this is r.t. from moscow our top stories today to be true develops is the time isn't right to reveal his plans for the presidency in twenty twelve he was fielding questions of american news conference where he also says that russia wouldn't support a u.n. resolution on syria after what's happened in libya and when asked about jail or else the jailed all tycoon mikhail khodorkovsky the president said his release would not be a threat to society. stories from us egypt's resolute revolution called an end to a dictatorship but it is

a shift in sectarian division of religious clashes already claimed dozens of lives of christians and muslims in plain post revolution leaders for failing to stem a worrying rise in interfaith violence right now. and big brother's battering sweden is the e.u. uses its legal cloud to force the country to stall people's online information sweden remains one of the few nations trying to protect internet use is pretty sick . next to no cross-talk program look at what's happened to america's one psychotic middle class some of the government is doing about it. he can. still. think. polo and welcome to cross talk i'm peter lavelle the story of many middle classes in the developed world the middle class has seen its condition and fortunes under stress for decades and the outlook is not encouraging that cannot be said of rising

classes in the developing world are we witnessing an historic exchanging of places . to. live. cross talk rising and falling classes i'm joined by geoffrey my run in boston he's a senior fellow at the cattle institute in washington we have samuel sheridan he's a policy analyst at the economic growth program at the new america foundation and in new york we cross to richard esko he is a blogger writer and a former wall street executive all right gentlemen crosstalk rules in effect that means you can jump in anytime you want but first let's look at the tale of a middle class. has long been the pride and joy of rich western countries but today this is rapidly changing the middle class is in danger under pressure for decades and assaulted during the great recession the middle class is shrinking and there is little evidence this will be reversed and you time so long

term unemployment in the current economy is the worst really the worst it's been in the post-war period currently something like forty five percent of all the unemployed have been unemployed for six months or longer the world is fundamentally changing and already the wealthy are getting even welfare money and power are rapidly becoming concentrated at the top and the big global corporations are earning more than ever before for example sixty six percent of the income growth between two thousand and one and two thousand and seven went to the top one percent of all americans meanwhile the middle classes of the developed world are consistently dwindling as american and european workers are slowly being merged into the new global labor pool and due to the globalization capital large corporations are leaving their home markets in search of much cheaper labor all to the benefit of the developing world

a huge growth of the middle class particularly again showed that in the other bric countries which is going to transform the relationships between consumer and producer across the world being able to save and consume with the same time russians brazilians chinese indians and many others have lifestyles and tastes resembling their western peers these are countries that are going to continue to grow. if not rapidly at least moderately while the rest of europe and united states seems to be. in crisis the truth is that the middle class and the rich developed west is in serious trouble if current trends continue the very nature of western societies may change in the meantime the developing world will have what the. barry well these. are crossed party. ok jeff in boston i'd like to go to you first here and researching this program so that some of these scouts are just astounding the bottom fifty percent of income

earners in the united states now collectively own less than one percent of the nation's wealth also for the first time in u.s. history more than forty million americans are on food stamps and the u.s. department of agriculture projects that number will go up to forty three million americans this year so i guess it's kind of a rhetorical question what is the state of the middle class particularly in the united states well i think that there is an issue but it's also possible to overstate the issue we should remember that you know being a middle is a relative term means being between a people are very poor and very rich but in fact the absolute level of the middle class their ability to have a home to send their kids to college is still much higher than it's ever been they're still living a very comparable lifestyle compared to a huge fraction of the world compared to people just a generation earlier and so on and so forth so we shouldn't overstate the case here at the same time there certainly are issues but the question is what should one do

about it what policies should water temperature change to address those issues i think that's the hard question that we need to think about it's amusing samuel go to you in washington in light of what we just heard there should we just have a new definition of the middle class because there doesn't seem to be a lot in the middle of if there's so much concentration of wealth in the top. i don't think it requires a new definition of the middle class but i think it does require you know consideration by policymakers and an effort to kind of rebuild the middle class and the united states you know we've seen we've seen a disappearance of the middle in a few areas in jobs and wages in the long term unemployment that we're facing now but also in kind of general middle class goods that we consider essential for a middle class lifestyle like health care and education you know some want to disagree with the previous speaker dr jeffrey you know college is really an affordable for a lot of people in the middle and health care costs are increasingly eating away personal income and it's really become difficult given the joblessness but then

also kind of the basic costs of middle class life richard if i go to you in new york where you jump in on that. well i would have to say i don't think it's possible to overstate the severity of the problem for the middle class in the united states i think that sure you can argue that the middle class standard of living in this country is better than what you'll find in much of the rest of the world but compared to what it used to be a decade ago two decades ago a generation ago it's in the process of substantial decline i think that basic issues previous samuel mentioned health is streaming expensive education extremely expensive employment the new normal is getting higher and higher and by the way your reporter referred to this what seems to be an ongoing sense of crisis and this is not artificial all of this is the result of deliberate policy choices that are

being made that are rapidly eroding the the north american middle class and will continue to do so unless we have a very honest discussion in this country about whether we want to preserve the middle class and an economy that's based on the prosperity of the middle class jeff what do you think about that is there political will out there to protect the middle class grant jump right in. let me respond to this point about health care it's certainly true that expenditure on health care has gone up dramatically and in that sense you might think well the middle class family with a given in column is worse off because now health care is more expensive but in saying that we're not comparing apples to apples the quality of the health care that's available is dramatically different that it was say a generation ago there are hundreds of new medications available there in port in new surgical techniques there is a quickness to do very detailed scans of people's brains or bones or things so we're spending more but we get a lot more things there's so much more of vailable so in that sense everybody

middle class lower class is better off because the quality of what's being provided by the health care service is so dramatically different sorry i didn't mean to you that's that's the whole point of the president's going to. go ahead that says no no samuel so this and we'll jump in and then we'll go to richard samuel go ahead. i think it's important though to recognize that health care isn't available to a lot of people in the lower and middle income you know for upper income americans health care health care plans are fantastic and access is fantastic but for the lower and middle income families it's often not and i wanted to make one kind of point that was you know dovetails off of what richard said is that going forward i think the prospects for the middle class are very worrying so if we don't look so much of what happened over the past couple decades but we look out a couple of decades you know i worry about people in my generation in the generation behind me you know not not finding a job out of college you know the unemployment rate for people under twenty four is now nine point seven percent you know so keep even those people with

a college degree. who are under twenty four you know have extremely high levels of unemployment higher unemployment than the overall population so i think you know the prospects for the middle class increasingly look fairly grim and i kind of worry about a lost generation effect you know for that in the middle class kind of in the next couple decades richard jumping go ahead. and i just want to get sure i just want to say two things here first about health care i think that while more services are being delivered to certain people at certain times we have to look at the numbers and the numbers tell the story the united states spends far more on health care than other developed countries and it's far worse in outcomes in terms of overall state of health and terms of mortality rates morbidity rates we're not getting the job done and health care is radically different among different social groups so we have a broken health care system that's extremely expensive that's like a shiny cadillac that doesn't go anywhere in terms of the numbers when what we

really need is a good city and they can get people back to health so that's health care and i couldn't agree with samuel more on the generational issues studies show that young people's overall lifetime in earnings are going to be largely determined by their first several years of on and of of employment in earnings and what we're seeing now is probably one of the official number the unofficial numbers are higher we're seeing in effect as he said in the last generation of americans and we're seeing in a row zhen of the social contract that guaranteed that previous generations number one could work and earn a good living and number two would be provided i.d.'s and health care health plans in this country for people who are employed cover less and less and people are paying more and more it's getting to be an enormous number and three that when people gave a lifetime of work and service that they could retire and financial security all

three of those elements of the social contract between the middle class and the nation are being severely dismantled now and again i'm going to say as a result to deliver a policy choices rather than ask it will go to deliver an element that i'd like to go to jeffrey before we go to the break here it's a very interesting point about the social contract because as an american we always were brought up that we would be better off than our parents but that's not the case anymore is it. well i mean that remains to be seen but i think the crucial thing to say about the social contract is there certainly was that idea around and as part of implementation of that idea a policy adopted a promises in terms of how much we could help people have a secure retirement of how much we could provide health care to all everyone who is elderly to everyone who's poor and now to more or less everyone and those promises that social contract is basically a pipe dream it's a completely unsustainable goal to guarantee the amount of retirement benefits health care etc that the u.s.

and most developed economies have promised their citizens and that's why greece and portugal and ireland are bankrupt that's why other countries are following that path that's why according to existing projections the u.s. is our only bankrupt because we engage in the social contract that was completely divorced from the reality of how productive us we could ever possibly be and what we could afford to spend given those levels of productivity ok on that person is going to we're going to a quick break gentlemen here after a short break we'll continue our discussion on middle classes stay with r.g.b. .

