View Full Version : 'proof' the US Middle Class is Radically Shrinking
Eric Stoner
08-09-2010, 12:48 PM
I didn't say they were. You were saying all these reports were predicting 10% unemployment will be the new norm. I was giving an example of one that wasn't making that prediction. Most mainstream economists I've heard, say the unemployment rate will eventually go back down, but not for a few years.
Why do you make such hateful comments about a commentator just because you disagree with her?
You are making faulty comparisons. You are comparing tax revenue from one year to another, before and after tax cuts. Tax revenue normally increases from one year to the next. Just because revenue increased after taxes were cut, doesn't mean revenue wouldn't have increased more without them. The fact is, when adjusted for inflation and population growth, tax revenue increased more from 1972 - 1980, than it did during the Reagan Administration, and far more from 1992 - 2000.
From 1980 - 1988, tax revenue per capita increased 19%, adjusted for inflation. From 1972 - 1980, tax revenue per capita increased 24%, and from 1992 - 2000, tax revenue per capita increased 41%.
http://krugman.blogs.nytimes.com/2008/01/17/reagan-and-revenue/
If you dispute these figures, then please provide references that contradict them. Calling the author names doesn't prove anything.
No, the Federal budget was balanced before taxes were cut.
I read that in the 1950's the wealthiest Americans were paying approximately 50% of their income in taxes, while today the wealthiest Americans are paying approximately 24% of their income in taxes.
As I've said before, we're going through the worst economic downturn since the Great Depression and it's going to take years to fully recover.
Read what you just posted :"The uneemployment rate will EVENTUALLY go down but Not for a few years". Unlike every other recession we've had.
Rachel Madcow is as vicious and factually challenged as they come. As is Ann Coulter for that matter. She is no more entitled to her own set of facts as you, me or anyone else. She specializes in factually delinquent personal attacks. I am obviously not alone in my distaste for her style and methods. Her ratings indicate that nobody else likes her either.
Just to prove that my disgust is NOT based on ideology, I have a lot more respect for economists like Robert Reich and Jared Bernstein than I do for a little asswipe like Krugman or a bitch like Madcow. They do NOT try to have their own numbers like Krugman does. They do not launch personal attacks at people they disagree with like Krugman and Madcow. I have just as much disgust for a right wing factually challenged bitch like Ann Coulter and Sarah Palin is an ignorant ditz afaic.
Whether you like them or not, the numbers are there for everyone to read. When Reagan left office, tax revenue had almost DOUBLED. In 2006, we had record tax revenues. Likewise, we had budget SURPLUSES AFTER Clinton cut taxes. After he cut taxes revenues went UP ! Btw, Krugman has been caught using faulty numbers and data so many times that even his Nobel Prize is screaming at his intellectual dishonesty. Be VERY careful using any facts or figures from anything he is remotely asssociated with.
As I pointed out, in the 1950's we had a top marginal tax rate of 91%. We also had three recessions. Our rich were less wealthy then than now. It is also instructive to distinguish between the wealthy and EARNERS. The wealthy have wealth. Earners create it. Nonetheless, I have repeatedly agreed with you that BOTH the wealthy and the highest earners do NOT pay their fair share of taxes. Even though the highest earners pay 50% of the income tax. That's why I oppose perpetual trusts that shelter wealth from taxation literally into perpetuity. That's why I want a flat tax with no deductions and no credits. The main reason I want a flat tax has nothing to do with fairness or class envy. It is to promote rational allocations of wealth and money and thus generate economic growth. Without shelters, everyone has an incentive to maximize earnings. If I make $100,000 and pay 30% after an exemption of $30,000 and you make $1 million and pay 30% after the same exemption, who is paying more in taxes ? Who is actually paying a higher percentage of his income ? You are. In both cases. I'm paying $21,000 and you are paying $291,000. On both a gross and percentage basis you are paying more.
As I've repeatedly pointed out, that is NOT what we have now. I, and many other six figure earners, pay a much higher percentage of our income than the uber-rich. There are children and grandchildren of the uber wealthy who have NEVER worked a day in their lives and never will, yet have seven figure lifestyles on which they pay no taxes except for sales and real estate levies. I know, I used to work protecting them as they limo'd and clubbed around NYC. Fortunately, some enjoyed spending Daddy and Grandpa's money ( and Mommy and Grandma's too ) in places like PEC and Scores but I digress. Wouldn't you like to see them have to pay a reasonable portion of their income in taxes ? Do you have any idea how many trillions, yes TRILLIONS, are sheltered in perpetual trusts ? On top of everything else, these trusts are not economically healthy. The whole point of the Rule Against Perpetuities was to promote buying and selling of property, by assuring and REQUIRING that at some point, somebody would be able to sell. Sales which, inter alia, could be taxed. Not anymore. Starting in the 1980's, states started competing with each other to get perpetual trust wealth and business by abolishing their respective Rules against Perpetuities. It also avoids estate taxes which as you know, I support.
We didn't recover from 1929 and in fact had a double dip in 1933 and a triple dip in 1938 thanks to GOVERNMENT policy. As I have repeatedly explained. We recovered from the 1981-2 recession thanks to Reagan's tax cuts.. We are NOT recovering now thanks to Obama's policies. It's much too far along for him or you to try to blame it all on Bush.
Melonie
08-10-2010, 12:28 AM
It's much too far along for him or you to try to blame it all on Bush
It's never too late to 'try'. However, it remains to be seen whether or not the GWB legacy can successfully be blamed for (snip)""The policies that crashed the economy, that undercut the middle class, that mortgaged our future, do we really want to go back to that, or do we keep moving our country forward?" Obama said at another fund-raising event in Austin, referring to Bush's eight years as president."(snip)
As with many recent Dollar Den threads, I suspect the real issue will not involve actual economic facts, but instead will involve successfully 'selling' a particular 'spin'. It will then fall to registered voters to figure out ( or not ) that the 'spin' and the actual economic facts seriously diverge !!!
I, and many other six figure earners, pay a much higher percentage of our income than the uber-rich.
There are children and grandchildren of the uber wealthy who have NEVER worked a day in their lives and never will, yet have seven figure lifestyles on which they pay no taxes except for sales and real estate levies
Do you have any idea how many trillions, yes TRILLIONS, are sheltered in perpetual trusts ?
This is of course the 'dirty little secret' of the 'uber-rich' versus gov't calls for increasing official tax rates on the 'rich'. In the real world, the 'uber-rich' have a multitude of options open to them to legally avoid having to pay tax rates that are anywhere near the official gov't tax rates. Trusts are merely one of a long list of options, which also include tax free municipal bonds, production tax credits for 'green energy' business partnerships, the ever-famous offshore bank accounts ( although they may have lost Switzerland there are still a bunch of other countries that offer 'anonymous' banking ), etc.
In general, the 'middle class' do not have access to these legal tax avoidance strategies because the 'minimum buy-in' prices are set too high - i.e. $50k / $100k per muni bond, $1 million+ for a green energy partnership slice, the cost of foreign travel to access 'anonymous' foreign bank accounts, etc. Therefore, in the real world, a call to increase taxes on the 'rich' really translates into the majority of those tax increases avoiding the 'uber-rich' and falling squarely on the upper 'middle class'.
... which brings us back to the original topic of this thread !
~
Eric Stoner
08-10-2010, 11:23 AM
http://www.reuters.com/article/idUSN0910217920100809
It's never too late to 'try'. However, it remains to be seen whether or not the GWB legacy can successfully be blamed for (snip)""The policies that crashed the economy, that undercut the middle class, that mortgaged our future, do we really want to go back to that, or do we keep moving our country forward?" Obama said at another fund-raising event in Austin, referring to Bush's eight years as president."(snip)
As with many recent Dollar Den threads, I suspect the real issue will not involve actual economic facts, but instead will involve successfully 'selling' a particular 'spin'. It will then fall to registered voters to figure out ( or not ) that the 'spin' and the actual economic facts seriously diverge !!!
This is of course the 'dirty little secret' of the 'uber-rich' versus gov't calls for increasing official tax rates on the 'rich'. In the real world, the 'uber-rich' have a multitude of options open to them to legally avoid having to pay tax rates that are anywhere near the official gov't tax rates. Trusts are merely one of a long list of options, which also include tax free municipal bonds, production tax credits for 'green energy' business partnerships, the ever-famous offshore bank accounts ( although they may have lost Switzerland there are still a bunch of other countries that offer 'anonymous' banking ), etc.
In general, the 'middle class' do not have access to these legal tax avoidance strategies because the 'minimum buy-in' prices are set too high - i.e. $50k / $100k per muni bond, $1 million+ for a green energy partnership slice, the cost of foreign travel to access 'anonymous' foreign bank accounts, etc. Therefore, in the real world, a call to increase taxes on the 'rich' really translates into the majority of those tax increases avoiding the 'uber-rich' and falling squarely on the upper 'middle class'.
... which brings us back to the original topic of this thread !
~
Number 1, the polls make it clear that the American people are not buying the "Blame it all on Bush" bullshit.
