Wednesday, July 27, 2011

Middle-Class Blues For Black And Brown Americans

Filling in for Rachel Maddow this week, Melissa Harris-Perry uses her professorial skills to explain just what has gone wrong for the American Dream for so many minorities.

As people of color become a proportionally bigger part of the American population, our national coffers will rely on them even more. We cannot pay off the national debt if households cannot pay off their personal debt, and if they are in debt, then you can't cut enough to ever make it possible to fix our government's debt problems, and particularly not if you refuse to tax that one group whose wealth is still tick, tick, ticking up.

Professor Harris-Perry goes straight after the "we must live within our means" idiocy by pointing out that families don't "live within their means", but regularly take out mortgage loans, equity loans, car loans, and student loans all the time in order to improve their own situation or to cover emergencies that come up...or to cover income from a lost job.

What's more, for minority households, the access to credit is much more limited because wealth begets more wealth.  This is why when Republicans (and some Democrats) say the most important thing is cutting spending, you have to respond with "no, it's not."

Take Tyler Durden at Zero Hedge with this chart for example.

While everyone and their grandmother is foaming at the mouth how both republicans and democrats hiked the debt ceiling for umpteen times over the past x years, the truth is that never before has the ratio of the proposed debt ceiling to the tax receipt ratio been as high as it is now. At nearly 6 times, this means that the top line (forget bottom line) cash inflows into the Treasury are 6 times lower than the current debt ceiling. And following the upcoming $2.5 trillion this number will surge to almost 8 times. So please ignore the next "pundit" who is complaining about the hypocrisy of not agreeing to an outright debt ceiling hike this time around - as usual they have no idea what they are talking about.

God forbid we try to lower that ratio by allowing the Bush Tax Cuts to expire on the wealthy. But no, the only option it seems is the cut spending on the poorest Americans in order to keep them poor, and then blame them for not earning enough.

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