Aside from the major hiccup the economy faced during the COVID-19 pandemic, the economy has been on a steady upward trajectory ever since years ago when we were talking about extending the Bush-era tax cuts. In case you don’t remember, we did end up keeping those cuts in place permanently for any individual making less than $400,000 per year, and for couples earning less than $450,000. Nowadays, those fortunate few who make more than that amount are paying a marginal rate of 35%.
But like I said, it’s been years since we passed the extension into law and I still don’t personally know anyone bringing home $400,000 per year. So who is actually paying that top tax rate these days? I decided to find out what kind of jobs command such high salaries:
1. The President
Perhaps the most famous $400,000 per year job is the leader of the free world. The office of the president not only pays a $400,000 annual salary, but also provides the president with a $50,000 annual expense account, a $100,000 nontaxable travel account, and a $19,000 entertainment account.
There are some obvious downsides to this particular career, however. Besides being very difficult to get, the job is highly stressful, and advancement post-office can be considered somewhat iffy. And, of course, you can’t expect regular raises: the last salary increase for the commander-in-chief (from $200,000 to the current rate) was in 2001. Prior to that, the previous raise (from $100,000) occurred in 1969.
On the other hand, most presidents end up receiving so many requests for speaking engagements after they hold office that he or she will be set for life. They also get a pension equal to the salary of the head of an executive department (Executive Level I) would be paid. In 2020, that is $219,200.
2. Surgeons and specialists
Even a local general practitioner can expect to pull in over $100,000 per year, but the real money in medicine is reserved for those who specialize. Anesthesiologists, heart surgeons, and brain surgeons can all expect to make up to $400,000 per year at the height of their careers. Plastic surgeons can make up to twice that amount.
Most people are completely okay with that though. After all, these people do a very, very important job.
3. CEOs and Founders
The median salary of a Chief Executive Officer (CEO) of a public company is over $700,000. These individuals are in charge of both short- and long-term profitability for their companies. CEOs generally have to know the industry inside and out (although there are certainly plenty of counter-examples), and need to have worked their way up over many years.
There are also plenty of CEOs from private companies who make quite a bit of money. The job can be stressful, but when you are the top dog, you reap the reward whenever your company does well.
4. Wall Street Bankers and Lawyers
If you work in either finance or finance law, the place to go for fat paychecks is Wall Street. According to an October 2012 report, “the average salary of financial industry employees in New York City rose to $362,950 in 2011.” While that still falls short of the mark required for the higher tax bracket, it’s important to remember that this figure represents the average (meaning some people are making more) and that there have almost certainly been raises in the past few years.
5. Mortgage Loan Officers
This may be surprising to you because not many people think of this group of individuals as ones who can earn the big bucks. However, there are some loan officers, riding the wave of historic low rates, who are raking in the dough right now. After all, their salary is directly tied to commissions they earn as a percentage of the total loan amount they get approved for their clients. They work hard, often seven days a week in many cases due to unprecedented loan volume these days, but they are definitely getting rewarded for their hard work.
6. Speakers in Public Events
Before the pandemic, the good speakers were booking speaking engagements left and right. Not only do they speak at conferences, but they also have opportunities to speak to employees in their offices as well. Some people even write books that tie into their brand. They travel all over the country (and some all over the world), so clients are plentiful.
The pandemic has slowed business to a trickle, but these people will bounce back because everything will eventually go back to normal.
7. YouTubers
Can you see why your son or daughter would want to be a YouTuber yet? The popular video creators not only make $400,000 a year, but they can have earnings in the millions every year. The vast majority of people who try to make it big fail to amass a following, but many dream of the life of recording themselves play video games and earning the big bucks all the time. What they don’t realize is that those who earn millions not only have talent, but they also work extremely hard. If not, then they have a team of people who are behind all the videos that get produced. An entertaining video takes hours and hours of editing, but most people just see someone talk, have fun, and collect cash.
The Top Percent of the Top Percent
These high-income earners are really rare. Consider the fact that most articles listing the highest paying jobs in America don’t even include any professions with median salaries of $400,000. Those individuals making $400,000 per year are in the top one percent of the top one percent — and often, they’re also public figures.
Thankfully, even though individuals in this bracket are few and far in between, the government estimates that raising the tax rate on this small group raise about $600 billion in new revenues a decade.
Not bad for a group that small.
What other professions that earn annual incomes of $400,000?
{ read the comments below or add one }
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Let’s try that again. Sorry, it’s very late here.
Peter N: all well said. I’m taking your posts as one “Aye” for for myself in the eyes of the jury.
Peter N: all weel said. I’m taking your posts as one “Aue” for for myself in the eyes of the jury.
Errata:
“there are 3 kinds of lies: white lies, damn lies and statistics.”
Steven H:
You continually point out tax rates and the income gap. They may both be present, but have you proved causality? Is it a true-true and unrelated argument? And don’t give me a lot of economist links. Economists split very evenly on whether government spending stimulates the economy. Keynes and Friedman won Nobel prizes for saying almost the exact opposite thing. No wonder it’s called the “silly science”. I stood numb in disbelief when Nancy Pelosi quoted that each dollar in unemployment benefits generated $1.25 in GDP. In the absolute, it would mean that we could all stop working and the economy would grow 25%. Hallelujah! That would solve a lot of our problems. Such absurdities come from an overintellectualization and avoidance of what are some obvious thruths of man. I can search a bit and find a bunch of counteracting statistics. To quote Will Rogers, a fellow Oklahoman, “there are 3 kinds if lies, white lies, damn lies and statistics.”
I do believe in the supply-demand-cost triangle. You do not, apparently. You seem to believe that the unskilled worker (large supply) that has lowering demand (due to globalization and mechanization) should get paid more. Not the way I understand the world. I also believe that an individual will work harder and smarter as well as take more risk if they can see some future greater reward. This is a form of EVIL greed in the mind of Liberals. I see it as a self evident truth of human nature.
I am NOT seeking an end to all help for people that are in temporary (due to extraordinary circumstance) or permanent (due to true disability) need. I just don’t want to see what is an extremely generous, possibly overgenerous entitlement state get larger and larger. Face reality, it cannot. 99 weeks of uneployment is too long. 1 in 7 on SNAP is too many. It is time to move to another job or locale or to change your lifestyle. We can’t continue to grow the disabilty roles in an asymptotic curve. I just don’t want the whole country to go the way of Detroit. California is on the way as companies and individuals flee confiscatory taxes and choking regulation. I love my country as much or more than you, I just believe that Liberalism is a siren’s song that will leave us all on the rocks (except those who jump (expatriate) the sinking ship). There is no central planning committee that can efficiently decide what is best for 310,000,000 plus individuals. Capitalism, tempered by modest regulation, is what has made us great and exceptional in out country. No links for you, just my humble opinion.
Agree with this sentiment. He won’t see it this way…. Not about links it is about what mechanisms you think work best in society. And all of them have flaws.
You misconstrue my arguments. Again. I understand Econ 101. Really. I will address this later when I have more time.
Not sure how I’m misunderstanding your position. You have posted the same general philosophy over and over in great detail. Seems clear as a bell to me.
Steven H: You continually point out the causality of tax law to the income gap. I simply point out that is much more a skills and or motivation gap acting in concert with globalization and the discouragement of new skills and new locales by government programs. 95000 out of 100000 could likely run a cash register. 1 out of 100000 can do brain surgery. Who is more valuable to society? Who is paid more? Who spent 15 years learning their craft? Should they be paid the same?
You point out something that is indeed one of several proposed causes. The fact that you have chosen one cause and rejected another out of hand puts you in the position of doing PRECISELY what you so rudely accused me of: rejecting what does not fit your preconceived worldview, aka “religion”. Try looking up some research and data that defends your position over mine and we can discuss this some more.
Steven H. I did not try to fit data to precovceived theories, just questioned why 17 years of asymptotically rising CO2 levels are supposedly causative of global warming, but the temperatures are level. I simply pointed out that the methane curve more closely fits the CO2 curve. I pointedly reject that I had some prexonceived theory. Your Liberal religion blinded you to that as a possibilty.
Stevendad, your preconception was to reject established science of CO2. You put forth a theory that had already been explored by science and rejected in multiple studies. Your anti-AGW religion apparently blinded you.
That said, … I don’t really like this snark about “religion” in our arguments. I throw it back at you because you threw it at me and I find it extremely offensive. Every one of of my posts and beliefs is based on science and research.
Steven H
Younare showing your ignorance of petroleum engineering. I was correct. Wastewater injection is NOT fracking and is created regardless of secondary or tertiary method used. Fracking is a separate, specific method of tertiary recovery.
You are NOT correct. Injection wells for wastewater are a part of the fracking process and have been increased linearly with the increase in fracking. How do you accomplish fracking without also getting rid of the wastewater? Increases in fracking mean increase in wastewater injection mean increased earthquakes.
Basically, Stevendad, you are saying that you recognize that Process A is ALWAYS followed by Process B, and that Process B is known to induce Process C. But nobody has ever actually linked Process A to Process C. The connection is completely unproved. To connect Process A to Process C through an intermediate Process B is just some of that liberal hocus pocus mumbo jumbo. Logic, I think they call it.
Come on Stevendad. I thought you were supposed to be smart.
Links for job-seeker argument
http://www.epi.org/publication/jobs-60-percent-job-seekers/
http://www.epi.org/publication/jolts-2013-september-low-level-of-job-openings/
http://www.politifact.com/truth-o-meter/statements/2014/jan/07/gene-sperling/there-are-3-unemployed-people-every-job-opening-ob/
http://www.epi.org/about/
It is a liberal website. What else do you expect them to say? See Stevendad’s post about lies and statistics.
They don’t address the fundamental problem. Do you/they expect employers to hire people when there are other places where they can make more money? It is that simple.
Why don’t all the bleeding heart liberals start their own business and hire the unemployed?
Liberals are all about OPM and minding other people’s business.
Peter N September
http://www.epi.org/about/
“It is a liberal website. What else do you expect them to say? See Stevendad’s post about lies and statistics.”
Your whine about websites being liberal is just as laughable as the Faux News and Koch brothers echo chamber network of misinformation you are fond of citing for your information (sic).
“They don’t address the fundamental problem. Do you/they expect employers to hire people when there are other places where they can make more money?”
Only fools think that all that is necessary is to add an additional FTE here and there will make the underemployment problem go away. There are people that need to be retrained to better empower them to adapt to the changing workforce. There are trades that need to be put back to work on infrastructure that business doesn’t focus on because the government has been doing it for decades.
But, to be realistic, the federal gas tax hasn’t been increased in a decade. Since 1993, the U.S. federal gasoline tax has been 18.4¢/gal. Just to adjust for inflation it should be 30¢/gal. That doesn’t even start to factor in the reduction of travel from the last recession or the increased efficiency of today’s automobiles.
“Liberals are all about OPM and minding other people’s business.”
Just as vulture capitalists and autocratic businessmen are out to get whatever they can regardless of who they leave sucking up their flotsam and jetsam believing they should be thankful for the scraps.
Your business practice of paying your employees/colleagues well is a sound and proven behavior that helps guarantee you provide a top notch product. It’s those that don’t for whatever reason that is depressing our economic growth.
2- Lack of jobs – My statement was that there are 2 to 3 times more job-seekes than jobs. You replied with a 6 word post with no reference or backup. “800 unfilled teaching jobs in Oklahoma.”
I responded with an opinion. Also no link here for backup, but I had listed a backup link for the same issue on August 17. Also, frankly, I thought it unfair to expect an extensive reply to such a sparse post that had no real question or assertion. It was a bit too terse on your part to expect a verbose reply. So I said:
“Stevendad, There are always temporarily unfilled jobs while employee-searchers and job-seekers connect. I know there are virtually always more teachers than positions available, so this stat does not make any consequential point that I can discern.”
The last phrase was added as an invitation for you to clarify if you had a real argument to make.
So was I too “religious” and unsupported in my post? Certainly not. Your post had no backup for data and no actual statement of assertion, while my post WAS based on actual studies and not just a single random statistic. And while you just dropped a random stat, I had offered an earlier link, and further offered an argument of reason, indicating that job positions are always open for a period of time before they are filled, and so, open positions do not inherently prove that positions cannot or will not be filled, nor do they say anything about the ratio of jobs to job-seekers in that field.
So again, I submit this to the panel of judges on this blog. In this particular argument was I being “religious” or was I being reasonable and logical?
Now, since this has come up, there is some additional backup for my position in the next posts. ( I have to limit the number of links in a post, because they get blocked or delayed, it seems, with more than 1 link.)
But before I go, one more issue:
3- On August 9, you posted: “Do you have any data that fracking is more dangerous? The US geological survey can’t directly relate earthquakes to fracking, but somehow liberals can. Interesting. “
I responded with an extensive post of multiple links, but most directly addressing your argument was this from USGS itself:
“The analysis suggests that a likely contributing factor to the increase [from the long-term average of two magnitude 3.0 or greater earthquakes per year, to 109 in 2013 and 145 in just 5 months in 2014] in earthquakes is triggering by wastewater injected into deep geologic formations. This phenomenon is known as injection-induced seismicity, which has been documented for nearly half a century, with new cases identified recently in Arkansas, Ohio, Texas and Colorado. A recent publication by the USGS suggests that a magnitude 5.0 foreshock to the 2011 Prague, Okla., earthquake was human-induced by fluid injection; that earthquake may have then triggered the mainshock and its aftershocks. OGS studies also indicate that some of the earthquakes in Oklahoma are due to fluid injection. The OGS and USGS continue to study the Prague earthquake sequence in relation to nearby injection activities.”
http://earthquake.usgs.gov/regional/ceus/products/newsrelease_05022014.php
So, while you claimed that USGS had made no connection between fracking operations and earthquakes, I showed (from a rather quick google search) that USGS had in fact been making connections between fluid injection (such as is used in fracking) and earthquakes, for half a century. You never, to my knowledge, responded to this direct repudiation of your unfounded and rather flippant accusation. So again, in each of these three cases, where I offer facts, you offer opinions only, unfounded and unsupported. (In the methane case, you offered links, but none directly supported your assertion.) And yet you accuse MY posts of being faith-based and religious and unsupported?
Do you have something more substantial to support your accusations against me, or would you perhaps like to acknowledge some error on your part, at least for these three instances? (You are always welcome to indicate flaws in my other arguments. I’m sure they are there. I have no pretenses at being perfect.)
“I take a certain amount of pride and researching subjects before I form an opinion, so I take offense at my arguments or opinions being described as “religion”.”
See definition 4 it fits you perfectly.
http://www.merriam-webster.com/dictionary/religion
On top of that you are more than willing to impose your religion on others just like many of the so called ‘great’ religions have done.
“For you to now characterize that conversation as me being unreasonable or “religious” and not supporting my arguments is itself, completely unsupported, and, I’m sorry to say, blatantly incorrect.”
And where has your “great society” got us, only more poor on government assistance.
“So again, I submit this to the panel of judges on this blog. In this particular argument was I being “religious” or was I being reasonable and logical?”
The evidence speaks for itself. You still don’t get it. Employers don’t hire people just to hire people. Employers expect new employees to increase profits. They must be more profitable than a machine or someone overseas. If not then employers will not hire. It is that simple. Why can’t you see this and acknowledge it the way things are?
“See definition 4 it fits you perfectly.”
It fits everyone on this thread, you more than any other. I am willing to have my beliefs altered by science and research. Are you?
Like you, Steven H, I would be offended by any accusation of forcing my “religion” of politics on others. Religion is based upon many unquestioned axioms and has it’s place, but that place must be totally separate from reason. Scientific reasoning should be applied to governance or else we risk descending into the illogic of, “I speak for God and He likes me better so I should rule”, also known as the Divine Right of Kings, from which the American colonies rebelled.
America was formed in the midst of the Age of Reason and every fiber of our political and legal culture cries out for due process, not only in our rule of law, but also in our public discourse necessary to understand and best decide issues. Religion, or simply faith that something is “true”, is anathema to American culture when applied to that discourse as has been asserted here. Faith says, “No more taxes!”. Reason answers why we should or should not raise taxes and the expected outcome. Faith says, “Government is too big!” while reason explores whether indeed government is too big or needs to grow in comparison to relevant factors. Faith also says, “Women never lie about rape”, while reason says, “show me the data upon which you base that belief.”
Religion (faith) has it’s place, but never in politics or science. I’ve enjoyed the lengths to which you’ve gathered data to support your positions and believe you’ve done so to a greater extent than the rest of us here and encourage you to continue.
Thank you, MOR. I really appreciate the reassurance. I was somewhat shaken by the hostility from Stevendad which has seemed so out of character.
[Sorry this response is long, but it is important to me.]
“Steven H: you always negate or dismiss anything that does not fit your belief system. Same went for my methane theory of global warming. You no longer think, you have religion. That’s a pity.”
Stevendad, ( and Peter, who seconded this accusation): I take this as a serious accusation, so I need to fully understand what you mean. I take a certain amount of pride and researching subjects before I form an opinion, so I take offense at my arguments or opinions being described as “religion”. I would be grateful if you can specify how the particular arguments I have provided have been unsupported. Meanwhile I will attempt to explore the subject based on my current understanding and perspective of the instances referenced above.
First, we need to get clear on definitions. When two people disagree in a discussion, they are arguing two sides of a position. They are then inherently rejecting the other position. So if you are simply accusing me of not immediately accepting your position, then that is simply a symmetric statement that we disagree and it applies equally to both of us.
Of course, in a productive argument, each side presents evidence or logical argument and the other side takes that evidence into consideration and either offers counter-evidence, or a credible argument as to why the original evidence may not apply or is incomplete. Offering such counter-arguments is not a flaw in the discussion but is an inherent quality of the productive argument.
The last theoretical point to bring up before discussing specifics is the point of psychological projection. This is a common human trait in which people take their own flaws and project them onto others, usually simultaneously denying the existence of the same trait in themselves.
Now to your accusation, Stevendad. (I will address discussions with Peter in a separate post, though I don’t really know what specific arguments he believes I have not supported with fact.) You are accusing me, as I understand it, not just of disagreeing with you, but of negating or dismissing your arguments in some sort of unreasonable manner, and you offer two examples. The earliest was the methane global warming theory you proposed. The second is somewhat unspecified, but I surmise it to mean my dismissal of your teacher statistics as evidence of plentiful jobs.
I will present my perspective on this here and submit it for judgment of the rest of the regulars here who have shown some objectivity: especially Peter, Normal Joe, JTM, MOR, and even JB.