Number 2 , funny you should mention "green energy partnerships" which coincides with the middle class subsidizing the rich in purchasing the Chevy Volt. A recent analysis by Deloitte Consulting of the electric-gas hybrid Chevy Volt aka the "Voltswagen" makes a number of very disturbing and troubling points:
1. It retails for $41,000. About two thirds of what the average American makes in a year
2. Affluent hipsters are being targeted by Government Motors as the prime market for this lemon. Deloitte says that the demand for such cars is from young, high income individuals who do NOT need passenger room for a family. They make over $200,000 per year. Deloitte notes this is why GM is rolling out the Volt in upscale, trendy urban markets.
3. To help this more affluent market get over any sticker shock for a car that gets a whopping 40 miles to the charge i.e. mpc; the Feds are giving them a subsidy of $7500. Middle class Californians get to pay even more as there is a state subsidy too.
4. According to Kenneth Green, an environmental scientist at the A.E.I., the Voltswagen is a "vanity car for the well off subsidized by the less well off".
5. It retails for $41,000 BUT it actually costs MORE. Government Motors is selling at a LOSS ! Depending on whose numbers you prefer, it actually costs as much as $81,000 a vehicle.
6. Supporters claim subsidies are necessary because electric cars are in their "infancy". Um, actually they have been around for about 100 years. They weren't practical then and certainly are not now.
7. Most damning of all, electric cars will increase the burning of coal. Huh ? WHAT ? ! ? ! That's right. The electricity necessary to recharge the Volt (btw, said recharging takes longer than the Volt can operate on a single charge ) has to come from somewhere. In the U.S. that means burning more coal. If China ever seriously pushed electric cars, it would be twenty times worse.
Obama has essentially taken taxpayer money and spent it on toys for upscale urban Libs. One of his two remaining bases of political support. Effectivley we have the middle class subsidizing the upper class so it can feel better about itself.
Melonie
08-10-2010, 01:35 PM
I agree on everything except additional US coal fired generation. Yes more electricity will need to be generated but it won't be from coal. The reason for this is that, according to one of the gentlemen who invited me to cruise around the caye on his yacht for a few days - and who is also 'well connected' in the US coal industry, the EPA has just received court approval to enact 'downwind pollution' restrictions on US power plants EVEN IF THEY ARE CURRENTLY OPERATING WITHIN THEIR STACK PERMIT LIMITS. It seems that if the total amount of airborne pollution being blown into say New York from the Midwest states makes it impossible for New York to meet air quality standards, those Midwest power plants will now be forced to reduce emissions.
The gentleman in question is actually prepared to 'pull the plug' in protest at the point where these new EPA regulations require a billion dollar investment in additional power plant stack scrubbers for a coal fired power plant to keep operating, and so are many of his proteges in the coal fired power industry. It will then fall to the gov't to try and pull a few million megawatts out of their a$$. However, like California, he is somewhat afraid that this could start a new trend toward greatly increased electricity imports from ( filthy ) Mexican power plants !
Time to go long on natural gas !!!
You also raised a specific reference to 'internal cost shifting' by GM to provide 'stealth' subsidies for the Chevy Volt ... specifically that the actual production cost per vehicle was in the $80,000 ballpark. I had already heard that cost shifting was taking place re expected Volt warrantee claims ( i.e. throwing a $10,000+ battery replacement against GM's general warrantee repairs budget versus < $1,000 average warrantee claim per gas engine vehicle ), but hadn't heard anything specific in regard to cost shifting of up-front production costs. Are there any more details available ?
~
Eric Stoner
08-11-2010, 07:31 AM
I agree on everything except additional US coal fired generation. Yes more electricity will need to be generated but it won't be from coal. The reason for this is that, according to one of the gentlemen who invited me to cruise around the caye on his yacht for a few days - and who is also 'well connected' in the US coal industry, the EPA has just received court approval to enact 'downwind pollution' restrictions on US power plants EVEN IF THEY ARE CURRENTLY OPERATING WITHIN THEIR STACK PERMIT LIMITS. It seems that if the total amount of airborne pollution being blown into say New York from the Midwest states makes it impossible for New York to meet air quality standards, those Midwest power plants will now be forced to reduce emissions.
The gentleman in question is actually prepared to 'pull the plug' in protest at the point where these new EPA regulations require a billion dollar investment in additional power plant stack scrubbers for a coal fired power plant to keep operating, and so are many of his proteges in the coal fired power industry. It will then fall to the gov't to try and pull a few million megawatts out of their a$$. However, like California, he is somewhat afraid that this could start a new trend toward greatly increased electricity imports from ( filthy ) Mexican power plants !
Time to go long on natural gas !!!
You also raised a specific reference to 'internal cost shifting' by GM to provide 'stealth' subsidies for the Chevy Volt ... specifically that the actual production cost per vehicle was in the $80,000 ballpark. I had already heard that cost shifting was taking place re expected Volt warrantee claims ( i.e. throwing a $10,000+ battery replacement against GM's general warrantee repairs budget versus < $1,000 average warrantee claim per gas engine vehicle ), but hadn't heard anything specific in regard to cost shifting of up-front production costs. Are there any more details available ?
~
Here ya go Mel :
Ron Gettelfinger, head of the UAW publicly said that GM is selling the Volt at a HUGE loss.
The battery pack alone costs GM $10,000. The special lights, wipers, radio and other electrically operated accessories on the Voltswagen all had to be retooled to be as low voltage as possible so as to avoid draining the battery pack while driving. At significant cost, of course.
Btw, GM predicts a 10 year battery life ( ALL batteries wear out eventually ) based on TWO years of testing !!!
GM received $400 million in Federal subsidies for R & D specifically for the Volt as part of the Auto Bailout.
The tawdry details are on doczero.org ; hotair.com and thelonelyconservative.com.
The bottom line is that the Voltswagen is a car without a market. The Toyota Prius and Nissan Leaf experiences prove that overwhelmingly, Americans do NOT want cars that get 40 miles to the charge. Or take more time to recharge than they can go before the battery runs down. Without a hard shove from it s owner ( Obama ) GM would NEVER have sunk serious money into this piece of junk. It's their 2010 version of the VEGA !
If anybody at Government Motors really had any brains they'd be busy retooling cars and trucks to run on natural gas and putting their R & D money into the REAL future for cars i.e. HYDROGEN.
threlayer
08-15-2010, 09:02 PM
It's much too far along for him or you to try to blame it all on Bush.
Nest time you in a relay race and you team-mate just before you decides to walk, rather than run, I'll bet you won't take all the blame either for losing the race.
Eric Stoner
08-16-2010, 08:23 AM
Nest time you in a relay race and you team-mate just before you decides to walk, rather than run, I'll bet you won't take all the blame either for losing the race.
Reagan was stuck presiding over the worst recession since 1937-8. He didn't spend his time trying to blame it all on Carter. JFK didn't bother blaming Eisenhower. Even Clinton didn't waste a lot of time blaming Bush The Smarter.
The fact is that Obama has proven that government spending does not generate economic growth and it does NOT create private sector jobs. This recession has resulted in a jobless recovery with anemic economic growth. Typical recoveries consist of AT LEAST 4% economic growth and net new job creation. Obama and the Dems are about to let taxes go up in the midst of a recession. That didn't work for Hoover or FDR. and Clinton's tax increase took effect AFTER we had already emerged from a shallow and short recession.
Non financial corporations have some $1.8 Trillion in cash that they are NOT spending. WHY SHOULD THEY ?
Melonie
08-16-2010, 08:48 AM
Non financial corporations have some $1.8 Trillion in cash that they are NOT spending. WHY SHOULD THEY ?
Actually, this speaks directly to the original topic of this thread i.e. a 'shrinking' middle class equates to a shrinking pool of discretionary dollars that can be spent on products and services provided by these non-financial US corporations. Therefore there is essentially zero motivation for these non-financial US corporations to invest their 'cash' to modernize / increase US production capacity ( with associated job growth ) in an environment of expected falling future demand. Instead, if there IS any increase in demand, and regardless of whether that potential increase in demand occurs within the US ( doubtful ) or in 3rd world countries ( probable ), it will be met by expanding production at the US corporations' much lower production cost offshore subsidiaries.
Melonie
08-16-2010, 08:56 AM
Nest time you in a relay race and you team-mate just before you decides to walk, rather than run, I'll bet you won't take all the blame either for losing the race.
For better or worse this analogy is irrelevant ... because we're not talking about the US being a country where the president is always able to implement his preferred policies. This of course plays both ways i.e. Clinton vs a republican congressional majority in the mid 90's, and GWB versus democratic majorities after the 2006 election. On the economic side, one of the very first things that the new democratic congress did after the 2006 election was to implement ethanol mandates which quickly resulted in increased prices for both food and gasoline - over GWB's objections. Arguably, the resulting rising food and energy prices subtracted from disposable incomes and contributed significantly to the following situation where it became impossible for some number of heavily indebted suburban Americans to service their pre-existing debt. Arguably, this in turn led to reduced consumer spending, to the 'house of cards' of subprime loans turning towards default, thus the bankruptcy of Lehman Bro's etc.
