Wikipedia defines “crisis” as any event that is, or expected to lead to, an unstable and dangerous situation affecting an individual, group, community or whole society. With support of the Republicans, the rich continues to get richer, the middle class is shrinking and threatens the social composition and stability of the U.S. economy. A lot of money, wealth and power are flowing to the top thus seriously expanding the Middle-America gap. A Congressional Budget Office study in 2011 found that households in the top 1% of wage earners saw their after-tax incomes increase by 275% from 1979 to 2007. The highest 20% of earners (excluding the top 1%) saw their earnings increase by 65%. As a result, the CBO found that those in the bottom 80% saw their share of the nation’s total income decline by 2 to 3 percentage points depending on which bracket they were in while the top 20% of income earners saw their share increase by 10 percentage points largely driven by gains among the top 1%.
To compound the problem, in 2008, the US experienced the most shocking blow to the economy since the Great Depression. When President Obama took office in January 2009, the country was losing almost 600,000 jobs per month. Instead of helping address the problem, the Congressional Republicans united in obstructing any actions taken by Democrats to resolve the crisis. This absolute rejection 0f the entire Republican Party to participate in the process of governing is without precedent but helps to fulfill a pledge made by Republican Senate Minority Leader Mitch McConnell when he stated on more than one occasion that his number one priority was making sure that President Obama is a one term president. By their actions or inaction, Congressional Republicans led by McConnell, Boehner and Cantor prove time and time again that they do not care about middle and working class America if it means helping President Obama to get re-elected.
During the last few months of the Bush Administration when the economy was in free-fall, the only action taken by the Congress that enjoyed widespread support by Republicans was the Troubled Assets Relief Program (TARP). This program was basically designed to save the Wall Street banks and protect the profits of the very wealthy, something Republicans were very interested in. Unfortunately, however, once President Obama took office regardless of the fact that unemployment was already at 7.6% and climbing, all of the Senate and House Republicans decided that their chances for reelection and a return to power were better served by blocking or stalling any legislation to promote economic recovery.
The Stimulus was the first major effort to help middle and working class Americans. With 3.6 million jobs already lost in the recession, the Democrats quickly mobilized to pull together some type of relief. Instead of participating in the process of governing on behalf of the people they represent, the Congressional Republicans used every available opportunity to make unsupported claims and criticism about the Stimulus. Although most of the Republicans opposed the Stimulus, many requested Stimulus funds once the legislation passed.
The Congressional Budget Office (CBO) credits the Stimulus with adding as much as 4.5% to the Gross Domestic Product (GDP) and increasing the number of people employed by between 1.4 and 3.3 million. According to Mark Zandi, former economic advisor to John McCain, unemployment would be 11.5% instead of 9.5% without the Stimulus. Yet, 43% of Americans believe that the Stimulus hurt the economy based on unsubstantiated information disseminated by right-wing media and Conservative Republicans.
We all know that the Stimulus could have been more effective. Funds could have been better directed to achieve maximum job creation, but to say that the entire program “has gotten us nowhere,” as John Boehner recently stated is a big lie. The Republicans have continued to obstruct and use dishonesty, deceit and misrepresentation to convince the American people that Stimulus spending is ineffective and that tax cuts are the preferred option. The Stimulus did help but the middle-class is still in crisis. Here are some facts:
- 8.5 million people are receiving unemployment insurance and over 40 million are receiving food stamps.
- Middle-income jobs in the United States fell from 52% in 1980 to 42% in 2010 and those remaining have been replaced by low-income jobs that make up 41% of total employment.
- 17 million Americans with college degrees are doing jobs that require less than the skill levels associated with a bachelor’s degree.
- Over the past year, nominal wages grew only 1.7% while food and energy costs have increased by 2.7%.
- Wages and salaries have fallen from 60% of personal income in 1980 to 51% in 2010 except for the top 20%.
PART II TOMORROW
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