War on the Middle Class

Email Print posted by Twba 02/13/2008 09:28:20 AM EST

Google Technorati del.icio.us digg reddit


Wages have stagnated?

To be fair, demographic changes have sparked many misunderstandings about the economic health of the middle class. For example, Americans today are more likely to live in single-adult households than they were 30 years ago. Adjust incomes to take into account this shift, along with increasing employer contributions to retirement savings and to health insurance premiums, and you find that the real middle-class median income has risen 33 percent, or $18,000, since 1979. [LINK]

The middle class is shrinking?

True, fewer people today live in households with incomes between $30,000 and $100,000 (a reasonable definition of "middle class") than in 1979. But the number of people in households that bring in more than $100,000 also rose from 12 percent to 24 percent. There was no increase in the percentage of people in households making less than $30,000. So the entire "decline" of the middle class came from people moving up the income ladder. [LINK]

The rich get richer and the middle class falls further behind?

It's true that the share of national income going to the richest 20 percent of households rose from 43.6 percent in 1975 to 49.6 percent in 2006, the most recent year for which the Bureau of Labor Statistics has complete data. Meanwhile, families in the lowest fifth saw their piece of the pie fall from 4.3 percent to 3.3 percent.

Income statistics, however, don't tell the whole story of Americans' living standards. Looking at a far more direct measure of American families' economic status -- household consumption -- indicates that the gap between rich and poor is far less than most assume, and that the abstract, income-based way in which we measure the so-called poverty rate no longer applies to our society. [LINK]

Why does the middle class feel squeezed? It's not the high cost of living; it's the cost of living high.

< Al Wynn presented with his own ass in Maryland 4th | A suck-up "Jayar Rocks" post >
 Display:
War on the Middle Class | 61 comments (61 topical, 0 hidden)
I was wondering when you'd come out of hiding (none / 0)
It must be tough to see that the show's new format has drawn many more reasonable (and more importantly, *vocal*) posters to TYT.com.  Now it won't be just me who takes a minute to call you out on your pure and utter bullshit.

But welcome back, this should be fun!

Most Americans have benefited economically in the Reagan/Post Reagan Era?

"...From 1980 to 2005 the national economy, adjusted for inflation, more than doubled. (Because of population growth, the actual increase per capita was about 66 percent.) But the average income for the vast majority of Americans actually declined during that period. The standard of living for the average family has improved not because incomes have grown, but because women have gone into the workplace in droves.


The peak income year for the bottom 90 percent of Americans was way back in 1973 — when the average income per taxpayer (adjusted for inflation) was $33,001. That is nearly $4,000 higher than the average in 2005.


It’s incredible but true: 90 percent of the population missed out on the income gains during that long period..." LINK



The idea that there is a huge gap between the rich and everyone else in America is overblown and irrelevant?

"In 1985 there were just 13 US billionaires. Now there are more than 1,000. In 2005 the US saw 227,000 new millionaires being created. One survey showed that the wealth of all US millionaires was $30 trillion, more than the GDPs of China, Japan, Brazil, Russia and the EU combined...

Last year the 25 top earning hedge fund bankers in the US earned an average of $570m each. The average US household income is $50,000...

In 2005 the top one per cent of earners in the US gained 14 per cent in income in real terms, while the rest of the country gained less than one per cent. The situation is especially bad for the severely poor - those living at half the poverty level - whose numbers are at a 32-year high..."

LINK


Corporations and the rich are taxed too MUCH, not too little?

"...In the Fifties the proportion of federal income from company taxes was 33 per cent, by 2003 it was just 7.4 percent. Some 82 of America's largest companies paid no tax at all in at least one of the first three years of the administration of President George W Bush...

...Even some of the most wealthy - like Gates and Buffett - have spoken openly of the needs to address the massive 'inequality gap' that they have come to exemplify. In effect, some of the very richest Americans are calling for themselves to be taxed. In a speech last month Buffett - the third richest man in the world - pointed out that his tax rate was 17.7 per cent of his income while his secretary was taxed at 30 per cent.
 
'Many of the new super-rich are looking long term at the world and they see a collapsing US education system and health-care system and the disappearance of the middle class and they realise: this is bad for everybody,'...

LINK

And there's more where that came from.

I realize you want to find ways to justify being selfish and greedy, but the facts (at least those not created by conservative think tanks funded by those who share your goals of hoarding money at the expense of most Americans) don't back you up.

by ihavenobias on 02/13/2008 10:36:34 AM EST

Reason (none / 1)
ihavenobias wrote: It must be tough to see that the show's new format has drawn many more reasonable (and more importantly, vocal) posters to TYT.com.

