American Jubilee

America needs a Jubilee, a period of loan forgiveness, and a reset of the income disparity, From CEO to Janitor, starting with a Guaranteed Living Wage. The latest report on income disparity and CEOs is just another example how out of whack America has gone. It has been reported by the Department of Labor that over the last two years the average worker has seen his wages go down by 2%, CEO’s salaries have increased 43% and since 1978 CEO salaries have risen 725%. The average middle class worker has seen his wages increase 5.75% over the same time period.

There are more millionaires in the USA than at any time before; whereas the middle class has shrunk to record post WWII numbers. More and more Americans are slipping out of the middle class and into poverty. The chilling fact is that there are more people in poverty today than at any time since the New Deal.

Economic theorists have outlined concrete data that screams, “So goes the middle class, so goes the country.” The greatest years of economic growth took place during 1948-1968; the middle class grew and poverty shrunk. America fought two hot wars and one cold war during this span of years and still the American economy clicked ahead. During this same period, America expanded geographically with the additions of Alaska and Hawaii. The country was connected by the Interstate Highway System and Americans became mobile, creating the American suburbs, the American Dream, and home ownership.

After WWII, Americans started to go to school using the GI Bill to further educational possibilities that only rich kids could afford in the past. American universities had to expand to accommodate the new class of collegian: the middle class kid. The doctors, lawyers and engineers of the 60’s and 70’s were the product of the new middle class.

What fuelled this expansion was a 78% top marginal tax rate. Every one paid high taxes. The Beatles even sang about how high the tax rates were*. Taxes were high and defense spending was more in line with the rest of the world — around 25% of GDP. Today our defense bill is anywhere between 50-55% of GDP. No other country combined spends as much as the USA does on defense.

Today if you are one of the acutely wealthy like Mitt Romney, you pay a smaller percentage of taxes than the average middle class worker. The wealthy have the luxury of using a very friendly tax code to elude paying taxes on their wealth. There is no coincidence that every member of the US Senate is a millionaire and more than half of the members of the US House of Representatives are millionaires. The foxes have definitely been elected mayor of the hen house when it comes to taxes and politicians.

The Guaranteed Living Wage has been an idea going back to the early 1970’s with Saul Alinsky and in today’s writings of Robert Reich. That would go a long way in being the first step in restoring economic order. The second step is a systematic raising of salaries for workers across the board along with a tax code that can produce a vibrant middle class and a shrinking poverty level.

The country cannot afford to have a weak middle class; over the last 40 years, America has been in an economic malaise and that is evident in the slow trickle down of the quality of life for the average American.

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Mike Scourby is pretty normal for a guy who grew up in Brooklyn. Well, it’s true, and that’s also the name of his blog. He’s a Yellow Dog Democrat currently living deep in a Red State but, as he told his kids, he’s moving back to Brooklyn at the first sign of a twang. Mike spends his time educating young minds to a Bluer state of mind.

 
 

 

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Political cartoon by Ed Stein Ink. Check out Ed’s Facebook page for more commentary.