What’s the Problem With the Economy? ‘The Truth’ In Less Than Two Minutes Fifteen Seconds.
Whenever a complex issue like the economy can be summed up in a matter of seconds, or in this case a matter of minutes, regardless of viewpoint—it’s worth a post.
Former Labor Secretary Robert Reich delivers “the big picture in less than two minutes fifteen seconds.”
- Economy doubles since 1980, but wages flat
1. Since 1980, the American economy has doubled in size. But adjusting for inflation, most people’s wages have barely increased.
- All gains from the economy go to the super rich
2. Where did all that money go? Almost all the gains have gone to the super rich. The top 1% used to take home about 10% of total income, now it takes home more than 20% and the super rich have 40% of the nations entire wealth.
- With money comes political power
3. All this money at the top has given the super rich lots of political power, especially power to lower their tax rates. Before 1980, the top tax rate was over 70%, now it’s down to 35% and much of their income is capital gains subject to only a 15% tax. According to the IRS, the richest 400 Americans pay only 17%.
- Huge budget deficits
4. This means huge budget deficits. Tax revenues are down to less than 15% of the total economy, the lowest in 60 years, so public services are being cut at all levels of government. Our kids are being crowded into classrooms with more and more other children. Roads, bridges, levies, healthcare, safety nets—they’re all being sacrificed.
- Middle class divided
5. Instead of joining together for better wages and jobs, many people are so scared they are competing with other working people for the scraps that are left behind—so we get union versus non-union, public employee versus private, native born versus immigrant.
- Anemic recovery
6. The vast middle class, unable to borrow as it could before, no longer has the purchasing power needed to get the economy rolling again which means continued high unemployment and an anemic recovery.
The big picture? Reich says, “The only way we can have a strong economy is with a strong middle class.”
Sponsored by Move On.
Watch ‘The Truth About The Economy’:
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