Great article and well written. I just have a couple of points to add, but they might offer a way out of this trap.
And somewhere around Reagan and Thatcher years, late-stage capitalism started kicking in.
Both were instrumental in altering public perception of our governments, but they weren't alone. In the US this time also coincided with the beginning of the many think tanks that are funded by capitalists and their, usually disguised, version of political action entities. Much of their influence and the rise of corporate media is due to the agenda of President Clinton, the first neoliberal Democratic President after the Powell memo (Google it).
Reagan and Thatcher did their part by vilifying the "public purpose" function of their governments and convincing the working class that government was an inefficient "cost" to them, paid for by taxation and borrowing. This concept was never really embraced by politicians since FDR and the end of the gold standard domestically, but it gained considerable traction with a mostly econ illiterate voting population.
It resonated with their personal experience with finance and was quickly adopted by a new brand of media that existed to shape opinion, not to inform. When Clinton followed with a very similar message and spent his Presidency "leaning down" government, even to the point of spending less than government's "revenue", a unified front to deceive the people did wonders and the DNC was able to shift their donor base from labor unions to corporate interests, where the "real" money always was in politics.
Everything, everywhere, became commodified and consumable.
This is the goal of neoliberalism. To attain that goal the benefit of a government working for the people and the public purpose could not be tolerated. The people who make money from their money know how money works. The false principle of "trickle down" economics, turning every possible function of government over to corporate management or cutting it to the point of being cruel and useless, had the dual purpose of funneling money creation through the private sector from the top in hopes of some of it finding its way to the poor and working poor while also limiting government's ability to regulate and tax business.
The good news is, we have enough resources to change the status quo. And it isn’t too late to rethink Western economic systems.
One of the primary resources we have for this is our sovereign fiat currency that is available to Congress in an infinite supply, even without a dime of "revenue". All of the flap and fuss over the budget and the debt is nothing more than a distraction from the fact that Congress can "afford" anything that is available and for sale denominated in US dollars, including our labor.
Our federal government could quite easily initiate a "job guarantee" program that would set the floor for wages and benefits for the private sector employers. We only need the program to be funded at the federal level. It should be managed at the state and local level so it can fill whatever need those have for labor aimed at the public purpose. The participants would also have a say in defining what "work" is. As long as participation in the program is the choice of workers at their will it would force employers to bid against the wages and benefits it offers.
Such a program would replace much of the unemployment and safety net spending of both state and federal governments, but cost is never a factor to the federal government. The program would be largely countercyclical to the business cycle, eliminating a lot of suffering from involuntary unemployment. In doing so, it would also diminish the hold corporate capitalism has on workers and have the added benefit of maintaining a flatter GDP without the booms and busts we now see more frequently.
