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The Economic Crises: A basic five point program of
Recovery and Renewal

By the Wellstone Democratic Renewal Club Economics Committee

The significant economic contraction being experienced in the United States and around the world today was brought about by the excesses and corruption inherent in the ideology of an unregulated free market economy. This world view,  which was championed by most of the economic and political elites and dominated United States economic policy over the last three decades was focused on dismantling the legacy of the New Deal, which had helped lead us out of the depression of the 1930's and through the sustained growth periods of the 1950's and 1960's. This roll back of the New Deal led to poor or no regulation of new types of securities trading and mortgage lending, tilting of labor law and trade policy such that it is increasingly difficult for American workers to protect their standard of living, the dismantling of much of the social safety net, and the skewing of the tax structure to benefit the rich, literally at the expense of the rest of us.  

Together this agenda has created a condition where the average American worker can no longer afford to consume at a rate high enough to sustain the current economy. As consumer spending decreases credit dries up so businesses purchase less and lay-off employees. This creates a downward economic spiral that can only be reversed by focused and bold government action, particularly at the federal level.

Towards a new New Deal
The current economic meltdown needs to be addressed in a variety of ways that rely on the principles of the New Deal, updated for current circumstances including a highly interconnected global economy and instant communication technologies. There are five basic principles to guide that approach, they are:

1. Support the most vulnerable people first.

• Develop programs to keep people in their homes. This includes measures that force banks to re-negotiation loans to homeowners vulnerable to foreclosure and protection for tenants facing evictions in foreclosed properties.
  
  
• Provide extended unemployment benefits for the duration of the crises.
  
  
• Continue to fully fund the Food Stamp and Medicaid programs.
  
  
• Inject federal money into state and local governments so they can sustain quality public education , public transportation and social, public safety and health services This also keeps people employed who work in these areas.
  
  
• Build Sustainable infrastructure to create jobs and invest in the future:
  • Make immediate investments in wind and solar energy systems including new energy grids to get the power from where it's produced to where it will be used.
  • Fast track programs to build more mass transit systems as well as make bicycle and pedestrian infrastructure improvements.
  • Re-build aging water and sewer systems, bridges, schools, libraries, parks and other public facilities.
  • Expand the internet to underserved communities.
    
    
• Re-build a high-employment/ high-wage economy:
  
  
• Reform labor law to facilitate the organizing of workers by passing the Employee Free Choice Act.
  
  
• Re-negotiate trade agreements in the interests of workers in this country as well as the workers and farmers of our trading partners.
  
  
• Raise the federal minimum wage and pass living wage ordinances commensurate with the local cost of living.
  
  
• Use government tools to encourage investment in domestic high-wage, sustainable, productive industries, particularly alternative energy.
  
  
• Reform the tax system so it discourages outsourcing of American jobs
  
  
• Re-regulate the financial and mortgage markets to prevent the type of speculation, pyramid schemes, complex financial products and corruption that led to the current economic crises.
  
  
• Repeal most of the legislation that de-regulated the banks and financial system from 1980 forward.
  
  
• Re-organize the financial regulatory agencies so areas of responsibility are clearer and regulators can address the abuses inherent in many of the opaque and complex financial instruments created in recent times.
  
  
• Reorient the tax system so it awards savings and long term productive investment and discourages short term speculation.
  
  
• Implement strategies for long term government financial stability and manageable deficits. During economic downturns deficits should be relatively high since a large stimulus is needed to reverse the current condition, but longer term large deficits are dangerous and a burden to future generations.
  
  
• Lower the long term costs of medical care by creating a universal health care system that eliminates the profit and administrative costs of insurance companies while expanding coverage, including for preventive care (single payer).
  
  
• Reduce the military budget by 30-40% by eliminating unnecessary and redundant weapons systems and stopping useless and unwinnable wars.
  
  
• Eliminate large subsidies to oil companies, agribusiness and other inefficient and environmentally destructive sectors of the economy.
  
  
• Increase taxes on the wealthiest Americans.

US LABOR
AGAINST WAR