How WE CAN revive THE AMERICAN DREAM

To make the American Dream achievable for everyone we must create a new 21st century Virtuous Cycle

A Virtuous Cycle, as described by former Secretary of Labor Robert Reich is what America had during the Great Prosperity of 1947-1977.

A time in which everyone did well; the rich, the poor, and the often forgotten middle class.

This cycle (as seen in the picture to the right) starts with the federal government making higher education something of national importance, which allows for more young adults to have the necessary skills to obtain a good paying job.

This then leads to two things; the first being more tax revenues for the government, since more people are employed, which can be used to invest in a variety of budget programs. And the second being people having the ability to purchase more goods and reinvest in their local communities.

As a result, the demand for such goods will be at a higher level. Meaning, companies will have to hire more people to keep the supply in ratio with the demand.

As the company grows these employees become more valuable, creating high wage rates for them. Which they can then use to support their family and eventually send their child or children to college.

However, that Virtuous Cycle is unfortunately not feasible in today's society.

As noted earlier, the cost of higher education is unbearable for millions of Americans, which means too many young adults will lack the skills needed to compete in today's economy. Leading to a dead-end future with little opportunity to grow.

So to create a new 21st century Virtuous Cycle we have to first overcome the two biggest traps that hold back millions of Americans; lack of education and lack of funding.

To accomplish this, we must establish a universal pathway to higher education, we must reduce current student loan debt, we must create a 2% wealth tax on the highest income earners in America, we must expand programs such as The Earned Income Tax Credit, and we must reallocate funds towards proper development of low-income neighborhoods. Because if we fail to act now, we will not only let down this generation of Americans, but also the next generation of Americans.

Former Secretary of Labor Robert Reich.

The Virtuous Cycle sponsored by Robert Reich was introduced in the Netflix documentary Inequality For All

To make higher education a reality for all Americans Dr. Sara Goldrick Rab of Temple University has proposed the following:

Free ASSOCIATE degree programs

make private colleges fund THEMSELVES

and

Allow students the FLEXIBILITY to work while attending college

By doing this, we will be redirecting funds towards public colleges and universities, providing every person the option to attend college and work towards a higher degree so they can compete in this new era of a globalized economy.

However, we must also address the fact that millions of Americans are plagued by student loan debt.

Dr. Sara Goldrick Rab

To reduce student loan debt and lessen wealth inequality Senator Elizabeth Warren (D-MA) has proposed a plan to make college more affordable for all Americans. In the video to the left she outlines a plan that would provide much needed relief and opportunity to low income earning families through a "Ultra Millionaire Tax".

Currently wealth is not taxed in America, only income is. By creating a small wealth tax we will be establishing a new tax on the richest Americans that can provide a big relief to poorer Americans.

In addition to this, we must reinvest in low-income neighborhoods because too often people who are born into a below average community tend to become trapped.

The first step in achieving this is expanding the Earned Income Tax Credit. In the video to the right, Information Station explains what exactly the EITC is and why it is an effective tool for low income earners who need a boost.

Below is a graph from the Tax Policy Center that explains how the EITC is allocated.

According to the Tax Policy Center "if the EITC were treated like earnings, it would have been the single most effective antipoverty program for working-age people, lifting about 5.6 million people out of poverty in 2018, including 3 million children (CBPP 2019)." (1)

Because of its effectiveness, we need to ensure the EITC is allocated appropriately to all of those who are deemed in need of the credit.

In June 2020, Business Insider contributors Taylor Borden and Dominic Madori-Davis published a research report titled "Here's the income you need to live comfortably in every state in the US". Their research concluded that "The median necessary living wage across the entire US is $67,690. The state with the lowest annual living wage is Mississippi, with $58,321. The state with the highest living wage is Hawaii, with $136,437." (1)

This means that for the people who make more than $50,954, the income cap to qualify for the EITC, and less than their states living wage will struggle to just get by. This puts them and their children in a dangerous situation which often results in a less than fortunate future.

As seen is the UNICEF video below inequality is growing all across the world and those children at the bottom are almost guaranteed to stay there.

It's time we take meaningful action to combat this inequality and provide every child the opportunity to pursue their American Dream.

Because if we are to create a new 21st century Virtuous Cycle we must remember that it starts from the bottom up and not the other way around. The richest Americans will continue to earn wealth while leaving the poorest Americans behind.

The most effective way to change that is through the creation of a universal pathway to higher education and expanding programs like the EITC that don't give a hand out but rather a hand up.

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