So to some specifics:
1- The methane theory of global warming – We had an extensive, and I thought, rather congenial discussion on this subject. My main objection to your position, stevendad, was that the observation you made, correlating methane production to global warming, based on some reading, was not supported in the science literature as a primary cause over CO2. You and I both quoted articles and links to each other supporting our sides. The irony I found in the argument was that you harshly criticized climate scientists for fitting data to preconceived theories, when that precisely described your argument. In fact, as I stated on that part of the thread,
2- http://moneyning.com/career/who-actually-earns-400000-per-year/comment-page-6/#comment-553880
“After criticizing the fitting of data to preconceived theories, you then ask me what is wrong with your superficial fitting of US methane levels to a few years of leveling temperatures. I answer that there is nothing wrong with observing a correlation. But as you stated, it is not good science.”
As you may recall, we ended the conversation with the following exchange:
Stevendad: “Thanx for the input. I learned a lot on my own and from you.”
Steven H: “You’re welcome. Reduction of methane can help. It is an important greenhouse gas. But from what I have read, we will not reduce much of man’s impact without addressing CO2 because (a) we emit more of it than methane and (b) it stays in the atmosphere a long time (longer than methane) once we put it there.”
For you to now characterize that conversation as me being unreasonable or “religious” and not supporting my arguments is itself, completely unsupported, and, I’m sorry to say, blatantly incorrect. That is not the attitude you expressed at that time, and it would be an incorrect characterization of the discussion, in any case. We acknowledged each other’s positions and, while no final agreement was stated, we seemed to come to sort of an amicable close. Go back and reread, and I think you will agree.
If you indeed have some lingering objection to my previous arguments let me know, and I will try to address it quickly, without starting another page of AGW discussion.
(continued in part 2) …
Almost couldn’t be more oppositional to the welfare state than this Franklin quote:
In my youth, I traveled much, and I observed in different countries, that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.
Benjamin Franklin
In principle I agree with this too. But it still does not justify driving people into poverty with poverty wages, astronomical education costs, excessive societal income slopes, and continual advocation of policies causing redistribution of income and wealth from workers to the investment class.
And another:
It is the working man who is the happy man. It is the idle man who is the miserable man.
Benjamin Franklin
Read more at http://www.brainyquote.com/quotes/quotes/b/benjaminfr151681.html#XCc3ztqo1KLkG6Dk.99
Great quote. So let’s get people back to work! Stop exporting American jobs!
OK, I have hired about 25 people. What have you done?
We even hired a 16 yo high school student for summer projects programming.
Good for you. Now support legislation that keeps us from exporting all of our other jobs overseas.
As long as we’re qouting $100 Bem:
This hardly fits your liberal slant: (I guess we’ll dismiss it too)
I am for doing good to the poor, but I differ in opinion about the means. I think the best way of doing good to the poor is not making them easy in poverty, but leading or driving them out of it.
Benjamin Franklin
This is a great quote. Why would you mistakenly think that this is antithetical to liberal values? I proposed above how to drive people out of poverty. Part of the solution is to stop paying poverty wages for jobs that need to be done in America.
Another quote:
Let not him who is houseless pull down the house of another, but let him work diligently and build one for himself, thus by example assuring that his own shall be safe from violence when built.
Abraham Lincoln
Read more at http://www.brainyquote.com/quotes/quotes/a/abrahamlin133463.html#Q3hK5KE58VVSbhYH.99
That’s a fine quote. I certainly don’t consider paying the country’s debts as puling down someone else’s house. A few percentage tax increase on the extraordinarily rich is hardly pulling down their house. However, those who attempt to sabotage the needed safety nets of the poor are almost literally tearing down their houses, or at least causing them to be driven out of their houses.
It is a metaphor.
What is happening now is like being forced to pay for your spouse’s credit card debt when you didn’t sign for it. Some one else racks up the debt and others are forced to pay for it. There apparently is no limit to how much debt others will rack up and force others to pay.
Where is the limit and when doesn’t it stop? There isn’t any limit so what is to stop the gov from ‘tearning down someone’s house’.
Congress is our representative. When they rack up bills, they are our bills. All of the bills, all of us, like it or not.
As long as we’re on quotes:
Always bear in mind that your own resolution to succeed is more important than any other.
Abraham Lincoln
Read more at http://www.brainyquote.com/quotes/quotes/a/abrahamlin109274.html#oc02ipLwq64TF6TV.99
That is a great quote. I have no objection to it.
Steven H:
For those of you concerned about too many people on government assistance. The solution to that is:
– let there be a disincentive to not work.
– move if you’re in a bad economic area.
– loosen overtightened regulations.
– reward those who invest in themselves by reasonable taxation.
– invest in education for yourself that leads to work, not broadening of the mind.
– what your country can do for you, but what you can do for yourself.
– I agree on no,longer letting China manipulate the yuan and steal intellectual property, by the way.
Steven H: you always negate or dismiss anything that does not fit your belief system. Same went for my methane theory of global warming. You no longer think, you have religion. That’s a pity.
Very true- Steven H. This is what I was saying to you a few posts ago. You might think about this….
Please be more specific. I support almost all of my assertions with data and research and links and logic. Where, specifically, have I not? I will be happy to fill in any blanks.
By the way, do you have any data that supports your assertion that income disparity is NOT a result of government policies? Or is that a religious assertion based on faith?
Sorry to be snarky, but turnabout is fair play.
MOR: Redistribution DOES take place at the point of a gun. Try not paying your taxes.
Only through due process as require by civil society.
800 unfilled teaching jobs in Oklahoma.
Stevendad, There are always temporarily unfilled jobs while employee-searchers and job-seekers connect. I know there are virtually always more teachers than positions available, so this stat does not make any consequential point that I can discern.
For those of you concerned about too many people on government assistance. The solution to that is:
– higher minimum wage
– closing the 30-hour benefit loophole (proportional benefits below 30 hours)
– higher paying jobs at the low end
– better corporate governance rules so there are lower paying jobs at the high end
– limiting corporate monopolies or near-monopolies
– lower small business taxes and added marginal tax rates at uppermost incomes (to correct the systemic error where business tax rates are higher than highest individual rates)
– education system that promotes trades AND college, but without bankrupting parents
– trade policy that discourages massive job exporting
Because these things will help correct the high income slopes that drive people to poverty and put them on government assistance. If people are working at jobs that pay well, they will not need government assistance.
OK, we’re forgetting Rule 1 again. Teaching people how to be successful in society is not the same as building a successful society. It is RELATED, but not the same.
How to be successful in society:
good attitude
hard work
education
job skills
social skills
persistence
Those are all great. You can do better in society, any society, by following that rulebook. And anybody who thinks liberals are against those things is off their rocker. These are universal virtues.
Now take a fair society and make it an unfair society. Pick a method. Not impossibly unfair, mind you, just really tough. For instance, in bad old Carnegie steel days, workers had 12 hour shifts and irregular work at that. People died on the job a lot. Accidents. Or maybe you could imagine being unfair with the old sharecropper/company store model. That was an endless hole. But in those times, all of the virtues listed above would still get you farther with them than without. They are good principles of behavior.
But they have almost nothing to do with building a strong economic nation in America today. Because the economy has not changed due to laziness, or sloth, or a bad attitude, or the wrong skills. Those things exist. They existed before 1980 and after, but they are not the major players in income inequality or our sagging economy. They just are not. Yes individuals can make it in today’s economy … by staying a few steps ahead of the other folks who will NOT make it. But that is not the same as making an economy where everyone has a fighting chance.
Tax and business policy have changed for advantage of the rich. That is not whining. That is not resentment. That is not bad attitude. That is fact. And the fact is that it is bad for our GDP, bad for our economy as a whole, and bad for most Americans. We need to fix it and stop bad-mouthing the people who have been hurt.
And it MIGHT mean that the very very richest will earn a little less or be taxed a little more. My advice to those folks? Don’t be bitter. Don’t be resentful. Don’t make yourselves out to be victims of attack. With a good attitude, hard work, education, strong job and social skills, and persistence, you will still do just fine.
I think that our current US government policies are about generosity (or cynically buying votes). Regardless, it rewards you for failure and freezes you there. Rather than moving from Detroit when a job is lost, unemployment keeps you there, robbing you of opportunity for at least a year. It is great for settling up and moving on for 6 months max, but after then just perpetuates a failed plan. I agree, it may not be your fault! But rather than turn lemons into lemonade, it just turns them into sour grapes (sorry for the metaphorical stretch). I learned around age 14 I would never be QB for the Dallas Cowboys or center fielder for the St Louis Cardinals. If I had been somehow rewarded for my pusuits of these, I might have wasted 2 years on these nonproductive avenues rather than focusing on academics. Failure can lead to success and focus you into pursuits that fit your talents.
Perhaps a book titled (entitled?): The Obama Domestic Policy: Frozen in Failure should be written.
stevendad, I see your point about unemployment , but it has a flaw. When there are twice or thrice as many job-seekers as job openings, unemployment payments do not prevent job-seekers from finding jobs. Lack of jobs keeps job-seekers from finding jobs.
Liberals and Conservatives have a tendency to tell people how to live, just about different issues. It seems all are dug in on their positions. We’re all just doing political masturbation any way. This all amounts to zero. But those who are not in the one percent, take my advice and personally you will get closer. It’s about three miles up this thread.
So what am I? I have said repeatably that you should be free to do what you want to do as long as it doesn’t affect me. However, you have affected me by voting for obama and raised my taxes not to fund the government but to give to other people.
You are calling yourself a victim whenever someone does something that affects you? With that definition we are all victims. In life we all take turns, one day we’re the bug and others we are the windshield. It’s just the way it is.
Sooo ….. you are saying you are a victim then? A victim of those awful people who voted for Obama?
The taxes have been raised and they HAVE been used to fund government, because, in case you didn’t notice, government spending has gone down over the last 4 years. That’s any way you count it, raw, adjusted, or per capita. By adjusted per capita it went down 10% and the deficit, you may also have noticed has been cut in half since Bush’s last budget year.
As for “giving to other people”, you apparently mean safety nets. SS, Medicare, Medicaid, ACA. Well, sorry Peter N, but America has been on that track for bout 75 years now. We don’t just “fire” our citizens and leave them to rot in the street. We have programs for poor, for retired, and for disabled. If you resent paying your national membership fee to support these folks, I can’t help you or sympathize with you. I’ll just refer you once again to Ben Franklin’s wisdom, this time with the full two paragraphs, since it seems to apply:
===
The Remissness of our People in Paying Taxes is highly blameable; the Unwillingness to pay them is still more so. I see, in some Resolutions of Town Meetings, a Remonstrance against giving Congress a Power to take, as they call it, the People’s Money out of their Pockets, tho’ only to pay the Interest and Principal of Debts duly contracted. They seem to mistake the Point. Money, justly due from the People, is their Creditors’ Money, and no longer the Money of the People, who, if they withold it, should be compell’d to pay by some Law.
All Property, indeed, except the Savage’s temporary Cabin, his Bow, his Matchcoat, and other little Acquisitions, absolutely necessary for his Subsistence, seems to me to be the Creature of public Convention. Hence the Public has the Right of Regulating Descents, and all other Conveyances of Property, and even of limiting the Quantity and the Uses of it. All the Property that is necessary to a Man, for the Conservation of the Individual and the Propagation of the Species, is his natural Right, which none can justly deprive him of: But all Property superfluous to such purposes is the Property of the Publick, who, by their Laws, have created it, and who may therefore by other Laws dispose of it, whenever the Welfare of the Publick shall demand such Disposition. He that does not like civil Society on these Terms, let him retire and live among Savages. He can have no right to the benefits of Society, who will not pay his Club towards the Support of it.
Wait a minute. Just wait a minute! What does this Franklin guy know anyway?!
Everything.
If Ben Franklin truly said those words then he was a Marxist. Did Ben Franklin ever get elected to an office?
Steven H, who would create jobs and with what if the entrepreneurs had only what they needed to live? You must realize your socialist philosophy would cause the biggest depression ever. Why work if someone is going to get all the excess over what is need for survival. Why work at all if someone is going to give you what you need for survival anyway?
Yes, Benjamin Franklin truly said those words in a letter to Robert Morris, 25 Dec. 1783.
As to your completely inane questions about the quote, I am in absolute shock that you could misinterpret what was being said so completely.
Mr. Franklin was not proposing a policy. He was making two points: (1) that it is highly “blameable” for citizens to be reluctant to pay the taxes to pay off the bills and debts that the country has incurred, because the bills and debts are ultimately those of the citizens, and (2) the country is like a club to whom you pay your membership dues, and which then provides the infrastructure for businessmen to make money; only money for your basest needs is truly yours; the rest, whenever it is needed by society, is the province of the society that enabled you to create it.
BTW Peter N, I will thank you for honoring me. You have seemingly put me on the same pedestal as Ben Franklin. You have called us both Marxist, and you badly misinterpret almost everything we both say.
Peter N August 30, 2014 at 2:41 pm
“If Ben Franklin truly said those words then he was a Marxist. Did Ben Franklin ever get elected to an office?”
I seem to recall that Ben Franklin lived more than a hundred years before Karl Marx. So, are you calling Marx a Franklinist?
And no, Franklin was never an elected official. But, then neither were Plutarch, Socrates, Plato, Michelangelo, Nikola Tesla, Albert Einstein, Thomas Edison, Leonardo Da Vinci, Isaac Newton, Pythagoras, Aristotle, or Archimedes.
“A victim of those awful people who voted for Obama?”
Yes, what right do they have to other people’s money?
“The taxes have been raised and they HAVE been used to fund government, ”
I have no problem with that but the transfer programs are not part of the government. They aren’t in the Constitution. The forced funding of social programs is part of the liberal agenda. They don’t truly believe in freedom or responsibility. They seem to think they can force people to pay more taxes so they can buy more votes. That is why libtards are evil and not true Americans. Libtards belong in some communist country.
Government which is the organization of peoples into communities for purposes of security and mutual welfare, has always derived revenue in the form of taxes by whatever name, and distributed services regardless of from whom those taxes were collected. There have alway been those who pay more in taxes than they receive in direct benefits. That is what you call, “redistribution of wealth”, and what, in reality, has always been the function of government. Without government, the redistribution of wealth would take place at the point of a gun and without civility.
Social safety nets, passed by Congress, signed by the President, have been deemed Constitutional for at least 75 years, by the Supreme Court. It is your philosophy which is at odds with the principles of the founders and the population and laws of this country. It seems it is you who ought to set up your Libertania elsewhere.
“Yes, what right do they have to other people’s money?”
Money, justly due from the People, is their Creditors’ Money, and no longer the Money of the People, who, if they withold it, should be compell’d to pay by some Law. — Benjamin Franklin.
I used to be a liberal. I believed all of the things I was supposed to believe: White men were bad, CEO’s were stealing from their workers, women are kept down by men, global warming was my fault. For years I fought with my husband over politics but he hung in there with me. Then I voted for Obama the first time and from day one, he talked about how my hardworking husband was bad and didn’t pay his ‘fair share’ and should pay more. I started taking notice. I watched everything he did. Then I started watching other news channels. Then I started to see all the lies being fed to me for my whole life. I stopped listening to celebrities to form my political opinions. And I kept wondering why my husband was evil when he was breaking his back working all the time. I wondered exactly how much was our ‘fair share’ and how much Obama wanted to tax us to be happy. So when you say no one changes their views, it isn’t entirely true. Some people wake up and see the truth.
Allison, maybe you need to stop believing anybody who is saying the other side is evil. White men are not bad, and neither are black men, your husband, Obama, rich people, poor people … we are all just trying to get along here. Maybe if everybody would stop pointing fingers and accusing each other of being evil, we could reach reasonable compromises on how to move forward in society. But your rant makes it sound like you jumped from liberal radical to right-wing radical. How about trying out the middle?
What if I don’t want to be in the 1% because I’m very good at what I currently do and I’m intrinsically rewarded by helping others to a much greater degree than were I to “work hard to become rich”? ( And don’t give me that “job creators” BS.)
Aspie – that’s what I was saying earlier. You should choose whatever path you want for whatever reason. Not all about money.
And Allison – don’t be totally dismayed with the liberal or democratic side of things just because of this president. The more of us that just think for ourselves rather than just decide what “side” (of basically the same equation) we are on, the better off we will be.
I’m proud of the fact that I have some far left ideas and beliefs and some more right leaning thoughts as well. Every time I do a “test” of where I fall I always come up a little left of center. But that certainly doesn’t mean I want to be labeled liberal. There is a gray area here. Not North vs South or Hatfields vs McCoys.
You’re a good man Peter, despite our differences. I score the same but probably for different reasons.
Thanks – same to you. Been fun talking with you…
I’m out too. I tried adapting to move to middle ground, and became more respectful, trying to avoid inexplicably hated terms like “bonus income”, but the high earners on this thread are totally convinced that there is no income disparity problem, that every dollar of the historically high income they receive is exactly what they deserve, that the historically low taxes they paid under Reagan and Bush were appropriate despite the debt accumulated under such low revenues, and the 25% smaller share of income and stagnating wages for 90% of Americans is because of some flaw or deficiency in those Americans: their education, their choices, their ambition. They do not conceive how any of the disparity can be due to all of the political decisions and structural changes since 1980 that have tilted our economy toward the rich and shifted 10% of all income from the lower 90% to the upper 1%. They still argue the rich need lower taxes. Even though lower taxes to the rich have resulted in exported jobs, declining GDP and a sagging economy.
What we need is not more advantages for the rich, but a rebuilding of the middle class. I just hope the economy doesn’t have to collapse again to get the point across. But economic disaster may be the only way to acquire the political will to set tax and business policies back to a stable condition.
“and the 25% smaller share of income and stagnating wages for 90% of Americans is because of some flaw or deficiency in those Americans: their education, their choices, their ambition.”
Most of these people would have done OK 100 years ago when things were simpler, but would they want to change their lives now for a life 100 years ago?
Believe me, most are much better off now.
“Even though lower taxes to the rich have resulted in exported jobs, declining GDP and a sagging economy.”
This is so wrong. Look at what happen to Burger King today. It was because corporate taxes are too high. GDP is increasing. If the economy was sagging then why is the stock market so high?
“What we need is not more advantages for the rich, but a rebuilding of the middle class. ”
OK but how are you going to rebuild the middle class? How are you going to make them more adaptable to the current conditions? You have no solution. That’s OK. I don’t think there is a solution unless you can change human nature or genetics.
“But economic disaster may be the only way to acquire the political will to set tax and business policies back to a stable condition.”
That will not do it either.
Peter N August 26, 2014 at 8:32 pm
““Even though lower taxes to the rich have resulted in exported jobs, declining GDP and a sagging economy.””
