democrats in charge. But many in a new and younger generation of real and potential left progressives DO need the education. No amount of lecturing or warning from older progressives can lived, real-time experience of the Democratic Party in national power (a voting-age novelty for a 27 year-old American) when it comes to learning that "everything still pretty much suck[s]" when Democrats hold the top job(s).

Older lefties can be forgiven, perhaps, for chomping at the bit as they watch Obama's honeymoon with much of the electorate, young and old, linger into the summer of 2009. But liberal and progressive disillusionment with "Brand Obama's" imperialist and state-capitalist outrages and "betrayals" will deepen in coming months and years in accord with the continuing economic crisis and the new president's fierce commitment to the American Empire Project and to the post-9/11 National Security State. Empire's New Clothes and his Democratic allies will provide leftists with many more teach-able moments on the richly bipartisan nature of American Empire and Inequality, Inc.

...

http://www.zcommunications.org/the-dawning-age-of-obama-as-a-potentially-teach-able-moment-for-the-left-by-paul-street

Folks,
The best discussion of economic inequality's effects on society is Pizzigati's 2004 book "Greed and Good: Understanding and Overcoming the Inequalities that Limit Our Lives". It can be downloaded at www.greedandgood.org.
OYE

I have a solution. We'll force all the academics, the highly compensated creative people, the writers and free-thinkers, and all successful artists into a "retraining program" where they can be more like all the uncreative work-a-day people. If they refuse? Jail.

Oh wait, that was the Cultural Revolution, and it indeed cured China's national inequalities: everyone became poor and hungry. But now that PROC market reforms are moving forward (a wee bit..), people are being rewarded for their uniqueness, abilities, drive, ambition, creativity, and leadership.

Disincentives are the problem, not the solution. Penalizing creativity and innovation is the problem. Sure, far better "greed controls" on capitalism are needed. Yesterday's senate vote on financial reform didn't go nearly far enough. But to reject ample rewards for the most creative, motivated, innovative, and free-thinking members of our world kills the very life blood by which we PROGRESS.

Inequality Is the Real Debt Burden

wonderful title

captures the whole economic problem we face in 6 words

The Glue That Holds Chaos Together

Yes, and we have also forced inequlity on the peoples of other nations. Slave labor, child labor, underpaid foreign workers and their pimpimg employers are a large part of why our wages are driven down and our jobs are being stolen. This nation has a reponsibility to put it's citizens to work, not to give slave labor jobs to illegal aliens, or provide cheap computers for Africa.

to lose weight, you have to eat so as to raise the metabolic rates to a level at which you can burn fat off more efficiently. likewise, in order to bring down the deficit, you have to spend money to heat up the economy, raise demand and employment, and soon the revenues will come in to reduce the deficit. no activity will occur when the private sector is timid. or when the banks decide to sit on their capital, which they get from the federal reserve in massive quantities, paying wholesale interest rates of less than 1%.

despite the flow of cheap capital through the federal reserve to the banks, the government does not require them to make consumer or small business loans, nor does it forbid them from using federal reserve money to make risky bets on derivatives or other highly speculative financial instruments. in other words, the banks maintain all the options, though the taxpayer underwrites their foundation and insures against their huge mistakes, as we have seen in the obscene cost of the bailouts

smaller, consumer friendly banks ought to be chartered by the government. let them have access to federal reserve capital and the mission of underwriting credit for small to medium size businesses. you might get some real growth that way.

I seem to remember Obama telling the financial sector, you either get used to the idea of more regulation and oversight to get your bailout, or deal with that mob with pitchforks yourself. However, the only mob with those metaphorical pitchforks these days are the teabaggers. Where are the progressives when it comes to getting out on the street and backing Obama's pitch? Whinging that he hasn't done it all himself?

Unless the country wants a dictatorial raid on the accumulated wealth of the upper 20 percentile and a socialist redistribution, perhaps through make work projects and a minumum guaranteed income, business will have to put their own pressure on banks to stop hoarding cash and get it moving again. Are progressive businesses putting that kind of pressure on banks? Or are they whinging also? Do progressives value a Republic enough to fight for it? Or are they satisfied to just complain that Obama hasn't done enough things fast enough?

Where are those pitchforks?

Kasandrasduplex asked, "So who has the most money overall?"

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

"In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one's home), the top 1% of households had an even greater share: 42.7%."

And the tax rates for the economic elite have been steadily reduced for over three decades by both Republicans and Democrats with the war cry that lower taxes will create a stronger economy. We are now reaping the bitter results of those lies.

there is poverty, and suffering and unemployment.

not because there is a lack of money.

but because the power to create money world-wide is in the hands of the people who manage, under a private concession, all the central banks.

and, as a consequence, those people control how ressources, from the agricultural, industrial, financial and mineral sectors are employed.

also, the labour force.

for the past two hundred years those people have been promoting the development of the state in lieu of the absolutist monarchies.

and they have made the bosses of the traditional political parties, their new aristocracy.

that is why, we the people have no say in government:the state supplanted the nation.

the state therefore is a tool for domination by the world emperor: the House of Rothschild, through the political parties.

¿IS THERE ANY ALTERNATIVE TO THIS SYSTEM OF MODERN SLAVERY?

LET US DEPRIVE THE LORD OF CAPITAL of his privilege to manage the federal reserve bank, the european central bank, the bank of england, of china and japan, etc....

and a new world would emerge from the ashes of the current crisis.

if you are an entrepreneur, you are a servant to the lord of capital...he will take away your assets, whenever he wills, through inflation, deflation, taxes, interests, wars...

if you are a labourer, ¿isn't it in exchange of a salary that you voluntarily accept your condition as a slave?.

Let's face it: American "democracy" is an out-of-date system, designed for the 18th Century. Even though they expanded the vote, and the concept of 'rights', they left out 'economic rights'. This is why Bobby Kennedy and Martin Luther King died: because they began to discuss openly the flaws of a system that left so many impoverished.

The Left also has its share of the blame, because they spent more time on 'sex,drugs, and rock and roll,' and on the mass media than on actual protest in the streets. Once the Vietnam War was ended and Nixon deposed, the protests ended. This may be the only reason the Establishment deposed Nixon, who had already brought the war to an end. It was to silence the protests and left-opposition.

Like suckers, the Left fell for it. Nixon's scalp did nothing to help the situation. By 1980, the country was in 'recovery' from "sex, drugs and rock and roll", the Oil "Crisis", and Iran, and Reagan saw his opportunity to lord it over the peons. The rich grew richer, and the poor whimped out instead of rioting. The police state began to kick in, along with crack, crime, and AIDS.

There should be a protest every year, if not every month, in DC, NY, LA, and wherever else the power is. These fat-cats are too powerful and they need a kick in the ass.

End tax breaks for corporations!

"Inequality Is the Real Debt Burden"

Amazing! No mention of the World Bank, International Monetary Fund or Bank for International Settlements or their roles in global inequality. But you can find it here: http://publiccentralbank.com/. Well worth reading.