The Economy
Floor Speech
Mr. SANDERS. Mr. President, I think most people understand that the United States today is in the midst of the worst economic crisis since the Great Depression of the 1930s. What I want to do is take a very few minutes to talk about how we got to where we are today and what policies we need, in my view, to move this country forward in a very bold way so that we begin to create the millions of jobs the middle class of this country desperately needs.
Let me begin by taking a quick look back to where we were in January of 2009. It is important that we take that look back because if we don't know how we got to where we are today, it is going to be very hard to move us in a different direction.
January 2009 was, as we all recall, the very last month of the Presidency of George W. Bush. In that month we lost over 700,000 jobs. That is an extraordinary number, almost unprecedented. In fact, for the last months of the Bush administration, this country was hemorrhaging jobs as a result of the financial collapse brought about by the greed, the recklessness, and the illegal behavior on Wall Street.
During that period, our gross domestic product, the total sum of all that our economy produces, had gone down by nearly 7 percent during the fourth quarter of 2008--a 7-percent reduction. That was the biggest decline in more than a quarter century. Some $5 trillion of Americans' household wealth evaporated in a 12-week period as people in Vermont and all over this country saw the value of their homes, their retirement savings, and their stocks plummet.
We were at a moment where some economists thought we might enter the worst depression in history, that the entire world's financial system would collapse. In January of 2009 we were hemorrhaging 700,000 jobs. That is where we were.
Of course, as a result of the collapse on Wall Street, the last months of the Bush administration were a total economic disaster, but let us be clear about the cumulative 8 years of the Bush administration. What happened over that 8-year period? From 2001 when President Bush came into office, until January 2009 when he left, this country lost over 600,000 private sector jobs. Let me repeat that. During the Bush 8-year period, this country lost over 600,000 jobs. The reason it is important to understand that is there are folks in this Chamber, throughout this country, who want to go back to those policies. I am not quite sure why anyone would want to go back to a set of economic policies which resulted, in an 8-year period, in a loss of 600,000 jobs. Net, there was a gain during the Bush administration of 1 million jobs--a very poor record--all of them government jobs, many of them in the military, in Homeland Security. That is, under anybody's definition, a horrendous record of job creation. In fact, it is a record of job loss.
During the Bush years, not only did we lose 600,000 private sector jobs, median income--median family income dropped by $2,200. In other words, middle-class Americans earned significantly less income at the end of the Bush era than they did when he first came into office. During those 8 years, over 8 million Americans slipped out of the middle class into poverty; over 3 million lost their pensions; and nearly 8 million lost their health insurance.
During that period, 4.5 million manufacturing jobs disappeared as companies shut down in the United States and moved to China, Mexico, Vietnam, and other low-wage countries. In the year 2000 we had over 17 million manufacturing jobs in this country. At the end of the Bush era, in 2008, we had less than 12 million. That is a huge reduction in good-paying manufacturing jobs--in fact, the fewest number of manufacturing jobs since the beginning of World War II.
Under President Bush our trade deficit with China more than tripled and our overall trade deficit nearly doubled.
I raise those issues once again because it is very important to understand that there are a number of people in this Chamber who want to go back to those policies--policies which were a demonstrative failure.
But here is another important point, and we should understand this very clearly. While the middle class was battered during the Bush years and median family income went down, while poverty increased, not everyone did badly. In fact, during the Bush administration, the wealthiest 400 Americans saw their incomes more than double. The middle class was battered, median family income was down, poverty increased, people lost their health insurance, people lost their pensions, but the wealthiest 400 Americans saw their income more than double. In 2007, these wealthiest 400 Americans earned an average of $345 million in 1 year--on average, $345 million. In terms of wealth, as opposed to income, the wealthiest 400 Americans saw an increase in their wealth of some $400 billion during the Bush years--400 people, an increase of $400 billion during the Bush years.
Let me talk for a moment about something I consider to be very important, but we do not talk about it very much in the Senate. We do not talk about it very much in the media. It is not something we engage in polite conversation, but it happens to be one of the important economic issues facing our country; that is, the issue of distribution of income and distribution of wealth.
All over America, whether it is in Minnesota or Vermont, everyone wants to know--in New England, everyone loves the New England Patriots or the Boston Celtics, and what people want to know is, at the end of the day, who won and who lost and what was going on in the game. Well, in terms of income distribution, that is the result of income as economic activity. Who won? Who lost? And let's be very clear that when we talk about winners and losers, the United States today has the most unequal distribution of income and wealth of any major country on Earth, and that inequality is getting worse. I know many people choose not to talk about it, but I think it is imperative that we do talk about it.
Today, the top 1 percent earns more income than the bottom 50 percent. Let me repeat that. The top 1 percent earns more income than the bottom 50 percent. In 2007, which is the last year for which we had good statistics, the wealthiest 1 percent, the top 1 percent of income earners, took in 23 1/2 percent of all of the income earned in the United States. Let me repeat that. The top 1 percent earned over 23 percent of all income earned in the United States. Here is an even more amazing statistic. The top one-tenth of 1 percent--top one-tenth of 1 percent--took in 11 percent of total income, according to the latest data available.