Yes these little details matter - but they are easily forgotten !
jimboe7373
08-16-2010, 09:43 AM
Reagan was stuck presiding over the worst recession since 1937-8. He didn't spend his time trying to blame it all on Carter. JFK didn't bother blaming Eisenhower. Even Clinton didn't waste a lot of time blaming Bush The Smarter.
Reagan didn't have the collapse of the entire financial system to contend with either. It was so recent that I'm amazed people seem to forget how uncertain things were and pontificate. When Obama came in it was a crapshoot if the economy and even the country could survive the mess. Just not having a complete collapse in my opinion is a worthy accomplishment. Reagan also didn't have a 24 news cycle and rapid enemies who try to make him look bad at every single thing he does nor did Reagan have a large part of the government that was working their hardest to make him and the country fail so they could regain power.
The fact is that Obama has proven that government spending does not generate economic growth and it does NOT create private sector jobs. This recession has resulted in a jobless recovery with anemic economic growth. Typical recoveries consist of AT LEAST 4% economic growth and net new job creation. Obama and the Dems are about to let taxes go up in the midst of a recession. That didn't work for Hoover or FDR. and Clinton's tax increase took effect AFTER we had already emerged from a shallow and short recession.. Once again we were and actually still are in "emergency mode" Obama did not want to have all the spending that he's doing, he's said that many times but the alternatives of having the financial world crash seemed much worse. If we spend too much we know what happens, if the whole financial world crashes and the huge companies aren't rescued- we don't know what happens. I would choose his course of action as well.
Lastly, he has to blame Bush as it WAS Bush who caused this mess, and in the age of "new media" where any internet blow-hard can pass opinion off as fact and media outlets have become entertainment/propoganda machines stuff like that has to be pointed out an American public that is gullible to the point of embarrassment.
Just one question for you guys- After 8 years of Bush and tax cuts and money going to the top etc.- How many jobs were created?
Eric Stoner
08-16-2010, 12:22 PM
Reagan didn't have the collapse of the entire financial system to contend with either. It was so recent that I'm amazed people seem to forget how uncertain things were and pontificate. When Obama came in it was a crapshoot if the economy and even the country could survive the mess. Just not having a complete collapse in my opinion is a worthy accomplishment. Reagan also didn't have a 24 news cycle and rapid enemies who try to make him look bad at every single thing he does nor did Reagan have a large part of the government that was working their hardest to make him and the country fail so they could regain power.
Once again we were and actually still are in "emergency mode" Obama did not want to have all the spending that he's doing, he's said that many times but the alternatives of having the financial world crash seemed much worse. If we spend too much we know what happens, if the whole financial world crashes and the huge companies aren't rescued- we don't know what happens. I would choose his course of action as well.
Lastly, he has to blame Bush as it WAS Bush who caused this mess, and in the age of "new media" where any internet blow-hard can pass opinion off as fact and media outlets have become entertainment/propoganda machines stuff like that has to be pointed out an American public that is gullible to the point of embarrassment.
Just one question for you guys- After 8 years of Bush and tax cuts and money going to the top etc.- How many jobs were created?
I don't know if you were around when Reagan was President. I was. The liberal press savaged him on a daily basis. There was no Fox News or Rush Limbaugh back then. Reagan had to deal with double digit interest rates; double digit inflation and double digit unemployment.
I'm tired of hearing about how Obama rescued us from a financial crisis. Afaic he did diddly squat ! The TARP bailout engineered by Paulson to bail out his Wall St. buddies was in place BEFORE Obama became President. So were the takeovers of Fannie and Freddie. Obama did take over GM and Chrysler. So what ? The jury is still out on whether one or both will survive.
Obama doesn't need anyone's help to "look bad". He's doing just fine all by himself. Who let Michelle go to Spain on the public dime ? Who couldn't piss or get off the pot with regard to the BP Gulf mess ? Who criticizes his own country at every opportunity ? Who has appointed left wing nuts like Van Jones ? Despite a VERY friendly and supportive press, his poll numbers are way down. On merit. What has he accomplished ? What has he generated besides doubt and uncertainty ?
Who controls the entire Executive Branch ? Obama. Who controls Congress ? Obama's party, the Dems. So who are you referring to when you say: " a large part of the government is working its hardest to see him and the government fail " ? WHO ?
How did Bush cause this mess ? How did he promote sub-prime loans ? Every time he tried to rein in Fannie and Freddie, Barney Fwank and Chris "Friend of Angelo" Dodd stopped him. Did his SEC appointee do his job ? NO. Neither did the Fed. We've gone over this countless times. There is plenty of blame to go around but Bush only gets part of it. The Dems in Congress and the Wall Street banks bear a large part of the responsibility. Who signed the repeal of Glass Steagall ?
It wasn't Bush. It was CLINTON.
Melonie
08-16-2010, 02:18 PM
also, to answer your question about jobs creation ...
http://www.ritholtz.com/blog/wp-content/uploads/2009/08/0808-biz-webcharts.gif
as the chart shows, GWB averaged about 1.5% positive jobs creation over his two terms ... about the same as LBJ and Eisenhower. JFK's job growth rate was actually the lowest in recent years - until president Obama took office anyhow.
jimboe7373
08-16-2010, 05:03 PM
^^^^^ the post before the previous one:
OMG! this is bizarro world- I can't even comment. I'm out of here.
threlayer
08-16-2010, 10:50 PM
...I'm tired of hearing about how Obama rescued us from a financial crisis. Afaic he did diddly squat ! The TARP bailout engineered by Paulson to bail out his Wall St. buddies was in place BEFORE Obama became President. So were the takeovers of Fannie and Freddie. Obama did take over GM and Chrysler. So what ? The jury is still out on whether one or both will survive.How quickly you forget the obvious. The US was in financial free-fall when Obama was sworn in. A lot more than TARP and GM and Fannie anbd Freddie was required to stop the Bush disaster. Why dont you stoip reading your past posts and get info from another source? A reliable one this time.
Obama doesn't need anyone's help to "look bad". He's doing just fine all by himself. Who let Michelle go to Spain on the public dime ?...This is the kind of BS crap that goes on in the conservative press just 6to get back in power. They and you seem to have great desperation to take very minor things aqnd blow them up to discredit anyone who is not in their political party.
How did Bush cause this mess ? ... We've gone over this countless times. DE-REGULATION and a strong preference for INCOME SHIFTING from the middle class to the rich. Plus under Bush's tutelage the sub-prime loan market was greatly increased so that the finhancial industry could profit more.
There is plenty of blame to go around but Bush only gets part of it. The Dems in Congress and the Wall Street banks bear a large part of the responsibility. Who signed the repeal of Glass Steagall ?
It wasn't Bush. It was CLINTON. The repeal of Glass Steagall was a huge mistake, but Reagan made banking industry mistakes too. You forgot the US consumers that reached deeper than their pockets. The Wall Street banks and the mortgage marketeers were greatly encouraged by Bush's and Greenspan's fiscal policies. At one time I thought it was amazing (and amusing) how one-sidedly you see things. But now I just see boring stubbornness, purposeful oversight, and blind refusal to accept information that refutes your ideology.
threlayer
08-16-2010, 11:05 PM
also, to answer your question about jobs creation ...
as the chart shows, GWB averaged about 1.5% positive jobs creation over his two terms ... about the same as LBJ and Eisenhower. JFK's job growth rate was actually the lowest in recent years - until president Obama took office anyhow.
But that last year, where the rate of growth stopped and actually became negative subsequently, is the most telling part of Bush's failed presidency. No one else had that bad of a record. and at a time when globalization, one failed war, and one completely unnecessary war were already having deleterious effects on the US economy. (This is why I will always regard Bush the lesser as a failed President, likely the worst we've ever had. and also likely the worst communicator we've had.)
It has most certainly had an enormous effect of discretionary spending and the relevant industry of this site.
Melonie
08-17-2010, 02:44 AM
But that last year, where the rate of growth stopped and actually became negative subsequently, is the most telling part of Bush's failed presidency
Of course the veto-proof democratic majorities that took control of both houses of congress after the 2006 election had absolutely nothing to do with that negative rate of growth ?
eagle2
08-17-2010, 07:02 AM
The Democrat majorities were never veto-proof, or even close to it.
threlayer
08-17-2010, 07:32 AM
The Democrat majorities were never veto-proof, or even close to it.
Further, they became majorities when people realized that the Bush presidency was actually doing severe damage to the US. Finally! But still too late for the middle class.
Deogol
08-17-2010, 11:32 AM
^^^^^ the post before the previous one:
OMG! this is bizarro world- I can't even comment. I'm out of here.
You'll be back. :D
Eric Stoner
08-17-2010, 12:08 PM
Let's judge Iman Obama just on HIS record, shall we ? What was unemployment when Obama swore on the Koran ( oops, sorry, getting a little carried away with the "Mosque Mess" HE injected himself into. I know he used a Bible, he was born in this country; he's not a Muslim ) and took the oath of office ? 7.7 % Now it is 9.5% after hitting a high of 10.1 %.
