The debt ceiling gridlock and the limited range of solutions being considered in Washington to solve our economic crisis are likely to worsen the enormous gaps in wealth, income and opportunity that already exist. While the politicians argue, we are careening toward establishing a society in which the lion’s share of money and opportunity is permanently consolidated at the very top. This goes well beyond balancing a budget: it goes to the heart of who we are and who we are going to be. According to the Congressional Budget Office, between 1980 and 2007, average household income for the bottom 80 percent has remained relatively constant, while the top 20 percent has doubled, and the top 1 percent has nearly quadrupled.
And just this week, a Pew Research Center study – based on U.S. Census data – revealed that, while the current recession has hit middle and working class people hard, it has hit minority communities hardest of all. While median wealth in white households has dropped 16 percent, it has dropped 53 percent in African-American households, 54 percent in Asian households, and 66 percent in Hispanic households.
The study reveals that white wealth now stands at 20 times that of black wealth and 18 times that of Hispanic wealth.
A different study on wealth gaps released last year described wealth as “what you own minus what you owe” which “allows people to start a business, buy a home, send children to college, and ensure an economically secure retirement.” Researchers warn that “without wealth, families and communities cannot become and remain economically secure.” And fewer people are feeling secure these days.
Stay with me here. With the top 20 percent owning 80 percent of the wealth, that would leave the remaining 80 percent to “share” the remaining 20 percent of the wealth. Put more bluntly, if wealth can be described as the thing that buys homes and gets our kids to college, nearly half of the American people are unable to do either as they have virtually no wealth at all.
While our cultural narratives often blame lazy workers and greedy unions, the fact is that the playing field has been rigged for a powerful few. Things like a 40 percent tax cut for those earning a million dollars or more since the 1960s and a 50 percent reduction in corporate taxes over the past 30 years have driven more resources to the very top.
Policies like that have brought our nation to a profound fork in the road. In the past, at our best we’ve relied on our democratic principles to confront systemic injustices. So what will we do now? Are we going to continue to crush the middle class and expand the poor or are we going to invest in the future for all?