“This is so wrong. Look at what happen to Burger King today. It was because corporate taxes are too high.”
Maybe not. Burger King is currently owned by Brazilian 3G Capital. Purchased from a group of investment firms led by TPG Capital in 2010 who removed the company’s stock from the New York Stock Exchange, ending a four-year period as a public company. The delisting of its stock was designed to help the company repair its fundamental business structures and continue working to close the gap with McDonald’s without having to worry about pleasing shareholders. The chain has fallen to third place in terms of same store sales behind Ohio-based Wendy’s, the result of 11 consecutive quarters of same store sales decline.
Although “tax inversions” (in which a company decreases the amount of taxes it pays by moving its headquarters to a country with lower rates, but maintains the majority of their operations in their previous location) have been a recent financial trend, it will not have as much of an impact on Burger King’s reincorporation in Canada: the corporate tax rate in the United States is 39.1%, Canada’s corporate tax rate is only 26%, but Burger King had used various sheltering techniques to reduce its tax rate to 27.5%. As a high-profile instance of tax inversion, news of the merger was criticized by U.S. politicians, who felt that the move would result in a loss of tax revenue to foreign interests, and could result in further government pressure against inversions (which had, until the Burger King merger, been primarily invoked by pharmaceutical firms).
“GDP is increasing. If the economy was sagging then why is the stock market so high?”
“First, productivity gains. Corporations have been investing in technology rather than their workers. They get tax credits and deductions for such investments; they get no such tax benefits for improving the skills of their employees. As a result, corporations can now do more with fewer people on their payrolls. That means higher profits.
Second, high unemployment itself. Joblessness all but eliminates the bargaining power of most workers — allowing corporations to keep wages low. Public policies that might otherwise reduce unemployment — a new WPA or CCC to hire the long-term unemployed, major investments in the nation’s crumbling infrastructure — have been rejected in favor of austerity economics. This also means higher profits, at least in the short run.
Third, globalization. Big American-based corporations have been expanding and hiring around the globe where markets are growing fastest — even while the U.S. market is lackluster. Tax policies and trade policies have encouraged them.
Finally, the Fed’s easy-money policies. They’ve pushed investors into the stock market because bond yields are so low. On Tuesday, the yield on the 10-year U.S. Treasury note was just 1.9 percent.
All of this spells widening inequality in America, because the people who invest the most in the stock market have high incomes. Those who rely most on wages have lower incomes.
Corporate profits are claiming a larger share of national income than at any time in 60 years, while the portion of total income going to employees is near its lowest since 1966.
… all the economic gains between 2009 and 2011 (the last year for which data were available) went to the richest 1 percent of Americans. The bottom 99 percent has continued to lose ground. ”
http://www.huffingtonpost.com/robert-reich/stock-market-record-high_b_2812590.html
http://finance.yahoo.com/news/dow-punches-time-high-us-143119493.html
-I do think the income disparity is an issue. But not something the government should or can fix. Economic shifts will take place and adjust organically
– I do think I deserve my income and am not ashamed to say it.
– I don’t care to differentiate our government policies based on republican or democrat. It’s all the same to me – same policies based on political reasons not on what is best for our nation.
– I don’t think the rich need lower taxes. Never have said that.
– I tend to think that an individual’s situation is largely their own responsibility. I think that about me. I think that about you. Just the way I think and just never have been comfortable blaming external factors (the government, my parents, things that have happened to me).
My experience in life is that defeatism, negativity and an excessive belief in luck create poor outcomes. A person with this set of attitudes will always say that poor outcomes were caused by outside forces. I’ve done everything I can. My por outcomes are society’s fault. Corporations screwed me over. If CEOs would make less, I would make more. If we just changed tax policy and took more money from “the rich”, everything would be fine. It’s always something other than their own thinking, their own attitudes, and their own behaviors that cause their poor outcomes.
So naturally proposed fixes to poor outcomes from these folks are going to be something external to self as well, since self is never at fault, by definition. The rich stole the money I should have had, so I need to take it back. Tax policy is why I am poor, so let’s fix tax policy. Since they themselves are never at fault, other, more successful people must be.
Then there are other people who run into the same life roadblocks as the first group. Rain falls on the just and the unjust. Yet this second group bounces back from setbacks, and rarely complains about how unfair life is. Why? Is it because they’re all part of the 1%? Are they all overpaid CEOs? All part of the rich?
No, of course not. It’s because they willfully refuse to allow temporary setbacks to determine their future. They don’t blame other people when bad things happen. They don’t allow “luck” to determine their life’s story. And I would contend that it is precidely because they have this set of attitudes, and the fact that they don’t blame others when things go wrong, that they dramatically increase their chances of becoming part of the 1%.
Now I would be the first to say that good things happen to bad people, and bad things happen to good people. But guess what? That’s life. We all experience that. But at some point after you have recovered from the shock of unfortunate circumstances, you need to get over it, and move on. Even if your bad luck actually was somebody else’s fault, if you never move on from that, your own bad attitude about that incident, or about life in general, will paralyze you. This will significantly increase the likelihood that you will have more “bad luck”. It will be a self-fulfilling prophecy.
In the long run, the most important determinant of how your life is going to turn out is you. Your own attitudes and your own behaviors determine most (not all) of how your life will be. Those with defeatist, negative attitudes don’t want to believe this. They want to believe poor outcomes are caused by external forces, cicumstances conspiring to keep them unsuccessful while tilting the world in favor of others. But it doesn’t make it any less true that they are still the masters of their own destinies.
If you believe that you can, or if you believe that you can’t, in either case, you’re probably right.
Very very well said. Couldn’t agree more and it is largely why the debate on here deteriorated in my mind….. I admittedly have a hard time seeing that point of view you describe – the “blaming the system” angle. Certainly we are all at times frustrated with the “system”, the economy, the government, corporate America, politicians, etc but blaming them for ones own circumstances is a different question. No matter what these “systems” put in place to boost the fortunes of certain groups, someone will be unhappy. It is never enough unless you drive your own train and make your own luck. It can be done – we have all seen countless examples every day from all walks of life and all income levels and education backgrounds. The beauty is – there isn’t one way to do it – we can all have success (financial, family, prestige, personal satisfaction, love, mental and physical success, etc) if we choose. Nobody is holding you back but you.
While I am in favor of some basic societal safety net programs, when half of the country is on some form of federal assistance, we have swung too far in that direction, in my opinion.
http://mercatus.org/publication/nation-government-dependents
I recall that when my parents and grandparents were growing up, the common ethos was that you did everything you could to stay off government assistance. It was considered a negative, shameful, something to be avoided. if you were “on the dole”, you were a loser, shiftless, lazy.
My grandparents, who were adults during the Great Depression, would have easily qualified for any and all types of need-based assistance. They lived in a northeastern city which today nobody in their right mind would consider living in. My grandfather had a sixth grade education. My grandmother, an eighth grade one. They worked crappy jobs under terrible working conditions their whole lives. They lived in two-family row housing. They never owned a car, never went on a vacation, my grandmother made much of the clothing that my mom and her siblings wore, because they couldn’t afford store-bought clothes.
Yet despite these economically brutal conditions, they refused public assistance. They saw “feeding at the public trough” as bringing shame on their family. Plus, many others in the Great Depression were in the same boat as them. They felt like they would be cheating the system out of money for a family that “really” needed it, even though by any measure they themselves needed it as much as anybody. Yet as bad as it was, they fought through arguably the worst economic years in the nation’s history, and never once did they blame other people for their plight, and never once did they accept any form of government payment.
Contrast that to the current generation. My own daughter was put through a bachelor’s degree program at a Midwestern public university by me and her mom without having to pay a dime of any of it. She was raised in a white collar secondary city of 150,000 with two universities, low unemployement, high educational achievement, and almost non-existent crime. By world and historical standards, she is one of the most wealthy, privileged people to ever walk the planet.
As it turned out, after she graduated she was laid off a couple of years ago from her first full-time job. She was 26. Rather than beat the bushes for another job, the first thing she did was apply for unemployment benefits, which she then received for many months. Rather than feeling guilty or shameful about it, she saw the benefits as her right, an entitlement that she “deserved”.
And so it goes. I think these are case in point examples of how attitudes have shifted over the last 70-80 years. I think far too few people these days are like my grandparents, and far too many are like my daughter. And this seismic shift in attitudes and corresponding behaviors is one of many reasons why our country is in the economic condition it is in today.
Great story….I have similar things in my family too. Both sets of my grandparents as well as my wife’s parents (born right after the depression) did the same thing – came from nothing, built up into nice middle class lives.
The other key point about your story and mine is that the older generation’s struggles (and progress) furthered along their entire family. Sure, they didn’t go from poor to the 1%, but their progress helped pave the way for your daughter to have the privileges she did. Now she has a great head start to moving even more up the ladder.
We can debate how many people feel “comfortable” relying on government or living off of public assistance. But regardless of the numbers, living this way doesn’t help advance them – it just helps them survive.
No different than if my kids choose to live off the money I live them. They could live a nice life but it won’t “advance” our family and create the upward income mobility we all desire. That’s what I’m trying to do – is set up my kids and even grand kids to have more opportunities than I have.
But that is long term thinking – most want everything now. All part of the culture shift we have been talking about that is a contributory factor to this disparity.
Yes, exactly. My mom and dad gave me advantages that they didn’t have growing up. And while the advantages they gave me did help me, they were not sufficient conditions for my success.
I think this is a key point, one which others in these threads entirely discount. In no way did the advantages I had guarantee my success. Nor did my better conditions mean that others from lesser means could not achieve what I have achieved. Far from it. I think this is the critical lie — the false belief that somehow differences in starting points makes it (nearly) impossible to achieve similar ending points. As you said, while it was unlikely that my dad could have made it to the top 1%, his movement from one of the lowest socio-economic classes into the upper middle class was dramatic, completely invalidating the belief that starting point determines destiny.
I think, too, that belief systems cut both ways. My family had a mostly positive belief system. However, if your family of origin believes that success comes from having a good starting point, or from “luck”, or that the 1% stole all the money you should have had, or that you can’t succeed so why bother trying, or that college “is for eggheads who don’t have any street smarts”… etc…. this also gets passed down to future generations, and results in poor outcomes. I’ve seen this first hand in the extended family of a friend of mine.
His family grew up poor on a midwestern farm. His father was an abusive alcoholic who routinely bad-mouthed education. My friend is the only one of the six children, or his parents, to go to college. He is now in his 60s, and enjoying a retirement that neither his parents nor his siblings have ever achieved. Several of his siblings call him and his wife “lucky”. Yet throughout their lives these siblings refused to go the university that was 20 miles up the road so that they could improve their situation, as he did. They refused to work “desk jobs”, as he did, because “they couldn’t stand to be cooped up like that all day long”. And so on. And to this day they still don’t see the connection between their attitudes and the choices they have made, versus the attitudes and choices of their brother, my friend, and how those choices have directly led to the differences in lifestyles they each of them now experiences.
Definitely experienced similar things myself. My own mother lives below the poverty line because she “doesn’t want to be tied down to a 40-hr work week”. To each their own, though – she is fairly happy just gardening and spending time around her house with minimal income. Some people do choose priorities other than money, which is fine – but if she was to be bitter about those that make much more and live more lavish lifestyles, that would be kind of stupid.
I remember when I got out of college and had trouble finding a job – I never thought that because I went to college I deserved employment. I just don’t understand the attitude of feeling like you aren’t “getting what you deserve”. Even through some of the real hardships I have gone through I have never felt this way.
Ken, Thank you for the personal story. Certainly the blight of the Great Depression (and Dust Bowl, for those who directly encountered that as well) was hard on families, and those that survived its oppressive weight had to be strong and resourceful. My own mother, born in 1929, was daughter of a South Dakota farmer, and was a young schoolchild during the Dust Bowl. She and her older sister would walk to school along the fence line, so they could find their way in the dust storms.
One thing I learned recently (in a very good book about the period “Freedom From Fear”) about government assistance in the 30’s is that it was highly frowned on, even by the distributors of such aid in the local government offices. Families who applied for assistance were often investigated as to their moral character, and friends and neighbors were interviewed, placing much shame and embarrassment on the hapless man (or occasionally the woman) who was head of household and so (seemingly) morally unworthy that they could not support their family. Thus many who were both deserving of, and in need of, government assistance, were denied the opportunity because they did not want to be so shamed. So while there was indeed a personal resistance to “the dole” among many individuals, there also was often an element of society-induced shame that I see as unfortunate.
What I see as lessons and fruits from this terrible time, are the policies and programs that were established to allow people to work and be productive without government assistance, but also programs to aid those who could no longer work. Thus Social Security was established to protect the retired, but also strict bank and economic regulations were established to try to prevent the economic failings that lead to the Depression.
Unfortunately, the lessons of the Depression fade with generations, and thus the bank regulations were dismantled, labor protections have been dismissed, and we have again come to the point of income slopes that have equalled and even just surpassed the disparity in 1929 before the Crash.
Income disparity: Well Peter, I know you dispute it, but there is a lot of evidence that government policy changes created much of the high income disparity so it seems only right that government policies should also be used to lessen it.
Blaming external factors: When you see a cause and effect and observe the impact of the effect on your own life or of others, is it really just “blame” to state the cause and effect? An individual should take as much control of his/her situation as possible, but we are all impacted by politics, laws, tax and business policy, etc. To ignore the impact is foolish. To state the impact is not blame.
No one is disputing income disparity. What I object to is your cure that won’t cure anything because it has been tried for so long.
Why does it bother you so much? Take any activity like chess, table tennis, golf etc. If you look at the top 1% they are many magnitudes better than the average Joe six pack. It is the way things naturally are.
Why does it bother you so much?
Actually I know. You are jealous and envious and always making excuses and blaming others.
In sports we would call you a poor loser.
In sports we would call
Peter N August 30, 2014 at 9:31 pm
“Why does it bother you so much? “Actually I know. You are jealous and envious and always making excuses and blaming others.”
If it were only as simple as this. You can not characterize me as such, but yet I am working to correct what I see as a serious threat to our economy.
I have yet to hear any cogent persuasive facts that would support our current policies supporting the upper 10% based on the myth of job creation. If this premise were true America should be fully employed, not just those that are measured, but those who have fallen off the measuring stick as well. We wouldn’t have military families or veterans needing food stamps to feed their families.
I am not in favor of expanding these social safety nets, what I am against is any move to diminish them. I have always been a staunch proponent of workfare, wherever and whenever possible.
What I challenge anyone to refute with empiracle studies is how the concentration of wealth among fewer and fewer people is not the underlying cause of our anemic and increasingly extended climbs out of the recessions of the past two decades.
I’m not looking for theories or anecdotes, but a compelling reason why the engine of our economy, the critical mass of consumers seeing their buying powers erode while GDP supposedly grows and segments of our society enjoy the opposite. There is something fundamental broken needing a repair and all we do is argue over who deserves what.
“In sports we would call you a poor loser.”
This statement sums it up pretty well. In the business world across the board the ultimate objective is to create win-win solutions so that the relationships between businesses can grow and thrive and become models for future growth. Too many have lost sight of this critical component of interpersonal communication.
I have indicated multiple cures, but have been repeatedly accused of proposing only one. And my “cures” have NOT been “tried for so long”. They have not been tried at all except during 1945 to 1980, when they worked exceptionally well at keeping income disparity low and the economy pretty stable.
Normal Joe wrote:
“You can not characterize me as such, but yet I am working to correct what I see as a serious threat to our economy.”
I see the never contracting social programs as being a serious threat to the economy. It consumes a lot of wealth and grows like a cancer.
http://www.cato.org/publications/policy-analysis/american-welfare-state-how-we-spend-nearly-$1-trillion-year-fighting-poverty-fail?gclid=CjwKEAjwj4ugBRD1x4ST9YHplzMSJACTDms8ZQw81wTJHfT_11K7euRnC1dYG6UwXgDCvLvsDCvHOhoC9cXw_wcB
“What I challenge anyone to refute with empiracle studies is how the concentration of wealth among fewer and fewer people is not the underlying cause of our anemic and increasingly extended climbs out of the recessions of the past two decades.”
The empirical studies can draw whatever conclusion they are trying to achieve.
If a society consumes all the wealth it produces and then some like ours does it will be hard to grow.
“I’m not looking for theories or anecdotes, but a compelling reason why the engine of our economy, the critical mass of consumers seeing their buying powers erode while GDP supposedly grows and segments of our society enjoy the opposite”
I have said a few times before that GDP is a poor measurement of creating wealth. Do a search to find out why it is flawed.
Steven H wrote:
“I have indicated multiple cures, but have been repeatedly accused of proposing only one.”
You have not said anything that hasn’t been said or tried before and failed. You can’t look back. The world isn’t the same as then. I have said many times one must be adaptable.
Peter N August 31, 2014 at 11:39 pm
“I see the never contracting social programs as being a serious threat to the economy. It consumes a lot of wealth and grows like a cancer.”
I don’t understand how a person as clever as yourself can’t see the causal relationship between the growing wealth gap and those finding themselves in poverty working for poverty wages. They are inexorably related and starving the beast returns us to Depression era misery and all that comes with it.
“I don’t understand how a person as clever as yourself can’t see the causal relationship between the growing wealth gap and those finding themselves in poverty working for poverty wages. ”
Because it doesn’t exist. How do the wealthy take from the poor? Neither you are Steven H have addressed that question. Your assumption is wrong. You assume everything is zero sum. It isn’t.
Nearly $1T was spent on welfare last year. Where did it go? It was wasted so it will happen again and again and again and again……
Peter N. – It must be very comforting to be right all the time, never misreading the facts, and scoffing at whatever you disagree with. There are many people like yourself, intent on charging through like a bull in a china shop. I have a brother-in-law that thinks he’s the best investment expert in the world. But he makes not a single red cent doing it for others, there must be a reason there.
I’ve learned from my parents and my upbringing that “creating wealth” is not the only thing in life and unworthy of devoting my time better spent with family and friends in good company. I’ve done well selecting a profession that has grown with me and I have kept pace with the increases in GDP over my lifetime. I took the time to educate myself to put myself in a position to take advantage of the opportunities that have come my way. But, to keep pace, my education has never ended. I have had to morph along with the changing technologies to remain on the leading edge.
Many of the ideals and motivations you have I share. Just not to the extreme that you find necessary for your own personal sense of self worth. Does that make me any less of a person than you? That will remain debatable. I think the big difference is the way we view others.
What you choose to believe is that everyone is the product of their own decisions and motivation. You choose to ignore socialized limitations that are imposed on many. While true that some are able to rise above what life has hobbled them with, it is the exception, not the rule. I can only hope that for every one of you, there may be ten of me just to balance out the equation. It’s the democratic way.
