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Our Economy Favors The Rich - To The Detriment Of Others

Posted on the 31 December 2014 by Jobsanger
Our Economy Favors The Rich - To The Detriment Of Others
Our Economy Favors The Rich - To The Detriment Of Others
The top chart here (from the Bureau of Labor Statistics) shows that since the recession, productivity in the United States has risen (by about 9.3% through 2013, and is still rising). In the past, that productivity would have been shared by owners, management, and workers -- and all quintiles of income (except maybe the poor, the bottom quintile) would have seen a rise in income. But that didn't happen.
The second chart (made from U.S. Census data) shows what actually happened. The top 20% of Americans have seen some nice income growth due to that productivity, and the top 5% has seen even more significant income growth. Meanwhile, the incomes of the bottom 80% of Americans has remained flat -- it has been stagnant, showing no growth since the recession.
How has this happened? It started about 1980, when the Republicans began to impose their "trickle-down" economic theory on our economy -- by weakening unions, deregulating Wall Street and the financial sector, giving huge subsidies and tax loopholes to corporations, cutting taxes for the rich, creating a special lower Capital gains tax for investors, and helping corporations to ship jobs to low-wage countries (even to the point of giving corporations a tax break to help in off-shoring those jobs).
This has created the largest gap in income and wealth between the rich and the rest of America since before the Great Depression -- and that gap continues to grow. Taking advantage of the GOP policies, the rich have hogged about 95% of all new income created by increased productivity since the recession (and most of the other 5% has stayed in the top 20%) -- leaving virtually nothing for the bottom 80% of Americans.
But it gets even worse. The bottom 80% didn't just suffer stagnant wage growth, they have actually seen their income drop when inflation is considered. As the bottom chart shows, inflation has climbed by about 11.8% from the end of the recession through 2013 (and will rise again in 2014 by a small amount). This means the bottom 80% of Americans have lost more than 11.8% of their buying power since the recession (meaning their salaries will only buy about 88% of what they could buy pre-recession).
In the last 40 years, the Republicans have been able to tilt the economic advantage in this country toward the rich -- and to the detriment of all other Americans. And they are not through yet. Now that they have taken control of both houses of Congress, they are talking about more tax cuts and breaks for the rich and corporations -- and they want to do it on the backs of hurting Americans (by cutting food stamps and other government programs, by cutting Social Security benefits and eliminating Medicare, by refusing to raise the minimum wage or even abolishing it, by cutting education funding, etc.).
If they are allowed to continue their ridiculous (and already failed) economic policies, this country's economy will not just continue to falter but could easily slide into another (and deeper) recession. Unfortunately, there is little that can be done to stop this. The best we can hope for is that Senate Democrats (through the filibuster) and President Obama (through the veto) can stop the worst of the Republican plans. But there's just no way around one fact -- it's going to be a very tough couple of years for most Americans.
Our Economy Favors The Rich - To The Detriment Of Others

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