Reasonableness still seems to be in short supply. But then what would you know about reasonable? You think raising tax rates and punishing high achievers will bring back the good old days. This isn't the Fifties. Japan and Germany are not post-war ruins. America is not the last industrial empire left standing after a world wide orgy of death and destruction. We could afford to shoot ourselves in the foot with high tax rates then because we had no competition. We can't do it now and we won't. The top rate won't go back up to 70% -- much less 91%. Too many countries have lowered tax rates and experienced economic growth for that growth to be merely coincidental. Politicians will keep our rates in line with those of the competition. And that's a good thing.

You also like to point out that the lower class is not earning much income. You think CEO pay is at fault. I think crappy schools, urban dropout factories and suburban diploma mills, are at fault. You see young men not making as much as their cohorts in the previous generation and fault free trade. I fault underachieving wankers who are more enthusiastic about the latest games for their Nintendos and Playstations than acquiring marketable job skills.

In college, it was not unusual for me to study until four in the morning and then walk a couple miles through litter strewn streets to a house in the worst part of town, only to get up in a few hours and do it all over again. I worked over a hundred hours per week for an entire summer to make enough money to start my own business. It was not unusual that in my late twenties and even sometimes in my early thirties I worked eighty to ninety hours per week for months at a time. I also rolled the dice and chose not to buy health insurance during those years, thinking, correctly as it turns out, that my doctor bills would be much lower than the premiums.

What I call ambition and willingness to work hard and take risks, you call selfishness and greed. That's why I would hire an immigrant from Mexico any day before I would hire an ignorant slacker from suburban Chicago.

by Twba on 02/15/2008 07:56:50 AM EST

[ Parent ]
You seem to think we should make or keep (none / 0)
things as hard as possible for people. I completely disagree. I think, as FDR said, we need to make morality affordable.

I also think we need to put people in a position to succeed, because otherwise they will often fail to live up to their full potential.  People shouldn't HAVE to work 40 hours a week AND go to school full time while taking out massive loans.  How will America compete with countries that have cheap/free post-secondary education?  Exactly. 

Pointing to the few examples that somehow make it through is the exception that proves the rule.

And people that can't make it (or make it out of their high crime, gang and drug infested shitty public shool area for that matter) aren't all "slackers".  That's such an absurd generalization.  Congratulations SuperMan, you proved that a very small number of people can succeed in incredibly tough situations (and what, you mean to say there was NO amount of luck/good breaks and or role model guidance involved?).

There's a difference between giving handouts and giving help, and you fail to make that distinction.  Everything is weakness and laziness with you, and you want a dog-eat-dog world because YOU made it in a dog-eat-dog way.  So what? 

If the current system isn't working for the vast majority of Americans (which in turn means the country isn't nearly as educated and healthy as it should be), why should anyone buy your line that we should keep things the way they are because people aren't "tough" enough or some other oversimplified, macho bullshit?

PS---Calling you a coward might be a bit dramatic, but why in the hell *did* you wait until this thread was no longer on the main page before you replied? Don't give me BS that you were busy, as usernames are visible on the homepage sidebar. Also, good job totally ignoring the devastating information I posted and sourced. It'll help you continue with your selfish, narrow worldview that says "If I'm ok and my friends and family are ok, screw everyone else, they must be lazy".

by ihavenobias on 02/15/2008 06:28:03 PM EST

[ Parent ]
IHNB (none / 0)
Also, good job totally ignoring the devastating information I posted and sourced.

I ignored it because it wasn't devastating.

Calling you a coward might be a bit dramatic . . . usernames are visible on the homepage sidebar.

Thanks for pointing that out, Mr. Cloaked User.

And people that can't make it (or make it out of their high crime, gang and drug infested shitty public shool area for that matter) aren't all "slackers". That's such an absurd generalization.

OK, instead of ignorant slacker from suburban Chicago, I'll say nitwit from Naperville. Is that specific enough?

by Twba on 02/16/2008 11:40:51 AM EST

[ Parent ]
So I checked out the hotlist (none / 0)
and I have to say, the fact that you're getting SO specific with your ad hominem attacks is honestly kinda creepy.

Are you going to refer to what I'm wearing next?

And yes, the fact that the bottom 90% of American's having seen any real income growth since 1980 IS devastating, unless you're in complete  and outrageous denial.  Oh wait...never mind.

by ihavenobias on 02/25/2008 06:42:41 PM EST

[ Parent ]
Hotlistious (none / 1)
And yes, the fact that the bottom 90% of American's having seen any real income growth since 1980 IS devastating, unless you're in complete  and outrageous denial.

I have disputed your favorite statistics in the past. When I'm in the mood, I'll do it again. Be patient.

by Twba on 02/26/2008 02:37:40 PM EST

[ Parent ]
Dub (none / 0)
I guess this means I am in the Top 10%? I have become very affluent since 1980, and I owe it all to Ronald Reagan and George Bush.

Well, there were some other factors:

1. Living well below my means.
2. Saving like a miser.
3. Working like a beast of burden.
4. Paying cash for everything.
5. Maintaing zero debt.

