It turns out that Ted Cruz was wrong when he said financial inequality has gotten worse in the U.S. under President Obama. Yes, the very rich are doing well now that Obama turned the economy around from the disaster that befell us at the end of the last Bush Administration, but the bottom 90% are even better off than they were.
Click here to read this Washington Post story of February 17, 2014 and see those pesky facts Cruz overlooked when he attached President Obama on ABC News last Sunday.
Politicians on both sides of the aisle are talking about how to ensure that everyone, not just the wealthy, benefits from economic growth, with conservatives accusing the Obama administration of protecting banks and corporations at the expense of the middle class. “I chuckle every time I hear Barack Obama or Hillary Clinton talk about income inequality, because it’s increased dramatically under their policies,” Sen. Ted Cruz (R-Tex.) said last month.
That’s not true, though. As David Leonhardt writes in The New York Times, federal policy effectively blunted the pain of the financial crisis for most American families, according to data from the nonpartisan Congressional Budget Office. When incomes decline, people pay less in taxes. When people lose their jobs, they qualify for benefits like unemployment insurance and food stamps. The fiscal stimulus expanded many of those programs. As a result, writes Leonhardt, while disposable incomes for the richest percentile declined 27 percent between 2007 and 2011, they remained constant for the nine-tenths of the country that isn’t very rich.
Income inequality is still at its highest level in decades, but it’s declined slightly since 2007, Leonhardt writes.