This is a very sobering but not surprising story. The “evil geniuses” in this story include Ronald Reagan, Donald Trump, Milton Friedman, Lewis Powell, John H. Sununu, Mitch McConnell, Grover Norquist, Robert Bork and others. The Democrats own a lot of the blame too. Their Congress representatives were lobbied to support various deregulation efforts and tax cut packages. And now many Americans reap what has been sowed and plotted by the economic right.
The rich have gotten richer and the middle and lower classes have struggled the past 40 years. Listed below are some notes from my reading of the book:
In 1980, income above $700,000 (in today’s dollars) was taxed at 70% by the federal government, but today the top rate is 37%. And the richest Americans, who back in the day paid an average of 51% in federal, state and local taxes combined, now pay just 33%.
The richest 0.01% of Americans, the one in 10,000 families worth an average of $500 million, pay in effect federal income tax rate half what it was in the 1970s.
Before 1980, all Americans’ incomes grew at the same basic rate as the overall economy. Since 1980, the only people whose incomes have increased at that rate are people with household incomes in the range today of $180,000 to $450,000. People with incomes higher than that, the top 1%, have gotten increases much bigger than the overall economic growth. Meanwhile 90% of Americans have done worse than the economy overall.
The average monthly Social Security retirement benefit more than tripled from 1950 to 1980, adjusted for inflation, but it has increased by just half in the four decades since.
“The greatest lie is that the 401(k) was capable of replacing the old system of pensions,” says the regretful man who was president of the American Society of Pension actuaries at the time and who had given his strong endorsement to 401(k)s. Today only one in eight private sector employees are in line to get such a pension, and most American workers don’t even have a 401(k) or an IRA or any other retirement account.
Only a quarter of people graduating from four-year public colleges and universities in the early 1990s had student loan debt; by 2010, 2/3 did.
The United States economy since 1980 has grown as much as or more than those of most of our rich country peers, although not all —-Sweden, for instance, has continuously grown faster than America for the last 30 years. But while the average US income and GDP per capita have risen as fast as or faster than incomes in your European economies, in exceptional America the more real life relevant median income – – the amount of money going to the person who earns more than the poor half and less than the rich half has hardly budged for decades.
In every international ranking of healthcare quality, the United States is low, from 28th to 37th place. Until the 1980s too, life expectancies for people in all the rich countries were increasing right in line but now people in the other countries live 3 to 5 years longer on average than Americans. According to the health efficiency index compiled by Bloomberg News which combines longevity and healthcare spending into a single metric for almost every country, the United States is second from the bottom, better only than Bulgaria.