Maybe these young complainers could learn from these simple get-rich-slowly strate gies. 

by KenTX on 02/26/2008 03:12:32 PM EST

[ Parent ]
Pardon me, do you have any Grey Poupon? (none / 0)
You must be in the top 10% with the other winners of life's lottery.

by Twba on 02/28/2008 11:22:16 AM EST

[ Parent ]
It's all a big illusion (none / 0)

I somehow doubt that going to a lake and speaking to owners of fancy boating toys paints an accurate overall picture of the American middle class.

" Looking at a far more direct measure of American families' economic status -- household consumption"

This consumption was credit driven, Joe.  That party is fixing to end.  Take their economic measure in another year or two and you'll get a much more accurate reading.  This high consumption on credit isn't just a feature of the citizenry, it's also a feature of our government.  They just borrowed $600 billion dollars for an unnecessary war.  That money went to the likes of KBR and Haliburton and The Carlyle Group.  That's a huge transference of wealth from our kids (future taxpayers) to the defense industry.    The projected costs are well in excess of a trillion dollars, and that is a conservative estimate now.

One last thought: The increase in the standard of living over the last two decades has been driven by cheap energy.  That too is fixing to end. 

The problem is not that people are bitching with a full belly (they are), the problem is that those bellies are going to be shrinking soon and your pals are looking the other way while it sneaks up behind them, just like they did in 2001 with Al Qaeda. 

by bfaul on 02/13/2008 10:51:28 AM EST

Whoa Nellie... (none / 0)
First of all, thanks for your posting. I appreciate your attention to detail and your providing of statistics...

Enough with the nicities...ARE YOU FUCKING KIDDING US!!! Are you going to sit their honestly and say that the Middle class isnt doing so bad, and that we should just stay in our place? Its because people ARE MOVING UP?????


I dont know you and I dont know your politics, but anyone is just foolish to think that Middle and lower income people aren't suffering due to the economic realities of the last 20 or so years. The upper classes have lived off of our backs for far too long. Its time they start taking it in the ass just like we do...


The rich better watch it...there are a lot of people losing a lot and they're really getting pissed. Your statistics and logical arguments will not quell the masses when the shit hits the fan. Bullshit like this just makes us more convinced that a change needs to come...

Viva le Revolucion!!!



by bobo1 on 02/13/2008 11:04:39 AM EST

Again, This Is Alarming (none / 0)
Robert Frank, Wall Street Reporter and author of a new book that touches on the massive inequality said this:
 
'We in America are heading towards 'developing nation' levels of inequality. We would become like Brazil. What does that say about us? What does that say about America?"

Granted, we all know the Wall Street Journal has a huge reputation for liberal bias, but still.  ;)

by ihavenobias on 02/13/2008 11:52:05 AM EST

[ Parent ]
stats n stuff (none / 0)

I don't think the original poster was clear about inflation adjustments.  To just say that the number of people who make over $100,000 a year is more than it was in 1980... well duh?  Inflation has been at least double since then.

 

But I do think people's standard of living is increasing, and it's been partly due to credit cards and partly due to the fact that so much is imported now.  Very simply, we can get more stuff for our $$ because it comes from places that make stuff very cheaply.  It's bad for those who can only work in the manufacturing sector, and great for the rest of the country.  This is the dilemma of Free Trade. 

by schmoab on 02/13/2008 11:58:45 AM EST

[ Parent ]
But that's just it, it's NOT (none / 0)
"great for the rest of the country".

While there are some benefits, there are plenty of negatives. &nb sp;In fact you hinted at one of them in your post.

The vast majority of the stuff we can now get very cheaply is JUNK we don't *need* but are made to *want* through billions and billions in advertising and marketing. Consumer goods inflation therefore seems low (because cheap eletronic gadgets are pumped out) and free trade/supply siders love to point to it to show how free trade works so well.

But they leave out how much more we pay for things we NEED, like food and energy.

Then there's Wal-Mart, an ENORMOUS corporation that's all over America. They have an incredible amount of leverage with their suppliers, and often pressure/force them (directly or indirectly) into shipping their labor overseas, and then go on to pay their employees here next to nothing.

So average Joe loves buying his cheap junk (again, mostly stuff he doesn't need but some stuff he does, like clothes) from Wal-mart and thinks free-trade is great.  After all, Joe didn't/doesn't work in the manufacturing sector.

But what most people don't realize is that Wal-Mart has (by far) the most employees of any American business that are on government aid programs!  In other words, Wal-Mart workers have to make up for your low-low prices (and their shit pay and expensive/no benefits) by taking more of your tax money!

That's just a flawed business model. That's not even getting into the other ways in which they screw local communities and small businesses.

