For as long as I can remember, Americans have been concerned that the government’s Social Security program will run out of money by the time they get to use it because the Baby Boomers will suck the well dry. But as former Secretary of Labor Robert Reich explains, Social Security trustees planned for the Boomers but will face a shortfall in the next decade because of increased income inequality in the US.
The Social Security trustees anticipated the boom in boomer retirements. This is why Social Security was amended back in 1983, to gradually increase the age for collecting full retirement benefits from age 65 to 67. That change is helping finance the boomers’ retirement.
So what did the trustees fail to anticipate? Answer: the degree of income inequality in 21st century America.
Put simply, a big part of the American working population is earning less than the Social Security trustees (including me) anticipated decades ago — and therefore paying less in Social Security payroll tax.
Had the pay of American workers kept up with what had been the trend decades ago — and kept up with their own increasing productivity — their Social Security payroll tax payments would have been enough to keep the program flush.
At the same time, a much larger chunk of the nation’s total income is going to the top than was expected decades ago.
Here’s the thing: Income subject to the payroll tax is capped. Every dollar of earnings in excess of the cap is not subject to Social Security payroll taxes. This year’s cap is $160,200.
One key goal of Project 2025 is to purge all government agencies of anyone more loyal to the constitution than to Trump — a process Trump himself started in October 2020 when he thought he would remain in office.
Trump has promised to give rightwing evangelical Christians what they want. Accordingly, Project 2025 calls for withdrawing the abortion pill mifepristone from the market, expelling trans service members from the military, banning life-saving gender affirming care for young people, ending all diversity programs, and using “school choice” to gut public education.
Project 2025 also calls for eliminating “woke propaganda” from all laws and federal regulations — including the terms “sexual orientation”, “diversity, equity, and inclusion”, “gender equality”, and “reproductive rights”.
Other items in the Project 2025 blueprint are precisely what Trump has called for on the campaign trail, including mass arrests and deportations of undocumented people in the United States, ending many worker protections, dropping prosecutions of far-right militias like the Proud Boys, and giving additional tax cuts to big corporations and the rich.
Trump has repeatedly claimed that climate change is a “hoax”. Project 2025 calls for expanding oil drilling in the United States, shrinking the geographic footprint of national monuments, terminating clean energy incentives, and ending fossil fuel regulations.
Trump has said he’d seek vengeance against those who have prosecuted him for his illegal acts. Project 2025 calls for the prosecution of district attorneys Trump doesn’t like, and the takeover of law enforcement in blue cities and states.
The 900-page document was prepared by Heritage Foundation, whose president stated recently on a right-wing podcast that “We are in the process of the second American Revolution, which will remain bloodless if the left allows it to be”. (This is the same logic used by abusers: “Why did you make me do that to you?”)
This all sounds sort of alarmist until you actually read what’s written in the document, like this passage on abortions:
Because liberal states have now become sanctuaries for abortion tourism, HHS should use every available tool, including the cutting of funds, to ensure that every state reports exactly how many abortions take place within its borders, at what gestational age of the child, for what reason, the mother’s state of residence, and by what method.
It’s like that old bit of advice: “When people show you who they are, believe them”. Conservatives are literally telling us their plans for exacting a fascist regime under Trump…we should believe them.
The consequences of Schedule F could be catastrophic for the government. As Jacqueline Simon, the policy director for the American Federation of Government Employees, put it: “There will be a massive exodus of competence.”
“When you fire everyone who knows what they’re doing and only hire people who will say yes to the rich guy in charge, that’s not a recipe for good government,” Oliver added. “It’s a recipe for the Titan submersible.”
With a civil service full of loyalty appointees, Trump wouldn’t need Congress to pass a national ban on abortion drugs, for example, when his head of the Food and Drug Administration could just rule them “unsafe” — a plan specifically outlined in Project 2025.
Education Week simply states one of Project 2025’s goals: “The U.S. Department of Education would be eliminated.”
The Heritage Foundation’s Project 2025 offers more visibility into what policy agenda a future Trump administration might pursue. It says policies that support LGBTQ+ rights, subsidize “single-motherhood” and penalize marriage should be repealed because subjective notions of “gender identity” threaten “Americans’ fundamental liberties.”
It also proposes increasing surveillance of abortion and maternal mortality reporting in the states, compelling the Food and Drug Administration to revoke approval of “chemical abortion drugs” and protecting “religious and moral” objections for employers who decline contraception coverage for employees. One of the groups that partners with Project 2025, Turning Point USA, is among conservative influencers that health professionals have criticized for targeting young women with misleading health concerns about hormonal birth control. Another priority is defunding Planned Parenthood, which provides reproductive health care to low-income women.
