The Long and Disastrous War That No One Is Talking About

“We can have democracy in this country or we can have great accumulated wealth in the hands of a few, but we cannot have both”-Supreme Court Justice Louis Brandeis

For the past two weeks the main debate on capital has been about the extension of the Bush tax cuts. In a bill that has just passed the House and Senate and is now awaiting the President’s signature, there are millions of dollars of tax cuts for the American people to hopefully boost the economy. There are tax cuts for working families, payroll tax holiday, energy tax credits, extensions of TARP, and many others that can be found here. In essence this bill, although furthering the deficit, is meant to have a positive impact on the economy by encouraging more consumption. According to the Non Partisan Center for Budget and Policy Priorities, the payroll tax holiday and working family credits alone will keep 2 million out of poverty.

Although many economists disagree on the size of the impact and whether we should be sacrificing our long term problem of the national deficit to fix our short term unemployment problem, most if not all respected economist believe that the additional plan proposed by the Republicans will have neither long term or short term benefits, except those at the very top.

The Republicans plan is to extend the current Bush tax cuts, which will give tax credits to the richest .1% of the American population (you know the ones that got them into office thanks to the recent supreme court decision). This will cause over $800 billion to be added to the deficit.

Here are some facts about the poor in America;

-Over 50 million Americans live in poverty

-50% of American children will use food stamps at some point in their childhood

-In 2009 1/5 of households didn’t have enough money to buy food.

-1.4 Americans filed for bankruptcy in 2009

-Workers between 55 and 60 have lost 25% of their 401k

-Over 5 million families lost their home since the recession

-It is expected that by 2014 an additional 13 million families will lose their home

-Over 3 million Americans are homeless and the fastest growing segment is single parents with children

-Counting for “involuntary part-time” and “discouraged workers” (which the government doesn’t take into consideration), the unemployment rate jumps from 9.7% to 20% or over 30 million citizens

-Even though Americans were the most productive workers in 2008, in the 3^rd quarter worker productivity has risen at an annualized rate of 9.5%

-According to the Bureau of Labor Statistics the median wage in 2008 was $32,390

Billionaire Warren Buffet (the second wealthiest man on earth) has come and said the Bush tax cuts should be left to expire and that “trickle-down economics” theory has not worked.

The Republicans are banking on the fact that the Democrats and the President will back down first since a bad deal is better than no deal at all and as it is being sent to the President’s desk to be signed, the Republicans will come out of this as victors in this game of chicken.

George W. Bush’s former communication director Dan Batleh recently said “We knew that, politically, once you get into law, it becomes almost impossible to remove it, that’s not a bad legacy, the fact that we were able to lay the trap does feel pretty good, to tell you the truth”.

The Republicans, the party of “moral values”, is willing to hold the middle class hostage in exchange for gifts to the wealthiest of Americans. They are so ardent about this measure that they have sworn that no action will be taken by the Republicans on any further bills (like DADT, Dream Act, and 9/11 Responders Bill), if they don’t get what they want. This has nothing to do with compromise, this is extortion.

ex·tor·tion

1. an act or instance of extorting.

2.  Law . the crime of obtaining money or some other thing of value by the abuse of one’s office or authority.

3.  oppressive or illegal exaction, as of excessive price or interest: the extortions of usurers.

4. anything extorted.

 

Here are some facts about the rich in America;

-In the 1970’s CEO’s made $25 to every 1$ the average worker made. In 2000 that reached $90 to 1$. In 2004 this reached epic proportions to $500 to 1$.

-According to Robert Freeman of DePaul University, between 2002 and 2006, the top 1% captured ¾ of the economy’s growth.

-Right after the recession the 400 richest Americans increased their net worth by $30 billion making their combined net worth equal $1.51 which coincidently is the combined wealth of 50% of the population.

According to the UN the United States GINI coefficient was 40.8. This value is in between the countries of Turkmenistan and Senegal. We need to address the class warfare that has been going on for the past 40 years and not repeat our mistakes. We know that this income distribution discrepancy causes economic crises (see figure 1) and that it causes the moral fabric of society to come apart at the seams.

For more information of how inequality affects society in other non-economic ways, you can check it out here.

If we are to be a society that bases its values of equality and fairness, we need to publicly address the inequality in our society and demand that it changes.

“The ruling class is the rich…And those people are so able to manipulate our democracy that they really control the democracy”-Walter Cronkite