Agree. The conversation has deteriorated. For what it is worth I agree with your last post. Thanks to the partisan politics and media rhetoric we will just continue to have rants that blame everything on one party and people who feel victimized by the process. Every society will have winners and losers – and certainly this creates people that can’t get out of their own way. Every economy will also have ups and downs and ebbs and flows – and our government will do their best to react to it and try to keep things from getting out of control (like the banking crisis). They won’t always get it right. Our society needs to help people get the skills they need to achieve and the proper opportunity. The rest is up to them. There is no light at the end of the tunnel for those waiting for someone to change the rules of the game to help them.
It’s been fun. I am out of here. This is just like Congress. Nobody is changing anyone’s mind. Nobody agrees and everyone has a different opinion on how to fix something that isn’t fixable. Here is my last rant. The market will move to least resistance. No company will pay .01 cent an hour because nobody will apply for the job, so that argument is the biggest piece of crap. We are paid based on our skills and knowledge. The free market sets salaries. Nobody forced you to buy a home, Fannie and Freddie were just buying loans from the banks. Some of the portfolios got tainted by sub prime (my wife does the taxes on this stuff so I know what I am talking about more than others). Get a job that can’t be outsourced. Life your own damn life, stop bitching about your lot in life if you aren’t willing to fix it.
The government doesn’t create jobs? What about our bloated/inefficient military?
The gov creates jobs with what?
I agree the military is inefficient. It doesn’t need to make profit.
I am not sure it is bloated.
By the way, you also haven’t answered how fiscal liberals and moral conservatives have the omniscience to tell everyone else how they should live? The new one is forcing kids to eat broccoli, 95% of which goes down the disposal according to my eleven year old.
Breakfast and lunch is cheap. Bagels or eggs or cereal per serving doesn’t cost that much. If parents can’t afford to feed kids, don’t have any more. 12 eggs cost a buck. 16 servings of bread is like $3. Oatmeal costs pennies per serving in the store. Why don’t poor people go back to the days when everything is made from scratch instead of buying it. Making bread is cheap and easy. I can make a bunch of pancakes and they come out to be 10 cents each based on costs of ingredients. Maybe schools should be teaching how to grow vegetables instead of geometry.
Seems like JB is pretty good at telling everyone how to live (post above).
I am not telling you how to live, just that it isn’t that expensive to put decent food on the table. My god, you are getting free money from the gov’t to buy food. Just buy better food. Learn to stretch it out if you are so damn poor.
Sorry, JB, my remark was a bit snarky. It just seemed ironic to have stevendad complaining g about liberals telling people how to live, and then your reply SEEMS to be all about telling poor people how to live. I do respect the point about stretching money when you are poor. I don’t necessarily respect the assumption that most poor actually need this advice and are not already stretching each dollar as far as possible. Many do, some don’t.
BTW, minor point: US city average price of eggs in Jul 2014 is $1.95, not $1. Maybe cheaper where you are.
By the way, on a separate topic, I appreciate having your insider knowledge for defense of the government workers. I don’t agree with you on everything, but I do think that gov’t workers get bashed unfairly much of the time, so it is good to hear your perspective.
I don’t think New York and Nebraska need the same minimum wage. I bet there are very few actual minimum wage jobs in NYC. The costs are too high living there. Costs are cheaper in Nebraska, but the number of people are also limited. You won’t have 1,000 people applying for a barista in Omaha. If nobody applies for the job, then the salary is increased until they find people willing to do the job. States can set their own minimum, which is really the gov’t telling a company what you are worth. Most hamburger flippers are only worth $5. an hour. Don’t like it, go be a pet sitter or baby sitter. they are making $10 an hour now.
People in fast food are in hot kitchens and on their feet. Harder work and worth more than a babysitter.
Besides, Minimum wage has not been $5 or below in 2013 dollars since 1949.
JB/NJ: Of course Federal workers CAN move up the pay scale based in their budget and number if employees. That is extremely naive to think otherwise. Also sets them up for better consulting jobs, often with benefits.
You still haven’t answered why NYC and small town Nebraska need the same minimum wage.
Way to misinterpret what I said. Of course gov’t employees can move up, but salaries aren’t as flexible as they are in the private world when all salaries on dependent on taxpayer dollars to fund gov’t employees. If apple sells a trillion ipods, they have a ton of extra money. The gov’t has to either raise taxes or have a healthy economy with more taxes coming in due to more population, more sales tax, more tourism, more of stuff that generates money. The last 4 years here the salaries were held steady until we could see the economy got better, which it did. But again, I have no place to really move up in my department. I am happy doing what I am doing and I am not qualified to take our Director’s job. Thus, he makes more money than I do.
FYI, my wife just got a promotion and a huge raise. So now I am paying even more taxes, but will also be enjoying an earlier retirement by about 4 years. She is one of less than 200 in the country doing what she does. More rare than a baseball player in MLB. Companies pay for her talent. Thus, she got a promotion and a raise. She isn’t greedy, she works hard, has 75 people under her. Anyone want to say she was lucky? Or was in the right place at the right time? 24 years at effectively the same company. She went from staff to Director. Many never make it past manager. She has skills learned over year, not just reading a text book. With her bonus, she will be in the $400K club. We are just going to save most of that money. Suck it consumerism. We don’t need a thing. House is paid, cars are paid. We will start to loosen up and stay in better hotels now and maybe rent better cars on vacation. Guess what, that is still spreading the wealth giving money to companies. We could stay at home and nobody would benefit. The gov’t didn’t help her with the promotion. She didn’t grease our Congressperson, and it wouldn’t help. She isn’t going to be the head of the company, but her boss makes 3 times what she makes. Guess what, companies are paying for the it in accounting fees so that means we all pay for it when we buy stuff. Don’t like it? Don’t buy stuff. Starbucks coffee could be cheaper if it wasn’t for Sarbanes-Oxley. Or some of would think that profit would just go straight to the CEO.
The minimum wage is the minimum for Nebraska. IOf NYC wants to raise theirs, it is their right. What is wrong with this system? Nothing. It keeps states from battling for the lowest minimum wage to attract business. Guaranteed, that if Texas could set any minimum wage it would be one dollar, if not $0.01/hr.
Nobody has to pay the Minimum Wage. It is a MINIMUM. Many companies pay more. AGAIN, your skills determine your pay and many, many jobs just aren’t worth $10 an hour. There are very, very few college graduates making minimum wage and if there are, there is a long story behind the reason.
Consider that one of those “long” stories could well be the latest recession. Many companies, small and large, depend on that minimum wage as a bargaining chip to pay as little as possible while not subjecting themselves to legal actions. Let’s go back to the original intention of the legislatures when the minimum wage was introduced.
Beginning in 1912, several attempts at the creation of a state minimum wage were met with staunch opposition resulting in losing in the courts. The Lochner era United States Supreme Court consistently invalidated compulsory minimum wage laws at the state level. Such laws, said the court, were unconstitutional for interfering with the ability of employers to freely negotiate appropriate wage contracts with employees.
The first attempt at a federal minimum wage law in 1933 in the National Industrial Recovery Act also was ruled against by the then Supreme Court. It wasn’t until the Fair Labor Standards Act of 1938 that the then Supreme Court uphold the Fair Labor Standards Act, holding that Congress had the power under the Commerce Clause to regulate employment conditions.
This was one of Franklin Delano Roosevelt’s crowning achievements, one in which he went on record saying “No business which depends for existence on paying less than living wages to its workers has any right to continue in this country. ”
The minimum wage had its highest purchasing value ever in 1968, when it was $1.60 per hour ($10.79 in 2014 dollars. From January 1981 to April 1990, the minimum wage was frozen at $3.35 per hour, then a record-setting wage freeze. From September 1, 1997 through July 23, 2007, the federal minimum wage remained constant at $5.15 per hour, breaking the old record.
A common exemption to the federal minimum wage is a company having revenue of less than $500,000 per year while not engaging in any interstate commerce.
In today’s highly competitive market many workers are finding themselves in the unenviable position of taking work wherever they can just to put food in babies mouths. The absence of a cola, management’s propensity to funnel more of the profits from increased productivity to themselves, and the point that the time is now available is fomenting concern, anger, and rage.
The ranks of the minimum wage employees are much different from decades ago. They now include single and dual parent families with one, two, three, or maybe 4 or more children and have exhausted all other opportunities without relocation. And keep in mind that the majority of job growth has been in the lower paying minimum wage jobs. One of the intended consequences of the minimum wage was to lift hard working people of all types from poverty. Today’s minimum wage keeps them there.
Exquisite post, Joe.
Remember all, for the most part, the sequester “cuts” were a lack of 2% MORE increase, not cuts
AS MOR posted above:
According to the Council on Foreign Relations, “In calendar year 2013, military spending declined from $671 billion to $619 billion, in constant 2011 dollars. In dollar terms, this was the largest decline since 1991. The reduction in U.S. operations in the Middle East and the sequester mean this figure is likely to fall again in 2014.”
http://www.cfr.org/defense-budget/trends-us-military-spending/p28855
Sounds like real cuts to me.
Congress should be paid out of their campaign funds. All of their staff should be paid by campaign funds. They will spend so much time raising money they won’t have time to disagree in Congress.
That wouldn’t obligate our legislators to special interests at all, would it? Well, since they are bought and paid for by oligarchs now, I guess we might as well go all the way and have the oligarchs legally own them. (“When you accept the kings money, you must do the kings bidding”)
How can a gov’t employee be greedy? The pay is set, raises can be few and far between for the masses. Even Congress can’t make more than any other person in Congress.
MOR: I’m sorry, that is just FALSE according to all the Federal employees I know (over 2 dozen). Ou are smoking grass if you think the Federal government is effecient. I’ll give you an example. The HiTech act buried in the 2009 recovery gave a 2% carrot in 2010 to use electronic presriptions, then a 2% penalty, I believe starting in ’12. This was implemented nearly 100% of our vendors in just over 6 months. That is, except 3: the VA, the Indian Health Service and the local Air Force base. What is the common thread there?
There is inefficiency and greed in business and in government. No argument. It is human nature. In one of Scott Adam’s books, (Dilbert Future?), he characterized mankind perfectly as having three overbearing characteristics: greed, laziness and horniness. It’s a dim view of mankind but all too true all too often, and explains many human actions.
The inefficiency in government today is exemplified by the sad state of VA, and the deplorable resistance to funding it properly and managing it well. But inefficiency in business is also rampant and can be said to be a driver of our recent crash. The income disparity I have been railing about is basically a large inefficiency in our system that takes money away from the spending middle class and places it in the hands of a small number of investors (here i mean the upper 0.05%) who cannot manage it efficiently in a way that benefits society.
Steven H:
Perhaps it is unfair to lump you with some of the others. However, I must emphasize some points:
Comparing pre and post Reagan tax rates is very didficult as huge swaths of deductions and legal shelters were removed. You just can’t quote tax rates and directly compare them.
Yes, much more control needs bto e from cities and states. I tried to meet my Senator in Washington and he didn’t have time. He does not represent me. So I don’t like his government taking $100+ k from me each year without a voice in how it is spent. The state and locals take less and are at least here where I can see them. Of course, liberals will cite what happened 150 and 50 years ago as examples the states can’t handle it. Relatively few who were of voting age in 1965 (21) are still alive. I just have a hard time taking the blame for their idiocy. And the world is about 1000% more transparent now. If you don’t like your state, move or run for office. Air pollution is much less an issue in open plains than in a bowl like LA. Again, local solutions for local problems.
I am still not being facetious about starting your business. It could make the most impact on carrying out your beliefs. Or it will turn you to the dark side like the rest of us who have owned their own businesses. Don’t sell yourself short, you clearly have the savvy.
My answer for Walmart has been stated many times. Again, $7.25 in Hobart, OK buys more than $15 in Manhattan. So a Federal wage may do too much and destroy businesses (don’t kid yourself, it will) in small towns and not do enough in NYC. So let NYC do it’s thing and Hobart do their’s. Again, local decisions for local issues.
As far as the very wealthy’s taxes, I still feel we should tax wealth, not income if we must raise taxes. AGAIN, for the jillionth time, most of the 2% pay the AMT and never got the Bush tax cuts. The other 50% who paid taxes did. They have given up nothing.
I do not recall calling you names. I think just the once with NJ. To say that the Federal government (Fed, Congress, Fannie and Freddie) was not a huge portion of the economic failure is bizarre and IMO still idiotic. Everything bad that happened is due to George Bush and his evil minions, Big Business. Really?
And greed of government employees does exist. Just as much as greed in the private world. It just takes different forms. I was just pointing out you NEVER mention it. To hear it from you, one would think all govt employees are altruistic servants worhty of sainthood. I agree there are good and bad people in every walk of life. This is human nature. Libertarians believe in human nature as it is, liberals AND conservatives believe in human nature as they think it should be (on different issues). Real world vs Utopia. What gives either the right to both judge and enforce upon others what they believe? Is anyone that wise? Are you?
“To say that the Federal government (Fed, Congress, Fannie and Freddie) was not a huge portion of the economic failure is bizarre and IMO still idiotic. Everything bad that happened is due to George Bush and his evil minions, Big Business. Really?”
Freddie and Fannie, as I said were a trigger. Their role is significant, but too often overstated. Normal Joe expressed a credible argument further up that further minimized their role. The real problem was economic deregulation and misplaced faith in markets to regulate themselves. Greenspan even eventually admitted this.
If you really want my opinion (and I’m pretty sure this is one you don’t want), it was Reagan, and not Bush, who was the source of most of our modern ills.
– He cut taxes to unsustainable levels, giving most of benefit to rich
– He raised taxes on middle class with SS increases
– He began the myth that tax cuts pay for themselves
– He weakened unions with the air controller firings
– He mandated that monopoly regulation was no longer vigorously enforced
– He resisted raising minimum wage, allowing it to drop by 25% (in real terms) over his 8 years.
– He tripled the national debt and reversed the pay down of Debt/GDP for first time since WW2.
If we had had even one true GOP conservative in office, one that knew enough math to actually balance a budget instead of borrow and spend, for any of the 5 terms GOP Presidents held office since 1980, perhaps we would not be in this mess.
Aspiekid: The distinction between wasted private money and government money is that is their money. Government is OUR money. And OUR children, grandchildren, an so on. Of course the liberals think it is ALL their money.
Yes Stevendad, my point exactly. Everyone pays taxes and receives services in return. No one wants to see his dollar going down the toilet or services reduced and therefore, many more eyes suspiciously eye government spending which is much more transparent than the books of private industry. And almost every incident someone believes to be government waste, whether real or imaginary, makes news.
I do believe that because of that constant oversight, government employees are much more cognizant of frugal spending practices than their counterparts in industry, and actual waste is much lower. We will never eliminate all waste, nor would making such an attempt be cost effective. Therefore, we will always hear stories about government waste and many will think it’s a much greater problem than it really is because we hear so few about such waste in business.
The gov’t process makes things harder than it has to be. There is waste around here, but it is more time wasted by people not accepting electronic signatures. Things could be passed electronically, but they won’t accept 21st century technology.
“I do believe that because of that constant oversight, government employees are much more cognizant of frugal spending practices than their counterparts in industry, and actual waste is much lower”
Have you ever worked for a govt entity? I have. You are incorrect.
“I do believe that because of that constant oversight, government employees are much more cognizant of frugal spending practices than their counterparts in industry, and actual waste is much lower.”
Businesses must make a profit and be competitive. Governments do not.
Where was the oversight on the IRS when they wasted all this money. Pick an article, there are many.
https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=irs%20lavish%20parties
Who went to jail? No one.
Steven H, Normal Jo, et al:
So government interference (Fed, Fannie Mae) had nothing to do with economic melt down. OK. Wow. My view is they were necessary, albeit not sufficient to cause the chaos.
You’ve never answered that government employess are also greedy, incentivized to maximize the size of their fiefdoms. This helps them during and after retirement when they get larger salaries, benefits and then more power to move into post government jobs in industry.
You’ve never answered how Alaska is like Florida and Omaha like New York City so much that a huge monolithic government passes the best rules for all people.
Your answers have been: tax the rich, tax the rich, tax the rich….several thousand times.
I have proposed several things that did not raise income tax but helped the deficit and economy. Pretend like “tax the rich” is off the table for one second (or are you too narrow minded to do that) and come up with some other solutions.
Again, personally, I would encourage you to risk your home and other assets and start a business that pays $15 an hour at least and gives rich benefits. Are you willng to put YOUR money where your mouth is? Or just OUR money?
Stevendad, I respect you, but sometimes you filter your listening as much as Peter N often has. I have not only agreed with some (not all) of your proposals but have advocated several items of my own and agreed with those of others, stating repeatedly over the last several weeks that taxes are only PART of a solution. I have been consistent in one point and that is saying that as the economy grows and recovers, expenses need to be paid for. And the way to pay for them, Constitutionally, is to tax, and you can only tax the money where it exists. For you to say that I, or others here only have the message tax, tax, tax, is much LESS accurate than to say that your primary obstinacy is to claim that no new taxes should be considered under any possible condition.
As soon as I say, or anyone else says, the word “tax” on this forum, there are some here for whom their hands cover their ears, their eyes glaze over, and their brain shrivels into a little black hole from which intelligence can no longer escape. The people on this thread, are on the whole, some of the most intelligent, able people I have encountered on an internet forum. And yet this one word drives the conversation into rambling rants of rage.
Congress is elected. By us. They pass laws and acts that have to be paid for. We are the ones who have to pay for them. With taxes. Some of us would prefer that IRS didn’t exist, or social safety nets didn’t exist or that Obamacare didn’t exist. Some of us wish the Supreme Court had made different decisions 50 or 80 years ago. You can choose to live in the past and long for some utopia that might have existed if everybody else saw the world your way. But this is a country of Republicans and Democrats, Liberals and Conservatives, Radicals and Moderates, poor and rich, and we all have to make this little assembly of mixed ambitions play together.
So let’s live in the present and not fantasy-land. I came on this thread wishing that tax rates could be transformed instantly to those of the 60’s or that the 10% of all income that moved from the middle/working class (lower 90%) to the investor/entrepreneur class (upper 1%) could just be moved back to its origin. Just as you, Stevendad, wish to alter and undo former Supreme Court decisions. But those things won’t happen. Not soon, not instantly. And similarly, nobody is slashing safety nets or eliminating huge swaths of government. Anyone who actually thinks this is likely is just fooling themselves.
The radical elements in our society, whether the small percentage of the country who strongly associate with the tea party, or the small percentage who strongly identify with the Occupy movement are minorities, and they cannot, should not and will not ultimately impose their will and their will alone on the more moderate elements of society. That is the primary message i get from these conversations. My side will not accept the others’ most radical solutions, and they will not accept radical solutions from my side.
