USA: The Price of Inequality by NYT, Reuters, Huffpost & agencies 2:23am 12th Feb, 2013   February 5, 2013    Progressive Caucus Leaders introduce Measure to Replace Sequester and Create Jobs.    WASHINGTON: — Ten members of the Congressional Progressive Caucus, led by Co-Chairs Reps. Keith Ellison (D-Minn.) and Raúl M. Grijalva (D-Ariz.), introduced The Balancing Act this afternoon, which cancels the across the board “sequester” budget cuts, achieves a fair and balanced approach to long-term deficit reduction and creates 1 million jobs all over the country.    Since 2011, budget deals in Washington have let wealthy corporations and the Pentagon off the hook while cutting more than $1.7 trillion from programs America’s working families need to survive. The Balancing Act brings relief to working Americans by making sure the Pentagon and the nation’s biggest corporations pitch in and do their part to get our economy working again.    “Almost $2 trillion has been cut over the past two years from teachers, firefighters, police officers, loans for college students, and infrastructure investments,” Rep. Ellison said. “The American people shouldn’t continue to pay the price for massive tax breaks for millionaires and billions of dollars in subsidies to oil companies.”    “If one-to-one is really our goal, why don’t we make the entire budget and investment process one-to-one instead of restricting it to this current round?” Rep. Grijalva said. “We’ve cut non-defense budgets to the bone. There are simply no major savings hiding in school lunch or nurse training programs. We need investments. The Beltway refusal to make job creation our number one priority is a scandal, and the Balancing Act is the right way to fix it.”    The Balancing Act has two major components. It eliminates the impending “sequester” cuts and replaces them with an equal amount of revenue by closing corporate and individual tax loopholes. This creates the equal overall cuts-to-revenue balance when looking at the budget beginning in 2011, when the Budget Control Act was passed. The bill also cuts approximately $300 billion from wasteful Pentagon spending and reinvests the money in job creation. The bill is expected to create more than 1 million jobs by investing in infrastructure, teachers, and putting money in consumers’ pockets.    Congress cannot continue to write blank checks to underwrite wasteful Pentagon spending, especially at the expense of putting people back to work and investing in our crumbling infrastructure and struggling schools,” Rep. Barbara Lee (D-CA) said. “We must bring an end to waste, fraud, and abuse at the Pentagon, and The Balancing Act is an important step in keeping the wasteful spending in check.”    “Sequestration was never intended to be good fiscal policy. It was never intended to be policy, period,” Rep. Judy Chu (D-CA) said. “The Balancing Act provides a reasonable alternative to the draconian sequester cuts hanging over the American people. By reducing our deficit responsibly while creating jobs and investing in our future, it asks everyone to give a little, while ensuring no one has to give a lot. This measured proposal ensures that programs benefiting countless Americans do not suffer disproportionately to protect our bloated defense budget.”    “The Balancing Act is designed to prevent the catastrophic results of sequestration while instituting a healthy long-term balance between cuts and revenues,” said Congressman Jerry Nadler (D-NY).    “The simple truth is that – from seniors and kids, to small businesses and the military, to our still recovering economy – sequestration hurts a lot more than it helps. Its effect would be devastating to our economy and would eliminate thousands of critical jobs in the midst of a recession. And what makes it worse is that it is all unnecessary. That’s why it is imperative that we stop the misguided and self-made disaster that sequestration, or equivalent spending cuts, will bring.”    “It is time to eliminate the damaging sequester cuts and ensure that we can reduce our long-term deficit in a fair and balanced way.” Rep. Jan Schakowsky (D-IL) said. “Balance means that in addition to smart spending cuts and raising revenue, we need to put people back to work. The Balancing Act would close tax loopholes for wealthiest individuals and corporations and would create 1 million jobs by investing in infrastructure and keeping teachers in the classroom.”    “Every American family knows you don’t use your children’s lunch money to pay down credit cards,” Rep. Jim McDermott (D-WA) said. “This bill is different from the Republican approach—it asks everyone to do their fair share, grows jobs and keeps our promise to children, the elderly, and the poor.”    “With a combination of budget cuts and revenue increases, the Balancing Act will protect American families from the worst effects of sequestration, reduce the long-term budget deficit, and create more than one million jobs,” Rep. Yvette Clarke (D-NY) said. “We need to protect the programs – from Medicaid to veterans’ benefits to federal aid for education – on which every member of our civil society depends, and continue our investments in education and infrastructure.”    