[Peace-discuss] A view from abroad

[C. G. Estabrook]

  From 
<http://www.spiegel.de/international/zeitgeist/0,1518,712496,00.html#ref=nlint>:

...While America's super-rich congratulate themselves on donating billions to 
charity, the rest of the country is worse off than ever. Long-term unemployment 
is rising and millions of Americans are struggling to survive. The gap between 
rich and poor is wider than ever and the middle class is disappearing.

...The government was announcing new economic growth figures by as early as last 
fall, much earlier than expected. The banks, moribund until recently, were back 
to earning billions. Companies nationwide are reporting strong growth, and the 
stock market has almost returned to it pre-crisis levels. Even the number of 
billionaires grew by a healthy 17 percent in 2009.

Two weeks ago, Microsoft founder Bill Gates and 40 other billionaires pledged to 
donate at least half of their fortunes to philanthropy, either while still alive 
or after death. Is America a country so blessed with affluence that it can 
afford to give away billions, just like that?

Gates' move could also be interpreted as a PR campaign, in a country where the 
super-rich sense that although they are profiting from the crisis, as was to be 
expected, the number of people adversely affected has grown enormously. They 
also sense that there is growing resentment in American society against those at 
the top.

...According to a recent opinion poll, 70 percent of Americans believe that the 
recession is still in full swing. And this time it isn't just the poor who are 
especially hard-hit, as they usually are during recessions.

...The United States is experiencing the problem of long-term unemployment for 
the first time since World War II. The number of the long-term unemployed is 
already three times as high as it was during any crisis in the past, and it is 
still rising.

More than a year after the official end of the recession, the overall 
unemployment rate remains consistently above 9.5 percent. But this is just the 
official figure. When adjusted to include the people who have already given up 
looking for work or are barely surviving on the few hundred dollars they earn 
with a part-time job and are using up their savings, the real unemployment 
figure jumps to more than 17 percent.

In its current annual report, the US Department of Agriculture notes that "food 
insecurity" is on the rise, and that 50 million Americans couldn't afford to buy 
enough food to stay healthy at some point last year. One in eight American 
adults and one in four children now survive on government food stamps. These are 
unbelievable numbers for the world's richest nation.

...The boom in stocks and real estate, the country's wild borrowing spree and 
its excessive consumer spending have long masked the fact that the overwhelming 
majority of Americans derived almost no benefit from 30 years of economic 
growth. In 1978, the average per capita income for men in the United States was 
$45,879 (about €35,570). The same figure for 2007, adjusted for inflation, was 
$45,113 (€35,051).

Where did all the money go? All the enormous market gains and corporate 
earnings, the profits from the boom in the financial markets and the 110-percent 
increase in the gross national product in the last 30 years? It went to those 
who had always had more than enough already.

While 90 percent of Americans have seen only modest gains in their incomes since 
1973, incomes have almost tripled for people at the upper end of the scale. In 
1979, one third of the profits the country produced went to the richest 1 
percent of American society. Today it's almost 60 percent. In 1950, the average 
corporate CEO earned 30 times as much as an ordinary worker. Today it's 300 
times as much. And today 1 percent of Americans own 37 percent of the total 
national wealth.

Income inequality in the United States is greater today than it has been since 
the 1920s, except that hardly anyone has minded until now.

In America, the free market is king, and people with low incomes are seen as 
having only themselves to blame. Those who make a lot of money are applauded -- 
and emulated. The only problem is that Americans have long overlooked the fact 
that the American Dream was becoming a reality for fewer and fewer people.

Statistically, less affluent Americans stand a 4-percent chance of becoming part 
of the upper middle class -- a number that is lower than in almost every other 
industrialized nation.

So far, politicians have failed to come up with solutions for the growing social 
crisis. Washington is still waiting for jobs that aren't coming. President 
Barack Obama and his administration seem to be pinning their hopes on the notion 
that Americans will eventually pull themselves up by their bootstraps -- 
preferably by doing the same thing they've always done: spending money. Domestic 
consumer spending is responsible for two-thirds of American economic output.

But even though Federal Reserve Chairman Ben Bernanke continues to pump money 
into the market, and even though the government deficit has now reached the 
dizzying level of $1.4 trillion, such efforts have remained unsuccessful.

"The lights are going out all over America," Nobel economics laureate Paul 
Krugman wrote last week, and described communities that couldn't even afford to 
maintain their streets anymore.

The problem is that many Americans can no longer spend money on consumer 
products, because they have no savings. In some cases, their houses have lost 
half of their value. They no longer qualify for low-interest loans. They are 
making less money than before or they're unemployed. This in turn reduces or 
eliminates their ability to pay taxes.

As a result, many state and local governments are faced with enormous budget 
deficits. In Hawaii, for example, schools are closed on some Fridays to save the 
state money. A county in Georgia has eliminated all public bus services. 
Colorado Springs, a city of 380,000 people, has shut off a third of its 
streetlights to save electricity.

...Americans have been struggling with a rising cost of living for the past 20 
years. At the beginning of the decade, families were already paying twice as 
much for health insurance and their mortgages than the previous generation did.

"To cope, millions of families put a second parent into the workforce," says 
Harvard Professor Elizabeth Warren, who President Obama appointed to chair the 
congressional panel to oversee the government's bank bailout program. According 
to Warren, the average family has spent all of its income and used up its 
savings "just to stay afloat a little while longer."

Because they lacked savings, Americans began borrowing money to cover all of 
their other expenses, including education, healthcare and consumption. American 
consumer debt now totals about $13.5 trillion.

Many people threaten to suffocate under the burden of their debt. Some 61 
percent of Americans have no financial reserves and are living from paycheck to 
paycheck. As little as a single hospital bill can spell potential financial ruin...