5 more ways to get the American Dream Back
The following is excerpted and adapted from Who Stole the American Dream? by Hedrick Smith.
Step 6: Push China to Live Up to Fair Trade
Economists estimate that strong action by the United States and other countries to combat China’s unfair trade practices and rebalance global trade could generate 4 million jobs in the United States.
Step 7: Save on War and Weapons
Cutting spending on wars overseas and reducing the Pentagon budget by $1 trillion over the next decade would generate funds for a domestic Marshall Plan and underwrite a middle-class agenda.
Step 8: Fix Housing and Protect Safety Net Programs
Six million families have been foreclosed out of their homes and 22 million more are trapped in homes that are “under water” — worth less than their mortgages. Arranging massive refinancing of millions of underwater homes would help get the economy moving and strengthen the nation’s safety net programs, especially Social Security and Medicare.
Letting these borrowers benefit from today’s low interest rates would give them more cash to spend. But banks won’t approve loans for more than the value of the house and government-backed enterprises, like Fannie Mae and Freddie Mac, have balked at writing down loans they have guaranteed in the past.
Smart economists have suggested multiple ways to break the housing logjam. For example, Glenn Hubbard, former chief economic adviser to President George W. Bush, has urged Fannie Mae and Freddie Mac to reduce loan balances on some of the homes now under water and to rewrite their rules so that up to 10 million homeowners can qualify for refinancing at lower rates.
Equally important are steps to protect and strengthen Social Security and Medicare. The easiest way is to remove the income cap on the payroll tax. Ordinary employees pay a 7.65 percent payroll tax to finance Social Security and Medicare, but income over $106,800 is exempt from this tax. Removing that tax cap would go a long way toward solving the funding shortfall for Social Security and Medicare.
Finally, as long as we claim to be a “land of opportunity,” the United States must support the economic ladder for the 60 million in America’s “aspiring middle class” — the hardworking poor who depend on such safety net programs as Medicaid and food stamps. Without programs like those, the chances for rising into the middle class would almost disappear.
Step 9: Rebuild the Political Center
Regenerating the centrist core of American politics, by rejecting extremist candidates in both parties and by opening up our political process in every state, will give more influence to moderate and independent voters.
Americans Elect is the most ambitious effort to promote a bipartisan middle ground in the presidential election: It would bypass the Republican and Democratic nominating conventions by offering registered voters a forum to nominate their own presidential candidate via the Internet, with the proviso that whoever is chosen as presidential nominee must select a running mate from the opposite party.
Third Way, a think tank, has a more focused and practical agenda. Its leaders want to open primaries to all voters and turn over the redrawing of congressional district lines to nonpartisan commissions.
Step 10: Mobilize the Middle Class
The only sure way to alter today’s patently unequal democracy is for average Americans to mobilize politically. If enough of them demand action from Congress and the White House, politicians will get the message and respond.
What’s needed now is an army of volunteers prepared to battle for the common cause of reclaiming the American Dream.