How many jobs have been lost since January, 2009 ? 3.3 million.
How much has the National Debt increased on his watch ? $2.5 Trillion.
How many jobs were created by the Porkulus Bill ? NONE.
How many homeowners have lost their homes since he took office ? Millions.
How much is the takeover of Fannie and Freddie costing us ? $291 billion last year and at least $ 98 billion more to come. Both are exempt from the new Finreg Bill btw. Are any of the loan modification programs working ? Not really. 1.24 million enrolled ; 520,000 dropped out and only 398,000 got permanently modified loans. And those are iffy as the redefault rate has climbed from 3.5 % to 7.7% and is now at 14.9 %. Industry experts say about 60% will eventually re-default. Why ? Because Obama let history repeat itself and let Fannie and Freddie give out bonuses of up to 20% of their salaries to execs who produced enough trial modifications, even if few ever became permanent. The top 12 execs got $42 million in bonuses alone. The two CEO's got $6 million each. For GSE's that LOST money !
Next year, EVERYONE's taxes are going to go up. Drug companies,health plans and medical device manufacturers will all be charging more as they pass along higher taxes to their customers. Medicare taxes are going up for some workers as are taxes for some investors.
Individuals, families and employers who can't afford health insurance wil be taxed instead.
Obama is even proposing to tax charitable contributions for high income donors . Who seriously contends that our economy is going to be helped by taking MORE money out of consumers' pockets ? Consumers whose resumption of spending is still being waited for.
We've become "Bail Out Nation" under Obama and he and the Dems are just getting warmed up. We had the bank bailout ; the auto bailout; public employee bailout ; teacher bailout and now we've got not one but two Union pension plans trotting up to Washington hat in hand. The Teamsters and the NEA. Both their pension plans are broke and both want bailouts. Last year the NEA collected $377 million in dues and agency fees of which it doled out $50 million in campaign contributions in a NON- Election year. The Teamsters collected $187 million last year. With their decade long history of crime and corruption including outright looting of their pension funds, they have the gall to seek a bailout ? Um. Yeah.
threlayer
08-17-2010, 01:43 PM
Bush was the original stimulus for big business and the uber-rich. Now it is time for an about-face. Remember that Bush's failures didn't end when he moved out of the White House. And now you're blaming Obama for the massive scale of Bush's failures when really he's mostly trying to fix those failures. They have certainly uprooted his plans--those that he got elected upon. You're interpreting the facts to suit your opinions.
Deogol
08-17-2010, 08:12 PM
Bush was the original stimulus for big business and the uber-rich. Now it is time for an about-face. Remember that Bush's failures didn't end when he moved out of the White House. And now you're blaming Obama for the massive scale of Bush's failures when really he's mostly trying to fix those failures. They have certainly uprooted his plans--those that he got elected upon. You're interpreting the facts to suit your opinions.
Could you list the things Obama has to deal with and at what date they will be owned by him?
Eric Stoner
08-18-2010, 07:35 AM
Could you list the things Obama has to deal with and at what date they will be owned by him?
According to some of his cheerleaders in the lamestream media , maybe after his first term ? Reagan got hammered for the state of the economy throughout 1982 culminating in the '82 Mid -Term Elections. The economy was clearly starting to improve but he was held responsible for unemployment, a classically lagging indicator. I am actually willing to cut Obama some slack on that one.The job losses to date are fairly attributed to the Recession that started under Bush The Dumber. The problem is that OBAMA's policies promise to do NOTHING to improve the situation and in fact promise to make things worse. His Porkulus Program did not create a single Private Sector job. Now he and the Dems are letting taxes increase BEFORE we recover. I'm sorry but history teaches that raising taxes is NOT a good thing to do when the economy is weak. It didn't work for Hoover or FDR and it's not going to work for Obama.
threlayer
08-18-2010, 09:52 PM
Could you list the things Obama has to deal with and at what date they will be owned by him?
That would take some time for me to research. I'll let him do the talking about that. But I may have a few things to say about it later.
threlayer
08-18-2010, 09:59 PM
...The problem is that OBAMA's policies promise to do NOTHING to improve the situation and in fact promise to make things worse. His Porkulus Program did not create a single Private Sector job. Now he and the Dems are letting taxes increase BEFORE we recover. I'm sorry but history teaches that raising taxes is NOT a good thing to do when the economy is weak. It didn't work for Hoover or FDR and it's not going to work for Obama.
Time will tell and will be more accurate than your opinions.
It is certainly arguable that Bush's tax cuts brought the US to the beginning of this deficit and those tax cuts were almost entirely for the rich. Was that Bush's trickle down theory? Now we see that we need that money back but we can only change the tax laws going forward. (The only thing that trickles down to the middle class is the pee inside old rich men's pants.)
Eric Stoner
08-19-2010, 06:57 AM
^^^ You highlight a standard Liberal argument that I have never understood. The argument goes that deficits result from tax cuts and the way to cure deficits is to raise taxes. What about the SPENDING ? Bush's tax cuts , if left in place for the highest earners, supposedly will
add $36 billion to next year's deficit. So what ? Why not cut spending by $36 billion ?
Secondly, this argument ignores the increase in economic growth that results from tax cuts which in turn raises incomes resulting in ... wait for it... HIGHER REVENUES.
threlayer
08-19-2010, 06:09 PM
^^ Maybe it depends on just how those tax cuts for the rich are utilized for the good of the whole economy rather than being squirreled away in some overseas tax haven. But maybe it is the point -- that you don't understand an outlook other than your own. I made a suggestion about that.
Melonie
08-20-2010, 02:33 AM
^^^ but, arguably, increasing US tax rates on the 'rich' only serves as an even stronger motivator for the 'rich' to squirrel away even more of their earnings in offshore tax havens. The 'dirty little secret' behind recent IRS investigations of the Swiss UBS accounts of rich Americans is that these accounts are 'simple' in structure thus ( formerly ) accessible to the upper middle class. Truly rich Americans still have access to a plethora of offshore tax haven opportunities - but the structure must be more complex thus the 'minimum buy-in' cost is higher.
On the flip side, increasing US tax rates on the rich also serves to drive the rich to divert their investment money away from taxable instruments ( like stock shares, corporate bonds ) that would help private sector businesses modernize and/or expand, and toward tax free instruments like public sector municipal bonds that help 'bankrupt' state and local gov'ts keep writing welfare checks and bureaucrat paychecks. From your comments can I assume you think that the latter is more beneficial to the 'whole economy' ?
threlayer
08-20-2010, 12:08 PM
^^ If our Congress weren't so thoroughly captured by the rich and the big corporations, we would have fewer opportunities for squirreling away monies. I'm setting the "rich" limit the same way Obama has, 200k/250k/yr (upper middle class in any case). But remember that is only income, not inheritance taxes, which don't even exist anymore (which are a more socially complicated issue). Regarding taxable investments, far as I recall the tax rates on LT capital gains and dividends are the lowest they've been in generations. Same for bond payouts. I think some people are so disenchanted or otherwise convinced that supporting the US is so despicable that they are willing to lose a little more money or take a big risk by doing something other than paying taxes. I suppose because they believe their money is better than that of others less wealthy, even though the US has afforded them a lavish lifestyle that they wish on no others.
BTW I understand that state bonds are only used for capital projects, not for giving money to the dreaded welfare class.
threlayer
08-20-2010, 02:13 PM
^^ Dividends and LT gains being taxed at less than half the income tax rate is an obvious 'ploy' to make the rich richer faster. An argument for that is to incentivize capital investment in industry and commerce, and that makes the rich even richer but it does provide jobs that in turn multiply their efforts and make the rich yet even more rich. But a person working for a living, often at some risk to health (as well as income), would seem to need just as much, if not more, taxation preference than those 'investing for a living'. It's just that the fat cats support other fat cats at regular peoples' costs, as it has always been. Democracy or not.
Melonie
08-20-2010, 05:46 PM
^^^ again, the old adage remains true that corporations never actually pay income taxes ... they merely pass on the cost of those taxes to their customers.
Melonie
08-21-2010, 07:18 PM
Here's a view from the Germans on the 'Erosion of America's Middle Class' ...
(snip)"According to a recent opinion poll, 70 percent of Americans believe that the recession is still in full swing. And this time it isn't just the poor who are especially hard-hit, as they usually are during recessions.
This time the recession is also affecting well-educated people who had been earning a good living until now. These people, who see themselves as solidly middle-class, now feel more threatened than ever before in the country's history. Four out of 10 Americans who consider themselves part of this class believe that they will be unable to maintain their social status.
Unemployment Persists
In a recent cover story titled "So long, middle class," the New York Post presented its readers with "25 statistics that prove that the middle class is being systematically wiped out of existence in America." Last week, the leading online columnist Arianna Huffington issued the almost apocalyptic warning that "America is in danger of becoming a Third World country."
In fact, the United States, in the wake of a real estate, financial economic and now debt crisis, which it still hasn't overcome, is threatened by a social Ice Age more severe than anything the country has seen since the Great Depression.
