Even judged by its own yardstick, the trickle-down approach has failed to deliver: Rather than getting richer, we have been slowly impoverishing ourselves.
While incomes at the very top have soared to levels beyond imagining even a generation ago, the average inflation-adjusted income of the bottom 90 percent of earners was lower in 2006 than it was back in 1973. And since 2000, the median income of all Americans has actually slipped, proof that tax cuts for the rich do not create general prosperity.
Today, more and more of us do not have enough money to live on without going into debt. For each dollar of equity people gained in their homes from 1980 to 2006, they borrowed two—and while a portion of that is accounted for by poor decision making, much has to do with the sheer impossibility of making ends meet.
This should come as no great surprise.
For anyone born after, say, 1970, the world has been shaped by Ronald Reagan’s remaking of government’s relationship with private interests—a vision of lower taxes, less regulation, and maximum economic leeway for those at the top. In this view, the pursuit of wealth is the warp and weft of America; everything else will follow.
By contrast, the preamble to the Constitution tells us the nation’s reason for being in 52 words that can be reduced to six principles: society, justice, peace, security, commonwealth, and freedom. Individual riches don’t make the list. They are a product of American society, not its guiding purpose.
David Cay Johnston, Fiscal Therapy: Getting the economy back on its feet, giving taxpayers a break, saving your retirement fund and your kid’s college tuition? Done.
And it won’t cost you a penny.
- Quit Cooking the Books
- Make the Superrich Pay Their Share
- End Legal Tax Cheating
- Invade the Caymans
- Wean Wal-Mart (and the Yankees)
- Cut Off the Utility Scam
- Ground the Private Jet Exemption
- Demolish the Mansion Deduction