Brace yourself. In coming weeks you’ll hear there’s no serious alternative to cutting Social Security and Medicare, raising taxes on middle class and decimating what’s left of the federal government’s discretionary spending, on everything from education and job training to highways and basic research.
“We” must make these sacrifices, it will be said, in order to deal with our mushrooming budget deficit and cumulative debt.
But most of the people who are making this argument are very wealthy or are sponsored by the very wealthy: Wall Street moguls like Peter Peterson and his “Fix the Debt” brigade, the Business Roundtable, well-appointed think tanks and policy centers along the Potomac, members of the Simpson-Bowles commission.
These regressive sentiments are packaged in a mythology that Americans have been living beyond our means: We’ve been unwilling to pay for what we want government to do for us, and we are now reaching the day of reckoning.
The truth is most Americans have not been living beyond their means. The problem is their means haven’t been keeping up with the growth of the economy—which is why most of us need better education, infrastructure and health care and stronger safety nets.
The real median wage is only slightly higher now than it was 30 years ago, even though the economy is twice as large.
The only people whose means have soared are at the very top because they’ve received almost all the gains from growth. Over the past three decades, the top 1 percent’s share of the nation’s income has doubled; the top one-tenth of 1 percent’s share, tripled. The richest one-tenth of 1 percent is now earning as much as the bottom 120 million Americans put together.