Trouble in Dreamland
| “Raising taxes on millionaires won’t help us when we hit the lottery.” |
In June of last year, student loans amounted to $833 billion, and for the first time surpassed the amount of the nation’s total credit card debt. The occasion passed with relatively little notice except from some of those involved in public policy who expressed concern about how the young were paying for their college educations.
A year later, as the nation tries to enliven its anemic economy, young college graduates from 20 to 24 years old are suffering from a rate of unemployment much higher than usual. In June, the jobless rate for young college grads was 12.1 percent.
This group of Americans worked hard, completed their college studies at great expense, and now with substantial debt they enter a work force that has no place for them. Nonetheless, their debt still looms before them and must be repaid.
Mayor Michael Bloomberg of New York asserted that the huge debt and high unemployment create a major economic crisis. On a radio program he said, “You have a lot of kids graduating college can’t find jobs. That’s what happened in Cairo. That’s what happened in Madrid. You don’t want those kinds of riots here.”
Even though the economic circumstances might not lead to riots, prolonged unemployment will undoubtedly create a sense of disappointment and bitterness. It will be difficult for many of the young to believe again that opportunity is readily available for everyone.
The belief that those who work hard could become affluent has suffered a serious blow. It is likely that young college grads, who have been educated to study the data, will now perceive that only a few enjoy the “American Dream” quality of success. But this has always been so.
An analysis of the 2008 IRS tax returns by the Tax Foundation reveals that 1,399,606 tax returns had the top one percent adjusted gross income of all taxpayers. An income of greater than $380,354 was necessary to fall into this category. Only 140,000 of those taxpayers earned enough to be the super rich and be counted in the one tenth of one percent (0.1%) category. The income necessary to be in that group is $1.8 million or more.
While it is indeed important for America to encourage the development of business enterprises, it is also important to recognize that the direct beneficiaries will be relatively few in number. About 95 percent of all taxpayers will earn less than $159,500 per year. At today’s prices that is not a super rich level. So it is important that the nation’s public policy and a progressive tax system provide public services and a reasonable standard of living for everyone.
It is hard to understand why Americans of modest means support some of the policies of the conservatives that benefit only the rich at the expense of the middle class. Perhaps the current experience of unemployment will inspire many young college graduates to be more realistic about their future. They should become actively involved in supporting policies that benefit all Americans.