The United States is experiencing the problem of long-term unemployment for the first time since World War II. The number of the long-term unemployed is already three times as high as it was during any crisis in the past, and it is still rising."(snip)
(snip)"In its current annual report, the US Department of Agriculture notes that "food insecurity" is on the rise, and that 50 million Americans couldn't afford to buy enough food to stay healthy at some point last year. One in eight American adults and one in four children now survive on government food stamps. These are unbelievable numbers for the world's richest nation.
Even more unsettling is the fact that America, which has always been characterized by its unshakable belief in the American Dream, and in the conviction that anyone, even those at the very bottom, can rise to the top, is beginning to lose its famous optimism. According to recent figures, a significant minority of US citizens now believe that their children will be worse off than they are.
Many Americans are beginning to realize that for them, the American Dream has been more of a nightmare of late. They face a bitter reality of fewer and fewer jobs, decades of stagnating wages and dramatic increases in inequality. Only in recent months, as the economy has grown but jobs have not returned, as profits have returned but poverty figures have risen by the week, the country seems to have recognized that it is struggling with a deep-seated, structural crisis that has been building for years. As the Washington Post writes, the financial crisis was merely the final turning -- for the worse."(snip)
(snip)" Part 2: Where Did All the Money Go?
The boom in stocks and real estate, the country's wild borrowing spree and its excessive consumer spending have long masked the fact that the overwhelming majority of Americans derived almost no benefit from 30 years of economic growth. In 1978, the average per capita income for men in the United States was $45,879 (about €35,570). The same figure for 2007, adjusted for inflation, was $45,113 (€35,051).
Where did all the money go? All the enormous market gains and corporate earnings, the profits from the boom in the financial markets and the 110-percent increase in the gross national product in the last 30 years? It went to those who had always had more than enough already.(snip)
(snip)"Income inequality in the United States is greater today than it has been since the 1920s, except that hardly anyone has minded until now.
Little Chance of the American Dream
In America, the free market is king, and people with low incomes are seen as having only themselves to blame. Those who make a lot of money are applauded -- and emulated. The only problem is that Americans have long overlooked the fact that the American Dream was becoming a reality for fewer and fewer people.
Statistically, less affluent Americans stand a 4-percent chance of becoming part of the upper middle class -- a number that is lower than in almost every other industrialized nation.
So far, politicians have failed to come up with solutions for the growing social crisis. Washington is still waiting for jobs that aren't coming. President Barack Obama and his administration seem to be pinning their hopes on the notion that Americans will eventually pull themselves up by their bootstraps -- preferably by doing the same thing they've always done: spending money. Domestic consumer spending is responsible for two-thirds of American economic output.
But even though Federal Reserve Chairman Ben Bernanke continues to pump money into the market, and even though the government deficit has now reached the dizzying level of $1.4 trillion, such efforts have remained unsuccessful.
"The lights are going out all over America," Nobel economics laureate Paul Krugman wrote last week, and described communities that couldn't even afford to maintain their streets anymore.
The problem is that many Americans can no longer spend money on consumer products, because they have no savings. In some cases, their houses have lost half of their value. They no longer qualify for low-interest loans. They are making less money than before or they're unemployed. This in turn reduces or eliminates their ability to pay taxes.
Turning Out the Lights
As a result, many state and local governments are faced with enormous budget deficits. In Hawaii, for example, schools are closed on some Fridays to save the state money. A county in Georgia has eliminated all public bus services. Colorado Springs, a city of 380,000 people, has shut off a third of its streetlights to save electricity.
There are many discrepancies in America in the wake of the financial crisis. On the one hand, the Fed is constantly printing fresh money, and the government spent $182 billion to bail out a single company, the insurance giant AIG. On the other hand, the lights are in fact going out in some areas, because Washington, citing the need to reduce spending, is unwilling to provide local governments with financial assistance. "America is now on the unlit, unpaved road to nowhere," economist Krugman warns."(snip)
(snip)" No longer able to pay the rent, the Sabedras were evicted from their house in August.
Friends and relatives had few resources to help them. Now they live in a room at the Salvation Army homeless shelter in downtown Ventura, which is run by Captain Finley.
The sudden plunge into homelessness is a reality that's difficult to understand, given the images of America we are accustomed to seeing in television series and films. They always depict homes with well-kept yards and two-car garages with basketball hoops attached to them. This America still exists, but it's shrinking. And often those who are managing to keep the illusion alive can hardly afford to do so.
Americans have been struggling with a rising cost of living for the past 20 years. At the beginning of the decade, families were already paying twice as much for health insurance and their mortgages than the previous generation did.
"To cope, millions of families put a second parent into the workforce," says Harvard Professor Elizabeth Warren, who President Obama appointed to chair the congressional panel to oversee the government's bank bailout program. According to Warren, the average family has spent all of its income and used up its savings "just to stay afloat a little while longer."
Spiraling Debt
Because they lacked savings, Americans began borrowing money to cover all of their other expenses, including education, healthcare and consumption. American consumer debt now totals about $13.5 trillion.
Many people threaten to suffocate under the burden of their debt. Some 61 percent of Americans have no financial reserves and are living from paycheck to paycheck. As little as a single hospital bill can spell potential financial ruin."(snip)
from
It is interesting that Der Spiegel is able to speak to the 'heart' of the problem for many ( former ) Middle Class Americans ... something which US media hardly ever mentions. I'm speaking of course of the decision by many Middle Class Americans to abjectly refuse acknowledging that their stagnant incomes versus rising prices was making their middle class lifestyle economically untenable over the course of the last 30 years. Rather than reducing their lifestyle to bring actual expenses in line with actual income, instead many Middle Class Americans chose to 'make up the difference' via reducing savings level to zero. And when that was no longer sufficient to 'make up the difference' they then resorted to the spending of borrowed money. And when even that was no longer sufficient they wound up liquidating investment and retirement assets.
This of course brings us to today's situation ... where a growing number of Middle Class Americans have continued to cling to their untenable lifestyle to the point of having depleted their savings, burying themselves in debt, and having liquidated all of their assets. Where they could have opted to voluntarily migrate to a 'working class' lifestyle that was sustainable, instead they have 'walked off the cliff' going straight from a middle class lifestyle to a poverty lifestyle. Along similar lines, instead of voluntarily reducing to a 'working class' lifestyle that would have provided some level of life savings and a house to pass on to their children, instead they will pass on nothing to their children except overhanging debt and a bleak future.
~
Deogol
08-21-2010, 08:56 PM
In 2012 the greatest empire on earth ruled as a republic will disappear and a new dark ages will appear.
eagle2
08-21-2010, 09:28 PM
(snip)" Part 2: Where Did All the Money Go?
The boom in stocks and real estate, the country's wild borrowing spree and its excessive consumer spending have long masked the fact that the overwhelming majority of Americans derived almost no benefit from 30 years of economic growth. In 1978, the average per capita income for men in the United States was $45,879 (about €35,570). The same figure for 2007, adjusted for inflation, was $45,113 (€35,051).
Where did all the money go? All the enormous market gains and corporate earnings, the profits from the boom in the financial markets and the 110-percent increase in the gross national product in the last 30 years? It went to those who had always had more than enough already.(snip)
~
This is the result of 30 years of "supply side" trickle-down economics. Apparently, the "trickle-down" isn't trickling down. This is obvious to everyone but the conservative ideologues who want more of the same.
hockeybobby
08-21-2010, 10:08 PM
In 2012 the greatest empire on earth ruled as a republic will disappear and a new dark ages will appear.
Poppycock.
Melonie
08-22-2010, 06:36 AM
In 2012 the greatest empire on earth ruled as a republic will disappear and a new dark ages will appear.
Arguably, both ancient Rome and America began their declines when the originally conceived 'republic' became more and more of a 'democracy' instead.
And it's ironic that you should mention 'New Dark Ages' ! UK's Market Oracle just published a very interesting piece on this very premise ...
(snip)"The Dark Ages is a term referring to the perceived period of cultural decline or societal collapse that took place in Western Europe between the fall of Rome and the eventual recovery of learning.[1][2][3] Increased understanding of the accomplishments of the Middle Ages in the 19th century challenged the characterization of the entire period as one of darkness.[3] Thus the term is often restricted to periods within the Middle Ages, namely the Early Middle Ages, though this usage is also disputed by most modern scholars, who tend to avoid using the phrase.[1][4]
During this time, little changed, the economy stagnated, small wars were fought, and disease spread. Sound familiar? ( Swine Flu, Credit Crisis, Iraq / Afghanistan ) What has changed in America in the last 10 years? We hear about advances in science and discoveries happening every day, how has this been implemented or impacted our daily lives? As an example, computing has advanced by leaps and bounds, 128-bit Cell processor technology enables supercomputing for the masses . Yet the total broadband penetration in the US is falling behind 20 nations including Estonia . America is not being singled out, but as a leader, it is unique in its class. If we didn’t use USA like an example, it could be argued that change is happening in China. In fact what they are doing in the rest of the world is “Americanizing” about 20 – 30 years behind the US. (snip)
(snip)"Functional Illiteracy
There are college graduates who ‘don’t read’, an anecdotal observation. Someone said, “It’s great that they made a movie about this topic for people like me who don’t actually read.” It’s easy to brush off statement like this as individual dumb statements, off the cuff remarks with no meaning. But what if this is part of a larger trend? What if there is a growing mass of college graduates who ‘don’t read’? We can see this trend on sites like Fark.com, here:
In a recent movie “Idiocracy,” Mike Judge dramatizes the ‘dumbing down’ of modern man:
A narrator (Earl Mann) explains that in modern society, natural selection has become indifferent toward intelligence, so that in a society in which intelligence is systematically debased, stupid people easily out-breed the intelligent, creating, over the course of five centuries, an irredeemably dysfunctional society. Demographic superiority favors those least likely to advance society.[2] Consequently, the children of the educated élites are drowned in a sea of sexually promiscuous, illiterate, alcoholic, degenerate peers.
