We hear it all the time. There’s no money to improve our schools. There’s no money to rebuild our infrastructure. There’s no money to ensure that our citizens have access to food and medicine. There’s no money to care for the mentally ill and the homeless. There’s no money to give our veterans the care they deserve. There’s no money for pensions and retirement benefits.
The US is broke…at least that’s what Teapublicans want us to believe.
So what happened? How did we go from the richest, most powerful nation on Earth to a nation that can no longer afford the things that our citizens value most? For starters, our economic ills are the result of two costly wars, the unparalleled expansion of government immediately following 9/11, an expansion of Medicare drug benefits and the Great Recession that began as the result of unfettered gambling by the so-called “too big to fail” banks.
But none of those causes have been as devastating as runaway greed, the off-shoring of jobs and money (it’s estimated that wealthy Americans, including Mitt Romney, and US-based multinational corporations have stashed trillions in off-shore tax havens), subsidies for large corporations, and tax cuts intended to benefit the very wealthiest portion of our populace.
Following World War II, when we could afford to build things, our top individual tax rate was 91 percent for those making more than $200,000 per year. The capital gains tax was 25 percent. And the effective corporate tax rate was 50 percent.
Compare those rates with today’s: The top individual tax rate is now 39.6 percent for those making more than $400,000. The capital gains tax is 15 percent. And the effective corporate tax rate is 17 percent (that is, if large corporations pay any taxes at all). In fact, some large multinationals now have a negative tax rate!
See the problem?
For most working Americans, wages have stagnated over the past 40 years, while worker productivity has skyrocketed, along with incomes for the wealthy. Most Americans are working harder and earning proportionately less…if they’re lucky enough to have a job! And the only answer Congress (at least the Teapublican portion of Congress) has for these problems is to cut spending, to protect tax cuts for the wealthy, and to cut taxes for corporations.
Speaker Boehner, Minority Leader McConnell and the rest of the Teapublicans in office want to “starve the beast.” They consider investment and compromise dirty words. And they steadfastly refuse to agree to one more dollar of revenue.
To relate that to family finances as Teapublicans are so fond of doing: It’s as if parents, faced with growing credit card bills, decided to give up food for their children in order to cut their work hours!
Yes, we have to cut government waste and be efficient with our spending. But there isn’t enough fat in discretionary spending to eliminate the deficit and still meet the needs of our growing population. We already have seen that with the sequester cuts, and they’ve only just begun. If we want to reduce our nation’s debt without destroying our fragile economy, we must find new sources of revenue.