http://cpc.grijalva.house.gov/hot-topics/progressive-caucus-leaders-introduce-measure-to-replace-sequester-and-create-jobs1/    http://cpc.grijalva.house.gov/back-to-work-budget/    January 19, 2013    Inequality is holding back the Recovery, by Joseph E. Stiglitz. (NYT)    The re-election of President Obama was like a Rorschach test, subject to many interpretations. In this election, each side debated issues that deeply worry me: the long malaise into which the economy seems to be settling, and the growing divide between the 1 percent and the rest — an inequality not only of outcomes but also of opportunity. To me, these problems are two sides of the same coin: with inequality at its highest level since before the Depression, a robust recovery will be difficult in the short term, and the American dream — a good life in exchange for hard work — is slowly dying.    Politicians typically talk about rising inequality and the sluggish recovery as separate phenomena, when they are in fact intertwined. Inequality stifles, restrains and holds back our growth. When even the free-market-oriented magazine The Economist argues — as it did in a special feature in October — that the magnitude and nature of the country’s inequality represent a serious threat to America, we should know that something has gone horribly wrong. And yet, after four decades of widening inequality and the greatest economic downturn since the Depression, we haven’t done anything about it.    There are four major reasons inequality is squelching our recovery. The most immediate is that our middle class is too weak to support the consumer spending that has historically driven our economic growth. While the top 1 percent of income earners took home 93 percent of the growth in incomes in 2010, the households in the middle — who are most likely to spend their incomes rather than save them and who are, in a sense, the true job creators — have lower household incomes, adjusted for inflation, than they did in 1996. The growth in the decade before the crisis was unsustainable — it was reliant on the bottom 80 percent consuming about 110 percent of their income.    Second, the hollowing out of the middle class since the 1970s, a phenomenon interrupted only briefly in the 1990s, means that they are unable to invest in their future, by educating themselves and their children and by starting or improving businesses.    Third, the weakness of the middle class is holding back tax receipts, especially because those at the top are so adroit in avoiding taxes and in getting Washington to give them tax breaks. The recent modest agreement to restore Clinton-level marginal income-tax rates for individuals making more than $400,000 and households making more than $450,000 did nothing to change this. Returns from Wall Street speculation are taxed at a far lower rate than other forms of income. Low tax receipts mean that the government cannot make the vital investments in infrastructure, education, research and health that are crucial for restoring long-term economic strength.    Fourth, inequality is associated with more frequent and more severe boom-and-bust cycles that make our economy more volatile and vulnerable. Though inequality did not directly cause the crisis, it is no coincidence that the 1920s — the last time inequality of income and wealth in the United States was so high — ended with the Great Crash and the Depression. The International Monetary Fund has noted the systematic relationship between economic instability and economic inequality, but American leaders haven’t absorbed the lesson.    Our skyrocketing inequality — so contrary to our meritocratic ideal of America as a place where anyone with hard work and talent can “make it” — means that those who are born to parents of limited means are likely never to live up to their potential. Children in other rich countries like Canada, France, Germany and Sweden have a better chance of doing better than their parents did than American kids have. More than a fifth of our children live in poverty — the second worst of all the advanced economies, putting us behind countries like Bulgaria, Latvia and Greece.    Our society is squandering its most valuable resource: our young. The dream of a better life that attracted immigrants to our shores is being crushed by an ever-widening chasm of income and wealth. Tocqueville, who in the 1830s found the egalitarian impulse to be the essence of the American character, is rolling in his grave.    Even were we able to ignore the economic imperative of fixing our inequality problem, the damage it is doing to our social fabric and political life should prompt us to worry. Economic inequality leads to political inequality and a broken decision-making process.    Despite Mr. Obama’s stated commitment to helping all Americans, the recession and the lingering effects of the way it was handled have made matters much, much worse. While bailout money poured into the banks in 2009, unemployment soared to 10 percent that October. The rate today (7.8 percent) appears better partly because so many people have dropped out of the labor force, or never entered it, or accepted part-time jobs because there was no full-time job for them.    