As the economic crisis deepens, it’s an open question whether new spending money will be put into the pockets of the poor and lower-middle economic classes. Their millions of modest payments for
groceries, fuel, rent, health care, mortgages and entertainment do much more to keep the economy going than the purchases of multi-million-dollar mansions and yachts by the few who are very rich.
President Bush has been vague about where spending should be stimulated, but his aides have floated a plan of tax rebates of $800 for individuals and $1,600 for married couples. That would leave the millions who pay no income tax at all out in the cold. Those same millions pay 6.2 percent out of each paycheck for the regressive Social Security tax.
The White House is expected to resist a plan by some congressional Democrats to limit a rebate to taxpayers who earn less than $85,000 a year and to provide equal cash payments to those who don’t pay income taxes.
Even if the Bush administration relents and goes along with some relief for the poor and lower-middle income classes, this one-shot benefit can nowhere make up for nearly a decade of systematic transfer of wealth to a tiny percentage at the expense of the rest of the population.
Soon after taking office, President Bush pushed through a massive tax cut that overwhelmingly benefited the rich, did little or nothing for the poor, and didn’t do much for the middle class.
Long before the housing bubble burst and the credit crisis boiled up, most wage-earners and middle-income salaried workers found their “real” take-home pay actually going downhill. Rents, home prices, health care, automobiles, gasoline, heating oil, electricity and groceries kept going up, eroding the value of the dollar. Businesses, feeling the pinch, often hired part-timers and cut hours of work to
avoid paying health benefits.
It should have been no surprise, when the housing bubble inevitably burst, that there would be a surge of mortgage defaults, credit card nonpayment, and now automobile repossessions.
As Congress struggles to fight off a recession, it must give the poor a break, which could also include increased unemployment benefits and more heating assistance funding. Giving them a fair shake will mean economic justice but also economic sense, since their spending is what makes America’s economic wheels go around.
Comments
comments for this post are closed