The reviews are in, and consumer spending this holiday season was up a mere 3.6 percent over the year before. It was the weakest increase in at least four years, as families purchased fewer presents to put under the tree — and spent one-third of that increase on gasoline.
The news is the latest evidence that the free spending fueled by Washington’s aimless policies in Iraq has turned our economy into the equivalent of a grade-B horror flick come to life — Return of the Living Debt.
While the Bush-Cheney administration and its allies such as Rep. Mike McCaul squander more than $3 billion of our tax dollars every week in Iraq, economic security in central Texas communities continues to suffer. Job creation is slowing down, unemployment is rising, and debt-driven growth is bottoming out. The world’s first trillion-dollar war, almost all of it borrowed, is creating economic casualties here at home as the new year gets underway.
In addition, the collapse of our nation’s mortgage and credit markets is now rippling through the economy. At least two million middle-class families will probably to lose their homes to foreclosure.
Apparently following the example set by Mr. McCaul’s political bosses in Washington, D.C., consumers have borrowed against their homes and maxed out their credit cards. But as the lackluster recent holiday sales show, we aren’t borrowing to buy widescreen TVs or other luxury items. We’re going into debt to cover escalating health care costs, soaring college tuition rates, and to pay for gas to get to jobs, while our paychecks are stagnating.
No wonder economic security is now the top issue this election year. Merely breaking even has never been an acceptable notion for Americans — especially when one of the culprits is the war in Iraq, which has not only lost mainstream support but is helping to increase the highest national debt in history.
Here is some of what Washington should be doing to improve middle-class economic security:
• Universal health care. These days, access to high-quality, low-cost health care should be a right, not a privilege. I support a plan to leverage down health costs by creating a single nationwide risk pool, to guarantee open disclosure of all prices so that we know what a pill costs before swallowing it, to insist on unitary pricing so that everyone pays the same price for the same product or service, and a renewed commitment to insuring every child.
• Energy independence. Invest in alternative sources of energy. Wind, solar, geo-thermal, bio-diesel, and other alternative energy technologies are an opportunity for the U.S. to become a global leader again. The result? Greater energy independence, fewer energy costs, and the creation of sustainable jobs. Repealing taxpayer subsidies for polluters will improve our economy, clean up our environment, and strengthen our national and economic security.
• Expand the Earned Income Tax Credit. This pro-work, pro-family IRS program, first created by Ronald Reagan, helps middle- and low-income working families obtain federal tax credits. Unlike tax cuts for the wealthy, the EITC puts money directly into local economies. Last year, 2.1 million Texas recipients qualified for more than $4.3 billion in refunds, with the average return coming to nearly $2,000. This money is spent in local businesses on school supplies, small appliances, vehicle repairs, and other good or services that may have been deferred during the rest of the year for lack of spending cash.
• Invest in education. China, India, and others are investing in the next generation of our global competitors. Let’s reverse the Bush-Cheney administration’s cuts in Pell Grants for eligible college students, reform their failed ‘No Child Left Behind’ boondoggle, and once and for all stop them from trying to siphon tax dollars out of public schools to pay for a private-school voucher scheme.
• Micro-lending. Expand the scope and lending limits of the Small Business Administration’s innovative micro-loan program. This home-grown wealth program helps encourage local companies and entrepreneurs, and the money stays in local communities in the form of higher tax revenues, consumer spending, sustainable local jobs, and economic opportunities for middle-class and working families.
These steps may not be easy, but they are essential. The free spending in Iraq and laissez-faire enforcement of financial regulations by the Bush-Cheney administration and its reliable allies in Congress have created a danger far more horrifying than a grade-B Hollywood movie. They have placed the economic security of the American middle-class at risk.
This election, let’s have a serious conversation about our priorities to move forward. It begins by ending the war in Iraq and shifting the resources we are spending there to things that matter the most — universal health care, better public schools and access to college, a stronger Social Security trust fund and comprehensive services for our veterans and their families — here at home.
These are some of my ideas for positive change. The last thing we can afford is more of the same. We need a change in Washington — now.