Economics reporter David Cay Johnston takes an accounting of American wages, personal debt, national income from manufactured exports and tax revenue both today and 10 years ago, and concludes the U.S. needs a new set of fiscal policies.
For starters, adjusted for inflation, Americans’ average pretax income fell roughly $2,700 between 2000 and 2010. Wages per capita dropped 4.3 percent during the same period, and the ranks of the partly and fully employed jumped a meager 1.5 percent while the population grew 6.4 times faster.
Mortgage debt grew 51 percent as averaged adjusted pretax income fell during the century’s first decade. During the same period, the U.S.-Chinese trade deficit grew from $112 billion to $302 billion, with U.S. exports to that country dropping $27 billion.
“Trade with China has destroyed every 55th job in America” according to the Economic Policy Institute, Johnston writes, due in large part to China’s lax regulations and minimal protections for workers and the environment.
—Posted by Alexander Reed Kelly
David Cay Johnston at Reuters:
How many years of evidence does it take to establish that a policy worked or failed?
Will continuing our current tax, credit and trade policies produce favorable results in the future? Will they produce higher incomes?
My reading of this and tons more data is that the Bush tax cuts utterly failed, the Fed’s artificially low-interest rate policies under presidents Bush and Obama do far more damage than good (especially to savers), and that the United States is harmed both by the imbalance in the trade relationship with China and scores of trade agreements with South Korea and other low-wage countries that are deeply flawed at best.
ansik (CC BY 2.0)