High unemployment, of course, depresses wages. Adjusted for inflation, real wages have stagnated or fallen; a typical male worker’s income in 2011 ($32,986) was lower than it was in 1968 ($33,880). Lower tax receipts, in turn, have forced state and local cutbacks in services vital to those at the bottom and middle.    Most Americans’ most important asset is their home, and as home prices have plummeted, so has household wealth — especially since so many had borrowed so much on their homes. Large numbers are left with negative net worth, and median household wealth fell nearly 40 percent, to $77,300 in 2010 from $126,400 in 2007, and has rebounded only slightly. Since the Great Recession, most of the increase in the nation’s wealth has gone to the very top.    Meanwhile, as incomes have stagnated or fallen, tuition has soared. In the United States now, the principal way to get education — the only sure way to move up — is to borrow. In 2010, student debt, now $1 trillion, exceeded credit-card debt for the first time.    Student debt can almost never be wiped out, even in bankruptcy. A parent who co-signs a loan can’t necessarily have the debt discharged even if his child dies. The debt can’t be discharged even if the school — operated for profit and owned by exploitative financiers — provided an inadequate education, enticed the student with misleading promises, and failed to get her a decent job.    Instead of pouring money into the banks, we could have tried rebuilding the economy from the bottom up. We could have enabled homeowners who were “underwater” — those who owe more money on their homes than the homes are worth — to get a fresh start, by writing down principal, in exchange for giving banks a share of the gains if and when home prices recovered.    We could have recognized that when young people are jobless, their skills atrophy. We could have made sure that every young person was either in school, in a training program or on a job. Instead, we let youth unemployment rise to twice the national average. The children of the rich can stay in college or attend graduate school, without accumulating enormous debt, or take unpaid internships to beef up their résumés. Not so for those in the middle and bottom. We are sowing the seeds of ever more inequality in the coming years.    The Obama administration does not, of course, bear the sole blame. President George W. Bush’s steep tax cuts in 2001 and 2003 and his multitrillion-dollar wars in Iraq and Afghanistan emptied the piggy bank while exacerbating the great divide. His party’s newfound commitment to fiscal discipline — in the form of insisting on low taxes for the rich while slashing services for the poor — is the height of hypocrisy.    There are all kinds of excuses for inequality. Some say it’s beyond our control, pointing to market forces like globalization, trade liberalization, the technological revolution, the “rise of the rest.” Others assert that doing anything about it would make us all worse off, by stifling our already sputtering economic engine. These are self-serving, ignorant falsehoods.    Market forces don’t exist in a vacuum — we shape them. Other countries, like fast-growing Brazil, have shaped them in ways that have lowered inequality while creating more opportunity and higher growth. Countries far poorer than ours have decided that all young people should have access to food, education and health care so they can fulfill their aspirations.    Our legal framework and the way we enforce it has provided more scope here for abuses by the financial sector; for perverse compensation for chief executives; for monopolies’ ability to take unjust advantage of their concentrated power.    Yes, the market values some skills more highly than others, and those who have those skills will do well. Yes, globalization and technological advances have led to the loss of good manufacturing jobs, which are not likely ever to come back. Global manufacturing employment is shrinking, simply because of enormous increases in productivity, and America is likely to get a shrinking share of the shrinking number of new jobs. If we do succeed in “saving” these jobs, it may be only by converting higher-paid jobs to lower-paid ones — hardly a long-term strategy.    Globalization, and the unbalanced way it has been pursued, has shifted bargaining power away from workers: firms can threaten to move elsewhere, especially when tax laws treat such overseas investments so favorably. This in turn has weakened unions, and though unions have sometimes been a source of rigidity, the countries that responded most effectively to the global financial crisis, like Germany and Sweden, have strong unions and strong systems of social protection.    As Mr. Obama’s second term begins, we must all face the fact that our country cannot quickly, meaningfully recover without policies that directly address inequality. What’s needed is a comprehensive response that should include, at least, significant investments in education, a more progressive tax system and a tax on financial speculation.    The good news is that our thinking has been reframed: it used to be that we asked how much growth we would be willing to sacrifice for a little more equality and opportunity. Now we realize that we are paying a high price for our inequality and that alleviating it and promoting growth are intertwined, complementary goals. It will be up to all of us — our leaders included — to muster the courage and foresight to finally treat this beleaguering malady.    * Joseph E. Stiglitz, a Nobel laureate in economics, a professor at Columbia and a former chairman of the Council of Economic Advisers and chief economist for the World Bank, is the author of “The Price of Inequality.”    January 7, 2013    Independent Senator Bernie Sanders calls for Wealthy Americans and largest corporations to "start paying their fair share of taxes".    Senate Minority Leader Mitch McConnell was "dead wrong" during a recent interview on ABC, Bernie Sanders stated Monday. In the clip, McConnell declares that “the tax issue is finished” and the only way to move forward in debt ceiling negotiations will not be to increase revenue, but to make major spending cuts to programs like Social Security, Medicare and Medicaid.    Instead, Sanders says, corporations and wealthy Americans should pay their fair share in taxes, which would increase greatly needed revenue and erase any fabricated need for austerity. Further spending cuts to the already starving social services would only hurt lower income and middle class families and would do greater harm to the country than McConnell"s proclamations admit.    Sen. Sanders: The fact of the matter is that tax revenue today amounts to only 15.7 percent of GDP, nearly the lowest in 60 years. Despite Sen. McConnell’s position, the lack of revenue coming into the federal government must be addressed.    Today corporate profits are at an all-time high, while corporate income tax revenue as a percentage of GDP is near a record low.    At 1.6 percent, corporate revenue as a percentage of GDP is lower than any other major country in the Organization for Economic Cooperation and Development, including Britain, Germany, France, Japan, Canada, Norway, Australia, South Korea, Switzerland, Norway, Italy, Ireland, Poland, and Iceland.    Senator Sanders noted, the average corporation paid a mere 12 per cent of profits in taxes in 2011—the lowest level since 1972—and in 2005 one out of every four corporations paid absolutely no income taxes at all despite massive profits.    Additionally, "large corporations and the wealthy" skip out on over $100 billion taxes per year through tax avoidance schemes such as offshore tax havens.    All of this, Sanders notes, comes in stark contrast to McConnell"s declaration that "the biggest problem we have at the moment is spending."    At a time when the middle class is disappearing and the number of people living in poverty is at an all-time high, do we cut programs that working families desperately depend upon, or do we ask the wealthiest people and largest corporations — all of whom are doing phenomenally well—to start paying their fair share of taxes?    December 21, 2012    Washington"s Austerity Plan threatens the 50 Million Americans already in Poverty, writes Rose Ann DeMoro.    With a compromise on social security now unmasked – costing the elderly an estimated 6.2-7.7%, according to business writer Doug Henwood – America becomes more and more a place of poverty. Warnings that austerity begets poverty will go ignored, but the nation"s deteriorating condition cannot so easily be overlooked.    No surprise, in this milieu of victimizing the most marginal, that one anniversary has received far too little attention. This year, 2012, marked the 50th anniversary of a ground breaking book, The Other America, by Michael Harrington, a searing examination of rampant poverty in the richest nation on earth. A prominent review of Harrington"s work in the New Yorker magazine, reportedly brought to the attention of then President John F Kennedy, ultimately helped influence the Great Society reforms later launched by his successor Lyndon B Johnson.    But half a century later, we seem to be back to square one in this country.    For the past two years, the nation"s largest nurses organization, National Nurses United, has promoted a program to spur revitalization of our economy to assist families in financial peril. Our campaign was largely spurred by an alarming spike in patients presenting in hospital emergency rooms and clinics across the country who are forced to choose between paying medical bills, their rent or mortgage or feeding their families.    The crisis nurses saw was not an aberration. By 2011, with the recent recession showing scant signs of abating, official US poverty figures had soared to nearly 50 million Americans. Some in the political arena tend to pigeonhole poverty by race, but this calamity crosses all lines of gender, geography, age, and ethnicity.    Last year, almost one in four children lived in a family that regularly had difficulty affording sufficient food, according to the US department of agriculture. On the other end of life, 8.3 million people over 60 in 2010 faced the threat of hunger, up 78% from a decade earlier – yet another reason to oppose the proposed fiscal cliff cuts in social security or Medicare.    Hunger and malnutrition, as nurses will attest, lead to a broad array of health problems, ranging from reduced immunity to disease or even organ failure. For children, poor nutrition can severely stunt cognitive development and growth. For adults and seniors, the consequences can include more chronic illnesses and shorter life spans.    