A liberal view xcerpted from Former Labor Secretayrt bert Reich’s blog 07-25-08:
Most Americans can no longer maintain their standard of living. The only lasting remedy is to improve their standard of living by widening the circle of prosperity.
The basic reality is this: For most Americans, earnings have not kept up with the cost of living … they are barely higher than they were in the mid-1970s, adjusted for inflation. The income of a man in his 30s is now 12 percent below that of a man his age three decades ago.
This underlying earnings problem has been masked for years as middle- and lower-income Americans found coping mechanisms to live beyond their paychecks:
The the first coping mechanism was to send more women into paid work … to prop up family incomes. The percentage of American working mothers with school-age children has almost doubled since 1970 — to more than 70 percent.
A second way: They worked more hours. The typical American now works more than … three decades ago … putting in 350 more hours a year than the average European, more even than the notoriously industrious Japanese.
A third coping mechanism: They began to borrow … they turned their homes into piggy banks by refinancing home mortgages and taking out home-equity loans … Now, with the bursting of the housing bubble, the piggy banks are closing.
As a result, typical Americans have run out of coping mechanisms to keep up their standard of living. That means there’s not enough purhasing power in the economy to buy all the goods and services it’s producing. We’re finally reaping the whirlwind of widening inequality and ever more concentrated wealth.
The only way to keep the economy going over the long run is to increase the real earnings of middle and lower-middle class Americans. The answer is not to protect jobs through trade protection … Nor is the answer to give tax breaks to the very wealthy and to giant corporations in the hope they will trickle down to everyone else. We’ve tried that and it hasn’t worked. Nothing has trickled down.
We must … adopt (more) progressive taxes at the federal, state, and local levels. In other words, we must rebuild the American economy from the bottom up. It cannot be rebuilt from the top down.
* * * * *
Want more from the Homa Files?
Click link => The Homa Files Blog
* * * * *
The Homa Files 
Leave a comment