In social dictatorships (real name of what you would refer to as communism) people do not work hard enough cause they lacked the prospective of growth. That's where you need capitalism.
So but then the problems arise when capitalism goes on for too long, and wealth becomes concentrated too much to the Elite. The poor will be predetermined to fail to endless poverty by being born to a ghetto neighborhood. So both are the end of the scale. The solution is something in between. That would be capitalism with huge taxes on the wealthy's income and bank accounts.
Money in modern economy is like blood in the body. If it gets stuck somewhere or concentrates too much at a certain place it makes you sick. This is the same as in the US economy where money is too much concentrated with the Elite. Money, or at least most of it is not flowing back to the lower 90% of the society. Elite starts to live in secluded neighborhoods. The rest of the territory becomes ghetto-like, low income families, crime, unsafe. Low quality education etc.
The current economic crisis is based on these facts:
- the current economic system was mainly developed by Keynes as "new deal" after WWII.
- It basically said that in economic downturn, the government has to step in and do government-purchases, huge investments like (build a dam, reactor roads infrastructure etc.) that will drive the economy, create jobs , create more demand etc.
- back then the economy was mostly product-based
- since then the economy turned to mostly service-based
- Keynes method does not work anymore effectively since government cannot do huge purchases in one. (they cannot order 5Million manicure-s)
- government cannot handle the economic downturn, just shovel it under the rug.
- we have a huge real-unemployment rate. But the people who do not want to look for a job are not part of the currently viewed unemployment rate. These are the people who get social benefits (foodstamps).
- the number of effective employed and working people are many less then it should be, thus the economy's output is not effective.
- in this service based ineffective output economy economic stability is based on consumer confidence.
- consumer confidence is based on the money available for spending and the future expectation of it.
- The only way to increase the available money for spending would be to give more income to the working people. Thus increase spending, demand and consumption, employment etc.
- the top 10% of the nation possesses over 90% of bank account money in the US currently. The lower 90% has only 10% of the money.
So what would be the way to provide more money to spend for the consumers in a long term sustainable way given the current circumstances in the US? Can it be done by reallocating the bank account money's to create some sort of equilibrium and drive the economy by giving money to spend for the lower 90%? That would drive spending, consumption more jobs etc. The Elite of course would have to accept that in a way that they give some of their money to the lower classes for spending, but logically they, the elite are the business owners, so they would just drive this way more consumption to their own businesses, so they could make up for it, let's say in 5 years of tax deductions? Or any other solution?