Some years back, my mother got me a subscription to Funny Times. While it is a somewhat left leaning publication that focuses on humor, each issue features “Harper’s Index” which includes various interesting numbers-often juxtaposing them for impact. While this is hardly what one would consider an academic source, the numbers can be easily checked. Naturally, there is always the point of concern that not everyone (even the experts) agree on the exact numbers-but these sorts of disputes can be rationally addressed.
One interesting number is that 71% of the current US debt was accumulated during Republican presidential terms. This is hardly a shock-after all, while Democrats are presented as wasteful spenders and for a bloated government, the modern Republicans have been the ones to really push spending. This is not, of course, to absolve Obama from the debt that has arisen under his administration. However, a fair assessment of his performance requires noting that he started in a deep hole of debt and in the downswing of an economic meltdown. Or, to use another analogy, he became captain of a stricken vessel that was running towards the rocks. Some generous folks might say that keeping the vessel afloat was a notable accomplishment.
While the latest Republicans have been inclined to rage against lifting the debt ceiling, 2/3 of the times the debt ceiling has been lifted have been under a Republican president. While debt is a serious problem, the righteous indignation of the Republicans thus seems a bit strained.
The common wisdom of the Tea Party and many Republicans is that we are taxed enough already and that America is crippled by the cruel lash of the taxman. While I am not a big fan of taxes, this is hardly a time of cruel and unusual tax burdens. In 1961 US corporations paid 40.6% of their profits in taxes. In 2011 the number is 10.5%. Some companies, as has been noted in other posts, pay no taxes. The fact that companies are showing amazing profits and are flush with cash shows that the idea that they are languishing under cruel and excessive taxes is hardly an accurate portrayal of the situation. Now, if the big companies were struggling and short on cash due to high tax rates, then there would be grounds for complaints. However, the myth of the tax monster is one that plays well in many ears.
While the big corporations are generally doing great, the rest of us are not doing so well. 18.2% of Americans have reported that they ran short on money to buy food in 2010. The median wealth of white Americans has dropped 16% since 2005 while Hispanics have seen a decline of 66% in household wealth since 2005. One possible reason for this is that the “job creating” corporations have followed the practice of depressing wages. This has yielded 75% of the increase in their profit margins since 2001. In short, the “job creators” have been “creating” wealth by paying people less. That is, of course, an effective way to increase profits. However, it bodes ill for the people who are working ever harder and longer for ever smaller paychecks. As might be imagined, corporations benefit greatly from weakening unions since they tend to work at keeping wages up.
It might be argued that corporations are just engaged in smart business-paying people less means, obviously enough, more profits. Of course, this also has the impact of lowering the money that people spend into the economy-at least in the case of those with lower incomes. As has been pointed out, the wealthy do a great deal of spending-so perhaps they can sustain the economy as the middle class dwindles in size and wealth. Perhaps someday we will see a return to a two class (poor and rich) system. However, this would most likely lead to a revolt on the part of the former middle class.
It could be argued that people can just work hard to make money or create their own businesses. However, making wealth is not a matter of hard work. For example, the Chinese workers who make iPads and iPhones work very hard-but they will not become rich working for Apple. The real money lies in getting other people to work hard for you for as low wages as possible.
Of course, trying to create a business means competing with established businesses who will tend to well connected and who have spent millions on lobbying to ensure their advantages. People can, of course, succeed in this-just as some people can run 100 mile races, play pro ball or kill a tiger in hand to hand combat. However, the odds are not very good-so most folks are stuck working for others with little or no chance of creating a successful business of their own. Some would say that this is fair and hence people who are poor or out of work have only themselves to blame for not being rich.