Granted, Wal-Mart could technically reduce their profits and pay their workers more, but they don't and won't. You could argue this doesn't directly relate to bad trade deals, but IMO it does all go back to the bigger picture issue that America has gotten WAY too caught up in just looking for the LOWEST prices to to the exclusion of all other considerations.

Also, what if every dog/cat owner in America lost a pet because of the China imported tainted pet food?  Would they still speak out in favor of less "cumbersome government regulation"?  Or what if their kid got sick (or worse) from led tainted toys?

Hell, what if they're kid put one of these in their mouth?

Not to mention the fact that as the supply of workers goes up (both low and high skill workers, i.e. IT people, etc.), wages go down across the board.

PS---If you want great info on these topics, click here.

by ihavenobias on 02/13/2008 12:37:31 PM EST

[ Parent ]
bobo (none / 0)
I think what twba is saying is that the key to happiness is wanting less.

The Middle Class in America is becoming more affluent every year. The problem is that American toys are becoming more numerous and expensive every year.

Back in the 1970s, we had a TV with rabbit ears, a rotary phone, and a light bulb. That was about it.

The problem today is all the "stuff" (trying to use a nice word) that consumers want, and the debt they are willing to incur to acquire it.

By the way, since you are new, I might as well pass along some more information. Twba hails from the Great State of Arizona, and he is by far the most intelligent participant in this forum. Please be nice to him.

by KenTX on 02/13/2008 10:49:14 PM EST

[ Parent ]
darn it! (none / 0)
Here is the Stanley Johnson link.

by KenTX on 02/13/2008 10:51:09 PM EST

[ Parent ]
i agree to a point... (none / 0)
yes, i understand the whole "everything is better for this generation" and the stuff (nice word for shit) is more expensive and probably less necessary.

what i disagree with is the fact that the wealthy in this country (top 10%) or so have SO MUCH WEALTH AND POWER that they dictate to the masses what is "the norms' of our consumption. i feel that Americans especially have this feeling that they "deserve more" for the job they do, and there is good AND BAD in that kind of thinking.

It really comes down to what you believe the "basic standards" that everyone, regardless of class or wealth, should enjoy commonly (I believe we divulged into this discussion about free radio programs some time ago :)

Is a cell phone "Standard" in todays society? Internet? Decent Health Care? A running vehicle? The middle and lower classes are debting themselves to death just to achieve what we were told was "the American Dream", what we were told that our fathers and forefathers fought and in some cases died for what we deserve.

I think the rich, just as in every period of history, have had it far too good for far too long. Yes, they will always be rich, but they better just shut up and pay their share to bring the rest of us up to this material "standard of community".

Thanks

by bobo1 on 02/13/2008 11:25:05 PM EST

[ Parent ]
I can solve the inequity problem. (none / 0)
Place a 50% tax on all inheritance over $1 million. This would end all oligarchy.
 
The problem is flight of capital out of the country. 

by KenTX on 02/14/2008 12:03:33 AM EST

[ Parent ]
Well that might do something... (none / 0)
Talk about Capital leaving the country!!! You would drive all of the wealthy out with that kind of tax rate!!!

not that Im saying thats a bad idea, im just sayin...

by bobo1 on 02/14/2008 12:25:06 AM EST

[ Parent ]
Who cares about flight of capital? (none / 0)
I want us to start EXPORTING GOODS again.

by jarett on 02/14/2008 03:30:48 AM EST

[ Parent ]
I totally agree (none / 0)
The US used to be the #1 exporter of finished goods and now we've become the #1 importer.

Why?  Bad trade deals.  That does NOT mean I'm saying we have to become the #1 exporter again (probably not realistic), but it *does* mean we shouldn't have these awful and massive trade deficits (balance, right?).

The value of the dollar has fallen something like 40% Since Bush took office!

PS---You know Jarett, there's an interesting thread called "Obama On Trade" featured on the hompepage where you can share your thoughts on importing vs exporting.  I'm not saying anything, I'm just saying. ;)

by ihavenobias on 02/14/2008 09:42:56 AM EST

[ Parent ]
Cant disagree with him (none / 0)
Like Tom The man said. Passing money around without producing any goods is a path to a recession or depression. It makes perfect sense to me .

by Chinese Democracy on 02/14/2008 05:52:00 PM EST

[ Parent ]
Good old days (none / 0)
...the key to happiness is wanting less.

It's not the high cost of living; it's the cost of living high. One key to happiness is living within your means.

Back in the 1970s, we had a TV with rabbit ears, a rotary phone, and a light bulb. That was about it.

I misplaced it when I moved, but I had kept one of the old rotary phones as a joke. It made a great paperweight, because it must have weighed close to ten pounds. I don't even have a land line now.

by Twba on 02/15/2008 08:14:24 AM EST

[ Parent ]
Use lube (none / 0)
bobo1 wrote:The upper classes have lived off of our backs for far too long. Its time they start taking it in the ass just like we do...