We can only do what is politically possible. Right now, that is either to continue the bickering, leaving the conversation to be controlled by the radicals, resulting in nothing but increased debt and chaos; or we can reject the radicals and resume running the government by moderate compromise.
If you would like, Stevendad, I will summarize a point by point opinion of what I think are the good ideas, yours and others, that have been proposed. You have not seemed to care much for my opinions, but I can do that. If we can grow the economy and lower unemployment without raising taxes or throwing grandma in the street, great.
But the conversation will have to continue later … I have other pressing matters.
“government employess are also greedy, incentivized to maximize the size of their fiefdoms”
That is a political caricature, only partially true. About as accurate as my saying that all rich steal from the poor.
“You’ve never answered how Alaska is like Florida and Omaha like New York City so much that a huge monolithic government passes the best rules for all people.” Governing is always imperfect. I’m not sure what sort of answer you expect. Leave everything to cities? states?
My state (Texas) likes to poison the air and its residents’ lungs with toxic chemicals because lax regulations bring big bid’ness. This is why we need the EPA. This is why we sometimes need national regulation.
“Again, personally, I would encourage you to risk your home and other assets and start a business that pays $15 an hour at least and gives rich benefits.”
(a) I have neither money, knowledge, nor aspiration to start a business. Don’t try to make that a black mark against me. It’s not.
(b) Why does every attempt to raise wage and benefit standards some small amount back to previous norms end up with you or others throwing up your hands like it’s a catastrophe?
You already pay above market wages to professionals. What skin is it off your nose if Wal-Mart has to pay a minimum wage equivalent what I made when I was 15? What do you care if companies have to pay medical benefits and wages so that safety nets are less stressed? How does it impact you if there were new marginal rates at 1 million and 10 million dollars income? Why are all of these reasonable proposals off the table when they have zero impact on your life?
I am replying to Peter N here, because it is too cumbersome to reply up above where there is no reply button. Quoted phrases are from Peter N.
“Given [opportunities]? You have to make them or recognize them when they occur.”
Don’t change the subject. MOR and I were referencing how you indicated that favorable conditions of the economy were opportunities for you. Yes they were. As they were for everyone. Guess what? Someone worked to put those opportunities in place. The economy of the healthy middle class that you grew up in was built by FDR and Democrats. They built that. The materials of construction were strong unions, highly progressive tax rates, restrictions on monopolies, and strong economic regulation. You benefitted from the very “opportunities” you now abhor, and resent allowing others to benefit from.
“You give no credit to the company for providing an environment that allows them to create wealth. The deal is that the company gets a portion or return on investment.”
Very interesting statement. You, in turn, give no credit to the government for providing an environment that allows businesses to create wealth. The deal is that the government gets a portion or return on investment. Meaning enough tax revenue to pay for whatever it is that Congress buys.
“Steven H has made all sorts of distorted statements. He thinks I get bonus income. [ You do.] I receive money instead of worked to earn it. [Earn means receive. Same thing.] He thinks I have ridden some sort of curve implying I got hear without effort [never said that ; in fact I explicitly said the opposite] and he keeps worrying about the income gap [excessive income slope, actually, because it is a huge issue and many people smarter than I recognize how hugely important it is] , and wanting to tax others he doesn’t respect [actually I just want to apply needed tax on people who have money as opposed to those who don’t; respect has nothing to do with it] and he has no plan for the money except to squander it [not true; we have debts to pay, since when is paying off the deficits and debt ‘squandering’?; it is good business policy. In my industry, we call it ‘math’.].”
” You should be up in arms about the misery index and it did go down under Reagan” — due primarily to the Fed, plus Reagan’s debt stimulus. If Reagan and Bush2 had not squandered the treasury with unnecessarily extended tax cuts after economy was recovered, Obama could have applied more debt stimulus as well, and gotten us out of the slump faster.
“Spending originates in the congress. Reagan could have shut down the government by not passing the spending bills. Reagan didn’t spend anything on his own.” Congress’ spending was less than Presidential proposals. Reagan led the fight for low taxes and he could and should have asked to raise them back to sustainable levels once the deep tax discounts were no longer needed.
“Do you think people were actually paying 70% in taxes? I don’t.”
Effective tax rates on 0.01% was over 40% until 1985, It is around 25% now.
http://fas.org/sgp/crs/misc/R42729.pdf
“BTW, I remember seeing a huge increase in my take home pay from that event.
That was while I was still working for other people and living in an apartment. It helped me accumulate the money I needed later to buy into the my current company. I wasn’t rich then but I benefited.” Exactly, the very actions that created today’s huge debt, also allowed you to become rich. You rode the curve. And now you want other people’s money to pay back the debt that you benefitted from.
“Why does it always come down to making someone else pay more than their fair share?” Exactly. Why do you want the poor to pay for the sins of the rich?
“It really seems to me that you are resentful and envious of those that made the right decisions.” No. Just resentful of those who don’t recognize the benefits they receive from society, and are unwilling to pay back their fair share.
“I know. You would just say luck and dismiss the 30 years it has taken me to get here. You seem to think success happens over night. Your horizon is too close and have no idea what is beyond it. You think opportunities don’t exist but they do just outside your horizon or ability to see them.”
Not what MOR said. You hear everything through a distortion filter. Not “just luck”. But partially luck and calculated opportunity GIVEN to you by the society you are so abhorrent of. The money you earn (receive for your labor) is only possible due to government …, how did you say? “providing an environment that allows them to create wealth.” The deal is that the government gets a portion or return on investment.
That was for Normal Joe. At least acknowledge that the failure of a federally based program (albeit many were at fault) cannot happen if there is no such program. The Feds are too big and too monolithic to do anything with finesse.
Something occurred to me as well. I hear if constant greed by the wealthy. What about Fed employee greed? They do all they can to build fiefdoms to get up to GS15. I KNOW this. My Dad, brother and brother in law all worked there and thrived because of their competence. However, most they worked with games the system for their own betterment to the exclusion of efficiency and with little if any betterment if the public. There was a well known and repetitive process of buying unneeded furniture and equipment and lavish conferences so there would be 100% budget use (so they could ask for more).
Stevendad, I am sure that such inefficiency exists, but the percentage of waste may not be as large as you think. Agencies often fight for every last dollar to accomplish their appointed task, and then, after funding delays and various cuts, they may find themselves with an unexpected windfall at the end of the year which is too big to spend “normally”, but not received soon enough to spend efficiently. So yes, they buy some equipment that may or may not be useful so as not to weaken themselves in the next appropriation cycle.
This budgeting and allocation process itself is inefficient, and perhaps the rules should be changed to discourage such gaming, but it still may only represent an inefficiency of 5% or so. Large private companies are inefficient is much the same way, with departments fighting for funding and wasting much of it. That does not mean we should eliminate private business.
If Fannie and Freddie did not exist, it might have taken longer for the unregulated greed of the oversized financial industry of the US to destroy the economy, but I have no doubt that the other factors that took down our economy would have done so by themselves in good time, without those two agencies.
I should acknowledge, now that I see the conversation thread, that yes you did point out multiple causes of the economic crash. The error is in putting too much emphasis on the particular trigger and not the existence of the loaded gun. The loaded gun was, as it always is, highly leveraged debt, and the reason that happened was economic deregulation. There was no Fannie and Freddie in 1929 or any of the many earlier economic crashes or panics. Poor economic policy, leveraged debt, unregulated greed – these are the guns and gunpowder that fire the fatal bullet. The trigger changes every time.
Here is one point that I can agree with you. It was greed but it was the bankers, not the entrepeneur that was at fault. So far none of them have gone to jail for their misdeeds. This fact also lessens my faith in the gov.
I think you have misplaced too much of you anger. Too much has been directed against the people that truly create wealth and not enough against the people that you say destroyed it. I don’t think destroyed it is quite the right words but the bankers did hood wink people into getting loans they couldn’t afford and then sell the loans in a fraudulent way. The bankers were taking advantage of the ignorant people. You can’t deny that the people that were conned were ignorant and didn’t know a scan when they see one. I won’t deny there are bankers that were the conn men.
What pisses me off to no end is that the companies ( stock holders ) are forced to pay the huge fines and not the executives that mismanaged the and ran the conns. You have to remember that there are a lot of average people with 401Ks that took a hit. They probably didn’t own the bank stocks directly but they suffered as their mutual funds dropped and yet these conn men go free and they did get their ‘bonus’ money for ripping off the stupid.
Now if you want to blame the regulators you should see some of the Barney Frank YouTube videos on this topic. During the Clinton times banks were urged to make loans easier to get. I am not blaming Clinton for this but is was the democrats in general that wanted to ‘help’ those that really couldn’t afford the loans.
The democrats lie. If is all here on video.
http://youtu.be/hxMInSfanqg
In 2006 I was in Kenton, Ohio helping to start up a machine that creates wealth. In the evening I looked at the paper and notices there were 3 pages of sheriff’s sales. These sales were homes that were being auctioned off. The starting priced was 2/3 of the estimated value. 3 pages. I wondered at the time what was wrong here. Later it became apparent. Looking back I can see we were screwed back in 2006 but no one saw the warning signs or knew what they really meant.
I think we are in a simular situation now because of the high debt. We are screwed. We just don’t feel the pain yet.
When the stuff happens it still will be the most adaptable that will come out head. I know you don’t like this but that is the way it is.
Well, Peter N, I didn’t think you and I would agree on much of anything, but here it is. Yes I agree that bankers have gotten off too lightly. I wish now they had been broken up, but I understand also that the government, in the midst of the panic in 2008/2009 were attempting to protect many of those very stockholders, and so some hasty decisions were made. I wish they would quickly reinstate Glass-Steagall but I’m afraid the bankers’ political power won’t allow that to happen.
You are so right about Federal waste. I can tell you firsthand that the “fighting for the last dollar” scenario Steven H describes is not even close to reality. It may have been 20 years ago, but certainly not now. Federal budgets are as healthy as they have ever been and agencies even have the money to build fancy new facilities or offer expensive training programs.
Peter,
Private companies offer many times more fancy new facilities than the federal government. Simply compare any major private executive’s office to a government head who controls the same number of employees. (Also, compare their salaries.) So far as expensive training programs, we are treated to the extreme exceptions in government excess in the main stream media because it’s news about how our tax dollars are spent. It sells media. No one cares about whether Apple spends money on expensive training programs. It’s not news, so you only hear one side of this comparison.
I once worked in government and, at the same time, my best friend was director of quality control for a large medical device manufacturer. We compared constantly. I have never witnessed waste in government to match my friends tales of stupidity, greed, inside politics, and downright overt waste in his very successful company. Waste happens. When it’s in government, it’s news.
Just talking about what I’ve seen – which is certainly not “fighting for the last dollar”. Didn’t mean to imply there was waste (there may be but I wouldn’t know) ….just saying that it is a crazy mistake to think that budgets are super tight. Only at one agency (EPA) have I seen that to be the case.
Totally agree though about your comments about waste.
After the sequestration, defense agencies are indeed fighting for the last dollar. Other agencies have been cut as well.
That is not true!!!! Defense and intelligence are still sitting really really pretty. Business is booming for them and contractors alike.
Some things we just disagree on but I can tell you for certain you are wrong about this one.
According to the Council on Foreign Relations, “In calendar year 2013, military spending declined from $671 billion to $619 billion, in constant 2011 dollars. In dollar terms, this was the largest decline since 1991. The reduction in U.S. operations in the Middle East and the sequester mean this figure is likely to fall again in 2014.” http://www.cfr.org/defense-budget/trends-us-military-spending/p28855
The U.S. Military has been forced to make cuts, so I’m not sure what you mean by, “… still sitting really, really pretty.”
I’m not talking about the US military. I’m talking about the department of defense and intelligence. They are different entities. And this article mentions “likely to fall” which is what we expected but last I checked we aren’t slowing down…..
Just telling you – I know of not one person here locally that has been hurt severely by cuts. The most they have done is offer “early outs” to those who were retirement age already.
An anecdotal story for whatever it’s worth….
Several years ago I happened to take a process improvement class in Arlington, VA, just outside DC. In that class were several retired career Marines. They were roughly in their late 40s….ish…. and to a person they all said that they were “double dipping” from the federal government. What they meant by double dipping was that like most military and police, they were able to retire after 20 years of service with full benefits. Then they got hired back as private “consultants” doing (in most cases) the same job, for equal or in some cases higher pay.
I have ZERO problem with someone that put in 20 years of military service, joined at 18, now 38 and collect benefits. What else are they supposed to do? They could have gotten a job at Costco and received a pension plus working. Why is that a problem? They earned the pension and now they are still putting into the SS at probably a higher rate.
I know of no private sector job where you can retire at 38, collect your full pension, go back to doing the same job you used to do, and earn your full salary on top of your full pension.
The earliest you can ever collect a pension in the private sector is 55, and even then your pension benefit is severely reduced, typically only about 50% of what your full pension would be.
There are many consultants out there. They are there for a reason. they pay for their own health care and SS. A higher rate is merely making up for the the gov’t was paying for. We had a person in our department that worked for the county for 30 years. She is in her mid 50’s. The sport authority, not technically affiliated with the County offered her a job. She retired from the County and went to work for the Sports Authority making more money. They probably have a different retirement system.
“I know of no private sector job where you can retire at 38, collect your full pension, go back to doing the same job you used to do, and earn your full salary on top of your full pension.”
There aren’t any civilian jobs that can be as brutally hard as the military jobs. Those that are pay a lot of money so they too can retire early.
There are construction and machinery/factory installation jobs where one can be highly paid and retire after 20 years easily.
The woman you mention who worked for the county government — was she able to retire with full benefits in her mid-50s, or do you know? My guess is that she did, as this is more typical of government workers overall — 20 years and you get full benefits.
By contrsat, most private sector companies don’t even offer pensions anymore. And if they do, to retire with full pension benefits you typically have to be 62 or older.
Peter N — “…There aren’t any civilian jobs that can be as brutally hard as the military jobs. Those that are pay a lot of money so they too can retire early…..”
The three retired Marines with whom I took the process improvement class, and who were all double-dipping as per my original post, were all performing desk jobs when they retired….. and when they were-re-hired for those same jobs as consultants.
I work for a defense contractor providing critical functions. Our contracts are starved for money and government agencies are struggling to get and keep needed funding. This is one area I know directly what I am talking about, although, of course, I do not have direct knowledge of all government agencies.
Department of defense and intelligence are indeed impacted negatively and strongly by sequestration. I know this. I see it daily.
There is no federal job where you can retire before 50. Military is something different. Most federal jobs the earliest retirement is 56 but others – that typically involve more dangerous jobs like the secret service – can retire at 50.
I can not acknowledge an assertion that is not based in fact. I have been working in the financial services sector for my entire professional career which spans more than three decades. Back in the ’80s the GSE’s were the defacto standard for real estate qualifications. They were the only game in town and their qualification standards were the only way to ensure that the original lender could sell the load to the secondary market which was the GSEs.
The Savings and Loan debacle virtually killed the primary lending vehicle for community reinvestment. Chalk one up for Paul Volker as the trigger, it was his interest rate policies in response to inflation along with the end of inflation, deregulation, regulatory forbearance, and fraud that killed the S&Ls.
It was the subsequent lending market that ultimately replaced the S&Ls that was the foundation of the Great Recession. Wall Street entered the secondary lending market and marginalized the GSEs. It was the absence of control by the GSEs, not their existence, that blossomed into the housing and lending bubbles.
I wish there was an edit function on this site. “sell the load” should be “sell the loan.”
Thanks Joe. I had not heard it explained that way before.
No, no, no. Wrote a fifty or so line explanation in past that stated EVERYONE. was responsible. However, there would be a zero chance if Fannie Mae and Feddie Mac did not exist! A truly idiotic post.
Stevendad, I understand your reply button does not work on your phone. But please, if you reply to a post, indicate to whom or what you are replying to, or paste a bit of the original in your reply. Otherwise, posts such as yours above here make no sense.
If you are replying to Normal Joe, who posted an excellent summary quoted from Wikipedia, I will have to strongly disagree that it was an idiotic post.
“If Fannie and Freddie did not exist” wishful thinking is not particularly helpful. One could have easily said “If rating agencies had worked properly”, or “If CDS and other such sketchy financial instruments had been properly regulated, or did not exist” or “If Alan Greenspan did not exist”, or “If Reagan had not started deregulating banks in the 80’s”. There are lots of causes and so there are lots of what ifs. What Normal Joe’s truly excellent post pointed out is that the causes were complicated and we need to RESTORE proper and necessary economic regulation that has been dismantled, not give economic free reign to the prime forces of the economic crash by deregulating even more.
As you get older you will see the folly of your thought process. Winston Churchill: “If you’re not a liberal when you are 20 you have no heart. If you aren’t a conservative when you’re 40, you have no brain.”
Churchill’s crown achievement before leaving office was to assure the Brits of a single payer health care system. That’s what the RW now considers “socialized medicine”. The terms “conservative” and” liberal” depend on your definition and that changes over time.
There are no true conservatives in GOP leadership. For 30 years, they have all been borrow-and-spend puppets of their biggest donors. The biggest conservative of the last 30 years was Bill Clinton, who compromised with Congress on spending, fought hard for tax increases necessary to balance the budget, and not only allowed welfare reform but actually campaigned on it.
Reagan and the Bushes are responsible for 3 times the Debt/GDP increase that has occurred under Obama, and Obama’s was all arguably due to a crash that occurred before his watch, and that was due largely to excessive faith in GOP (not conservative) principles of economic deregulation and tax cuts.
A true conservative can do math and understand how to balance the budget. The tax-cut mantra extolled by today’s GOP is neither conservative nor mathematically sound.
Aspire kid. You’re dead wrong about EPA regs and I KNOW medicine regs have gone up tenfold. But in a way, you’re making my point. Had the Feds never gotten into mortgage business, NO CRISIS. Chew on that… Feds are too big and unwieldy to not have trillions of dollars of UNINTENDED CONSEQUECES of any large program. Keep it small.
It is discomforting to repeatedly hear over-simplistic assessments, especially something as convoluted and complex as the Great Recession. Yes, there is much cause and there are many players that have some responsibility in the debacle, but to blame the government alone is a questionable assertion.
The U.S. Senate’s Levin–Coburn Report concluded that the crisis was the result of “high risk, complex financial products; undisclosed conflicts of interest; the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street.
