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Redistribution of Wealth? Yes, We Should! February 27, 2009

Posted by Kate Ryan in 2010 Budget, Barack Obama, Economy, Health Care, National Politics.
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want2President Obama unveiled his $3.55 trillion budget yesterday to great praise or damnation – depending upon which side of the aisle you sit on.  To Democrats, Liberals, and Progressives, this budget represents a necessary shift in the country’s priorities away from war, corporate welfare, and greater income inequality and toward strengthening families and communities.  To Republicans and Conservatives, however, the budget represents unbridled social spending, big government, and excessive taxation on the entire American populace.  Bob Ehrlich, former GOP Governor of Maryland, said on “Hardball with Chris Matthews” yesterday that the President’s budget, “is all about class warfare, all about punishing success.”  On the “News Hour with Jim Lehrer” last night, Douglas Holz-Eakin, former director of the CBO and John McCain’s campaign chief economic adviser said that the budget “uses the income tax for redistribution…There is no question that this is a redistribution of wealth.”

On the same program, Robert Greenstein from the Center on Budget and Policy Priorities, disputed Eakin’s assertions.  According to Greenstein, the budget contains “courageous” spending cuts by revisiting medicare and medicaid reimbursements (opposing the heath care industry), by returning the government to direct lending for student loans (opposing the financial industry), and by ending subsidies for wealthy farmers (opposing agri-business).   Mr. Greenstein also explained that the “tax hikes” are merely a roll-back of rates to what they were prior to George Bush’s presidency, during which time people making over $1 million per year saw a tax cut of over $150,000 each.  “I did not recall that the richest Americans were suffering before George Bush,” Greenstein said.

That’s the point.

The eight years of the Bush presidency presided over one of the greatest upward redistributions of wealth in American history.  Between 1967 and 2005 the share of income going to the top 5% of all households increased from 43.6 percent to 50.4 percent, while the share going to the bottom fifth fell from 4 percent to 3.4 percent. In 2004 those in the top one percent experienced a 12.5 percent increase in their incomes while everyone else, the other 99 percent of the population, saw an increase of only 1.5 percent.  When adjusted for inflation, wage and salary earning Americans saw their incomes lower than any time since 1970 last year.  And this is only income that we are talking about.  When you consider wealth – that is the value of all marketable assets when all debts, such as home mortgages and credit card debts are subtracted, yielding a person’s net worth – the top 20% of Americans own 84% of the net worth and 91% of the nation’s financial wealth.  

How did this happen?  Why didn’t we notice this insidious robbery that was happening under our noses?

First, the Bush administration advanced policies and relaxed regulation to make credit easier.  This allowed the regular, middle-class American to live the lifestyles we were told we could have without noticing that we didn’t have any money to pay for it.  The Bushies made it easier to use our houses as piggy banks and played upon our optimism that the housing market had no bottom.  It told us to sink our money in the stock market and we’d all have millions to retire on.  It used the power of the bully pulpit to convince us that the Unions that made sure our mothers and fathers had jobs with pensions, health insurance, and living wages were criminal and unnecessary.

Second, it distracted and divided us with fights over social issues.  They convinced us that if “Adam and Steve” got married our civilization would end.  They encouraged us to rally for the unborn while simultaneously cutting programs supporting the already born.  They pushed us into ignorance and idiocracy by having us advocate for creationism, intelligent design, and abstinence-only sex education.  In short, they treated us like the rubes we all behaved like.  And they laughed all the way to the bank.

Well, enough is enough.  It is time that we bring some equality back into our fiscal policy in this country.  I am not against rich people – I would like to become one someday – but I am against excess.  I believe that it is every person’s obligation to make sure that society functions for everyone.  We are judged by how we treat the least among us and I think if we went to our judgement tomorrow – we’d all be fucked.

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