With EITC, WIC, food stamps, etc., it's the poor who have been living off the upper classes.

by Twba on 02/15/2008 08:00:37 AM EST

[ Parent ]
Hey commenters (none / 0)

Twba had to search high and low to find someone who calls themself a progressive and yet writes this nonsense. He was probably tipped off to it by some Freeper site.

GIGO = Garbage In, Garbage Out. That's what it boils down to. The author pulls the statistics he needs to back his asinine theiry and ignores factors which refute him.

How accurate does ANYONE think THIS statement is?

"Mortgages, which represent 79 percent of all debt, are the more pressing concern. But even according to the most pessimistic estimates, only 1 to 2 percent of homeowners will be forced into foreclosure in the next few years."

We've already passed that number and he wrote the article less than two months ago. "Cassandra," he isn't.

Does he bother to mention the differences in the amount of savings a family has today over then? Gosh, I wonder why?

Does he go into any detail at all about how the methiods of figuring the statistics was changed by the Bush administration, removing items which would show the true devastation of the economy? Again, no.

"Assets have grown faster than debts for most middle-class families."

Burger King should sue him for copyright infringement for THIS Whopper!

What's the biggest asset a family can have? A house. Prices have skyrocketed for housing which will make a family's asset portfolio appear higher on paper than it really is. Ask someone who is trying to sell their $200,000 "fixer upper" how much of an asset an overpriced white elephant that won't sell is.

Nice try, Twba. Work harder next time.

by MedfordTim on 02/13/2008 12:18:45 PM EST

50% (none / 0)
i'd venture to say half the posters on this site agree with him, because it seems like half of the posters here are right-wing trolls.  or maybe it's just that they post so much it seems like there are a lot of them.

by mathcore on 02/13/2008 03:53:08 PM EST

[ Parent ]
That was part of my original point (none / 0)
Ever since the show has gone to the internet, the crowd that takes the time to post here has expanded quite a bit (for the better).

Before that, I honestly think a lot of people just gave up because the same group of cons/libertarians posted the same debunked, trickle down/free trade BS.  We actually have more productive discussions now and STILL have lots of disagreement, which is great.

by ihavenobias on 02/13/2008 04:05:32 PM EST

[ Parent ]
Conservative trolls infest every left wing blog (none / 0)
Conservative trolls infest most all of the left wing blogs . My theory is because the left totally dominates the net and they dont have anywhere to go :)

The Washington Post seems to have a love affair with right wing bloggers according to media matters. So when that paper was used as a reference I wasnt surpised. I guess it doesnt matter how many right wing trolls there are because the point being made was soundly debunked by a number of posters. It was what Obama would call a total rout.

by Chinese Democracy on 02/13/2008 05:07:59 PM EST

[ Parent ]
let me get it out (none / 0)
I will thank you to refer to me by my formal title in the Young Turks Forum: "Conservative Executive Producer Troll".

Since your rank is lower than mine, I have a favor I would like to ask of you.

by KenTX on 02/13/2008 05:16:48 PM EST

[ Parent ]
Past returns are no guarantee of future results (none / 0)
MedfordTim wrote: Twba had to search high and low to find someone who calls themself a progressive and yet writes this nonsense. He was probably tipped off to it by some Freeper site.

It must have been some Freepers, 'cause I don't know how to read the Washington Post and the NY Times. And the video is on the Wall Street Journal's website, the capitalist tool for capitalist tools.

Ask someone who is trying to sell their $200,000 "fixer upper" how much of an asset an overpriced white elephant that won't sell is.

Anyone stupid enough to pay 200 grand for a handyman's special deserves to lose his ass. Luckily, if he has one of the popular zero down loans with a teaser rate that is about to reset, he really isn't losing much if he walks away. All the people in foreclosure who put no money down have no equity to lose. They've been renting those houses and now they're going back into apartments.

by Twba on 02/15/2008 08:10:24 AM EST

[ Parent ]
Didn't realize you were such a slow reader... (none / 0)

Twba just happens to hold on to WaPo articles from a month prior in case he has a point to make. Of course he does. Especially the ones featuring contributors from Third Way (Jill! Get out of there! NOW!). the DLC mouthpiece.

(Twba has never understood that I don't mind capitalism. It's corporatism I object to.)

Would $100,000 be a more acceptable number to you? I don't know about the prices where you are, but on the West Coast, that amount will either buy you a place where you'll have to commute 4 hours each way or a rundown piece of crap. Do the rest of your comments still apply?

"...he really isn't losing much if he walks away."

No, not much. Just everything. Whatever credit ability he had is shot. He will be hounded for years by collection agencies. There might even be a bankruptcy in his future. These situations have been known to break up families. Maybe have to give up work to move. Loss of pride can enter into play. Depression, anxiety, hopelessness...there are a lot of variables. But, he'll get over it. Eventually.