The Financial Crisis Inquiry Commission concluded that the financial crisis was avoidable and was caused by “widespread failures in financial regulation and supervision,” “dramatic failures of corporate governance and risk management at many systemically important financial institutions,” “a combination of excessive borrowing, risky investments, and lack of transparency” by financial institutions, ill preparation and inconsistent action by government that “added to the uncertainty and panic,” a “systemic breakdown in accountability and ethics,” “collapsing mortgage-lending standards and the mortgage securitization pipeline,” deregulation of over-the-counter derivatives, especially credit default swaps, and “the failures of credit rating agencies” to correctly price risk.
The 1999 repeal of the Glass-Steagall Act effectively removed the separation between investment banks and depository banks in the United States.
The immediate cause or trigger of the crisis was the bursting of the United States housing bubble which peaked in approximately 2005–2006. As part of the housing and credit booms, the number of financial agreements called mortgage-backed securities (MBS) and collateralized debt obligations (CDO), which derived their value from mortgage payments and housing prices, greatly increased. Such financial innovation enabled institutions and investors around the world to invest in the U.S. housing market.
While the housing and credit bubbles were building, a series of factors caused the financial system to both expand and become increasingly fragile, a process called financialization. U.S. Government policy from the 1970s onward has emphasized deregulation to encourage business, which resulted in less oversight of activities and less disclosure of information about new activities undertaken by banks and other evolving financial institutions. Thus, policymakers did not immediately recognize the increasingly important role played by financial institutions such as investment banks and hedge funds, also known as the shadow banking system. Some experts believe these institutions had become as important as commercial (depository) banks in providing credit to the U.S. economy, but they were not subject to the same regulations.
During a period of intense competition between mortgage lenders for revenue and market share, and when the supply of creditworthy borrowers was limited, mortgage lenders relaxed underwriting standards and originated riskier mortgages to less creditworthy borrowers. In the view of some analysts, the relatively conservative government-sponsored enterprises (GSEs) such as Fanny Mae and Freddy Mac policed mortgage originators and maintained relatively high underwriting standards prior to 2003. However, as market power shifted from securitizers to originators and as intense competition from private securitizers undermined GSE power, mortgage standards declined and risky loans proliferated. The worst loans were originated in 2004–2007, the years of the most intense competition between securitizers and the lowest market share for the GSEs. U.S. subprime lending expanded dramatically 2004–2006.
As well as easy credit conditions, there is evidence that competitive pressures contributed to an increase in the amount of subprime lending during the years preceding the crisis. Major U.S. investment banks and GSEs like Fannie Mae played an important role in the expansion of lending, with GSEs eventually relaxing their standards to try to catch up with the private banks.
A contrarian view is that Fannie Mae and Freddie Mac led the way to relaxed underwriting standards, starting in 1995, by advocating the use of easy-to-qualify automated underwriting and appraisal systems, by designing the no-downpayment products issued by lenders, by the promotion of thousands of small mortgage brokers, and by their close relationship to subprime loan aggregators such as Countrywide.
The majority report of the Financial Crisis Inquiry Commission, written by the six Democratic appointees, the minority report, written by 3 of the 4 Republican appointees, studies by Federal Reserve economists, and the work of several independent scholars generally contend that government affordable housing policy was not the primary cause of the financial crisis. Although they concede that governmental policies had some role in causing the crisis, they contend that GSE loans performed better than loans securitized by private investment banks, and performed better than some loans originated by institutions that held loans in their own portfolios.
http://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%9308
You are correct. Although there are many to blame because the Great Recession was a confluence of a “perfect storm”, the main villain is Alan Greenspan. It was the Fed that kept interest rates artificially low which created the bubble that finally burst. Deregulation so trumpeted since Reagan, and the increased national debt caused by tax cuts plus increased spending, greatly helped, but it was Greenspan’s folly that triggered this mess. The real question here is whether our view is so obstructed by partisanship that we won’t learn from the mistakes made and are then destined to repeat them.
Again, if the government would just get out of the way… Lending went from ultraloose to ultratight. The restrictions on drilling are counter productive. Many hundreds of biilions are spent in following regs that are at best of minimal value. I get it, grew up in the ’60’s. Companies dumped raw effluent into the rivers. We have gone too far. Regulatory creep costs billions and billions and frequently does far more than the original legislation intended. But this is how bureaucrats raise their budgets and power. We could grow another 2 to 3 % with some reasonable loosening of regs. That would help everything. But the Fed government is so large and monolithic that it cannot do anything but vastly overreact to everything. That is why more should be done locally and state level.
Regulations always must be reviewed to assure that they are relevant and cost effective. But regulations were greatly loosened from the ’80’s to 2008, and it resulted in crisis after crisis from the Savings and Loan debacle to the Great Recession. Bureaucrats gain nothing by recommending nonsensical regulations although recommending the discontinuance of marginal regulations can backfire if something goes wrong. Yes, there are some regs out there that need modification, but no, we are far from overregulated, quite the opposite.
Steven H, JTM. Please spend $15 or so for a book called “Cash Flow Quadrant”. It explains how money is made extremely well: one quadrant is most people, working for others; one is people like me getting professional degrees or having superlative skills (ie jocks and actors); those who make money with other people’s time (OPT) or other people’s money (OPM). These exclude those few born to great wealth and those few who invest extremely well with they’re own money. The current state if thing is due to shrinkage of money into quadrant one (earned) because OPT money going to China, et al. Also OPM is going to the government or held in low risk investments due to fear of government. For example, a decent recovery in housing, prevented by tight lending (fear of government) would raise the economy hugely with jobs that can’t be exported. These have shrunk the money to earners, not some conspiracy of the wealthy against the middle class.
Amen. I am honestly starting to feel bad for those that blame all this on some sort of conspiratory machine. Must be a helpless feeling.
Here are the primary causes of the decline of wealth and income of the middle class:
– The perpetual quest for power, money and influence and the natural concentration of the above unless laws are actively applied to restrict such concentration.
– The rate of return on capital being greater than economic growth produces income disparity favoring those with capital (See Capital in the 21st Century, Piketti, et. al.)
– Laws and influences (reduced minimum wage, weak unions, insufficiently progressive tax policy, lax monopoly enforcement, non-protective trade policy) which reduce the negotiation power of the workers, tend to increase wage disparity in favor of the wealthy).
The reason OPT money is going overseas is due to poor trade policy.
The reason OPM money is going to government is due to excess money having to be paid to support safety nets due to lack of income in quadrant 1 due to income disparity.
Seems to me the whole cycle is caused by the hemorrhaging of the nation’s wealth and jobs to foreign factories. Every job sent overseas drains our nation’s economy. Perhaps we should figure out how to plug that hole.
“- The perpetual quest for power, money and influence and the natural concentration of the above unless laws are actively applied to restrict such concentration.”
Non-sense.
” The rate of return on capital being greater than economic growth produces income disparity favoring those with capital ”
True, because the ROI on machinery is higher. So what is your solution to making the ROI of people higher?
“The reason OPT money is going overseas is due to poor trade policy.”
Yes, did you just hear that Burger King wants to buy Tim Horton’s and move its head quarters to Canada to reduce corporate income taxes? It make sense to me but congress is full of idiots if they didn’t see that coming.
“The reason OPM money is going to government is due to excess money having to be paid to support safety nets due to lack of income in quadrant 1 due to income disparity.”
No it is simply due to spending on these safety nets. You still can’t get it out of your head that how much Bill Gates or Warren Buffet make or own doesn’t affect what others make unless they own stock.
“Seems to me the whole cycle is caused by the hemorrhaging of the nation’s wealth and jobs to foreign factories. ”
A lot of the wealth is still owned by US companies. They just don’t want to bring it back here because of taxes.
Taxes and labor are cheaper over seas. What is your solution?
” Perhaps we should figure out how to plug that hole.”
The corporate tax rate could be made competitive but there isn’t much that can be done to make US workers themselves, without machines, more competitive given the increase in minimum wage.
There aren’t any easy liberal solutions. Making everyone equally poor is not going to work. You will “Detroit” the whole of the US. Those that can will leave. Personally, I don’t think any solution will be found. People will squabble until disaster happens. Then it will be too late.
Just saw an article showing that the income gap between white and black US citizens is quite wide as well. In fact, about 27% of all black families live in poverty, vs about 9% of all white families. Maybe we should raise taxes on white people? 🙂
The point isn’t serious….just making the claim that sometimes things are the way they develop and it is not the government’s job to fix these sorts of statistical anomalies. Sometimes the top 1%’s income rises faster than the 99%. Sometimes metropolitan areas grow faster than others. Sometimes certain races or groups do better than others.
It’s all about liberty. The main thing we have to make sure of – and I know many on here have echoed this – is are the rules of the game set up to favor one group or another? That’s a great question to ponder in the black v white debate (a debate for another day). In context of our 1% vs 99% argument – is there upward mobility? I firmly believe that there is.
Note: “Rich” is a shorthand, not an insult or a derogatory term. Generally, it refers to people in the 1%, which spans a vast range of income from about $400K to about $10B (Warren Buffett).
Nobody’s liberty is being threatened. And certainly not that of the most well-off. That’s just a right-wing poll-tested talking phrase about raising taxes being the same as stealing liberty. It’s nonsense, really.
If anyone’s liberty has been stolen, it is the liberty of the people at the bottom and middle of the income ladder. With wages suppressed, college costs skyrocketing, mortgages lost, unemployment up … there are fewer paths up the ladder, and the ladder rungs are farther apart.
“are the rules of the game set up to favor one group or another?”
This is a GREAT question. It gets back to what happened to change the income curve. It gets back to the question about whether the economy has control knobs and who controlled them when the income curve changed. So what happened around 1980?
– Tax laws were changed drastically in 1980’s. Taxes on everyone dropped (but spending increased, especially on the Reagan’s defense initiatives, so debt increased), but most of the benefit of the tax cuts went to the most wealthy. There might have been an argument that the wealthy deserved to get more back since they paid more in … except that debt increased, so by all rights, they are responsible for most of the debt. Anyway, taxes decreased, and the rich benefitted.
– Unions were weakened. Reagan’s busting of the air traffic control union sent shockwaves through unions for decades. Weaker unions means less pay for workers and more for management. It decreases wages even in non-union industries. Score another for the rich.
– Monopolization laws were not changed – Reagan just decided they would be enforced ‘differently’, which meant hardly at all. The mergers that have occurred since the 1980’s would not have been allowed in previous decades. Larger companies means higher paid management, less competition, and less negotiating power for workers. Score another one for the rich.
– Glass-Steagall repeal. Clinton’s folly. It was pushed and written by GOP, but Bill should not have signed it. Finance sector bloomed. Score another for the rich.
– Bank deregulation – over and over. 1980’s started the deregulation madness that culminated in the 2008 crash. Ultimately the financial sector benefitted most, even after they caused the crash that took trillions out of the economy – mostly away from jobs and mortgages of middle class. Rich folks incomes dipped a bit but recovered. Stock markets, which are the economy of the rich, are higher than ever. Score another for the rich.
– Globalization – That’s a trade policy, controlled by the government. It has allowed easy exporting of jobs out of the US, favoring large corps and damaging manufacturing and low/medium skill workers’ prospects here at home. Yet another one for the rich.
All of the major changes in economic laws and rules for the last 30 years have favored the rich. The proof is in the pudding. Income inequality increases are not some random fortuitous event that just happens to favor the rich. It is an inevitability directly attributable to economic policy changes put in place, primarily by GOP administrations or legislators over the last 30 or so years.
The rich talk about an additional 5% in taxes being unacceptable theft of liberty. How about a loss of 25% of wages for 90% of Americans. That was not random. That was the result of GOP policy. 67% of income share in 1980 went to about 50% today. 50/67 = about 75%, or a 25% drop. It not only created hardship on 90% of Americans, and more poverty, but now the “consolation prize” of safety nets are put at risk because, the rich do not want to pay for the debt that their tax cuts created, but they want the working class and poor to pay and suffer YET AGAIN.
So the answer is YES, the rules have been changed to favor the rich. Income disparity at historic levels is the quantitative proof. There is a lot of talk about how the poor are responsible for their plight, but look at the laws, look at the history, look at the evidence. People didn’t suddenly get lazier in 1980. Laws changed. Policy changed. And the economy has changed. For the worse. We need to make it better.
I know that the people here, Peter, JB, Ken, Stevendad, as well as Normal Joe, JTM, Man-of-reason, myself, and even fuming Peter N care about this country, and want to improve it. No one wants to be taken advantage of. No one wants to lose what they have worked for. I don’t have an instant solution nor does anyone else. magical tax cuts didn’t work for Kansas because they never really worked for Reagan either. Tax cuts without revenue cuts creates debt, not prosperity. Tax increases alone won’t do it, but they should not be outright rejected either. Smart spending, intelligent discussion and a willingness to look at actual facts and mathematics are all that will save us. Along with a level of respect for others not at our income level without assumptions that others are unworthy of help.
“Nobody’s liberty is being threatened. ”
http://taxfoundation.org/tax-topics/tax-freedom-day
Do you think I make this stuff up? What is tax freedom day? Why does it keep getting later and later? If I/we am not free then what am I?
You have no answer so far.
It appears I am working a few more days to pay the Obama care tax.
“How about a loss of 25% of wages for 90% of Americans”
We have been through this. The government didn’t take their money. They were simply worth less in today’s economy. That is a big difference.
“If anyone’s liberty has been stolen, it is the liberty of the people at the bottom and middle of the income ladder. ”
They aren’t getting taxed at all. They are free do what they want. They can sit around all day and collect their handouts that have been extorted from people like me by people like you.
“, especially on the Reagan’s defense initiatives, so debt increased), but most of the benefit of the tax cuts went to the most wealthy. ” The government is responsible for defense as outlined in the Constitution. The tax cuts benefit the rich because the poor don’t pay much if any taxes to begin with.
Didn’t you see my post on bar room economics?
“So the answer is YES, the rules have been changed to favor the rich.”
Tell my accountant that.
” I don’t have an instant solution nor does anyone else.”
Finally, you admit it. So what would you do with the extra taxes but waste it like the gov has do since LBJ war on poverty which has failed big time.
“Tax cuts without revenue cuts creates debt, not prosperity.”
Only spending creates debt.
” Smart spending”
This is a Oxymoron given the current state of affairs.
Pewter N, your problem is you don’t listen to anyone except yourself. You have ridden the change in the economic curve that others put in place for you, and have benefitted tremendously from economic changes that you think are happenstance and that you are just clever enough to have benefitted from with your superior intelligence and skill.
You were born on third base and think you hit a triple.
BTW, “Pewter N” was a typo, not some obscure reference to silver or somesuch.
Libtard distortions again.
“You have ridden”
This implies that something else has done the work of getting here. Not so.
“the change in the economic curve that others put in place for you,”
I anticipated and adapted. I didn’t try to go down roads that were dead ends.
“You were born on third base and think you hit a triple”
Another libtard lie. I graduate from college with a debt. I started out a few steps behind home plate just like a lot of people. My debt wasn’t that big but neither was the navy pay I used to pay it off.
When I graduated from college I was as flaky as a bowl of cereal with all the other fruits and nuts. After my time in the navy I came out a serious person with goals and willing to put in the long hours to achieve them. I was use to long hours after the navy. During my time in the navy I spent my own money to buy personal computer parts and assemble them and program them. There were no PCs in the mid to late 70s. This stuff cost a fortune by today’s standards but it gave me a head start, an advantage that I never lost but I paid for that out of my own pocket and did this with my own time.
I haven’t had a personal credit card for over 30 years. I didn’t borrow money at all after I paid off my first car while in the navy. I didn’t think I even had a credit rating. I started investing in the stock market in the early 1980s. So after 30 years I have accumulated some money. I never took money out until I needed it to buy land and a building for my business. It took a long time to get to third base.
The reason why I don’t respect you or others is that you assume those that I did start on third base and received all sorts of bonus income instead of earning it.
I bet if you talk to most successful business owners they will have similar stories. It takes a lot of personal capital ( time ) to start a business.
Peter N – Get off your high horse! You still don’t get it!! Debt is caused by spending more than you receive, it is a 2 part equation, to ignore either part is ruin. As long as elitist people like you place blame solely on those “lesser than you”, I don’t care if a few elitist, fattened pigs get slaughtered, as you say “Better them than me!”. When will you people understand “trickle-down” and”starve the beast” doesn’t work? Trickle-down just allows you to pay less taxes while debt increases. Starve the beast does the same. Both have increased debt to the point where taxes will NOT go down, we will just get less for what is paid as interest expense dramatically increases. At the same time, many like you, back massive defense spending while backing cuts to welfare, and back huge management pay packages because they saved money by cutting wages of those below them, all of which shows where your values are.
Bad tax policy along with bad spending policy has put us here, not spending alone. If Bush had left taxes alone or spending alone, we would be in a different place today, instead this “conservative” increased spending while decreasing tax rates, then the conservatives of today try to place the debt blame on democrats and both parties claim the other incites class warfare. You, yourself, complain that Steven H just continues to spew liberal talking points, how is it that you continuing to just spew conservative talking points adding any more to the conversation? How is that any better?!?!! Just because someone else has a different view doesn’t make them a lesser person or their points any less valid, if it did most on here would have stopped listening to you long ago.
“Debt is caused by spending more than you receive, it is a 2 part equation, to ignore either part is ruin.”
Yes, but is the spending more than you receive that is the problem. Business owners know they must cut back spending when incomes drop.
If you have no income you will not go into debt unless you spend. It is spending that causes deficits.
“At the same time, many like you, back massive defense spending while backing cuts to welfare”
Have a military is mentioned in the Constitution. The welfare programs are not. Can’t refute that. This is what infuriates the libtards. They can only talk in terms of forcing their liberal agenda on others. They can’t use the Constitution to make their case. Libtards are un-Constitutional.
“and back huge management pay packages because they saved money by cutting wages of those below them, all of which shows where your values are.”
Here is another reason I hate libtards. They assume too much and make accusations that are false by trying to stereo-type others. My “serfs” are well paid.
“Bad tax policy along with bad spending policy has put us here, not spending alone. If Bush had left taxes alone or spending alone, we would be in a different place today, instead this “conservative” increased spending while decreasing tax rates, then the conservatives of today try to place the debt blame on democrats and both parties claim the other incites class warfare. ”
I thought I made it clear I didn’t vote for Bush. I didn’t think he was smart enough and I didn’t like the elder Bush’s new world order crap either. I am a libertarian/tea party type. You go about your business as long as it doesn’t affect mine and I will go about mine as long as it doesn’t affect yours. I am not like the libtards that want to impose their liberal religion on everybody.
