Jerome Bourgois criticizes past Republican tax bills and offers up some facts (“GOP tax overhaul more failed trickle-down economics,” The Daily News, Dec. 5). He claims that after the Republicans’ 1986 tax plan, workers’ wages and benefits declined. According to the Bureau of Economic Analysis, part of the U.S. Department of Commerce, employee wages and salaries totaled over $2.2 trillion in 1987.
By 1997 that number was $3.87 trillion. According to the Department of Labor, average hourly wages and earnings for production and nonsupervisory employees was $9.01 at the end of 1986. By the end of 1997 that figure was $12.75.
Bourgeois then claims, “The 2002 George W. Bush tax cuts for the ‘job creators’ resulted in a net job loss for the next seven years and the worst financial crash since the Great Depression.” He provides no causation. He simply states that one preceded the other so the prior must be at fault.
Of course, most market professionals believe that the root of the 2008 market crash were mortgage bonds that had been dishonestly rated and then used as collateral by major financial institutions. When the bonds’ revenue streams failed to perform as they were rated, the bonds’ prices dropped, and financial firms did not have sufficient capital to withstand the losses.
Clearly, Bourgois has an ax to grind — but he is not alone. Many Americans are justifiably frustrated at the lack of middle-class prosperity. Where he does a disservice is that he solely assigns the blame to the Republican Party when the facts show that both parties are at fault.
Between 1979 and 2013, the bottom 90 percent of wage earners saw their real wages grow, cumulatively, by 15 percent — low wage workers actually experienced a decline. The top 1 percent saw a cumulative wage growth of 138 percent.
At the same time, America’s debt skyrocketed from $827 billion (31 percent of GDP) in 1979, to $1.9 trillion (105 percent of GDP) in 2016. The issuance of government debt to fuel economic growth used to make financial sense. At one time, every $1 of debt returned over $1 in GDP. However, that figure is now well below 50 cents.
Washington politicians are happy to have the public debate tax policy. But it is a red herring. The truth is that D.C. politicians have found no level of revenue that they cannot exceed. Given that basic truth, debating federal tax policy is nothing short of folly. When the Democrats control legislation, Republicans argue that the debt is of primary concern. When the Republicans control legislation, the Democrats argue the same. Don’t fall for it.
Our children will pay for the misguided, but well intentioned, fiscal actions of our elected leaders. Given the nature of a global marketplace, their prosperity is guaranteed to not be as bright as their parents’ or grandparents’. If the undebatable, party-agnostic fiscal irresponsibility of Congress and the executive branch is not a case of financial child abuse, I shudder to think of what could possibly qualify.