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Showing posts with label Robert Reich. Show all posts
Showing posts with label Robert Reich. Show all posts

Saturday, April 23, 2011

Robert Reich: Beware the "Middle Ground" of the Great Budget Debate

Robert Bernard Reich, American politician, aca...Image via WikipediaRobert Reich: Beware the "Middle Ground" of the Great Budget Debate

How debates are framed is critical because the "center" or "middle ground" is supposedly halfway between the two extremes.

We continue to hear that the Great Budget Debate has two sides: The president and the Democrats want to cut the budget deficit mainly by increasing taxes on the rich and reducing military spending, but not by privatizing Medicare. On the other side are Paul Ryan, Republicans, and the right, who want cut the deficit by privatizing Medicare and slicing programs that benefit poorer Americans, while lowering taxes on the rich.

By this logic, the center lies just between.

Baloney.

According to the most recent Washington Post-ABC poll, 78 percent of Americans oppose cutting spending on Medicare as a way to reduce the debt, and 72 percent support raising taxes on the rich -- including 68 percent of Independents and 54 percent of Republicans.

In other words, the center of America isn't near halfway between the two sides. It's overwhelmingly on the side of the president and the Democrats.

I'd wager if Americans also knew two-thirds of Ryan's budget cuts come from programs serving lower and moderate-income Americans and over 70 percent of the savings fund tax cuts for the rich -- meaning it's really just a giant transfer from the less advantaged to the super advantaged without much deficit reduction at all -- far more would be against it.

And if people knew that the Ryan plan would channel hundreds of billions of their Medicare dollars into the pockets of private for-profit heath insurers, almost everyone would be against it.

The Republican plan shouldn't be considered one side of a great debate. It shouldn't be considered at all. Americans don't want it.

Which is why I get worried when I hear about so-called "bipartisan" groups on Capitol Hill seeking a grand compromise, such as the Senate's so-called "Gang of Six."

Senator Dick Durbin, Democrat of Illinois, a member of that Gang, says they're near agreement on a plan that will chart a "middle ground" between the House Republican budget and the plan outlined last week by the president.

Watch your wallets.

In my view, even the president doesn't go nearly far enough in the direction most Americans would approve. All he wants to do, essentially, is end the Bush tax windfalls for the wealthy -- which were designed to be ended in 2010 in any event -- and close a few loopholes.

But why shouldn't we go back to the tax rates we had thirty years ago, which required the rich to pay much higher shares of their incomes? One of the great scandals of our age is how concentrated income and wealth have become. The top 1 percent now gets twice the share of national income it took home thirty years ago.

If the super rich paid taxes at the same rates they did three decades ago, they'd contribute $350 billion more per year than they are now -- amounting to trillions more over the next decade. That's enough to ensure every young American is healthy and well-educated and that the nation's infrastructure is up to world-class standards.

Nor does the president's proposal go nearly far enough in cutting military spending, which is not only out of control but completely unrelated to our nation's defense needs -- fancy weapons systems designed for an age of conventional warfare; hundreds of billions of dollars for the Navy and Air Force, when most of the action is with the Army, Marines, and Special Forces; and billions more for programs no one can justify and few can understand.

If Americans understood how much they're paying for defense and how little they're getting, they'd demand a defense budget at least 25 percent smaller than it is today.

Finally, the president's proposed budget doesn't deal with the scandal of the nation's schools in poor and middle-class communities -- schools whose teachers are paid under $50,000 a year, whose classrooms are crammed, that can't afford textbooks or science labs, that have abandoned after-school programs and courses like history and art. Most school budgets depend manly on local property taxes that continue to drop in lower-income communities. The federal government should come to their rescue.

To think of the "center" as roughly halfway between the president's and Paul Ryan's proposals is to ignore what Americans need and want. For our political representatives to find a "middle ground" between the two would be a travesty.

Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.

Friday, September 24, 2010

Robert Reich: The Super Rich Get Richer, Everyone Else Gets Poorer, and the Democrats Punt

Robert Reich: The Super Rich Get Richer, Everyone Else Gets Poorer, and the Democrats Punt

The super-rich got even wealthier this year, and yet most of them are paying even fewer taxes to support the eduction, job training, and job creation of the rest of us. According to Forbes magazine's annual survey, just released, the combined net worth of the 400 richest Americans climbed 8% this year, to $1.37 trillion. Wealth rose for 217 members of the list, while 85 saw a decline.
For example, Charles and David Koch, the energy magnates who are pouring vast sums of money into Republican coffers and sponsoring tea partiers all over America, each gained $5.5 billion of wealth over the past year. Each is now worth $21.5 billion.
Wall Street continued to dominate the list; 109 of the richest 400 are in finance or investments.
From another survey we learn that the 25 top hedge-fund managers got an average of $1 billion each, but paid an average of 17 percent in taxes (because so much of their income is considered capital gains, taxed at 15 percent thanks to the Bush tax cuts).
The rest of America got poorer, of course. The number in poverty rose to a post-war high. The median wage continues to deteriorate. And some 20 million Americans don't have work.
Only twice before in American history has so much been held by so few, and the gap between them and the great majority been a chasm -- the late 1920s, and the era of the robber barons in the 1880s.
And yet the Bush tax cuts of 2001 and 2003, which conferred almost all their benefits on the rich, continue.
Democrats have decided to delay voting on whether to extend them for the top 2 percent of Americans or for the bottom 98 percent until after the mid-term elections.
Democrats have thereby given up a defining issue that could have enabled them to show the big story of the last three decades -- the accumulation of almost all the gain from economic growth at the top -- and to make a start at reversing it.
When will they ever learn?
Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.