It is statements like this where I lose all respect for the libtards that
“Business owners know they must cut back spending when incomes drop.” – Yet, we all know demands on government go up when the economy takes a dive, increasing the need for expenses while also decreasing income. Of course, when we could have a potential surplus, there are always calls to cut taxes, not to pay down debt or prepare for the future. We will all pay for this lack of looking forward whether we want to or not, you included.
“Have a military is mentioned in the Constitution.” – Umm, yes, but to what extent and how much to spend is debatable. We spend more than the rest of the world combined and many are still asking for yearly increases. SS and medicare are the largest and fastest increasing expenses, what do you propose we do, eliminate them?
Did I ever say you voted for Bush?!!?!? Quite sure I didn’t. You sir, have shown little respect for anyone on here and I have a feeling you don’t show it any better in person unless deemed worthy because the other person is richer than you. Your lack of respect for others is why I have little respect for people like you. You could learn a thing or two from the other wealthy people on this board and elsewhere. Of course, you are a rich guy, so that alone give you the right to be that way.
Now you show your true colors Peter, you think of your employees as indebted to you(“serfs”) only because you employ them, but without them you would have nothing. In who’s opinion is it that your employees are well paid, theirs, or yours!
You really are reaching for something. Normal Joe first used those words. I use the term to mock his statement. Notice the quotes. Read the response I made to Normal Joe. Do a search for the word serf if you know how.
We have very low turn over. Many have been with us for over 20 years. I saw the post about company and employee loyalty. That hasn’t been a problem for us. In fact the problem we have will be replacing the old and experienced workers because they have what we call tribal knowledge that will be difficult to replace.
You are trying to find fault where there is none. Like I said above in response to Normal Joe, you would be jealous of our ‘serfs’
BTW, it is easy debating with you guys. You have no answers and have to resort to outrageous statements in an effort to try to discredit what I have posted because you can’t refute it in a logical manner. It shows you are frustrated and how illogical you libs are.
Thanks for your personal history, Peter N. It’s a respectable story. It also proves you rode the curve without even knowing it. Riding the curve doesn’t mean you don’t work hard. It doesn’t mean you are lazy and got most of your achievements on someone else’s effort. It means you got some advantages that others don’t have simply by when and where you lived in stages of your life.
You were in college in late 60’s or early 70’s by the sound of it. Your parents, if they were like mine made a decent living in the 50’s to 70’s economy where even middle class incomes rode up with GDP. College was a lot cheaper then than now, and I mean in real inflation adjusted dollars not raw dollars. That’s a big advantage you had over today’s college student. You started investing in the 80’s. Wise decision. You got the benefit of Reagan’s debt-ridden stimulus to the economy which drove up stocks. You went to school and got in business at fortuitous times, using a bit of actual wisdom, fortitude and hard work to take advantage of opportunity knocking. Good for you. You rode the curve very well. But the curve definitely helped you out.
Since 1980, the curve has taken most people down. And the problem is, you don’t see how good fortune smiled on you so you despise the people who are not so lucky. You think they are deserving of a sorry lot in life. You don’t care that the economy has soured and made their life harder than yours, even when they apply equal effort and skill. Not your fault, right? So what if people have to run twice as fast and work twice as hard to achieve what you achieved. You say I make assumptions about you. You make incorrect assumptions in almost every one of your posts on this blog, assuming that 90% of people are stupider and lazier than you. That is why I have trouble giving you any respect.
“It means you got some advantages that others don’t have simply by when and where you lived in stages of your life.”
What advantages? There were opportunities that I took advantage of. I had to be able to see the opportunities and be PREPARED to take advantage of the opportunities.
“You got the benefit of Reagan’s debt-ridden stimulus to the economy which drove up stocks. ”
You forgot Carter’s stagflation. Do you remember the misery index which as the sum of inflation and unemployment?
http://www.miseryindex.us/indexbyyear.aspx
Reagon had to do something because the conditions under Carter were much worse than they are now.
“But the curve definitely helped you out.”
So who made this “curve”? It was people working and investing.
“Since 1980, the curve has taken most people down. And the problem is, you don’t see how good fortune smiled on you so you despise the people who are not so lucky.”
No you keep distorting things. I despise those that want to impose their liberal religion on me. Not all poor want to do that. Just the libtards.
“You think they are deserving of a sorry lot in life. You don’t care that the economy has soured and made their life harder than yours, even when they apply equal effort and skill. ”
The economy hasn’t soured. You are just feeling sorry for yourself. The misery index has come down since Reagan saved the day.
” even when they apply equal effort and skill.”
Again you assume too much.
“You make incorrect assumptions in almost every one of your posts on this blog, assuming that 90% of people are stupider and lazier than you.”
I have not said this at all. I don’t care how lazy or stupid people are as long as they don’t impose their lazy and stupid ideas on me.
I am not trying to impose anything on you whereas you want to impose your libtard religion on me. You have the right to be liberal with your own money but not mine.
I took advantage of the situation. However, I had to have money to do so that that required foregoing immediate gratification.
Peter N,
You are correct that it is only those who prepare that take advantage of opportunities. But realize that there are many who are prepared that never are given the big opportunities. Also realize that not everyone is interested in becoming wealthy. They may seek the pleasure of doing something well and meaningful, or living modestly and raising a family. I’m sure you can think of many people in your life who could make more money in business for themselves or by working elsewhere, but are simply not interested. That in no way diminishes their value. They are the ones who work for you and allow you to prosper. They created your wealth.
StevenH has made some very good points, yet you answer him disrespectfully by dismissing him as “libtard”, and his ideas “libtard religion” rather than actually addressing the points he makes. Have you noticed that you are the only one using such terms? No one to my knowledge has called you a “conservaturd”, or did I miss that?
So far as inflation is concerned, presidents have little control of that. Carter didn’t cause stagflation any more than Reagan rescued us from it. It was the Federal Reserve, acting independently, that caused the ’81-’82 recession which increased unemployment and halted wage increases and the inflationary spiral. Reagan, to his credit, stimulated the economy by deficit spending to a greater degree than Obama has been allowed, and brought a fairly quick end to the recession. That’s the required medicine. He increased the national debt by 54% (adjusted for inflation) his first term, still a record, but instead of reducing spending once the recession ended, he continued using the credit card and drove up the debt another 47% during his second.
In 1980, the very wealthy took home only 30% after a certain income level was reached. That increased to 72% with Reagan’s tax cuts, a 140% INCREASE in take home pay! And, by the end of his presidency, many in the middle class were actually paying more in taxes than when he started. And yes, if you are in the 1%, you definitely benefitted from those deficits that you think the middle class, poor, and elderly should pay back by cutting their benefits..
The reality is that there are many fewer people who scam the system for freebees than you are led to resentfully believe and most all work just as hard and many times, just as many or more hours as you do. Being wealthy is in no way always linked to hard work, brains, or stamina, just as being poor is seldom the result of sloth or stupidity. Perhaps we can at least agree on one thing. We need a society that rewards all of those who work hard, smart, and diligently, a “meritocracy”. We need to give everyone the opportunity to achieve the highest level of his ambition, whether that’s income or self fulfillment. That’s what will benefit everyone and we are a long way from that goal, even though some of us achieve it through sheer good fortune.
“You are correct that it is only those who prepare that take advantage of opportunities. But realize that there are many who are prepared that never are given the big opportunities.”
Given? You have to make them or recognize them when they occur. Just because you don’t or didn’t see them does mean they aren’t there. Their are opportunities even in being laid off.
One of the most significant events that happen to me occurred when I was laid off back in 1985. I was highly paid at the time but I didn’t agree with management on a lot of things. I got laid off along with about 12 others. I could have said woe is me but by that night I was half packed to move and a little pissed.
I ended up working for some acquaintances with the provision that I would later be able to buy in. The pay wasn’t good compared to what I was used to but I knew I could change that around. The first week we got a small job. I told the owners to bid 20% higher than they were thinking about. I should have said 25% because we got the job. I am now president/half owner. The managers that “gave me an opportunity to do things my way” didn’t last long. The company that laid me off is one of my best customers now.
“Also realize that not everyone is interested in becoming wealthy”
I understand that and I think it is their right to do what is best for them as long as it doesn’t impact me.
“That in no way diminishes their value. They are the ones who work for you and allow you to prosper. They created your wealth.”
You have such a distorted view. You give no credit to the company for providing an environment that allows them to create wealth. The deal is that the company gets a portion or return on investment.
“StevenH has made some very good points, yet you answer him disrespectfully by dismissing him as “libtard”, ”
Steven H has made all sorts of distorted statements. He thinks I get bonus income. I receive money instead of worked to earn it. He thinks I have ridden some sort of curve implying I got hear without effort and he keeps worrying about the income gap, and wanting to tax others he doesn’t respect but he has no plan for the money except to squander it.
“So far as inflation is concerned, presidents have little control of that. ”
Who does? If the gov doesn’t print money there will be no inflation.
Inflation is a hidden tax that you would call regressive. You should be up in arms about the misery index and it did go down under Reagan.
“He increased the national debt by 54% (adjusted for inflation) his first term, still a record, but instead of reducing spending once the recession ended, he continued using the credit card and drove up the debt another 47% during his second.”
Spending originates in the congress. Reagan could have shut down the government by not passing the spending bills. Reagan didn’t spend anything on his own.
“In 1980, the very wealthy took home only 30% after a certain income level was reached. That increased to 72% with Reagan’s tax cuts, a 140% INCREASE in take home pay! ”
Do you think people were actually paying 70% in taxes? I don’t. BTW, I remember seeing a huge increase in my take home pay from that event.
That was while I was still working for other people and living in an apartment. It helped me accumulate the money I needed later to buy into the my current company. I wasn’t rich then but I benefited.
Why does it always come down to making someone else pay more than their fair share? It really seems to me that you are resentful and envious of those that made the right decisions.
“Being wealthy is in no way always linked to hard work, brains, or stamina, just as being poor is seldom the result of sloth or stupidity. ”
I know. You would just say luck and dismiss the 30 years it has taken me to get here. You seem to think success happens over night. Your horizon is too close and have no idea what is beyond it. You think opportunities don’t exist but they do just outside your horizon or ability to see them.
“We need to give everyone the opportunity to achieve the highest level of his ambition, whether that’s income or self fulfillment.”
I wonder how things would have been different if I wasn’t laid off. I was well paid and would have been comfortable I’m sure.
The opportunity to leave the company and do things my way was always there.
What you fail to realize is that there will always be people that are better adapted to doing things better than someone else. Why aren’t you complaining that basketball teams are not 80% white in proportion to the population? Basketball players make a lot of money right out of college without having to build a company over many years. They make much more than I do over a year.
Why don’t you direct your anger and contempt at them? Then you can rightfully talk about bonus income etc. Except for hiring an agent they create no jobs or but they may help sell shoes.
For clarification, of which much is needed here, my use of the word “serf” was in response to a hypothetical scenario offered by JC to which Peter N replied could be done “easily.” We should all strive harder to not put words into other peoples mouths.
I used “serf” to high light how you, and other liberals(I am being nice here), distort and exaggerate. This thread is full of liberal distortions and using words with bad connotations like ride the curve when it took a lot of work.
Peter N August 25, 2014 at 9:30 am
“I used “serf” to high light how you, and other liberals(I am being nice here), distort and exaggerate. This thread is full of liberal distortions…”
As if you never resort to such hyperbole?
It is almost comical, if not so pathetic, the way you keep citing all the most radical conservative news (sic) sources that have been proven to be nothing more than a great big echo chamber promoting unpopular or unproven policies that wouldn’t see the light of day if not for the billions of private dollars invested in this self serving network.
Our ultra-conservative radicals are frighteningly similar to the poor Russian people who have been fed erroneous information all their lives to the point that they can’t hold a cogent argument without appealing to one of their government propaganda machines. They, like our radical right, can’t find a conspiracy that they don’t like.
It is so ironic that our TP Conservative zealots are so similar to the former communist societies that they claim to hate so patriotically.
Steven H: “If anyone’s liberty has been stolen, it is the liberty of the people at the bottom and middle of the income ladder. ”
Peter N: They aren’t getting taxed at all. They are free do what they want. They can sit around all day and collect their handouts that have been extorted from people like me by people like you.
Peter N., if any statement portrays your complete misconception of the world, it is this one, especially when combined with your portrayal of the rich as “slaves” who are forced to work for others.
You can’t tell up from down, or slave from slavedriver. I think I will have to just not answer your posts, because it becomes increasingly evident that any words spent on you are a waste of effort.
Peter N: “BTW, it is easy debating with you guys. You have no answers and have to resort to outrageous statements in an effort to try to discredit what I have posted because you can’t refute it in a logical manner. It shows you are frustrated and how illogical you libs are.”
Peter N, “we” have lots of answers, all of which you ignore. You, on the other hand, alternate between the occasional and rare sensible post with information, and the more common enraged rant full of insult and other-worldly illogical assertions such as:
– Only spending causes debt (when it is clearly the difference of income and spending)
– Governments should act like businesses and cut spending when income drops (when it is well known that counter-cycical national government spending is necessary in a downturn, very unlike the responsibility of business).
– The rich are slaves forced to work, while the poor are lay-abouts who can lounge about receiving free stuff, (when by-and-large the poor are forced to work to survive, and it is the rich who can afford luxury and free time; most of those receiving benefits are retired, disabled, mothers raising children, or people who would truly rather be working than be unemployed).
“Peter N, “we” have lots of answers, all of which you ignore. ”
Which one doesn’t include tax and spend.
Which one takes personal responsibility for their situation instead of blaming others?
What gives one the right to just add 3.8% tax just to provide some other lame brain health care. If this can be done are we truly free when the gov can just decide to take what it wants?
Except for a few young, courageous and idealistic people in the military there are no brave in this country and there are no free. We exist only to be exploited.
“- Only spending causes debt (when it is clearly the difference of income and spending)”
yes, but if you have no income you can avoid debt by not spending. You have control over what you spend.
“- Governments should act like businesses and cut spending when income drops (when it is well known that counter-cycical national government spending is necessary in a downturn, very unlike the responsibility of business).”
I never said this.
“- The rich are slaves forced to work,”
for others. Refute it. The only option is to not make so much money. Do you really think this would help?
” while the poor are lay-abouts who can lounge about receiving free stuff, (when by-and-large the poor are forced to work to survive, and it is the rich who can afford luxury and free time;”
This is why I call you a libtard. When you own a business it is a tighter bond than a marriage. I don’t take vacations like my employees do.
You have no concept of what it takes to be a business owner.
“most of those receiving benefits are retired, disabled, mothers raising children, or people who would truly rather be working than be unemployed).”
Fine, it is your libtard religion. You pay for them just don’t ask me too. I will take care of my own.
According to your link:
“Tax Freedom Day® is the day when the nation as a whole has earned enough money to pay off its total tax bill for the year. Tax Freedom Day provides Americans with an easy way to gauge the overall tax take-a task that can otherwise be daunting due to the multiplicity of taxes at various levels of government and “hidden” taxes and fees that are often buried in the cost of living. Tax Freedom Day computed by dividing total tax collections by the nation’s income, as reported by the Bureau of Economic Analysis. Every dollar that is officially called income by the government is counted, and every payment that is officially considered a tax is counted. The resulting percentage is then converted into days of a 365-day calendar year.”
It’s an artificial number, an average, not a mean. Some people’s is earlier, while some people’s is later.
So, Peter, it was wrong of me to say before that you have not earned money or that the rich have stolen money from the poor. But it is also incorrect to claim that poor and middle class have fallen on hard times EXCLUSIVELY from failures on their part to adapt to modern economy, or from random uncontrollable market swings that might as easily benefit them again in ten years.
Government policy has changed. The men behind the curtain have been tweaking the knobs for decades creating advantage for business and the wealthy, and while many were well-meaning in thinking “what is good for business is good for the country”, and “rising tides lift all boats”, the side effect has been the income disparity, or high income slope, that this whole discussion is about. We need to fix the country and we ought to fix it, NOT as warring factions of rich and poor, with each side blaming the other for greed and sloth; but instead with programs that we can all get behind, such as some of those discussed here. Better education policy that does not bankrupt parents. More training and apprenticeship in businesses for new employees, possibly with tax incentives to accomplish those goals. Easing tax and regulatory burdens on small business while compelling large business to pay their share. A renewed interest in breaking up big monopolies. Restoration of Glass-Steagall. There are many things that can be done besides only raising taxes. But we need to look at tax revenue as a necessary evil to restore sensible budgets as well. We cannot continue to fall prey to the “magic tax cut” solution that alone has never and will never work to make this country prosperous.
Nor will the magic “tax the rich” solution work either. We are certainly already doing that now anyway – so we will see what impact it has. Totally agree with education, training and tax incentives for all of the above. Great point.
Your burger chef of the future. The machine will cook the burger to the medium rare I want and not screw up the order. I don’t need a person with a bad attitude taking my order. There are plenty of kiosks and apps that allow me to place my order, but the person can still screw it up.
http://ovens.reviewed.com/news/will-this-burger-bot-smash-americas-fast-food-jobs?utm_source=usat&utm_medium=referral&utm_campaign=collab
the skilled are out of work or underemployed or underpaid…..who are these skilled people you keep talking about? There aren’t enough plumbers or AC tech guys out there so what “skilled” labor is being underpaid? Not the auto union workers, not the welders. They might have a few less car brands to build, but they aren’t being underpaid. Not auto mechanics or airline mechanics. the manufacturing world can’t find enough machinists because people don’t want to do those jobs.
It’s the unskilled that are out of work. Their job market has shrunk tremendously. This means demand outweighs supply (which is the 2-for-1 situation Steven H references). When demand outweighs supply, wages decline. The unskilled labor force is largely screwed….. yet there are still opportunities in many fields that require training and skill that people just don’t want to do. People will adjust though – being out of work sucks!
http://www.forbes.com/sites/beltway/2014/07/15/whats-the-matter-with-kansas-and-its-tax-cuts-it-cant-do-math/
http://moneymorning.com/2013/05/22/high-taxes-mean-its-lights-out-for-california/
Good article. I wonder what Steven H’s solution to this would be. California is another Detroit on a much bigger scale. The politicians are going to run California into bankruptcy by failing to make the tough decisions to get the budget in order by cutting social programs. As it is the “cans” are leaving and the “cannots” will be left holding the bag just like in Detroit. The gov is not helping at all by allowing illegal immigration.
Japan will probably go down the toilet first. California will drag down the US with it soon afterwards.
Maybe they can just increase taxes on high income earners again.