But then, what about all those empty units that the bank now holds but desperately want to get rid of? (Ken, tell people what Houston looked like in '85 & '86) Think they'll be offered to all those new apartment dwellers at reduced rates, or will they go to some huge property management company?

Ah, the American Dream, circa 2008...

by MedfordTim on 02/15/2008 10:10:28 AM EST

[ Parent ]
Pocket change we can all believe in (none / 0)
Twba just happens to hold on to WaPo articles from a month prior in case he has a point to make. Of course he does.

I read it the day it was published. My memory is good enough that I was able to retrieve it with a single google search.

Especially the ones featuring contributors from Third Way (Jill! Get out of there! NOW!). the DLC mouthpiece.

I also read PPI regularly.

But then, what about all those empty units that the bank now holds but desperately want to get rid of?

There might be enough change under my couch cushions to buy one of those houses.

by Twba on 02/15/2008 11:25:26 AM EST

[ Parent ]
PPI = DLC...yuck! (none / 0)

You'd buy a house in Detroit?

You are an optimist!

by MedfordTim on 02/15/2008 12:00:46 PM EST

[ Parent ]
Yuck? (none / 0)
You don't like PPI? Guess whose econ. adviser is published over there?

by Twba on 02/15/2008 12:58:15 PM EST

[ Parent ]
Is that the video (none / 0)

( in the link) where the invisible hand of the free market comes in and does a dance routine with Beyonce?

 

 ...supply-side conservatives captured the Republican Party during the Reagan administration and implemented policies that continue to privilege the super rich today.They tell a compelling tale of middle-class decline. Pity it isn't true

Really? 

Increases in income from 1979-2005
 
 

by MRFred on 02/13/2008 02:39:28 PM EST

Oh yea (none / 0)

well take a look at this

Ken's favorite

This graph clearly shows that the people in this country who have no money are clearly not paying taxes on the money they don't have.

by z1p101 on 02/14/2008 12:40:47 AM EST

[ Parent ]
zippy (none / 0)
are you drinking again?

by KenTX on 02/14/2008 12:53:57 AM EST

[ Parent ]
Na Ken (none / 0)
just poking fun at you again. That's what I do here remember?

by z1p101 on 02/14/2008 01:12:46 AM EST

[ Parent ]
Oh Yeah! (none / 0)

 

 

by MRFred on 02/14/2008 08:13:31 AM EST

[ Parent ]
No No No (none / 0)
Don't even start with that "Federal Income Tax" pie chart! That FICA (social security and medicare witholding) amount that disappears every paycheck for the middle class as defined above IS A TAX. If you've forgotten, remember your employer is MATCHING that amount and therefore can't pay that as salary or is overhead if they hire someone new. That is over 15%, non-refundable. Remember that the witholding phases out. Don't buy into any pretty tax charts that don't include the employee witholding. Those "top 10 percent" people in the pie chart aren't paying that FICA tax on some to a lot of their income.

by MayorHardin on 02/14/2008 02:07:50 PM EST

[ Parent ]
There's a lot of passive income (none / 0)
"earned" by the top 10% who own loads of stocks and wait around the pool waiting for the dividend check to arrive (minus a tiny 15% tax compared to what the rest of us pay).

And conservatives have the balls to say that liberals are the ones who penalize work through taxes.  Right, because an office or construction worker should be taxed more than some fat cat watching the latest wall street scrolling ticker.

by ihavenobias on 02/14/2008 02:32:24 PM EST

[ Parent ]
Wait a minute (none / 0)

Are you trying to tell me that Ken's favorite pie chart that comes straight from Rush Limbaugh's web site is really just a piece of contrived, right wing propaganda bull shit.

Heh, I would have never known. 

by z1p101 on 02/14/2008 02:56:01 PM EST

[ Parent ]
Not clear (none / 0)
The chart I was bloviating about did not originate with Ken.

by MayorHardin on 02/14/2008 03:00:22 PM EST

[ Parent ]
Originally it did. (none / 0)

I grabbed it off of one of Ken's 20 or 30 posts where he has used it in the past. Poking fun at Ken's love of the contrived and misleading graph is kind of a running joke around here.

But you did bring up a good point about it that I do not believe anyone else has mentioned yet. 

by z1p101 on 02/14/2008 03:48:45 PM EST

[ Parent ]
Nuttin' poisonal, Mayuh (none / 0)
"...remember your employer is MATCHING that amount and therefore can't pay that as salary..."

Having heard this same sentiment in different forms, I don't direct this from-the-toes burst of laughter directly toward the Mayor, but in the general direction of the statement.

BWAH-Ha-ha-ha-ha-hahahahaha ...oh...man....oh, it never fails to crack me up...the idea that an employer would give the matching amount to the employee instead of pocketing it if only they didn't have to pay it.