Over 20 million Americans live in extreme poverty – with cash incomes as low as $10,000 a year for a family of four. Is it any wonder that the US has the third highest poverty rate out of 30 leading industrial nations?    The problem is exacerbated by decades of economic and political policies that have resulted in a massive shift of national wealth from working people to the corporate boardrooms and the yacht owners. One result: real wage growth for workers has stagnated for 30 years; median household income has steadily fallen since the Wall Street produced economic crash of 2008. Much of the limited job growth since then has been in the lowest wage sectors, primarily food service and retail.    Sadly, the issue remained almost as invisible on the 2012 campaign trail as it was when Harrington shocked the nation in 1962. But it is not a surprise to nurses who, every day, see the faces of poverty and the suffering of families left behind – even as corporate profits once again soar and the parties and good times are back on Wall Street.    With all the enormous wealth in our nation, we really can do something about poverty – as well as the overall economic morass that continues to plague not just the unemployed, or those working two or three jobs, and flipping hamburgers in Main Street towns and cities from coast to coast.    Nurses have a solution. Everyone deserves a good job at living wages, guaranteed healthcare for all based on patient need, not on ability to pay, and equal access to quality education. And now, with cuts to social security on the table, and despite the push by some politicians in Washington and many state capitals to enact more austerity programs on already hard-hit communities, there is a simple way to keep anti-poverty programs in place and pay for them.    A modest tax Wall Street on speculation, embodied in HR 6411, authored by Representative Keith Ellison, could generate up to $350bn every year, an amount that could save over 1.7m homes from foreclosure, or finance 9m new jobs at current average wage levels. Or it could fund the food plans of 24m families of four for a year, or lift all 3.8m female-headed households out of poverty for nearly a decade. Increasingly, the "Other America" is becoming all of us. It is up to all of us to end this disgrace.    Dec. 2012    "Redistributing Up": New Reuters series explores expanding US inequality.    The income inequality gap has vastly expanded over the past 20 years, largely in part to federal policies, which have decreased large amounts of revenue through unprecedented tax cuts for the wealthy and redistributed what"s left of that revenue away from public services and federally managed infrastructure programs to private contracts with multibillion dollar corporations—particularly defense contractors, weapons manufacturers, and security technology firms.    In the first article of the series, published Tuesday, Reuters traces the ways in which the federal government has acted as a wealth redistribution agency, not towards those in need, but upwards towards the already wealthy. According to the report, an analysis of census data, the federal government has "emerged as one of the most potent factors driving income inequality in the United States - especially in the nation"s capital."    The report cites public policy decisions, government "outsourcing" of projects to private firms, weakened unions, a shift in labor demand from low-skill jobs to high-skill professions and, most broadly, sweeping tax cuts, particularly during the Bush administration, that benefit top income earners and the corporations, lobbying firms, and law firms they work for.    "A cadre of Washington professionals advanced their careers by pushing through personal income-tax cuts during the administration of President George W. Bush that redistributed nearly 2 trillion dollars nationally over the past decade, mostly to high earners," the report states.    As a result of these policies, Reuters reports:    Inequality has increased in 49 of 50 states since 1989. The poverty rate increased in 43 states. Twenty-eight states saw all three metrics of socioeconomic well-being worsen. There, inequality and poverty rose and median income fell.    In all 50 states, the richest 20 percent of households made by far the greatest income gains.    http://www.reuters.com/subjects/income-inequality    November 5, 2012    Power to the People - Below the Poverty Line, by Simone Campbell.    With all the attention being paid this election to millionaire campaign donors and the importance of helping the middle class, candidates on both sides are overlooking one critical segment of our society. And it’s not a small segment – in fact it numbers over 46 million people and potential voters. People below the poverty line.    While I applaud any political candidate who puts the interests of the middle class ahead of the privileged class, we need to acknowledge that at this critical time in our nation’s history, 46.2 million people live in poverty. We’ve heard more angry talk about how threatened cutbacks might impact a fictional TV puppet than we have over how it will affect actual families living on about $250 a week.    