About four years removed from the Great Recession, the U.S. economy has been recovering slowly but surely from massive unemployment and drastically reduced spending. Nonetheless, the nation’s poor and middle class have been largely closed off from the steady ascent upward. After taking a hit in the first year of the recession, the top 1 percent of households saw an 11.6 percent increase in income from 2009 to 2010, while the income for the bottom 99 percent experienced only a 0.2 percent rise in income. About 2.9 million Americans fell into poverty as a result of the recession and plenty more could have done the same were it not for stimulus spending along with unemployment insurance and numerous federal programs for low-income and vulnerable populations.
Though the unemployment rate has fallen under 8 percent, the damage of about 8.8 million jobs lost in the recession has already been done. Moreover, the increase in stimulus spending needed to climb out of the recession along with a decade of lost tax revenue and unnecessary war spending has left us with historic budget deficits. $1.5 trillion in discretionary spending has already been cut from the budget and many members of Congress—many of whom criticized the stimulus spending of the recovery effort—are still calling for more cuts to balance the budget.
Cutting more from programs that benefit middle and low income households—who spend more of their discretionary income than the top income earners—would be adding more burden to an already fragile economy. Our economic agenda should instead focus on adding revenue from fair sources and reducing military spending to fund low-income programs, jobs programs and an infrastructure bank to spur consumer spending and in turn, economic growth and prosperity for all.
For more information on this issue, visit CHN’s Public Policy Priorities, 2013-2014.
Campaign for America’s Future
Center for American Progress
Center for Community Change
Center for Economic and Policy Research
Center on Budget and Policy Priorities
Citizens for Tax Justice
Economic Policy Institute
Policy Analyses and Research
- March 26, 2014Center for American Progress: Economic Snapshot - March 2014
February 26, 2014Citizens for Tax Justice: The Sorry State of Corporate Taxes
January 31, 2014NELP: Tackling the Long-Term Unemployment Crisis
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