People who cannot read are illiterate. What do we call those who choose not to read, especially those warning labels on batteries “Do Not Eat "(snip)
(snip)"Money managers and those in finance deal with this regularly: explaining the differences between investing and gambling. It’s like explaining the differences between reading Plato vs. The National Enquirer at the checkout stand. It could be argued that the reason that bankers rule the world, and the reason for the crisis, and the reason that more families are struggling to make ends meet, is largely due to financial illiteracy. This is not to blame them, there are few places one can obtain unbiased information about finance. So they think it’s like gambling, like playing cards – and when banks collapse or the market goes down, it’s the government, it’s corrupt executives, it’s never the investors fault.
Let’s imagine the scenario where the financial literacy in the world was tripled overnight, what impact would that have on the crisis and the economy in general? Any bubble requires participants. Obviously, without cheap and available money, the real estate bubble and credit derivatives bubble would have not existed, or at least been mild. However we agreed to take the money, with no plan for any consequences if the bubble burst. "(snip)
(snip)"An economy is a measure of resources, by some measures a metric by which to analyze a civilization. At least, it provides data points, whereas culture is less precise (how do we compare the value of Shakespeare vs. Norman Mailer?)
Investors are losing money simply by following the old model, and not being willing to accept that the world has changed. Interest rate parity theory doesn’t work, the Chicago school has collapsed, GDP doesn’t have meaning like it had when a currency can inflate and deflate an economy by the press of a button, while official statistics are ‘revised’ months after (meaning you can never trust any release for face value)."(snip)
(snip)"Negative Selection
Jim Rogers recently stated in an interview “Money is being taken from the competent and given to the incompetent.”
What happens to a democracy when participants are not capable of making decisions for themselves? Parents watch children to protect them from serious hazard, a parent will let his child explore the world in the safety of their home, but even in the home danger exists such as a hot stove, a filled bathtub, and household poisons such as Windex could prove dangerous to a child that doesn’t know the difference between ‘fun experimenting’ and ‘creating a highly explosive chemical mix’.
A parent will allow a child to make a mistake but not one that will injure him severely, such as walking into traffic or playing with matches. Should not, in the same spirit of care and concern, the more capable intelligent humans protect the less enlightened from creating a situation that could prove catastrophic for billions, and endanger the survival of the human race?
In Government, and in many corporations, it is not easy to fire someone for various reasons. So the easiest way a team can get rid of an incompetent and inefficient manager is simple: you promote them. Or else, in the famous movie ‘Office Space’ – you may face an angry Dilbert who finally burns down the building.
There is a big difference between slavery and hiring an incompetent manager to run the business. Human rights should not be confused with effective leadership. Giving all human beings the right to life, liberty, property, and the pursuit of happiness doesn’t imply that any human is qualified to be President or CEO of a bank.
Conclusion
We are entering a world that no longer follows rules of logic and order. Things that simply should not happen are happening on a regular basis. The 100-year storms are happening every year. Anomaly is the norm.
In our modern definition of the ‘new dark age’ – many cannot see the obvious paradox defining our age: Hurry up and wait. Save by buying a second item and get 50% off. We need to save the economy by bailing out the banks (who were responsible for the crisis). Information has never been historically more accessible, yet literacy and education rates are declining.
Unlike the previous Dark Age, we have abundant technology and widespread communications systems (computers and the internet) so we have a front row seat for the greatest movie ever produced."(snip)
from
I was particularly struck by the author's tongue in cheek point that combines the 'economic illiteracy' of most Americans with their increasing ability to ( unknowingly ) vote for economic policies that 'create a highly explosive chemical mix"
~
threlayer
08-22-2010, 08:54 AM
^^^ again, the old adage remains true that corporations never actually pay income taxes ... they merely pass on the cost of those taxes to their customers.
So do Ma and Pop proprietorships and independent contractors. Taxes are merely an expense for everyone.
You don't naively expect the corporations would greatly reduce their prices if corporate taxes were eliminated?
Another problem with that taxation-shifting concept is that people who earn considerably more then they spend would be penalized by the massive in personal income tax. And that is not in the best interest of the country.
Melonie
08-22-2010, 09:21 AM
Another problem with that taxation-shifting concept is that people who earn considerably more then they spend would be penalized by the massive in personal income tax. And that is not in the best interest of the country.
And therein lies another 'dirty little secret' about taxation of the 'rich' versus taxation of the 'middle class'. Rich people who earn considerably more than they spend have the advantage of tax free gov't muni bond income, the advantage of lower capital gains tax rates on non tax free investment income, the advantage of 'production tax credits' originating from partnership investments in gov't approved 'green' industries offsetting taxes due on other income dollar for dollar etc. In other words, there is a mutually beneficial tacit partnership between the very rich and the gov't / politicians, despite what might be said by gov't officials for public consumption, that the gov't / politicians are extremely unlikely to jeopardize.
In comparison, middle class people who earn considerably more than they spend can seldom afford the above, and instead must pay high 'ordinary income' tax rates on relatively low interest rate payout savings instruments. And as discussed in other threads, the great middle class panacea of investing their savings into gov't sanctioned tax deferred IRA's and 401k's may in fact turn out to have the highest effective tax rate of all ... if an ongoing poor economy / future gov't benefit eligibility rule changes forces them to pay early withdrawl penalties on top of high tax rates on the money withdrawn from these IRA and 401k accounts counting as additional ordinary income ( as opposed to lower capital gains tax rates applying if this money had been invested directly ). In other words, unlike the rich, and despite what might be said for public consumption, the gov't / politicians have no vested interest whatsoever in helping out the middle class.
here's a more cynical 'take' on the New Dark Ages that thinks along this line ....
(snip)"We are Entering a New Dark Age
Do you really expect the politicians to tell you this? That we are starting a new dark age? That the masses are about to become impoverished slaves?
Just the opposite. The sharpest minds in the world are working day and night, figuring out how to put you there. As they take your money and your freedoms. That is what Wall Street and its puppets in Washington do.
You may wonder why governments bailed out the banker whores, with trillions of your tax dollars. Why they gave them countless billions in bonuses. With almost no questions asked, and even fewer answered.
These assholes bankrupted our nation. They stole your money. They trashed the value of your home, wiped out your “guaranteed” retirement investments, and threw tens of millions of Americans out of work.
How could they get so much public money –- the greatest sums of taxpayer dollars any government ever gave any special interest group? With little more than a phone call?
Simple. They own our government. Bought and paid for. For shockingly little money, too.
But that’s not all. They also own us. They own our businesses. Our homes. Our cars.
They own anyone who needs their money to survive. Anyone who takes their credit. Which is basically the entire western world.
You and I being debt free isn’t enough. We are still beholden to them for the credit (financing) on our roads. Our sewers. Government, Our electricity. Our water sanitation services. All the basics of life, that we all take for granted.
Not much longer, I hasten to add. You better figure out how to unhook from the water meter. How to supply yourself electricity.
The bankers ‘gave’ the world 30-year mortgages. They gave us our hahaha retirements, annuities and stock market mutual funds. Their insurance companies (also a bunch of dead-broke, whore thieves) supplied our oftentimes rationed health care.
The bankers financed our cars for 48 months. Our motor homes, jet skis and exotic vacations. They let us build our airports and 100 million dollar jet liners. All on credit, that will never be paid back.
Let give you an example. The aviation industry has never made a profit. It’s been a loser since we took up our first paying passenger, Orville Wright, in 1903 at Kitty Hawk, North Carolina.
The masses have been able to fly for only one reason: airlines (and airports) were able to take on vast debt, and then roll that debt over and over. The airlines have lost far more money than they have ever made.
Massive government and banker debt supports the entire industry. Planes. Their maintenance. Airports. Air traffic control systems. All subsidized.
This debt keeps swelling. Both in amounts and terms. The date it must get paid back keeps getting moved further and further into the future. Now it stretches into the 22nd century. In reality, it will never be paid back.
Every major airport in the world is banker/government subsidized. And every one is a money loser. Same thing with the ground transport systems to the airports (roads, parking lots, trains, buses). Same with the air traffic control system, fire rescue, security systems. All government subsidized. NOT reflected in the ticket price.
These are just a few examples of the hidden unpaid debt that subsidizes our modern lifestyle. It’s that way in everything from roads to trucking to shipping. Even manufacturing.
