EITC also (Sandwichman, you listening?) provides incentive for people to work less because they can achieve a decent life without slaving long hours.

For single people EITC is alost nonexistent. Expanding it, and raising taxes to pay for it, will make us all more prosperous, and more equal.

(For some of the best analysis I've seen on EITC, see Lane Kenworthy's Egalitarian Capitalism.)

In general, the recipe for prosperity and stability seems to be a strong safety net/springboard (to maintain aggregate demand), combined with what many would consider to be a rather draconian approach to trade and labor issues (to maintain market efficiency).

The damaging effects of the latter are ameliorated by the benefits of the former.

Isn't is possible that a certain amount of governmment spending--and associated redistributive policy--is always necessary for a modern, high-productivity society to thrive without crashing?

That it's the only way to maintain consumer demand (and indirectly, investment) given high and ever-more-rapidly rising productivity, and the associated, inevitable devaluation of labor?

That the difference now is a matter of degree, and catchup?

That the extraordinary amounts required now--like those doled out grudgingly starting in '32, and spectacularly in WWII--are compensating for insufficient amounts in the (in this case 28) years leading up to the crash?

Is it a coincidence that every modern, prosperous country of any size taxes and spends between 28% and 50% of GDP? (Korea is the one exception--a country I know exactly nothing about.)

That 28% is the U.S. (The EU15 taxes 40% on average and 32% or more in every country, with the same long-term growth in GDP per capita, and far higher stability).

Have we been tipping, or have we tipped, off the botto edge, by not providing the government spending (and taxing) that a modern economy requires? And are taking all those responsible countries with us?

Is it coincidental that the U.S. has been the epicenter of both of the aforementioned crashes, in both cases following periods where government, redistribution, and wages versus profits as a share of GDP were all at historical lows?

Is it a coincidence that all those prosperous countries have come to tax and spend at that high level?

Or is a darwinian explanation more convincing: that countries which fail to do so...don't become (or stay) prosperous?