February 8, 2024 at 11:45 a.m.
What kind of America do you want?
Did you know that the US has had the strongest post-pandemic economic growth of all Group of 7 nations? The G7, as it is known, is a group of democratic countries with the world’s largest advanced economies. I am writing this letter because I received response from Rep. Derrick Van Orden to a note from me about aid to Ukraine. While I was pleased that he supported additional aid to Ukraine in its battle against the Russian invasion, I was disappointed to learn that he seems to know nothing about the state of our economy.
At the end of his e-mail, he talked about focusing on “ending skyrocketing inflation that is crippling our economy;” Perhaps if Mr. Van Orden had spent less time on junkets to Israel, and campaigning for Mr. Trump in Iowa, he could have paid more attention to the actual economic news. For the 12 months ending in November, the annual inflation rate was only 3.4%, down from 8% in 2022. Gasoline prices were down 11% year over year on average during 2023 and January gas prices are down 37% from the peak in 2022.
Our economy, far from being “crippled,” is rocking right along. GDP (Gross Domestic Product) grew 4.9% during the third quarter and 3.3% in the 4 th quarter. The annual growth of 3.1% for 2023 was the strongest since before the financial crisis in 2008.
Some projections have the economy growing at a rate of 4.2% in the first quarter of 2024. This compares to a growth rate that never exceeded 3% during the Trump administration prior to the pandemic in 2020, when GDP fell by 2.8%. Unemployment is back near historic lows. More importantly, real wages (after accounting for inflation) are increasing consistently for the first time in 40 years.
Biden’s economic theory (and practice) of growing the economy from the “middle out, and the bottom up” is working. This is not a new strategy; remember the “good old days” of the 1950’s and 1960’s? This is the way the economy used to work back then, when the highest marginal tax rate of ultra-wealthy Americans was 90%, and working-class families could afford to send their children to college or trade school. The government made sure that the public education system was well funded, that we had good roads to drive on, and that corporations couldn’t cut corners on product or worker safety.
That all changed in 1980 when Ronald Reagan and Republicans introduced “supply-side” economics, and began sharply cutting taxes for the rich. Now the highest marginal tax rate is just 37%. This resulted in a shift of our nation’s wealth from the middle class to the ultra-wealthy. The resulting government budget deficits from more limited revenue also gave an excuse to make cuts to our social safety nets, like raising the retirement age to receive Social Security. Governor Nikki Haley is talking about raising the retirement age to 70 so that the rich don’t have to pay extra SS taxes! That might be fine for someone who sits at a desk all day, but what about those who actually do physical work like construction or farming?
Think about the kind of world you want going forward when you vote this year. Do you want an America where you basically work until you die? Or do you want an America that works the way it used to, when the wealthy paid their fair share of taxes for the good of the country.