When one candidate dismisses 47 percent of all Americans as “victims,” while his vice presidential pick dubs them “takers,” it’s time to shake off the stigma and recognize the true faces of the struggling Americans among us: returning veterans unable to find a job or too traumatized by their war experiences to look; senior citizens burdened by high healthcare costs and struggling to pay their grocery bills; men and women who have to settle for low-wage part-time work without benefits because they can’t find a full-time job; people who can’t make ends meet working for minimum wage. Many have paid their fair share of taxes throughout their working lives, taxes now funding government programs helping them retrain for new jobs, pay the rent and put food on the table. To them, “government” isn’t a dirty word, it’s a saving grace.    Income inequality has soared to the highest levels since the Great Depression. Yet productivity at many companies is climbing alongside profits – in part because company leaders made a business decision to keep wages and benefits low in order to keep costs down. Those profits aren’t making it into the hands of working poor Americans. In fact, many of our nation’s hard-working citizens don’t earn enough to pull themselves out of poverty – never mind into the middle class. Programs like food stamps aren’t luxury items like Pay-per-View or Caribbean vacations, to be easily cut from our family budget. In too many households, they are an absolute necessity. What greater American value can there be than making sure all people in the most prosperous nation on earth have enough to eat?    My organization, lobbies Congress for economic justice. We’re idealists, but we’re not naïve. There’s no question that all government-run programs (including the military) need be held accountable and waste eliminated as much as possible in order to help fix budgetary woes. We agree that everyone willing and able to work should work. But when they can’t, the government – by the people and for the people – has a moral obligation to lend a helping hand. What is naïve is the belief that gaping holes in future budgets caused by decimating necessary social programs can and will be filled by church and community alone. That’s way more bake sales than any of us can count. Yet that could be the remaining safety net, considering that most analysts believe GOP budget proposals would require deep cuts in programs that benefit the most vulnerable people.    I can only hope that the candidate who called us “all children of the same God” with such conviction during the last presidential debate remembers that line if given the political authority to send some of those children to bed hungry after inauguration day. The stark reality is, more money for the chosen few means less government applesauce for the many.    Motivated by deep cuts in the budget proposed by Congressman Paul Ryan, we began our “Nuns on the Bus” movement, starting with a 2,700-mile trip through nine states. Every day on the road, we heard from men, women and even children facing a cold hard truth: if the so-called “Ryan budget” is passed, slashing funding for social programs for families at the economic margins will cause suffering. Throughout our bus tour, we encouraged thousands of our fellow citizens to contact their elected officials and voice their opposition to unfair cutbacks.    In a presidential race as close as this one, practically any segment of our society turning out to vote has the opportunity to influence the outcome of an election and change the course of our nation. Here, now, people below the poverty line have that power. The stakes are higher for them in this election than any other demographic, yet the sad reality is that in developed countries like ours, people at the economic margins don’t show up at the polls like those who are better off.    Now, with just days to go before the election, it’s Hail Mary time for the underprivileged. If ever there was a time when low-income families and their advocates need to stand up and speak out it’s now. When military pensions, disability compensation, housing assistance and child nutrition programs are on the chopping block, there’s no time – or vote – to waste.    “We the People” must harness our collective power in the one place where it truly doesn’t matter if you’re a billionaire or a bus boy, the one place where every American is equal in the eyes of the law and under God: at the polls.    Want to win this election, candidate Romney and candidate Obama? Recruit the vote of 46 million poor Americans.    * Sister Simone Campbell is executive director of the Catholic social justice lobby NETWORK and leader of “Nuns on the Bus,” a tour featuring a group of nuns drawing attention to the impact Wisconsin Congressman Paul Ryan’s budget plan would have on the poor.    http://halfinten.org/talkpoverty    http://topics.nytimes.com/top/reference/timestopics/subjects/i/income/income_inequality/index.html    * Visit the link below to watch Wealth Inequality in America, a video using infographics to make the case that not only is wealth distributed unevenly, but that it is much, much worse than we think. Visit the related web page
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