The Philadelphia Inquirer September 21, 2001
A Bailout for the People
by Richard B. DuBoff
In possibly the worst debasement of public discourse in recent years - no
mean feat - George W. Bush stated last fall, and repeats as President, that
when you look at taxes or the government surplus, "it's not the government's
money. It's your money."
And yet the Bush administration plans a multibillion-dollar bailout for our
airlines, already in financial trouble even before Sept. 11. So it's not
your money - it's the airlines' money?
America's airlines do need help - how much is something that must be
carefully considered - without which there could be bankruptcies and
declining capacity in the face of growing long-term demand for air travel.
But if the national government can step in and help a private industry and
its shareholders at a moment's notice, why is it wrong, or wasteful or a
threat to "freedom," for government to provide increasing and long-term
support for our economic and social infrastructure?
"It's not the government's money. It's your money." It is also your
dilapidated public school. Your frayed national parks. Your traffic jam.
Your increasingly costly and inadequate medical insurance.
And your catastrophically inadequate airline security system. No comparable
country relies on privately hired and supervised workers to carry out basic
security check-ins at airports. Our lives depend on such people - who
receive barely a few hours of training, earn minimum wage, and rarely last
more than six months on the job.
Our lives also depend on those who teach us to read, calculate and think -
and few comparable nations pay their teachers as poorly. Among high-income
nations, the United States ranks far from the top. Average salaries of
teachers with experience, as a percentage of per capita income, is very low
in the United States - 99 percent compared to 136 percent on average for 30
countries surveyed by the Organization for Economic Cooperation and
Development.
Amtrak is now coping with large increases in ridership on all its lines -
and we are on the verge of telling it to fold up shop if it fails to become
"self-sufficient" by 2003. Instead, it should be subsidized to the tune of
$2 billion to $3 billion per year. No other country imposes a
private-profitability standard on its railroads, for good reason: They are
part of national capital and are needed, more than ever, to support
transportation systems under enormous and essentially irreparable strain on
their motor vehicle and airway modes.
Social Security is alive and well. Even under the most pessimistic
projections for "financial adequacy" over the next 75 years, Social Security
will claim an additional 2.5 percent of our gross domestic product. Guess
what: Social Security benefits have been paid over the past 61 years, and
they have taken an additional 4.2 percent of our GDP - and over that period
our nation's economic productivity has been below what it now is, far below
what it will be in future decades.
Social Security's real problem is - can you guess? - its inadequacy compared
to its counterparts abroad. For workers with average earnings, the U.S.
replacement rate is less than half those of the French and Dutch systems,
less than two-thirds those of the German, Belgian, Spanish and Italian
systems.
The first order of business should be repeal of the Bush tax cuts -
backloaded for 2005-2010 and overloaded in favor of the richest households.
Then we can begin to reverse two decades of Reaganomics and the purposeful
shrinkage and starvation of the federal government. If Washington can bail
out a private industry - and not for the first time - it can certainly begin
to reinvest in our livelihoods, our well-being and our futures.
Richard B. Du Boff is professor emeritus of economics at Bryn Mawr College.