Oh, that's funny!


by MedfordTim on 02/14/2008 03:41:51 PM EST

[ Parent ]
That is why (none / 0)
I bothered to include the next clause of the sentence. If I want to take on a new employee and the prevailing wage for that position is $20,000 per year I know that it costs me around $21,400 automatically and irrevocably, before any other required or optional employee benefits. FICA is an economic cost and it is a tax.

by MayorHardin on 02/14/2008 03:54:15 PM EST

[ Parent ]
Stop before you hurt yourself (none / 0)
Really. Of course it's a tax.

So what?

The bottom line is "Is the employee worth $21,400." (Actually, at 7.65%, the figure is $1530, just so no one pops up with your example figure as supposed to be exact - I understood it as an 'i.e.')

The employee costs what they cost - does it really matter if $10,000 goes to the employee and $11,400 goes to the government to the business person? Or everything but $1 to the employee and the buck stopping in D.C.? Or is it that you just object to the employer being "forced" to contribute to his valued employee's retirement? Think of it as the cost of being allowed to do business in the country. Welcome to America.

by MedfordTim on 02/14/2008 04:41:11 PM EST

[ Parent ]
math for democrats and other dummies (none / 0)
"Remember that the witholding phases out."

That's right, and so do the benefits. I think they quit withholding somewhere around the first $96,000 in salary.

But if withholding is capped, so are benefits. Upon retirement, the largest check that an individual can receive is around $2300 per month.

It's OK with me if you want to triple the withholding cap to $300,000, so long as you to triple the monthly retirement benefit check to $6900.

Currently, Social Security is an inefficient, but fair retirement scheme. You get out of it roughly what you put into it.

Compare this with the Bush Social Security Privitization plan. If you put $5000 into an S&P 500 Index fund when a baby is born, and never touch it, the account will be worth roughly $4 million when the baby reaches age 65. George Bush wanted to divert some of the social security money into the market so everyone could be wealthy. But alas, Democrats would have none of it. 

by KenTX on 02/14/2008 05:22:28 PM EST

[ Parent ]
Mighty Morphin' Power Rangers! (none / 0)
We're a'morphin' to another area. The topic under discussion was the relative situation of the middle class over the years. I didn't say that it was wrong to phase out FICA, merely that it has a major impact on the relative percentages of taxation of the middle class compared to the top 10 percent.

And if you want the govenment to put the $5000 in the index fund at birth, just do it (the government, that is) and see what happens. Leave Social Security alone. If it works, you can reduce those FICA taxes later on. If not, you have prevented mass destitution among the elderly, which was the intent of the program.

by MayorHardin on 02/14/2008 05:38:13 PM EST

[ Parent ]
tiny minds (none / 0)
"If it works, you can reduce those FICA taxes later on."

The idea is to put those FICA taxes into high income mutual funds, so everyone can have a comfortable retirement, and American business  and the American economy can flourish and expand.

But then, I'm trying to educate a Democrat.

Never mind.

Have a nice day.

by KenTX on 02/14/2008 05:54:13 PM EST

[ Parent ]
Sliding in a change there (none / 0)
I notice you changed your tune from a nice unmanaged index fund to a "high income mutual fund". You have missed the disclosure line "past results cannot guarantee future performance" and I second Fred's comment which is also here about benefiting the fund managers.
I can't quite figure out why the vehemence here. Social Security is to provide a reasonably predictable foundation for society. That is the sense in which it is an "insurance" program. In the market you have the potential for gains that result from taking ownership in the economy, but also are not guarateed a return.

So encourage investment in the market for the long term, but don't eliminate the safety net. Or perhaps the diffidculty here comes of trying to educate a Republican.

by MayorHardin on 02/15/2008 01:29:21 PM EST

[ Parent ]
High income? (none / 0)
There are an awful lot of negative numbers on my retirement fund statement this quarter.  If it weren't for my employer's 50% matching funds it would have lost money last month.  Where are these magical "high income" funds and, if they exist, why isn't everyone using them instead of the real ones?

We're supposed to subject federal funds to these kinds of risks, just so managers can skim their pounds of flesh off the top?  Sounds like another Republican boondoggle.

"If you're not pumped up, then get the hell out, 'cause you don't belong here." -- Cenk Uygur

by Spinny on 02/15/2008 01:44:35 PM EST

[ Parent ]
Just to show (none / 0)
that I don't need to be educated about all things the rate of return over many years is what counts in a reetirement plan, not what happened over the last six months. When I checked last week, the S&P 500 price-to-earnings ratio (the "multiple") looked pretty favorable in historical terms, so a good fund manager will be looking for bargains. But we don't know how long it will take for historical trends to overcome current anxieties.

by MayorHardin on 02/15/2008 03:01:22 PM EST

[ Parent ]
Fair point (none / 0)
I've got maybe 20 years ahead still before I retire, and the long term gains and a different matter (assuming there's still an American economy after these bozos get finished with it).  Still, aren't the funds in those big federal accounts already managed?  I'm sure they don't just lie fallow gathering nothing over time, right?  Where's the value added in changing the management over to a private firm?  Oh yeah:  the private firm skimming off the top.