The problem we are having in terms of income is that the situation is becoming more and more unequal. We see that in the statistics, which are very clear. In the 1970s, the top 1 percent only made 8 percent of total income earned in this country, and now that number is 23 1/2 percent--almost four times as much.
I would point out that the last time income was this concentrated was in the year 1928, and I think we all know what happened in 1929. When you have such an unequal distribution of income and wealth, it is not only, to my mind, immoral and wrong that so few have so much and so many have so little, it is bad economics because the economy grows when all people have money to spend, when consumers can spend money. When so much of our income and wealth is concentrated on the top, we run the significant likelihood of major economic recessions, and that is what is happening right now.
Also, incredibly, in the midst of this growing inequality and while the very wealthiest people in this country became much richer and at the same time as our deficit soared, the tax rates for the people on top went down. Middle class declines, poverty increases, the rich get richer, and the tax rate for the very wealthy goes down. This was a result of not only tax breaks for the wealthy initiated during the Bush administration but also, quite frankly,
tax policy that took place before Bush. The result is that from 1992 to 2007, the latest statistics that we have, the effective Federal tax rate--effective Federal tax rate, and that is what people really pay--for the top 400 income earners in our country was cut almost in half. The rich get richer, their effective tax rates are cut almost in half.
Today, we have a Federal Tax Code that is so unfair, that it is so absurd that Warren Buffett, one of the wealthiest people in the world, often points out that he pays a lower effective tax rate than does his secretary. Hedge fund managers who make $1 billion a year now pay a lower effective tax rate than many teachers, nurses, firefighters, and police officers.
I should also add that in terms of wealth, as opposed to just income, inequality, of course, is also growing. Today, the top 1 percent owns more wealth than the bottom 90 percent, and during the Bush years, the wealthiest 400 Americans saw their wealth increase by some $400 billion. When a few people have incredible wealth and incredible income, they do not tuck that money under the mattress; they use that money.
The point Senator Murray of Washington was making a few moments ago on the DISCLOSE Act is a very good example of how some of those folks are making money. Not content to have the top 1 percent earning more than 23 percent of all income in America, these folks want more. Their greed has no end. And what they are now doing as a result of the DISCLOSE Act, a 5-to-4 Supreme Court decision, they and their corporate friends are now free to put as much money as they want into the political process, into television ads, into radio ads, and they do not have to disclose who they are. So you are going to have corporations with foreign interests getting involved with the American political process. You are going to have corporations putting all kinds of money into the political process, setting up phony institutions and front groups, and they do not have to tell the American people who they are.
In addition to the DISCLOSE Act and the huge amount of money now flooding into the political process, we have an enormous amount of lobbying and campaign contributions that are going right into the whole tax issue, that which we are debating now.
As you know, some of our Republican friends think, apparently, that the top 1 percent earning more income than the bottom 50 percent is not quite enough, that the fact that we have given huge tax breaks to millionaires and billionaires for the last 15 years is not enough; they need more. So what some of our Republican friends are doing and what their friends on Wall Street and big money interests are doing is pouring huge amounts of money into the political process which says that we should provide, over a 10-year period, $700 billion in tax breaks to the top 2 percent; that millionaires, those people making $1 million or more, should receive on average a $100,000 tax break. And they are fighting for tax breaks for the rich at the same time as they are saying: Oh, isn't it terrible that we have a $13 trillion national debt. So they wanted to give $700 billion in tax breaks to the top 2 percent, and then they say: Oh my goodness, isn't it awful that we have a recordbreaking deficit and a large national debt, and they want to pass on those tax breaks to our kids and grandchildren--increase the national debt so that we can give tax breaks to millionaires and billionaires. That makes zero sense to me. I think that is an incredibly dumb and irresponsible idea.
What I think we should do, what I believe we should do is that half of that $700 billion, instead of being given in tax breaks to the top 2 percent, should be used for deficit reduction. Let's do it now. And the other $350 billion should be invested in our infrastructure--rebuilding our roads, our bridges, our water systems, our schools, our transportation systems--and putting people back to work. Our infrastructure is crumbling. Everybody knows that. We are going to have to address it now or later. Let's address it now. In the middle of a recession, let's put millions of people back to work rebuilding America to make us more competitive in the global economy and make our economic system more efficient. I think, frankly, it makes a heck of a lot more sense to put millions of people to work rebuilding America's infrastructure and using $350 billion to lower the deficit than it does to give $700 billion in tax breaks to the top 2 percent. I hope that a majority of my colleagues or, in fact, 60 of my colleagues agree with that because, to me, that is the policy this country desperately needs.
I yield the floor.
Source