We're not broke. We've been robbed by the super-rich and big corporations who are raking in the cash and running up the deficit. Our economy is still more than twice as large as any other country in the world. With 4% of the world's population, we generate 24% of its wealth. We spend more on our military than almost all other nations combined and more than twice as much per person on health care as other developed countries. But over the past three decades, the rich have gotten richer while their tax rates have plummeted. While the income of the richest 400 Americans quadrupled -- they now have more wealth than the 155 million Americans on the other end -- their effective tax rates were cut almost in half.
One thing is for sure: corporate America is not broke. Sitting on some two trillion in cash, fattened every quarter by record profits, corporate taxes are at an historic low in terms of the economy and share of federal revenues. And that includes Wall Street, which was rewarded with bailouts, bonuses and bonanza profits for igniting the deepest recession in three-quarters of a century.
We're not broke, but the wealth grab is wrecking our economy. The rich can't spend enough to keep the economy going. The engine that drives it is a strong middle class. The problem isn't that we haven't generated wealth, it's that we've stopped sharing the wealth we've generated. If wages had kept up with productivity over the past 30 years, the median wage would be 60% higher than it is now. If income had increased at the same rate for everyone from 1979 to 2006, the average family would make about $10,000 more a year, but the top 1% would make $700,000 less.
We're not broke, but the power grab of the greedy is ruining our democracy. None of this happened by accident, nor is it the inevitable result of globalization and technological change. While the rich gobbled up a bigger chunk of the United States' economy, that hasn't been true in other developed countries -- including Germany, France and Japan -- that face the same economic pressures. Our politicians have been bought off with campaign contributions and wined and dined by lobbyists, many of whom used to work for or serve in Congress. Democracy is increasingly a myth; politicians respond to the policy preferences of the richest 10% and ignore the choices of the rest of us. The result has been tax, spending, financial and trade policies that have resulted in huge deficits and a crumbling middle class.
The middle class is not only the engine of our economy, it's the glue of our democracy. A bigger middle class leads to higher voting rates and lower levels of public corruption. When we believe that the system is stacked against us, we're more likely to drop out or cheat.
It's no wonder that despite elite celebration of economic recovery, Americans are deeply pessimistic about the future. Much of the public believes that our best days are behind us. And unless we build a movement for change, they will be right.
Building a movement for change requires both anger and hope. The story I've just told gets people angry. To turn that anger into positive change we need the rest of the story, how we can write a happy ending if we rally together. The fact is, it doesn't have to be this way. We can make other choices that will lead to shared prosperity, opportunity and security for all and a brighter future for our children.
We can create good jobs for everyone in America. There is more than enough vital work to be done, and Americans stand ready and eager to do it. We can create tens of millions of jobs, jobs for a green economy and energy independence, jobs to rebuild our infrastructure and create a new one for the information age, jobs to educate our children and take care of our seniors. We can assure that every job -- private and public -- pays enough to support a family, with decent wages, health and retirement benefits and family-friendly leave policies. We can create good jobs in America with the right trade, tax, purchasing and financial policies. Each of these are political choices, within our control.
We can tame the deficit without sacrificing our future by creating good jobs, increasing taxes on the wealthy and closing corporate tax loopholes, cutting unneeded military spending and controlling health care spending through a system that puts quality ahead of quantity and stops overpayments to drug and health insurance companies. There are real budget proposals in Congress that do all that.
We can take our democracy back from the super-wealthy and big corporations if we create a real movement for change. We need to embed the reforms necessary for restoring our democracy -- public financing of elections, slamming the revolving door shut between Congress and corporate lobbyists, a Supreme Court that has the common sense to see that money is not speech and corporations are not people -- in the movement to create shared prosperity and opportunity for all.
We're not broke, but we have been impoverished by an "on-your-own" ideology that denies the best in us. At the end, this is a question of what we believe. When you stood in school and took the pledge of allegiance, was it a pledge for liberty and justice for the few, for the super-rich? Or was it a pledge for liberty and justice for all? That's the pledge I remember taking: liberty and justice in an America that works for all.
Cross-posted from New Deal 2.0.
Start your workday the right way with the news that matters most. Learn more