This should help you understand why the bankers got these unbelievable government bailouts. With virtually no questions asked.
By pulling every dirty, illegal trick in the book, bankers managed to keep the whole bubble debt orgy afloat. Now it’s come to an end. The debts have grown too large. The losses from derivatives have gotten out of control. We can no longer finance (borrow) our way out of this. It’s curtains!
The theme for the next 100 years will be a much poorer world. A world where the masses are reduced to virtual slaves. They and their children will work their whole lives, to pay all this debt back.
No, we will not monetize it. We won’t inflate it away or simply default. That is another myth. A lie straight out of the pits of hell, to try and take more of your money.
Say the U.S. tried to do this. The second the world got wind of that shit, they would shut down our society. The fleeting credit we need would be gone. The lights would go out. The Homeland Security guys would not have gas for their helicopters, payroll or bullets.
So don’t kid yourself. Every stinking last dime owed will be paid in full. Including the compound interest.
We would need vastly greater amounts of new debt to support our kingly lifestyle. That money is no longer available. As a society we have borrowed all we can. Now it’s payback time.
That is why you see pay cuts right and left. Service cuts. Less and less of everything.
Even our cities are shrinking. There is not enough money to provide services to all neighborhoods. This will get worse and worse in the coming years."(snip)
from
~
hockeybobby
08-22-2010, 10:06 AM
The sky is falling!!!
Jeez Mel...does a day ever go by that you don't post your negative alarmist bullshit? Whether it's about the United States economy/government, or stripping, your posts are like a broken record. What is it? You quit stripping and living in the U.S., so now you have to convince everyone else that your path is the only one that makes sense? Or are you just trying to convince yourself?
You've been given the gift of another day of life on this glorious planet. Enjoy it! Tomorrow will take care of itself, and yesterday is behind you. Look up. The sky is most certainly not falling.
Melonie
08-22-2010, 04:27 PM
^^^ no, actually I'm secretly hoping that the American economy will 'cure itself' in the near future such that I can afford to move back home. Unfortunately, next year promises to bring something else ...
(snip)"According to the Tax Foundation, “All taxpayers” paid a total of just over a $1.1 trillion in 2009, and thanks to the taxpolicycenter.com, I see that corporate taxes were a mere $250 billion pittance in comparison.
The surprising and alarming thing is the amazing, cancerous growth of payroll taxes over the years, which now collects almost as much tax as individual income taxes! Hahahaha!
Pardon my laughing at the sheer stupidity that creeps into government, and the sheer stupidity of the people who elect the stupid representatives in the stupid government that stupidly create such sheer tax stupidity, but this is not real laughing, like when you are laughing at a funny joke.
For example, notice how you can’t help but laugh at this joke: “How many mainstream economists who agree with the neo-Keynesian econometric theoretical underpinnings of the Federal Reserve does it take to change a light bulb?”
Answer: “None, because they are too stupid to realize that the light has actually burned out, and they think that by merely lowering interest rates and creating more money, they can raise the ‘animal spirits’ of the light bulb to light again, and again and again, as many times as needed, and everything will then be fine from then on, as many times as needed, but in the meantime they are all stumbling around in the dark trying to make the light bulb incandesce again trying various magic tricks, like just throwing money out into the darkness.” Hahaha! See? It’s funny!
Now that is real laughter! On the other hand, my laugh is a kind of nervous titter, accompanied by shifty eyes narrowing to slits and by my shaking hands furtively inching towards bulging shoulder holsters, all of these behaviors being indicators that I am So Freaking Scared (SFS) that I want to start blasting a path to the safety of the Mogambo Bunker For Scaredy Cats (MBFSC) so that I could lock myself in, safely away in a panicked shoot-first-and-ask-questions-later defense from the calamitous destruction that always ultimately befalls an economy that is so stupid, so unbelievably stupid, so tragically stupid, as to construct an entire economy around the belief that there is such a thing as a “free lunch for everyone” through government deficit-spending, despite racking up a national debt ($13.3 trillion) that is almost 95% of GDP ($14 trillion) to pay for the “free lunch” so far! Gaaahhh!
Fortunately, this is not about how I am such a sniveling coward, but about how the current tax regime is scheduled to expire at the end of this year, and then the tax rates automatically go back to five brackets of 15%, 28%, 31%, 36% and 39.6%, unless Congress “does something.”
And unless the government “does something”, then selling assets to realize a profit before the end of the year means paying a third less taxes than if you sold next year! Big savings!
Alas, most of us realize at this point that the government will “do something,” by which I mean “borrow and spend money,” and things will get worse, and inflation will surge as the filthy Federal Reserve “does something” by creating staggering amounts of money to accomplish it."(snip)
from
^^^ And unlike Canada with it's vast reserves of gov't owned natural resources from oil to precious metals to industrial metals to timber to natural gas which provide a very 'real' source of income that the gov't can use to help pay for that proverbial 'free lunch' ... America has far fewer sources of 'real' value. And even when America does have such resources, such as offshore oil, current thinking calls for shutting down that US oil production and instead borrowing even more billions from the Chinese with which to purchase oil from Nigeria and Saudi Arabia and, of course, Canada ! No it doesn't appear that I'm going to be moving back home in the near future !
Indeed tomorrow will take care of itself in one way or another. And as you point out, everyone should be thankful for the fact that they are still alive tomorrow ... even if they are waking up from sleeping in their car !
~
eagle2
08-22-2010, 05:10 PM
When it comes to stupidity, I've seen few who can match Lew Rockwell
eagle2
08-22-2010, 05:13 PM
^^^ And unlike Canada with it's vast reserves of gov't owned natural resources from oil to precious metals to industrial metals to timber to natural gas which provide a very 'real' source of income that the gov't can use to help pay for that proverbial 'free lunch' ... America has far fewer sources of 'real' value. And even when America does have such resources, such as offshore oil, current thinking calls for shutting down that US oil production and instead borrowing even more billions from the Chinese with which to purchase oil from Nigeria and Saudi Arabia and, of course, Canada ! No it doesn't appear that I'm going to be moving back home in the near future !
Indeed tomorrow will take care of itself in one way or another. And as you point out, everyone should be thankful for the fact that they are still alive tomorrow ... even if they are waking up from sleeping in their car !
~
As always, you're making things up based on your ideology. Canada's economy is sound because they've had a responsible government for the past 10 years, unlike the US.
eagle2
08-22-2010, 07:15 PM
Mining and oil and gas extraction make up less than 5% of Canadian GDP. Services make up over 50%.
http://www.investorsfriend.com/Canadi8.gif
Melonie
08-23-2010, 03:55 AM
^^^ red herring ... try looking at the Canadian federal gov't's budget without including the Canadian private sector ! Of course, this year, you'll find some 'losers' as well as 'winners' where Canadian gov't involvement in natural resources is concerned ... specifically uranium versus the gov't owned share of money losing CANDU.
Eric Stoner
08-23-2010, 08:11 AM
We are ALL arguing in circles. The ridiculous part is that most of us are in substantial agreement : The rich ought to pay MORE in taxes. Huh ? But Eric, you continually argue for tax cuts. How are they going to make the rich pay more ?
As I have explained, and will do so one last time, tax cuts alone will not accomplish what most of us would like to see. Cutting the rates coupled with elimination of ALL deductions, credits and exemptions including the home mortgage interest deduction AND the elimination of Federal tax fee bonds will result in higher Federal revenues. Much higher and they would would grow and eventually DOUBLE. Perhaps in as little as five years.
As things stand now, the Bush tax cuts will expire and the only "rich" people who will really pay substantially more in taxes next year are the very people most of us would like to see get a tax break i.e. owners of small businesses. Instead of having more money to expand including the ability to HIRE more people, they will be writing bigger checks to Uncle Sam next year. At present, the Obama Regime is absorbing 25% of GDP.
Someone please explain to me HOW it will be economically beneficial for that sort of economic drain to continue ? How the economy will benefit from disabling small business from having the funds to expand ?; From eliminating incentives to work and invest. I'd like to add "save" but with current interest rates for savings at effectively zero or even a negative return, that makes little sense for the time being.
The intent may very well be to increase taxes on the rich. I think we all agree that they can and ought to pay MORE. Unfortunately history has proven that they will NOT do it. The super rich especially have been busy as beavers forwarding as much income into 2010 and postponing the usage of deductions, exemptions and credits until next year as possible. Why ? Because they are not stupid. They are following the Adam Smith / Milton Friedman dictum that people tend to act in their own self interest which means they are trying to minimize how much they pay in taxes. They have armies of accountants and tax lawyers helping them do just that.
One reason the Clinton tax increases of 1993 resulted in substantiially higher revenues was because the increase was made retroactive to reach 1992 income. The lapse of the Bush tax cuts will do no such thing.