I call suspect on the motive.

"If you're not pumped up, then get the hell out, 'cause you don't belong here." -- Cenk Uygur

by Spinny on 02/15/2008 03:30:03 PM EST

[ Parent ]
Believe me (none / 0)
you don't want to know about the investment of the social security funds collected in excess of current needs. It is infuriating. This is my chance to sound like a Republican! The money does not go to any type of ownership of assets that provide a return on investment. And just to make sure it is clear, the money you put into the system now that is not "surplus" is paid out to others receiving benefits now. It is not being "invested" on your behalf. You are receiving a future promise to pay from the government.

by MayorHardin on 02/16/2008 11:35:31 AM EST

[ Parent ]
Getting schooled (none / 0)
I guess I should have said "the surplus that used to be there before it got raided," right?  Or has the pyramid scheme already flattened out so much the surplus would be gone today, anyway?  Hey, on fiscal matters I do tend to sound more like a Republican than not, so fire away!  

What little I know of these matters comes from a brother-in-law who's the manager for the pension fund for one of our fair American states.  I know how much diligence and care he puts into getting maximum return for the state on those monies; guess I assumed the federal funds were managed as carefully.  Apparently not.  Hmm.

Okay, so tell me: what exactly is wrong with the idea Ken trumpeted, that didn't fly?  Would private management of the funds for each person entail massive risk and only profit the money managers?  What are the arguments against?

"If you're not pumped up, then get the hell out, 'cause you don't belong here." -- Cenk Uygur

by Spinny on 02/18/2008 08:04:22 AM EST

[ Parent ]
It beats Social Security (none / 0)
"We're supposed to subject federal funds to these kinds of risks, just so managers can skim their pounds of flesh off the top?  Sounds like another Republican boondoggle."

Over the last 80 years, the S&P 500 has averaged a 10.4% annual rate of return. Through the miracle of compound interest, you get growth on top of growth.

For example, $5000 invested in an S&P 500 mutual fund in 1943 would be worth $4 million today.

If we could invest Social Security dollars into the market, the money would probably be directed into total market index funds, where the money is spread over every publically traded company in America.

These funds have no fees (or very small fees), because they are managed by computers rather than fund managers.

by KenTX on 02/15/2008 04:28:13 PM EST

[ Parent ]
As long as (none / 0)
you say the account COULD be worth 4 million based on historical trends, I'm with you. To say it WILL be worth that is a leap of faith.

by MayorHardin on 02/16/2008 11:52:00 AM EST

[ Parent ]
By the way (none / 0)
I mean the account started today, not the 1943 account. (By the way, couldn't you buy your house for $5000 cash in 1943? So why did anyone still have a mortgage, or pay rent. Oh that's right, $5,000 at one time was A LOT OF MONEY. Puts me in mind of the famous magazine article from the mid-20s showing how everyone could be rich investing $15 a week in good common stocks. Math was completely correct; but average weekly take-home pay? $30. Source: W. Manchester 'The Glory and the Dream'.)

by MayorHardin on 02/16/2008 12:27:09 PM EST

[ Parent ]
Keepin The Dream Alive (none / 0)

 

Compare this with the Bush Social Security Privitization plan. If you put $5000 into an S&P 500 Index fund when a baby is born, and never touch it, the account will be worth roughly $4 million ( Bullshit! :Mr Fred) when the baby reaches age 65. George Bush wanted to

  divert some of the social security money

  into the market so everyone   fund manangers could be wealthy. But alas, Democrats would have none of it.

 

Oh no...we have plenty of "it", the  SubPrime Mortgage mess and the other debacles.

Do you think the American public is ready for another hands off, deregulated ,privatization scheme were in about 10 years the Wall street gurus who conceived this fund grab stand there , pull their empty pockets out and say.." the money was there once..."


by MRFred on 02/15/2008 01:06:27 PM EST

[ Parent ]
The future value of 4 million (none / 0)
after 65 years starting with $5000 requires an annual return of around 11%. Possible, but maybe it turns out to be 7% over 65 years. That's around $400,000.

by MayorHardin on 02/15/2008 01:41:08 PM EST

[ Parent ]
In case we're still going on this thread (none / 0)
The original paragraph by Twba references income from 1979 to the present. That is cherry-picking a time frame right from the start. Any reasonably fair comparison should go back at least to the elimination of wage and price controls by Nixon early in that decade and before the first OPEC oil boycott.

by MayorHardin on 02/16/2008 11:42:17 AM EST

War on the Middle Class | 61 comments (61 topical, 0 hidden)
 Display: