Thursday, October 23, 2008

The Growing Inequality Divide

A new report Growing Unequal? the "American Dream" of upward social mobility has emigrated from its birth place in the United States to northern Europe. The new report by the Organization for Economic Cooperation and Development (OECD) is on the growth of economic equality over the past 20 years in its 30 member states. The United States has the largest gap between rich and poor households after Mexico and Turkey. What? The current gap has gotten particularly large under Bush - since 2000. That is what an unfair tax policy will do.
The higher the inequality in a society the lower the social mobility the study says. What this means is dishwashers' sons are more likely to be dishwashers and millionaires' kids can assume that they too will be rich, adding that governments could do much to promote mobility, particularly through progressive tax policies, greater social spending, job creation, and increasing investment in education.

One unintended consequence of this inequality is "the crisis has sparked unprecedented worldwide criticism of the "free-market" economic model that the U.S. and Washington-based international agencies like the World Bank and the International Monetary Fund have vigorously promoted since the administration of President Ronald Reagan."

After Mexico and Turkey, the U.S. also has the highest poverty rate of the 30 OECD nations, according to the report, which defined poor households as those whose income was less than half of the media income in each of the member-countries.

For all OECD countries, the average poverty rate was just under 10 percent in 2005. In Mexico, the rate was highest at more than 20 percent. Turkey and the U.S. were tied at 17 percent. Lowest poverty rates were found in Denmark, Sweden, the Czech Republic, Austria, and Norway.

The person I listen to most on this subject is independent (Social Democrat) Senator Bernie Sanders (VT). Sometimes I think I should move to Vermont just so I could say he is my Senator. He speaks to the average person in economic terms like no other politician. His candidacy and his politics are actually modelled after the Scandinavian and northern European countries. Here is his plan. He actually has a name for it and it is called Rebuild America. I will let him speak for himself:

Let me be specific about what a "Rebuild America" program should include:

We should make a major financial commitment to improving our roads and bridges. We must develop energy-efficient rail lines for both freight and high-speed passenger service and promote public transportation. We need to bring our water and sewer systems into the 21st century. In terms of job creation, every billion dollars invested in the physical infrastructure creates 47,000 new jobs.

We should make a major financial commitment to energy efficiency and sustainable energy. With a major investment, we could stop importing foreign oil in 10 years, produce all of our electricity from sustainable energy within a decade, and substantially cut greenhouse gas emissions. We can make the United States the world leader in the construction of solar, wind, bio-fuel and geothermal facilities for energy production, as well as creating a significant number of jobs by making our homes, offices, schools and factories far more energy efficient.

We should make a major financial commitment to education. We must end the disgrace of millions of children under five attending totally inadequate child-care facilities while millions of other families are unable to afford a college education. We must invest in new classrooms, new computers, energy-efficient heating and cooling systems. That would not only create jobs, but relieve some of the burden on the regressive property tax.

In these harsh economic times we should extend unemployment benefits from 26 weeks to 39 weeks, so that more than 1 million Americans do not run out of their benefits by the end of this year. We should increase eligibility for food stamps and other nutrition programs to assist the hard-pressed middle class as well as the poor. We should substantially increase funding for the highly-effective community health center program so that, at a minimum, all Americans have access to affordable primary health care, dental care, and low-cost prescription drugs.

Finally, with cities and states facing deep deficits and cutting basic services, we must make a major, immediate financial commitment to states and municipalities. Their crisis will only grow worse as homes are foreclosed, as income and capital gains decline, as fees on sales of homes and motor vehicles diminish. For too long, unfunded federal mandates have drained the budgets of states and communities. The strength and vitality of America's communities must be restored.
The American people today are angry and confused. They feel they have lost their grip on the reins of power in our democratic society. While crooked Wall Street executives walk away from failing companies with millions in golden parachutes, middle-class Americans are seeing their life's savings disappear and their dreams for their kids evaporate.

I hope a new Democratic president will take office in January along with expanded Democratic majorities in the U.S. House and U.S. Senate. With strong grass-roots participation, we can pass legislation which creates millions of good-paying jobs as we address the major economic and social crises that confront our country. Now is the time to begin restoring the faith of the American people in our government. Now is the time to make government work, not just for the wealthy few, but for all Americans.

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