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profiteering here is no longer just down to drug trafficking. afghanistan and the dollar. and a lot. of . the middle east silage bryson. song from funniest impression is. these flintstones nazi scum. on. the cake. walk. welcome back to rostock i'm curious about to remind you we're talking about different middle classes. can you.

talk a richard you you were just it's and to say something before we went to the break so go right ahead. sure you know jeffrey said we can't afford the social contract that was promised and in it we hear that argument a lot but again you know we have to take all of these statements in context we've just had a report from the social security administration here in the united states saying that it's going to be even tougher to find of medicare and social security is going to start to run into a deficit situation sooner than expected but the number one reason why those numbers changed is because unemployment is so high and unemployment is high because we made the decision as a nation and one that not to invest more and job growth and job creation and economic growth so this is not accidental that what we're seeing in effect is

a death spiral a policy driven the best spiral element of the social contract and number two because we've had a generation now of tax cuts for the highest income people in this country and as a result it's starting to bleed dry some of the basic. social services that have been part of the deal what we are seeing any here's another example that i'd like to give you in the nineteen eighties that social security had a true financial crisis and under ronald reagan democrats and republicans got together and worked it out but were none of them anticipated was the route of the extreme accumulation of wealth by the top one percent of earners in this country meaning that far less of the country's income would be taxed for social security than was ever anticipated even by alan greenspan who led the commission so now we're seeing long term cash flow problems with social security again not an accident so we are in f.b.i.

real nature of the disease saying i see generally sense if zoe instore that or not i see josiah go right ahead. so it's certainly true that the projections of when social security trust fund and a medicare trust fund are going to run out of money has been exacerbated by the recent recession there's no doubt about that however the long term ok for medicare in particular and social security with some significant lesser extent has nothing to do nothing important to do with a recession there's nothing of any quantitative significance to do with the bush tax cuts it's because it was a completely unsustainable program because given the rate at which health care costs go up when everybody has their health care paid for and therefore there's no effective cost control that is three four percent faster than any economy has ever grown for a sustained period so that's just impossible no matter how low it started it's eventually going to be the whole economy and that has very very little to do with

tax cuts and with the cumulative wealth by the wealthy or with anything that happened in the two thousand and eight recession there is a fundamental problem yes it's maybe a few years earlier because the recession but that's really a very minor issue sammy would you can you know that because is it because it was certainly oh right and then i want to i want to go to samuel go ahead let me just clarify here. sammy go and say oh my god ok. so on health care i mean i think that there is certainly a cost issue and that is in our long term fiscal position in the united states health care is the issue social security is not very minor and so you can be fixed with a couple percentage points of g.d.p. it's just it's a similar problem on the health care issue though we have a cost problem we don't have a we don't have a problem with access or we have a problem with access because of costs not because we're delivering you know superior health care you know many procedures in the united states cost twice as much as they do in other countries and there's no reason that should happen so you

know saying that we can't deliver health care to the middle class i think is is the wrong way to approach the problem the right way is say we have a cost problem we need to control costs in the united states and we need to provide health care to every american richard you want to put employer earlier is questioning how are you going to try our ice jeffrey go right ahead. yeah i mean first of all the question which i just wanted you to basically and first of all jeffrey go ahead ok jeffrey go ahead you have a capri made a couple of statements about my right so we all agree on one thing we all agree that health care expenditure is going up at a rate that is not sustainable ok so we all agree that we need to do something to try to slow that path to get it consistent with the long run path of the overall economy the question is how and there are basically two approaches one is the command and control approach that europe uses where they limit access to many procedures or they control the prices that witch doctors can get reimbursed hospitals get reimbursed and so on and alternative is to have patients have much

more skin in the game for patients to pay a much higher fraction of the health care that they're receiving now yes europe has kept its health expenditure more moderate by using the command of control approach a lot of the cost believe that that leads to stifling of innovation that leads to over time much worse quality health care sector and quality of health that's going to be available and that if we do that in the united states which has been at the forefront of providing a little ation because you know no other country was doing it that we're going to have an incredibly ineffective health care system that would benefit the middle class it will be the middle class stuck in the lousy commander control system and the rich will buy their way around it so ok that's the wrong way to for the richard you want to do you want to jump in there go ahead richard. look first of all first of all my only point about the social security report was that medicare is going to go broke even earlier because of the recession and we have a cost problem in this country all three of us agree on that now out all the