To keep this simple, and to try and minimize the bickering, I have a modest proposal: Why don't we ALL put the tax argument on the shelf until 2011 tax numbers are available ? If Mel and I are right, we will see a stagnant economy in 2011 with no appreciable rise in tax revenues. If we are wrong, we will see an improving economy with lowering unemployment and a substantial rise in revenues FROM THE RICH ! Not the middle class. Mel and I concede that the typical American taxpayer who ACTUALLY cuts a check to Uncle Sam every April ( or even Quarterly like I do ) is going to see his payment(s) go up next year. We know that estate taxes go back into effect next year and we want to see how much more in INCOME taxes the RICH actually pay. I'll even use Obama's definition of "rich" : Individuals making at least $250,000 per year and couples making what is it $350,000 ? It's NOT MY definition of "rich" which would be at least twice that income level but we'll use it anyway. And we will see.
threlayer
08-23-2010, 09:48 AM
As always, you're making things up based on your ideology. Canada's economy is sound because they've had a responsible government for the past 10 years, unlike the US.
I think they do that by actually believing that their country is MORE IMPORTANT than their political party's power status. What a concept!! Wouldn't that be a great thing to see in the US again?!
Melonie
08-23-2010, 09:48 AM
^^^ agreed on circular arguments. Also agreed that we STILL do not know what the actual federal tax rate situation will be for 2011 ... either in regard to 'ordinary income' tax rates or to capital gains tax rates. Further agreed that 'rich' Americans aren't waiting for official announcements, and are 'cashing in' capital gains plus pulling forward as much ordinary income as possible into 2010 ... while postponing the use of tax credits and tax deductions into 2011 in anticipation of significantly higher tax rates taking effect.
For the sake of accuracy, I would point out that the 'rich' tax threshold being discussed in Washington is $200k individual or $250k married couple. But implementing these 'rich' tax thresholds will require new legislation by the US congress. Absent new legislation, the expiration of the GWB tax cuts will raise ordinary income tax rates and capital gains tax rates all the way down to those earning $46k per year individual. Absent new legislation, the expiration of the AMT fix will disallow tax deductions all the way down to those earning $75k per year. And of course new higher medicare tax rates will take effect in January as well.
And absent new legislation, anybody who can afford to invest $50k into a municipal bond can earn relatively high rates of interest that is totally free of federal and state income taxes. In fact, CA muni bonds as well as bonds issued by other high tax rate states are seeing heavy inflows of funds. This is presumably the result of the 'rich' selling off long term stock investments in order to book their capital gains under this year's lower tax rate, and reinvesting the proceeds tax free !
The ultimate point ... again ... is that 'saying' that tax rates are going to be increased for the 'rich' is a far cry from actually collecting more tax revenues from the 'rich' - to wit muni bonds are just one means by which this will not happen !!! And when the gov't allows all tax rates to increase, resulting in the 'rich' increasingly resorting to 'tax shelters' instead of 'productive' investments while the middle class cannot afford to do so, the middle class takes a double whammy. Besides paying higher taxes on their own ordinary incomes, there is also less available capital for businesses and other 'productive' investments which might otherwise have led to US jobs creation etc.
threlayer
08-23-2010, 10:07 AM
... The rich ought to pay MORE in taxes. Huh ? But Eric, you continually argue for tax cuts. How are they going to make the rich pay more ?....As things stand now, the Bush tax cuts will expire and the only "rich" people who will really pay substantially more in taxes next year Those were always going to be temporary. It was part of the trickle-down theory which was going to pay for the wars. Uhh, good luck with THAT!
....tax cuts alone will not accomplish what most of us would like to see. Cutting the rates coupled with elimination of ALL deductions, credits and exemptions including the home mortgage interest deduction AND the elimination of Federal tax fee bonds will result in higher Federal revenues. Much higher and they would would grow and eventually DOUBLE. Perhaps in as little as five years. Only way that will happen in that way is if taxes DOUBLE too. But who gets it worse in the end (perhaps the middle class?) Let's be real here. The rich will never let their favorite tax deductions/exemptions/preference items/credits disappear.
...
At present, the Obama Regime is absorbing 25% of GDP. And Bush didn't? Remember the two failed wars?
....
One reason the Clinton tax increases of 1993 resulted in substantiially higher revenues was because the increase was made retroactive to reach 1992 income. The lapse of the Bush tax cuts will do no such thing. Retroactive taxation should be outlawed. Tax planning is not illegal but cannot be done by retroactivity.
To keep this simple, and to try and minimize the bickering, I have a modest proposal: Why don't we ALL put the tax argument on the shelf until 2011 tax numbers are available ? Much of the taxation and financial regulations are still beinjg formulted. It would more beneficial to each of us to write to our reps and the presiudent with our ideas/demands/whatever than typing them here where they have no power whatsoever.
Individuals making at least $250,000 per year and couples making what is it $350,000 ? It's NOT MY definition of "rich" which would be at least twice that income level but we'll use it anyway. And we will see. That's 200,000 / 250,000 -- numbers always out of my reach.
Eric Stoner
08-23-2010, 11:16 AM
^^^ agreed on circular arguments. Also agreed that we STILL do not know what the actual federal tax rate situation will be for 2011 ... either in regard to 'ordinary income' tax rates or to capital gains tax rates. Further agreed that 'rich' Americans aren't waiting for official announcements, and are 'cashing in' capital gains plus pulling forward as much ordinary income as possible into 2010 ... while postponing the use of tax credits and tax deductions into 2011 in anticipation of significantly higher tax rates taking effect.
For the sake of accuracy, I would point out that the 'rich' tax threshold being discussed in Washington is $200k individual or $250k married couple. But implementing these 'rich' tax thresholds will require new legislation by the US congress. Absent new legislation, the expiration of the GWB tax cuts will raise ordinary income tax rates and capital gains tax rates all the way down to those earning $46k per year individual. Absent new legislation, the expiration of the AMT fix will disallow tax deductions all the way down to those earning $75k per year. And of course new higher medicare tax rates will take effect in January as well.
And absent new legislation, anybody who can afford to invest $50k into a municipal bond can earn relatively high rates of interest that is totally free of federal and state income taxes. In fact, CA muni bonds as well as bonds issued by other high tax rate states are seeing heavy inflows of funds. This is presumably the result of the 'rich' selling off long term stock investments in order to book their capital gains under this year's lower tax rate, and reinvesting the proceeds tax free !
The ultimate point ... again ... is that 'saying' that tax rates are going to be increased for the 'rich' is a far cry from actually collecting more tax revenues from the 'rich' - to wit muni bonds are just one means by which this will not happen !!! And when the gov't allows all tax rates to increase, resulting in the 'rich' increasingly resorting to 'tax shelters' instead of 'productive' investments while the middle class cannot afford to do so, the middle class takes a double whammy. Besides paying higher taxes on their own ordinary incomes, there is also less available capital for businesses and other 'productive' investments which might otherwise have led to US jobs creation etc.
Exactly ! Which is one reason why it is pointless to try and draw the line that defines "rich". $200,000 ; $250,000 ; $300,000 ; it doesn't matter because on January 1, 2011 EVERYONE's tax RATES are going back to 2000 levels. Pelosi is on record as opposing any preservation of ANY of the Bush tax cuts. A grand total of three ( 3 ) Dem Senators support ANY retention of the cuts.
See my new thread about New Jersey's Bond Scam.
Eric Stoner
08-23-2010, 11:32 AM
Those were always going to be temporary. It was part of the trickle-down theory which was going to pay for the wars. Uhh, good luck with THAT!
Only way that will happen in that way is if taxes DOUBLE too. But who gets it worse in the end (perhaps the middle class?) Let's be real here. The rich will never let their favorite tax deductions/exemptions/preference items/credits disappear.
...
And Bush didn't? Remember the two failed wars?
....
Retroactive taxation should be outlawed. Tax planning is not illegal but cannot be done by retroactivity.
Much of the taxation and financial regulations are still beinjg formulted. It would more beneficial to each of us to write to our reps and the presiudent with our ideas/demands/whatever than typing them here where they have no power whatsoever.
That's 200,000 / 250,000 -- numbers always out of my reach.
Lol. According to Krugman and other observers, the Bush Tax Cuts were always intended to be PERMANENT ! The Iraq and Afghan Wars got in the way of making them permanent.
You are fixated on Tax Rates. I care about Tax Receipts. We have numerous examples of higher rates resulting in LOWER collections and lower rates resulting in higher tax receipts. For some reason, you and your fellow Libs. insist on looking at tax rates in a vacuum i.e. regardless of what revenue collection is ; how much is being spent and what the economic growth rate is. Obviously if the economy is
larger a lower rate can bring in at least as much revenue as a higher one.
If you asked them, most rich folk would LOVE a flat tax system. The ones who would wail and gnash their teeth are : tax lawyers, accountants, lobbyists, bureaucrats, members of Congress and state and local governments. With a flat tax system, half of our tax lawyers and accountants would have to learn to do something productive. Half of K Street would be out of work. So would a LOT of IRS people. Congress would LOSE power. Part of its current strength is the ability to futz with the Tax Code to benefit this group or that which in turn fund their campaigns. State and local government expansion is funded by the super-rich buying those bonds which have to be paid back by tolls and taxes levied on ...
guess who ?... THE MIDDLE CLASS.