The Rich Really Are Getting Richer (The Poor? You Guessed it.)

In 2008, the last year for which data was available, the richest 10 percent of the U.S. population had almost the same share of the total national income as the remaining 90 percent.

Between 1970 and 2008, the bottom 90 percent of American households saw their purchasing power fall by 1 percent while the richest 0.1 percent saw their median annual household income increase by 385 percent.

This has brought us to a degree of income inequality in the United States last seen in the 1930s.

But the Republicans under the leadership of John Boehner and Paul Ryan seem to believe that the real problem here is that the rich just aren’t rich enough, and the poor just aren’t poor enough. And they are bound and determined to fix that unfortunate problem with a policy of new program costs and fees that fall hardest on the middle class and below.

The Republicans are insisting that the budget deficit problem must be addressed aggressively and immediately and that it can only be fixed by making huge cuts in programs and services that give a measure of economic security to the middle class, provide health care to the disadvantaged, and help seniors retire after a lifetime of work with a modicum of dignity.

But even as Republicans insist that they will not raise taxes, the GOP proposals for “fixing” Medicare, Social Security and Medicaid would have exactly the same effect as big tax hikes borne most heavily by the middle class, seniors and the disadvantaged.

For instance:

  • Under their proposal to kill health care reform, prescription costs for millions of seniors would immediately go up sharply because the infamous donut hole would come back.
  • The cost for Medicare insurance for those who are now 55 would be going up by a whopping $6,400 per year when it comes time for them to retire.
  • Republican proposals for cutting the cost of Medicaid would simply shift the costs on to states which in turn would be forced to limit the benefits for Medicaid recipients, reduce the scope of covered services, or require beneficiaries to pay larger co-payments.

And who are the people who really pay for that “fix”? Not the rich of course but Medicaid recipients. About two-thirds of them are poor seniors or the disabled. Most of the rest are poor children.

Despite the fact that social safety net programs such as Social Security and Medicare have long given Ayn Rand-loving libertarian types like Paul Ryan a rash, a recent Pew Poll found that an overwhelming percentage of Americans view Social Security, Medicare and Medicaid as good for the country. A remarkable 88 percent felt that way about Medicare.

Not even a majority of middle-class Republicans approve of the Republican plan to slash Medicare and Social Security benefits. According to the Pew Poll, when asked if it is more important to address the deficit or keep Social Security and Medicare benefits as they are, 53 percent of Republicans with incomes of $75,000 or less, said it is more important to maintain benefits.

And if you check Google News for the search terms “fee increases” or “tuition increases,” you will see that all across the country, as federal stimulus aid to states and municipalities comes to an end, all kinds of fees (the most regressive kind of taxes) are going up.

From Massachusetts to California, tuition rates for state higher education systems are sharply increasing. In my little town of Newton, Mass., parents of high school students will have to pay much higher fees for their kids to be in the school play, or the school band, or participate in athletics. If you were to try to design a disincentive program that would discourage middle class kids from participating in their school’s activities and going on the get a college degree, you could hardly design a more perversely effective system.

And even as all these increased costs and fees will be hitting the middle class hard, Republicans are fiercely protecting tax loopholes for big oil, hedge fund managers, and companies that ship jobs overseas. I tried a Google search for “increased landing fees for private jets” and I came up empty-handed.

If the Republicans are successful, and they seem to be holding a pretty strong hand at the moment, it is interesting to try to extrapolate what the US might look like economically in a couple of decades if the rich keep getting richer and the poor keep getting poorer at the current pace. It might be a good idea for most folks to get an early start acquiring a taste for Ramen noodles.


Marquee photograph via iStockphoto/DNY59