Wake up: the American Dream is over

The gap between America's rich and poor is growing, not least because it appears to be government policy.

Over the past 25 years the median US family income has gone up 18 percent. For the top one percent, however, it has gone up 200 percent. A quarter of a century ago the top fifth of Americans had an average income 6.7 times that of the bottom fifth. Now it is 9.8 times.

Inequalities have grown worse in different regions. In California, home to both Beverly Hills and the gang-ridden slums of Compton, incomes for lower class families have fallen by four percent since 1969. For upper class families they have risen 41 percent.

This has led to an economy hugely warped in favour of a small slice of very rich Americans. The wealthiest one percent of households now control a third of the national wealth. The wealthiest 10 percent control two-thirds of it. This is a society that is splitting down the middle and it has taken place against a backdrop of economic growth.

Between 1980 and 2004 America's GDP went up by almost two-thirds. But instead of making everyone better off, it has made only a part of the country wealthier, as another part slips ever more into the black hole of the working poor. There are now 37 million Americans living in poverty, and at 12.7 percent of the population, it is the highest percentage in the developed world.

And yet - even against this background of growing inequality - Bush continues with his tax cuts for the rich which even Warren Buffet, the second richest man in the world, has said "screams of injustice."

Bush is continuing Reagan's insane idea of "trickle down economics" in which, the theory states, the more you give to rich people the better off the whole of society will be. It's hard to imagine how they passed that off with a straight face.

The top 0.01 percent of households has seen their tax share fall by a full 25 percentage points since 1980, when Reagan introduced this theory, and in the interim period America's poor have simply continued to get poorer. Reagan's theory is obvious bunkum, and it's a wonder that no-one calls Bush for his idiocy in continuing it.

The facts simply don't support their argument.

All this comes at a time when Republicans are calling for the abolition of "estate tax", a tax that you only pay if, in death, you leave in excess of $400 million.

That they can be calling for this tax cut at the same time as Bush has sanctioned millions of dollars in cuts to Medicare, Medicaid and the education budget is simply proof that these are not men who believe in the American Dream. These are greedy individuals who will take as much as they can and bugger the rest.

It is harder than ever for an American born in poverty to rise through the social scales.

A survey last year showed that economic mobility (a measure of those people trying to make the Dream come true) was lower in America than Canada, Germany, Norway, Denmark, Sweden and Finland. In fact, the only country doing as bad as America was Britain.

Robert Reich did a wonderful lecture recently at Berkeley University - see the video here - in which he spoke of the gap between rich and poor as resembling an elastic band. You can only stretch it so far before it either has to snap back or simply snap.

Patriotism and a love of the flag is the only thing that is preventing this society from snapping.

America's poor are being shafted. And one day they will wake up to this fact.

The dream is simply that, a dream.

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Tags: Reagan, trickle down economics, tax cuts, poverty, american dream, wealth, distribution, US, USA, rich, poor, poverty, gap, widening,