Monday, January 18, 2016

Bernie Sanders and the Debt Class

Presidential candidate Bernie Sanders has made the central issue of his campaign the idea that our government has abandoned its responsibilities to the middle class. I would go a step farther and argue that we don't have a "middle class" at all. What we have is a "debt class" masquerading as a middle class. Debt has become an acceptable concept for politicians and ordinary citizens alike, and actively encouraged by financial institutions that reap huge profits at our collective expense. We're propped up as local, state, and federal governments, and family budgets. We are not solvent in the least.

Not only are we encouraged to borrow, we are punished for saving money by horrendously low interest rates. I still cannot understand why there cannot be separate interest rates for borrowing and saving, but that is the current situation and it is intolerable. One should earn more than (less than) pennies on the dollar for their personal or family emergency fund.

How do we accomplish changes to the status quo? Goals must be set in both legislation and personal consumer choices. We need to resist the temptation to borrow, to "keep up with the Jones'" lifestyle. Service, sharing, and generosity should be our personal governing concepts, not the accumulation of material wealth. We can do that without a government mandate. Those admirable ideals can, however, be enhanced by policies that reward those behaviors, and reward work rather than inherited wealth and corporate excess.

One of the quickest roads to bankruptcy in the U.S.A. is a health catastrophe. When even one hospital visit can put your bank account in arrears, and/or force you to beg on GoFundMe, we have a societal issue. So, addressing healthcare is paramount to turning around the personal debt crisis. A single-payer system ("Medicare for All"), as Sanders advocates, would be a great next step for the Affordable Care Act.

Student loans are another source of debt, and if we could at least make an effort at reducing college costs, if not making higher education free as many other developed nations have, then that would put many people on a more level playing field. When you consider the current minimum wage against cost of living and student debt, it is a wonder any young person can afford housing and a car, let alone a family.

Raising the minimum wage to at least fifteen dollars an hour is doable, with tax credits for small businesses. We should be actively encouraging more small businesses, so reward them as employers and entrepreneurs, and do not demand them to play by the same rules as multinational corporations.

Collect taxes from corporations currently avoiding taxation. End bailouts, subsidies, and other forms of corporate welfare. The revenue from this alone would likely reduce some individual tax rates, as well as reducing the federal deficit.

Meanwhile, we have to take some personal responsibility. We should start saving in spite of the poor returns at the present time. Cut up the credit cards. Flee big banks and put our money in accounts at credit unions where customers come first and there are no shareholders. Stop patronizing payday loan and rent-to-own enterprises that prey on our desire for instant cash or merchandise. Live frugally for ourselves, generously for others. Demand that the media stop obsessing over the wealthy.

What was it Rev. Martin Luther King, Jr. said? Something about "the content of their character." He was denouncing racism, but I suspect that today he would add that we shouldn't be judging the self-worth of others by the content of their bank accounts, either. That should most definitely not be the measure of any man (or woman) today.

Ok, so maybe we can do some of this. What would be the result? Were I a gambling man, I would bet that you would see some or all of the following result from increased wages, reduced debt, and overall fiscal responsibility: Alcoholism and drug abuse would decrease because of decreased stress from debt and poverty. Theft, illegal gambling, and related crimes would decrease with rising income. Frivolous litigation would decrease because currently lawsuits are viewed in part as a way to make up for low wage income. Employment would increase because one person wouldn't need three jobs to make ends meet. Dependence on welfare programs would begin declining. Volunteerism would increase because people would have more time free from wage-earning.

Bernie Sanders has, unfortunately, failed to articulate these connections between wealth disparity and the negative behaviors that result from it, let alone the potential benefits of reforming income inequality. Still, he is endorsed by virtually every economist in the land. We have at hand an unprecedented opportunity to begin reversing trends that, left to continue, will be the ruin of our society. I urge you only to think very carefully about both your vote at the booth, and how you vote with your hard-earned dollars in the marketplace.

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