"That belief is also why we've sought to ensure that every citizen can count on some basic measure of security. We do this because we recognize that no matter how responsibly we live our lives, any one of us, at any moment, might face hard times, might face bad luck, might face a crippling illness or a layoff. And so we contribute to programs like Medicare and Social Security, which guarantee health care and a source of income after a lifetime of hard work. We provide unemployment insurance, which protects us against unexpected job loss and facilitates the labor mobility that makes our economy so dynamic. We provide for Medicaid, which makes sure that millions of seniors in nursing homes and children with disabilities are getting the care that they need.
"For generations, nearly all of these investments -- from transportation to education to retirement programs -- have been supported by people in both parties. As much as we might associate the G.I. Bill with Franklin Roosevelt, or Medicare with Lyndon Johnson, it was a Republican, Lincoln, who launched the Transcontinental Railroad, the National Academy of Sciences, land grant colleges. It was Eisenhower who launched the Interstate Highway System and new investment in scientific research. It was Richard Nixon who created the Environmental Protection Agency, Ronald Reagan who worked with Democrats to save Social Security. It was George W. Bush who added prescription drug coverage to Medicare.
"What leaders in both parties have traditionally understood is that these investments aren't part of some scheme to redistribute wealth from one group to another. They are expressions of the fact that we are one nation. These investments benefit us all. They contribute to genuine, durable economic growth.
"Show me a business leader who wouldn't profit if more Americans could afford to get the skills and education that today's jobs require. Ask any company where they'd rather locate and hire workers –- a country with crumbling roads and bridges, or one that's committed to high-speed Internet and high-speed railroads and high-tech research and development?
"It doesn't make us weaker when we guarantee basic security for the elderly or the sick or those who are actively looking for work. What makes us weaker is when fewer and fewer people can afford to buy the goods and services our businesses sell, or when entrepreneurs don't have the financial security to take a chance and start a new business. What drags down our entire economy is when there's an ever-widening chasm between the ultra-rich and everybody else.
"In this country, broad-based prosperity has never trickled down from the success of a wealthy few. It has always come from the success of a strong and growing middle class. That's how a generation who went to college on the G.I. Bill, including my grandfather, helped build the most prosperous economy the world has ever known. That's why a CEO like Henry Ford made it his mission to pay his workers enough so they could buy the cars that they made. That's why research has shown that countries with less inequality tend to have stronger and steadier economic growth over the long run.
"And yet, for much of the last century, we have been having the same argument with folks who keep peddling some version of trickle-down economics. They keep telling us that if we'd convert more of our investments in education and research and health care into tax cuts -- especially for the wealthy -- our economy will grow stronger. They keep telling us that if we'd just strip away more regulations, and let businesses pollute more and treat workers and consumers with impunity, that somehow we'd all be better off. We're told that when the wealthy become even wealthier, and corporations are allowed to maximize their profits by whatever means necessary, it's good for America, and that their success will automatically translate into more jobs and prosperity for everybody else. That's the theory.
"Now, the problem for advocates of this theory is that we've tried their approach -- on a massive scale. The results of their experiment are there for all to see. At the beginning of the last decade, the wealthiest Americans received a huge tax cut in 2001 and another huge tax cut in 2003. We were promised that these tax cuts would lead to faster job growth. They did not. The wealthy got wealthier -- we would expect that. The income of the top 1 percent has grown by more than 275 percent over the last few decades, to an average of $1.3 million a year. But prosperity sure didn't trickle down.
"Instead, during the last decade, we had the slowest job growth in half a century. And the typical American family actually saw their incomes fall by about 6 percent, even as the economy was growing.