Soaring income inequality, with wealth and income concentrating at the top, is not healthy for a consumer-driven economy nor for a country built on notions of basic human equality. It undermines the foundations of both.
It is also not some naturally occurring phenomenon that we are helpless to address and must simply learn to accept. To a significant degree, it is the consequence of conscious policy choices skewed toward those with the most power and influence in this country, and we saw yet another example of those choices last week.
Just before Labor Day, a holiday established to honor the working people of this country, President Trump announced that he would refuse to give federal workers the 2.1 percent cost-of-living increase that they were otherwise scheduled to receive.
“We must maintain efforts to put our nation on a fiscally sustainable course, and federal agency budgets cannot sustain such increases,” Trump said in a letter explaining the move.
Now, in hard times, it might be necessary to forego worker pay hikes — that’s what we did from 2011-2013, when we were still trying to recover from the Great Recession. However, today the U.S. economy is booming, with 94 consecutive months of job growth dating back to 2010. In times like these, surely we ought to be able to help our workers at least keep pace with inflation.
But no, we are told we can’t afford it, that such a step wouldn’t be “fiscally sustainable.”
That’s odd, because just a few months ago we could somehow afford a massive tax cut of hundreds of billions of dollars a year, most of it going to the already enormously wealthy and to corporations already enjoying the highest after-tax profits in the nation’s history. That, we could afford. That was somehow fiscally sustainable, even though official estimates are that it would increase the national debt by another $1.5 trillion over the next decade.
Through that tax cut, we’ve basically borrowed additional hundreds of billions of dollars a year, added that amount to our nation’s debt, then handed that money to those already doing enormously well. And if that sounds crazy, it IS crazy. It’s crazy that Las Vegas Sands, a casino company owned by GOP mega-donor Sheldon Adelson, reaped a $670 million windfall from that bill. It’s crazy that, according to The Financial Times, the tax bill cut Apple’s tax liability by $47 billion. And it’s crazy that we can afford all that, while a 2.1 percent pay hike for workers is not fiscally sustainable.
During debate over the tax-cut bill, opponents warned that corporations would use the money to buy back their own stocks, ratcheting up stock prices while its proponents claimed that companies would use their riches to invest in new projects and raising worker pay.
“I would expect to see an immediate jump in wage growth,” Kevin Hassett, head of the President’s Council of Economic Advisers, predicted last October.
It is now September. There has been no jump in wage growth; adjusted for inflation, worker wages are actually declining, which is extraordinary in an economic boom, while stock buybacks and CEO pay are setting all-time records.
Meanwhile, Republican congressmen point with sadness at the soaring deficits that they have created, warning that programs such as Social Security, Medicaid and Medicare will have to be slashed because we are just too poor as a country to continue funding them.
These are choices. These are choices made not just by our leaders, but by those who elect those leaders.
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