One of the glories of America's recent past was the emergence of a large, prosperous, and politically powerful middle class. That legacy, which we have taken for granted for decades, is clearly now at risk. The middle class is shrinking, becoming less secure and less wealthy, and is losing the ability to shape society in a way that caters to the needs of the majority of the population.
At least three important features of our economy are accelerating this transformation yet are largely ignored or misrepresented by the mainstream media.
1) The massive transfer of wealth from the majority of Americans to the wealthiest Americans.
Between 1981 and 2007, the share of income reported by the top 1% of "earners" metastasized from 8.3% to 22.83%. See Table 5:
http://www.taxfoundation.org/news/show/250.html. Meanwhile, median household income, adjusted for inflation, has decreased from its high-water mark of $52,587 in 1999 to $50,303 in 2008. See Table A-1, p. 29 here:
http://www.census.gov/prod/2009pubs/p60-236.pdf. The media has responded to this story by ignoring it. Worse,the media provides a ready echo chamber for those who would protect this windfall for the uber-rich with calls for across-the-board tax cuts or "no new taxes." The suggestion that taxes on the wealthiest members of our society should actually be increased, by contrast, is scornfully dismissed as "class warfare." The fact that the top marginal income tax rates exceeded 90% during the 1950's and 1960's- an era of expanding prosperity- is conspicuous by its absence from most current discussions of the subject of tax rates.
2) Out-of-control health care costs.
The most important fact about our health care system- the fact that Americans spend twice as much as virtually everybody else for equivalent or inferior health outcomes- has been buried under an avalanche of suggestions that the real dangers to our well-being are posed by change rather than by the status quo. The real nightmare, we are asked to believe, is not the one we are already living through, but the phantasms of "socialized medicine", government bureaucracies, death panels, waiting lists, rationing, and- worst of all- the specter of not being able to keep the extraordinarily expensive health insurance plans that we already have.
While mostly ignored by the media, the latest OECD statistics paint a grim picture of the reality of American health care. In 2007, our health care expenditures came to $7290 per person. At the same time the per capita cost in Canada was $3895; in France, $3601; and in the cost-conscious United Kingdom, $2992. In return for their significantly lower expenditures, the citizens of each of these countries enjoyed longer life expectancies than their American counterparts. The picture doesn't get any prettier when health care costs are compared as a percentage of GDP: Canada spent 10.1% of GDP on health care in 2007; the U. K., 8.4%; France, 11.0%... and the United States, 16.0%. The most recent report from the CMS (Centers for Medicare and Medicaid Services) shows that health care spending in the United States ballooned to 17.3% of GDP in 2009.
In light of the astonishing disparity between our health care costs and those of our peers, it was just shocking when the "liberal" Obama administration was content to accept a health care reform plan with the stated goal of merely reducing the rate of medical inflation. Sadly, bad has been followed by worse as the media, presumably at the behest of powerful corporate interests, has enthusiastically stoked the fires of anger, paranoia and ignorance by amplifying the many attacks on the Democratic congress' and administration's already too modest attempt at reform. The premise of the opponents of reform seems to be that we Americans are incapable of offering affordable health care to our citizenry comparable to that made available in every other advanced democratic society.
3) Excessive military spending.
The United States accounts for approximately 4.5% of the world's population, but almost 50% of the world's military spending.
From Wikipedia-
http://en.wikipedia.org/wiki/Military_budget_of_the_United_States: "The U. S. Department of Defense budget accounted in fiscal year 2010 for about 19% of the United States federal budgeted expenditures and 28% of estimated tax revenues. Including non-DOD expenditures, defense spending was approximately 25-29% of budgeted expenditures and 38-44% of estimated tax revenues. According to the Congressional Budget Office, defense spending grew 9% annually on average from fiscal year 2000-2009." Note the use of ranges. Defense spending is notoriously difficult to quantify (See Winslow Wheeler on this subject:
http://www.cdi.org/program/document.cfm?DocumentID=4199), but the current trend is clear and unsustainable.
From an article by David Sirota (
http://www.salon.com/news/opinion/feature/2009/11/27/colbert_conservatism/): The 2010 Pentagon budget means "every man, woman and child in the United States will spend more than $2,700 on (defense) programs and agencies next year," reports the Cato Institute. "By way of comparison, the average Japanese spends less than $330; the average German about $520; China's per capita spending is less than $100."
Summarizing the above: since at least 1999, incomes for the majority of Americans have stagnated or declined as the richest 1% of the population has expropriated a massively greater share of the output of the nation's economy. Meanwhile, the decline in median incomes has been aggravated by the simultaneous increase in non-discretionary expenses as most people are forced to spend ever greater portions of their incomes to cover medical expenses and the taxes that support our "defense" budget. The combined effect of these factors is to leave the average worker and the average family with significantly less money left over for all other kinds of spending.
The stagnation of middle-class incomes was masked in the early years of the Bush administration as high levels of consumer spending were maintained through the devices of modest middle-class tax cuts (financed by government borrowing, unfortunately) and immodest increases in personal debt, courtesy of easy credit and the housing bubble. These dodges have finally run their course, however, and we are now left with the ugly prospect of a declining standard of living for a huge swath of the American people.
The reduced resources of the majority of Americans also makes the current level of taxation seem much more onerous even when tax rates remain unchanged. The media reinforces this impression by featuring a seemingly endless parade of ordinary citizens complaining about their tax bills. The preponderance of these stories all but buries the occasional mention of falling wages, burgeoning medical inflation, and exorbitant military expenditures.
If we want to turn these trends around, we need to start tuning out the useless and frequently counterproductive media cacophony. Our contemporary mass media should be recognized for what they are: captives of the rich and powerful. They may serve the public interest or adhere to higher journalistic standards on occasion, but only if and when the needs of their masters have already been met.
If Democrats think that they need to appear "strong on defense" to get elected; that they must promise that "if you are satisfied with your current health insurance you can keep it"; and if they really believe that tax increases for the rich are an inferior alternative to "no new taxes"- then maybe they can get themselves elected, but they will never be able to solve our most pressing problems or govern effectively.
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