Purveyors of pornography, Roberts writes, “are child predators and misogynistic exploiters of women. Their product is as addictive as any illicit drug and as psychologically destructive as any crime. Pornography should be outlawed. The people who produce and distribute it should be imprisoned. Educators and public librarians who purvey it should be classed as registered sex offenders. And telecommunications and technology firms that facilitate its spread should be shuttered.”
In a June piece for The Guardian and the video above from just a few days ago, Robert Reich outlines five crises — including wokeness, the trans panic, and critical race theory — that Republicans have manufactured in order to deflect from their true agenda.
Virginia governor Glenn Youngkin’s “day one” executive order banned the teaching of critical race theory. DeSantis and Greg Abbott, the Texas governor, have also banned it from schools.
Here again, though, there’s no evidence of a public threat. CRT simply teaches America’s history of racism, which students need to understand to be informed citizens.
Banning it is a scare tactic to appeal to a largely white, culturally conservative voter base.
However, I would argue that Reich needed to go a bit further. While the crises are inventions, their consequences go beyond mere distraction and into the territory of active harm, particularly of queer and trans people, Black people, and people of color. That’s why I modified the title from his original.
For the past 13 years, former Secretary of Labor Robert Reich has taught a class called Wealth & Poverty at UC Berkeley. He retired from teaching this year and has uploaded his lectures from the course to YouTube.
Welcome to my final UC Berkeley course on Wealth and Poverty. Drawing on my 40+ years in politics, including my time as secretary of labor, I offer a deeper look at why inequalities of income and wealth have widened significantly since the late 1970s in the United States, and why this poses dangerous risks to our society.
This course also offers insights into the political and public-policy debates that have arisen in light of this inequality, as well as possible means of reversing it.
Here’s the first lecture, What’s Happened to Income & Wealth:
Trickle-down economics is the economic theory that lowering taxes on the wealthy and on businesses will stimulate business investment to the long-term benefit of society. The idea is that by sprinkling a huge amount of money into the bank accounts and stock portfolios of the wealthy, a portion of that money will “trickle down” to everyone else. Despite ample evidence that it hasn’t worked, trickle-down has been an economic driver for discussions about taxes in the US since at least the Reagan administration. The newest research that argues that tax cuts for the rich don’t work for anyone other than the rich comes in the form of working paper by David Hope of the London School of Economics and Julian Limberg of King’s College London called The Economic Consequences of Major Tax Cuts for the Rich. From the press release:
Our results show that…major tax cuts for the rich increase the top 1% share of pre-tax national income in the years following the reform. The magnitude of the effect is sizeable; on average, each major reform leads to a rise in top 1% share of pre-tax national income of 0.8 percentage points. The results also show that economic performance, as measured by real GDP per capita and the unemployment rate, is not significantly affected by major tax cuts for the rich. The estimated effects for these variables are statistically indistinguishable from zero.
And the authors’ conclusion:
Our results have important implications for current debates around the economic consequences of taxing the rich, as they provide causal evidence that supports the growing pool of evidence from correlational studies that cutting taxes on the rich increases top income shares, but has little effect on economic performance.
Limberg connected the results of the research to post-pandemic economic recovery:
Our results might be welcome news for governments as they seek to repair the public finances after the COVID-19 crisis, as they imply that they should not be unduly concerned about the economic consequences of higher taxes on the rich.
Former US Labor Secretary Robert Reich agrees that the US should tax the rich to invest in public infrastructure.
The practical alternative to trickle-down economics might be called build-up economics. Not only should the rich pay for today’s devastating crisis but they should also invest in the public’s long-term wellbeing. The rich themselves would benefit from doing so, as would everyone else.
At one time, America’s major political parties were on the way to embodying these two theories. Speaking to the Democratic national convention in 1896, populist William Jennings Bryan noted: “There are two ideas of government. There are those who believe that, if you will only legislate to make the well-to-do prosperous, their prosperity will leak through on those below. The Democratic idea, however, has been that if you legislate to make the masses prosperous, their prosperity will find its way up through every class which rests upon them.”
Build-up economics reached its zenith in the decades after the second world war, when the richest Americans paid a marginal income tax rate of between 70% and 90%. That revenue helped fund massive investment in infrastructure, education, health and basic research — creating the largest and most productive middle class the world had ever seen.
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