Michael Schwartz Schwartz is a
fifth-year sociology student who can be reached at [email protected].
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Despite the recent election, it is my belief that nothing will
change for the tens of millions of Americans who are suffering
under our current economic conditions. The problem is not whether
the pro-big business capitalist Republicans, or the pro-big
business capitalist Democrats run the government. The problems that
exist are a natural part of our economic system. Neither party
would bring “prosperity” to the working class of this
nation, and the idea that things have “gotten better”
under Clinton is wrong.
When people describe the economy over the past eight years they
like to use the term “boom.” According to the media and
the official line of the government, times have never been better
and this is the greatest economy in history. I’m sure you all
know what I’m talking about.
You can’t watch the news, or listen to the radio without
hearing about a new report, which shows that we’re all just
an inch away from becoming the next “dot-com
millionaire.” But how are people really living under this
“booming economy”?
I checked out the census statistics for poverty rates and found
some information that is quite disturbing. There are 32.3 million
people who are living under the poverty line in the United States
today, and almost one in every five children is born into extreme
poverty. According to a Tuft’s University study released in
early 2000, almost 20 percent of children suffer from moderate to
extreme hunger.
The “poverty rate” that is defined by the government
is $17,029 annually for a family of four. According to my financial
aid statement, I’m entitled to almost $15,000 just for
myself. Imagine a family of four paying for rent, utilities, food,
medical expenses, clothes and everything else needed to live with
barely $17,000 a year.
Poverty in this nation is at epidemic proportions regardless of
what the media would have you believe. Almost 30 percent of
female-headed households live under the poverty line. This is
something that I myself experienced when my father passed away.
Thanks to the welfare reform act passed by President Clinton in
1996, the poverty rates in this country are only going to increase.
This “reform” eliminated aid to families with dependent
children, and has left many children without the aid they need. It
also put a five-year limit on the time a child can be on food
stamps. That means if a 2-year-old is on food stamps, that child
could lose his or her aid by the age of 7.
Some people benefit from these “boom” times; the
economy has expanded at an unprecedented rate in the past 20 years,
and the money is going somewhere. It’s not, however, going to
the working class. The money is being shifted from those on the
bottom to those at the top.
There has been a steady attack on the working class in this
country since 1973. The richest 2 percent of this country have seen
their incomes increase 59.3 percent since 1973 while poor people
have seen theirs decline. In fact, since 1989 those in the bottom
20 percent of incomes have seen a loss of 0.1 percent while the
rich in the top 2 percent have seen a gain of over 20 percent.
The L.A. Times workplace section on Oct. 29 pointed out that
people are working 12 hours more a week to maintain the same
standard of living they had in 1989. People are working harder than
ever and longer for less pay. It takes two people working full time
to provide the same standard of living that used to be provided by
one.
According to the government, there is currently a 4.1 percent
unemployment rate in the nation. That means there are over 13
million people who are actively seeking work and cannot find a job.
That does not count the millions who are underemployed, or those
who work two or three jobs to survive.
The times we are living in right now are comparable to those of
the 1920s. I remember reading in my high school history book about
the “Roaring ’20s,” a time when everyone was
doing great, the economy had never been better, and economic growth
was unprecedented. In fact, the stock market was moving up and up
and up, and people thought it was never going to end.
In the 1920s, the stock market wealth was created with money
that didn’t exist ““ it was called “buying on
margin.” Today, the stock market wealth is also being created
with money that doesn’t exist. People are buying stocks with
credit cards, taking out mortgages to buy stocks, taking out
personal loans, etc. When stocks crash (like priceline.com) the
fake money disappears and real problems exist.
The Nasdaq has lost several thousand points over the past few
months, and many people are financially devastated as a result.
According to Business Week, over $20 trillion of consumer debt
exists in our country today. The average household is over $20,000
in debt. In fact, for the first time since the Great Depression,
the population as a whole has a negative savings rate. There are 40
million Americans without health insurance, and that number is only
growing.
In the 1920s credit was just being introduced to people. They
then proceeded to buy cars, refrigerators, washing machines and
radios on that credit. When they could no longer afford to keep up
those payments, they stopped buying, and an entire economy came
down with them. Today, people have mortgages on their homes,
payments on their cars, thousands and thousands of dollars in
credit card debt, and this too will result in the same disaster.
For example, more bankruptcies were filed in 1998 than at any other
time in our nation’s history.
We should keep in mind that the experts have credited the
rapidly expanding U.S. economy as being the single engine of growth
keeping the entire global capitalist system afloat. Thus, similar
to the situation in 1929, the fate of the world economy is more
than ever before tied to that of the American economy. A depression
like that which followed the 1920s is definitely threatening to
return.