News Release

The Economy and “Bushonomics”


An associate professor of economic history at Villanova University, Schweitzer said today: “From the standpoint of historical statistics, the most obvious abnormality is the ever-widening gap in the distribution of income and wealth in this country, made all the more alarming by the nature of the discrepancy. Since 1980, taxes on the labor in this country have risen substantially in the form of the FICA tax charged both workers and their employers. Fifteen percent of all labor costs go directly to the federal government today, harming both workers and small businesses… When all taxes are factored in, a nurse’s aide trying to raise two children is paying a greater percentage of her income to Washington than Bill Gates.”

Schweitzer added: “On the one hand, we have households with so much discretionary income they think nothing of paying $2,000 for a ‘get-in’ seat to the Super Bowl; at the same time, the majority of working mothers with small children cannot afford a level of day care that meets minimal federal standards. We are raising a generation of children who will lack the nutrition, social contact, and intellectual stimulation that they need to be productive adults in later life. The state of the economy requires the caretaking parent to be working 40 hours a week, yet we have made no arrangements for the care of their children. This is every bit as important an economic issue as ‘capital gains’ — indeed, economic studies for the past 50 years have shown that the greatest indicator of future economic growth in a nation is not the building of new factories, but a well-educated populace. When they reach school age, the discrepancy will widen even more. The children of the well-to-do attend private schools with one teacher for every 10 students; an urban child faces a public school classroom with one teacher for 40 students, leaking roofs, and no money for textbooks. It is not only children who are suffering. The war against so-called ‘welfare’ has most cruelly hit those who are ill and disabled in our nation.”
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Miller, a professor of economics at Wheaton College in Massachusetts, is a contributing editor at Dollars & Sense magazine. He said today: “The Bush tax giveaway to the wealthy will not inoculate us against recession. First off, it will do little to combat slower growth in a timely way. Even if Congress passes the proposal intact, none of the cuts would be enacted before 2002. In truth, much of the Bush proposal would be slowly phased in over 10 years…. How should we use the budget surplus? If a tax cut is needed to bolster the economy, then why not use the surplus to pay for a cut in the payroll taxes paid by wage workers? Also, by targeting wage workers, who are often strapped for cash, a payroll tax cut — in effect an across-the-board raise — would immediately boost consumer spending. But what we really ought to do with the projected surplus is dedicate it to pressing social needs: alleviating poverty, insuring those who go without health insurance, and providing shelter for those who have no place to live. Even if the entire $3.1 trillion projected surplus were used for public spending, federal outlays in fiscal year 2011, according to the Congressional Budget Office, would be just 18.4 percent of GDP, smaller than at any point in the 1970s or 1980s or 1990s.”
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For further information, contact at the Institute for Public Accuracy:
David Zupan (541) 484-9167