evidence the experience of western europe the experience of medicare in the united states there is a working model for a system that works better and then there is a pipe dream and the pipe dream is a magical system where everybody somehow chooses an ideal such as sublime end of health care that works it's never existed anywhere the real choice in the real world is jeffrey calls it a command and control the system in western europe and medicare and so on which is enormously popular for command and control system you're always going to have command and control the only question is who's in command right now the insurance companies are in command the insurance companies are the death panels the insurance companies are the utilization review the the insurance companies are taking over we have a system of perverse incentives for healthcare providers in this country to provide more expensive service rather than better service at any time we've tried to

experiment with this idea of patients having siskind in the game so on it's turned into an arche for patients and profits for other areas i am not look i spent many years working in the insurance industry i am not morally or any logically opposed to the private sector even in an in social industry but the fact is we have a broken system if you're serious about the united states and its future fiscal health the answer is not to say we can't afford the social contract of the middle class the answer is to say let's get serious about looking at all of the solutions to work all right robin health care which means not stop pretending that there is a magical solution that involves more of the same and somehow getting a better is all right. sam i'd like to go to you and kind of broaden this out a little bit here again going back to going back to the term middle class people in the middle and it least by western european and american standards they're the

majority also but where's the political leadership of the majority of the people i mean again if there's the income is so different the differentiation is so huge now in the united states and where the politicians i mean where are the why aren't they there to protect those people because they won't go after the rich but they don't help the the middle class people that they were elected by. yeah i mean i think even in the last election i figured the republicans were going to go after the middle class and say look the democrats out of this coming out of this recession have not delivered to you and we're the party that's going to do it and i thought that would have put tremendous pressure on democrats i thought it would have been a very smart move politically and i think they would have picked up even more. seats in congress than they did and i think the two thousand and twelve election is i think we're going to see a dramatic swing i think we're going to move you know the obama bounce as they call it that's that's going to be over as soon as unemployment rates you know continues to hover around nine percent and people realize that their standard of living is you know on static maybe on you know moderate decline as real wages are falling you

know so i think that there i think political leaders are really slow to get around this issue i thought it was going to be republicans but i think it's going to be a defining you know the twenty total action jeffrey what do you think about that we're supposed to call will where is the political leadership for the middle class again the majority of the people. well i guess i don't think it is so absolutely i think if we look at what's happening in the dynamic in the u.s. we have programs that need to be scaled back but they're popular with the middle class and so they may end up not getting scale back and the ryan congressman from wisconsin proposed this major scaling back of medicare and the republicans voted for it but shortly thereafter they realized they made a mistake and most republicans went running away from it because medicare as richard pointed out is very popular with the middle class and almost every one of these are getting medicare or expects to get medicare so i don't see that the politicians are doing such

a bad job of trying to represent the middle class as you said there are lots of votes in the middle class so they can to distance themselves from the middle class too much now of course they also do a bunch of things to get contributions from various special interests so of course they vote for some things which are payoffs to various you know people of high income or to rich industries and so on banking being a you know a prime example but i think you know the case may be overstated they can't afford to just completely write up the middle class that's where a lot of the votes are ok richard if i go to you the generation of entitlement you know maybe everybody wants something but not everyone wants to pay for it. no not at all i mean i think there are a lot of solutions it's fascinating i love your previous question because my organization campaign for america's future has been doing a lot of polling polling and studying the polling and actually the much vast majority are registered republicans registered tea party are you cannot register bradstock identify tea party followers agree with

a set of policies that's not only pro middle class and pro social contract but absolutely sustainable and doable economically they they would rather see. taxes on the very wealthiest americans to support the preservation of social security as a currently exist by lifting the so-called payroll tax cap they'd like to see more done to rein in the costs of defense spending there is a there's a whole range of areas where the entire nation by sixty to seventy even to eighty percent ridge already feels one way about subjects you have leaders of neither party are representing their point of view polls show still overwhelmingly believe that people feel government action to create jobs are going to jump in here we're running out of time we think so my guest today in boston washington and in new york and thanks to our viewers for watching us here at r t see you next time and remember cross talk means.

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