Robert Freeman writes:
For the past thirty years the rich have been waging war on the middle class. It’s been astonishingly effective, partly because it has been undeclared. But even that pretense is now being abandoned. The President’s National Deficit Commission has effectively declared that the rich will now go after what is left of working and middle class wealth and will take whatever steps are necessary to seize it. If allowed to succeed, their plan will reduce Americans to a state of serfdom.
Ronald Reagan began the war on the middle class with his “supply-side” economics. Its very purpose, according to David Stockman, Reagan’s Budget Director, was to transfer wealth and income upwards. It cut the marginal tax rate on the highest income earners from 75% to 35% while dramatically expanding spending for war. The results were two-fold: massive federal debt and an astonishing rise in the share of income and wealth going to those who were already the wealthiest people in the world.
The national debt quadrupled between 1980 and 1992. George W. Bush would repeat Reagan’s policies and double it again between 2000 and 2008. Meanwhile, the share of national income going to the top 1% more than doubled, from 9% to 24%. The share going to the top one-tenth of 1% of income earners more than tripled. We now have the most unequal distribution of income in the developing world and the inequality is growing rapidly.
Shifts of this magnitude over such short periods of time have never been seen in American history. With the rich getting much, much richer, its means that everybody else is getting poorer. And in fact, real wages for median workers are lower today than they were in 1973. Indeed, while the inflation-adjusted income of the bottom fifth of workers fell by $6,900 between 1979 and 2007, the top 1% saw its annual income increase by $741,000!