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The American Dream Is Still Alive, but in Peril

There’s a lot of rage out there in the electorate, as everybody knows, but I think some of it is displaced fear that working hard doesn’t guarantee prosperity anymore.

This was expressed to President Barack Obama’s face in his televised town hall Monday by a recent law school graduate who told him: “like a lot of people, I was really impressed by your campaign and message... That inspiration is dying away. It feels like the American dream is not attainable to a lot of us.”

Most media outlets reporting on the U.S. Census incomes report last week focused on the deplorable fact that one in seven Americans — 43 million — lived below the poverty line in 2009.

But the Wall Street Journal had the right headline to explain the generalized experience of average Americans: “Lost Decade for Family Income.”

The median income of American families in 2009 was $49,777, below what it was in 1997.

The story of America is that, except during recessions, incomes rise. The median family income was $40,108 in 1967. It was $43,758 in 1977; $47,071 in 1987 and $49,309 in 1997. It got up to $52,338 in 1999. It’s been falling back ever since.

Americans are an optimistic people and they have always had a right to be. They still are — but less so.

A Pew Research Center poll this year found that 64 percent of Americans pronounced themselves optimistic about their family’s life, 61 percent about America’s future and 56 percent about the U.S. economy over the next 40 years. But those numbers are down from 81 percent, 70 percent and 64 percent in 1999.

Short-term attitudes are much more downbeat. A Gallup poll this month showed that 84 percent think we’re still in a recession and 47 percent think it’s not improving.

Instead of figuring out together what to do, politicians would rather blame each other and stick to their ideologies.

Democrats want more government-funded stimulus packages and continued tax cuts for the middle class even though the national debt is nearing 100 percent of GDP, the highest since World War II.

Republicans want to extend tax cuts for everyone — especially the wealthy — even though the census numbers show that income disparities are as great as they’ve been since the 1920s, and growing. Cutting domestic spending would add to the woes of those at the bottom.

So what to do? There ought to be both long-term and short-term solutions. One (relatively) short-term step might be creation of a national infrastructure bank that would use its lending authority to encourage private investment in roads, railways, air traffic control and waterways.

The American Society of Civil Engineers estimates that the country needs to spend $2 trillion to bring its infrastructure up to acceptable standards. Governments can’t afford such outlays, but well-structured bank loans might unleash the trillions that private companies are sitting on — and reduce the unemployment rate.

For the long-term future, the only certain answer is to vastly improve U.S. education so that Americans can compete with foreigners who work for lower wages.

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