Why are companies leaving California in droves? High taxes will make a prudent person move to lower tax states. Just like companies are merging with international companies with lower taxes. Why pay more than you have to when your services are getting worse and worse.
http://finance.yahoo.com/news/how-much–100-is-worth-in-your-state-152310027.html
Steven H – in case you missed my response above to seeing your perspective:
I have never disparaged the group you refer to. I have many friends and family members as a part of this group as well – so I know better than to paint a whole group with one brush. If you read back, you’ll see that it is you that is doing that, not me. You speak for how “the people” feel – I am only speaking for myself and other people I have personal relationships with. When I talk about “lazy people”, I’m just referring to those that I have seen with my own eyes. Neither of us have any idea what percentage of the struggling fall in this category. I have seen many hard working people struggling as well. It’s not black and white.
That said, I am the last thing from selfish financially. I am not part of a ‘culture of hoarding what I have earned’ as you describe. I gainfully employ many people and am very generous with them. I give heartily to charity. I tip very, very generously.
My #1 biggest expense is Federal taxes. And it is the most wasted portion of my budget thanks to the incompetence of the people making the decisions. I just don’t want more of my money to go down this rabbit hole.
I understand “their” perspective, but I don’t understand yours. I don’t see how someone who is struggling can point at others as the reason for their plight. I empathize with anyone who has been dealt a bad hand or who is struggling – but I never EVER will understand any perspective that blames others and makes oneself a victim. It is just not the way I think and find that sort of victimization hard to sympathize with.
This is a repeat because my reply ended up in the wrong spot.
Sorry Peter, but it seems egos get bruised too easily here. Yours, mine, everybody’s. We have to be able to state some generalizations in these brief posting spaces without having to insert an exception in each post for each individual poster present. When you say “There is a entitlement attitude as well that is shocking. I want it all….and i want it now. That I don’t understand.” it does SEEM as if you are painting most of a class of people with one brush, but I know you are making a generalization, and not applying it to me or every single person. When I say “culture of having more than anybody else and not wanting to give some back”, I think it is obvious that I am applying it to those who actually oppose paying back to society, which is not necessarily you or anyone else that the boot does not actually fit. It is a generalization that I think applies to many in the 1%. I realize the need to speak respectfully but geez!, can we not be so brittle?
End of rant.
Now, you do seem to be generous in your dealing with employee, and tipping generously is also a high indicator of respect for the labor of others. This is all good.
What I don’t understand is the disconnect between people saying that debt is way too high, but you can’t give government any more money because it does no good. It worked in the 90’s. Taxes went up (marginal rates more than today, but I realize other surcharges and exemption changes make an apples to apples comparison difficult) and Debt/GDP went down. In the 50’s, 60’s and 70’s, taxes were considerably higher than today or the 90’s and Debt/GDP went down. It is working now. Taxes went up and deficits have dramatically declined. Under Reagan and Bush and Bush2, taxes were lowered or kept low and debt went up. Way, way up. It seems to me that an unbiased observer would say that LOWERING taxes does no good and raising them to sustainable levels makes all the difference.
“I never EVER will understand any perspective that blames others and makes oneself a victim.”
So if your taxes are raised, you won’t blame others and make yourself out as a victim? Maybe you won’t but others here will. They already have been. I’m not trying to be snarky, but ALL of us complain if we think we are being taken advantage of. That’s not a characteristic limited by party or income. Half of the posts here (not necessarily yours) are complaints from the richest people in all creation acting like victims because “others” are trying to get some of THEIR money. That is exactly the same as blaming others and making yourself a victim. We’re just trying to pay the bills, for gosh sake.
I didn’t get on this blog to make people mad. I got on here to see what people thought about some data computations that I had seen and some that I originated myself based on economic data and spreadsheets of others. The facts that I thought (and still think) are significant that (a) our disparity curves are historically extreme and only matched by time periods of impending economic crashes, (b) the shift in income shares is roughly equivalent to a 25% pay cut for 90% of Americans and a 100% pay increase for the 1%, with smaller percentages among the lower tiers of that group, and percentages of 500% or more in the upper tiers (0.01% and above).
As a data analyst, I thought, and still think, this is hugely significant. But I expressed myself poorly when I got here, thinking that provocative language would get the point across. Instead it dulled and distracted from the message. That was my mistake.
So, setting aside the emotional response of thinking that I, or anyone else is blaming you or making themselves a victim, how would you feel as a worker at say the 75 percentile level (about $80K?), if you felt that your job was exactly what you wanted to do with your life and fit your skills and demeanor, but that your pay increases seldom got higher than inflation, and that you realized (or believed, anyway) that government controlled tax and business policies were largely responsible for keeping your pay 25% below what it might have been under previous policy, while managers and CEOs and financial gurus were reaping huge pay increases, not just from their already profitable professions, but from the shifts in policy that encourage and allow managers to suppress pay of subordinates while boosting their own.
I’m not making this up, or trying to dramatic or accusatory. This is how I think the economy has changed and I am not alone. And it really truly has nothing to do with blame and victimization. It has to do with honest assessment of changes in the economy, a detached view of human motivation, and observations that are completely consistent with the principles of self-interest. It is just data. But its direction still disturbs me.
It isn’t about egos. It is about your disrespect for the freedom of others and your willingness to tax(enslave) others even though you have no solution. This thread has been good for me as now I know there is no reasoning with the libtards.
“So if your taxes are raised, you won’t blame others and make yourself out as a victim?”
When you force one person to work for another that is slavery. I think the slave has a right to call himself a victim.
“I didn’t get on this blog to make people mad.”
Actually this has been quite enlightening. Now I know there is no need to negotiate or compromise with libtards. Regardless on how you may change your tune I know what you really feel and what you would do if given a chance.
“, but from the shifts in policy that encourage and allow managers to suppress pay of subordinates while boosting their own.”
What policy? Make stuff up why don’t ya.
“I’m not making this up, or trying to dramatic or accusatory. This is how I think the economy has changed and I am not alone.”
The economy has changed but those without skills have not. They have not adapted. If you subsidize poor you will only get more poor and make the problem worse. You think you are being a humanitarian but you and the libtard philosophy are condemning more to more of the same.
In the beginning there was the law of nature and in the end it will be the same. In between is just an aberration but it will end shortly.
Obviously you truly believe that it is a revenue problem – and not primarily a spending one. Let’s take that as fact for a moment. The only two ways to raise revenue are to raise taxes or improve the economy. I clearly believe that improving the economy (as happened in the 90’s and as happened from 2009-2013) is the fastest way to raise revenue. You clearly believe that raising taxes is the best way.
Here’s my main problem with you – and frankly, why you are having trouble getting anyone to be anything but irritated with you….. If you come to the conclusion that raising taxes is the solution, then so far your only real way you have proposed doing so is by raising taxes on those that you deem the “rich”, “priveleged”, “lucky”, “overpaid”, etc. You are whining about a situation that you perceive to be a problem and the only real solution you can see is that the rich pay to fix it.
But like Peter N says, there is no opening your mind to other ideas. I don’t feel “enslaved” by you suggesting raising my taxes. I just don’t think it is the correct path and certainly not the panacea to fix all of our country’s fiscal problems.
The offensive part is that for post after post you have tried to justified your endgame of raising the wealthy’s taxes by making a case that somehow we don’t deserve the money in the first place – that we were lucky or overpaid – or even worse, we have somehow taken this money from the middle class. This is the personification of victimization and the blame game.
Your style of argument is to determine what you want to happen (raise taxes on the rich) and work backwards to justify it. People like MOR agree with you but are more logical and open minded to having a productive discussion.
Peter,
Thank you for the post. I just lost most of the response I was composing. I’ll get back to you this evening.
Peter, thanks for both of your replies.
Regarding the first one, I’d like to correct part of your characterization of my position, as it has changed in more recent posts. You said:
“The only two ways to raise revenue are to raise taxes or improve the economy. I clearly believe that improving the economy (as happened in the 90?s and as happened from 2009-2013) is the fastest way to raise revenue. You clearly believe that raising taxes is the best way.”
Actually I have stated several times recently that improving the economy, AND raising taxes, AND making smart cuts to keep safety nets sustainable are probably all necessary.
From Aug 19: “We CAN bridge the debt gap, and it can’t happen by starving the beast. You have to add revenue (economic growth plus some reasonable tax increases) and constrain spending. ”
From Aug 18: “Clearly there is a debt gap. Clearly we cannot politically close that gap only with taxes, or only with program cuts. Economy growth is the best way out, but we need to apply both of the other techniques as well. ”
“But like Peter N says, there is no opening your mind to other ideas.”
Well, I don’t think I have been THAT stubborn.
I try to point out flaws in arguments that put all of the blame on the middle and working class and unemployed for their predicament. But I also have given a general nod to economic ideas from Stevendad and others without commenting extensively where I had nothing to add to those arguments. I critiqued one particular idea of Stevendad’s that I liked in principle but hated in implementation. I agree that increased education is a good thing (if we can keep from bankrupting students with tuition), but I also point out that the skills gap argument has flaws and I provided links to back that up.
“The offensive part is that for post after post you have tried to justified your endgame of raising the wealthy’s taxes by making a case that somehow we don’t deserve the money in the first place – that we were lucky or overpaid.”
That is the language I initially used, and it was a mistake. I haven’t used that language in a while. There is a point I was trying to make with that language, and I’ll have to be careful in clarifying it or I will just irritate people again. But I need to give it a try:
Most people in the 1% have a significant increase in real income (beyond that which is simply due to the mean increase in income per capita) relative to the corresponding person at that percentile one or two generations ago. I have no way of knowing whether a particular career, say CEO/founder of a modest financial planning firm, would have been at the same percentile spot on the income curve 2 generations back. but if he was, his income is 20% to 500% higher, depending on where he is on the curve, simply because of how that percentile point has improved because of the change in the curve. I used to call this a “bonus income”, which was not really intended as an insult, but as a technical term for income that is received because the disparity curve changed, in addition to the income a person already received had it not changed. There are a lot of assumptions and unknowns in that argument: distribution of careers and job positions and how they are laid out on the curve, etc.
What is known is that the 90 percentile point is about break even. Folks below that point on average, have done poorly, maintaining or slightly declining in real wages, but also significantly declining in income share, dropping from about 66% share to 50%. Conversely, folks above the 99 percentile have done well, with an average doubling of income share, but with most of that going to the upper echelons above the upper 0.5%.
So what? Why did this happen and do we care? (To be continued …)
A few interesting points I thought of in your reply….
1) “Income share” is a term I find puzzling. What difference does it make to me how my income stacks up relative to others? I just can’t imagine finding this troubling if I was struggling. I would care less about how my income compares to others and more about my real wages. And I would then look to see what I can do to increase those real wages if they aren’t enough to survive on. When I was making barely enough to survive I don’t remember ever being angry at the CEO of my company for making lots of money. It didn’t affect my pay one bit.
I think the difference is though – we aren’t talking about the same low-paid people. There are two groups in the “low paid bracket” – those that are building careers and are there temporarily and those that are largely unskilled and will remain there for their careers. It is the latter group that is pinched the hardest in this economy. To compare my experience (as a member of the former classification) is unfair. You can tolerate a lot more and not play the victim card when you know your stay there is likely temporary.
2) The irony in all of this in my story (and that of most in the DC area) continues to be that the reason our incomes jumped so dramatically is because of exponential rises in Federal spending. There is no denying that. The fastest way to take away my “bonus income” as you call it is for the government to dramatically cut spending. There is a very, very direct correlation here.
(continued) … This is starting to drag on, so I’ll try to be brief.
Since the income curve shaper is changed, and we don’t have infinite information on all individuals, let’s make a few simplifying assumptions. Let’s say that the relative number of people in given careers has not changed too much over about 3 decades. Neglect the years since the crash since obviously a lot of middle class jobs were lost then. Let’s talk about 1980 to 2008. Population has gone up, but we probably had about the same percentage of doctors, lawyers, etc. Not exactly the same, but close enough. From that, we can assume that given careers with # years experience hold about the same relative point on the curve. Again this is approximate. Maybe air conditioning techs moved from 71 percentile to 74 percentile, but they did not go down to 50 or up to 90. Everybody sort of rides their spot on the curve. As you gain experience and knowledge your pay increases because you go up the curve a bit. As national productivity goes up, the whole curve tends to rise, especially if the shape does not change. First year engineers or doctors, or plumbers are at about the same percentile over time. Now, change the shape of the curve as it changed from 1980 to 2008. What happens? Percentile points below 90 percent go down (relatively) and above 99% go up and from 90 to 99 percentile, they go up, but just a little. So it isn’t just unskilled who are losing when the curve changes, it is 90% of Americans … tradesmen, teachers, young engineers, young accountants, right along with the janitors, fast food workers and hotel room cleaners … everybody below the 90 percentile point, with those below 50p losing more than the 90p.
Something else happens. There is more poverty, and more people qualifying for safety net programs, because wages have been suppressed al the way down until minimum wage, where it stops by law. So government gets more expensive BECAUSE of the wage disparity.
So when you “ride the income curve”, you receive as pay whatever you WOULD have gotten without the curve change PLUS whatever the change in the curve provides (positive or negative).
So what? you might ask. The world changes every day, every year. The demand for a given career goes up and down. Business growth is unpredictable in a given year. Markets change. We can’t expect things to be constant. We can’t always long for what might have been when it is out of our control. True. But what if some of the market IS in control … of somebody. Does the market have control knobs? (continued below, where another post of Peter’s provides a great segue.)
OK, so I’ve been watching the latest posts for a while now, which I have enjoyed, in particular Steven H.’s and Peter’s, and this issue of increased income disparity over last 30-40 years. Steven H.’s explanation for it (hopefully I’m paraphrasing it correctly here) is that it’s a result of a combination of things, all of which having the effect (and perhaps the intent) of lowering the pay of the middle and lower class workers, while taking that money and increasing the pay of the wealthy. These “things” include but are not limited to: lowered real earning power for middle and lower class households by increasing CEO pay; lowering (in real dollar terms) the minimum wage; and tax policies which have benefited the wealthy at the expense of everyone else. Peter’s paraphrased explanation for increased income disparity: we entered the Information Age and so people who relied on Industrial Age skills were left in the financial dust; globalization; income is not a zero sum game; and the American economy has the most room for advancement and financial success of any economy, ever.
By now, everyone who has been reading these threads knows where I lean on those two alternate universes. For the most part I think the economy has changed dramatically, and that those who were not prepared for it, or didn’t realize it until too late, have fallen behind. It’s not so much a nefarious plot by the rich to stomp on the poor, albeit there are a few facts that Steven H. has brought up that have given me pause.
Then I started thinking…. Maybe there are alternate explanations not yet considered for why there is more disparity in household income now than there used to be. Notice how I said household income, not individual salaries. So I started examining my own life, and it didn’t take too long for something to occur to me…. Maybe this explanation, one we haven’t considered in any posts yet, could account for a lot of the income shift we are seeing.
Used to be that almost all women were stay at home moms, or at best, a second, smaller income. To an extent, that tradiational model still exists. But a much, much greater percentage of women are in the work force today than were in the work force 30 or 40 years ago. And to boot, more women are graduating from college today than men are. More and more often, women are financial peers. In many cases now, they make more than the man does, and/or are the primary breadwinner. Whatever the case, I think what’s indisputable is that women are contributing more to household income these days than they were 30-40 years ago.
Then I said to myself, “Self, divorce rates also skyrocketed since the 1960s.” Men such as myself who are divorced and had an ex-wife who stayed home were treated ….ummmm…..to say the least…. “shabbily”….. by the family court. This is a very common experience.
And so people like myself who were back in the dating world post-divorce tended to look for women who were finaancial peers. Financial parity wasn’t a dating criterion for me when I was naive, single and dating in my early 20s, but it sure became a criterion after my divorce in my mid-30s, and I lost more than $1 million to my ex.
So in my particular case, after my divorce I dated around and eventually found someone who was a peer in nearly all ways, including financial. Financial parity wasn’t the only criterion I had, but it was now in the mix as one of many criteria. Fast forwarding, once we combined households, we suddenly were in the top 2% of all income earners.
I guess I’m just saying that there are plausible explanations for household income disparity, perhaps numerous plausible explanations, which have little or nothing to do with tax policy, minimum wage, Information Age versus Industrial Age, and so on. They have much more to do with personal relationships, and in this particular example, people of substantially equal financial means choosing partners who push the household into the top 10%. Or 2%. Or 1%.
Thoughts?
To summarize my last post: I think some very plausible explanations for increased household income disparity are personal in nature, attributable to things such as: 1) there have been a dramatic increase in two-income households over the past 30-40 years as more and more women entered the workforce, began working full-time rather than part-time, and so on; 2) women are earning more and contributing more than in the past, even if they were always part of a two-income household; and 3) men such as myself who have had highly negative experiences with the family courts and who want to avoid repeating those same mistakes (e.g. 50/50 split of marital assets upon divorce) now are partnering with financial peers more than they ever have in the past.
Ken – thanks for adding this perspective. I do think you make a great point here. You could even possibly look to divorce rates and single parent homes in the lower income brackets as a factor on the other end of the spectrum too I imagine.
Your point does fall in line with what I have been saying all along in that this evolution is organic – and not intentionally created by greedy fat cats. That said, we do need to adjust to this as individuals and as a community. Combining incomes like you did is one way to do that on a personal level.
Excellent summary of the debate between Steven H and I. Totally agree with the way you summarized.
I will respond, but only briefly, because I know that Peter N. really doesn’t listen to anyone but himself and his like-thinking rich “victims” of assault by the “libtards” who he believes are enslaving him. (No I don’t mean to refer to the entire 1% or anyone else posting on this blog, except for Peter N. )
– Casting the richest people in creation as slaves is so ludicrous, I would never have believed anyone could be so deluded as to make the statement.
– I haven’t changed my tune, but I have changed my tone.
– The policy changes have been discussed extensively and you obviously have not listened. I won’t repeat the song for the tone-deaf.
– Skills are important but even the skilled are out of work or underemployed or underpaid. The skill gap is, if it exists, is only part of the problem. (See previous discussions and links.) There are twice as many job-seekers in each industry as there are jobs available.
– The law of nature? You are trying to sound profound and prophetic but it comes across as mindless and self-delusional.
Taxing incomes doesn’t just target the rich. It targets those that want to be rich. Those with high incomes. There is a distinction. As Peter point out, there are some places where you need to have a higher income just to live decently.
“- I haven’t changed my tune, but I have changed my tone.”
You haven’t changed your tax and spend with no real solutions mantra.
“There are twice as many job-seekers in each industry as there are jobs available.”
So create a job. I/we have, about 25.
“The law of nature? You are trying to sound profound and prophetic but it comes across as mindless and self-delusional.”
We’ll see. I think it is clear that the current state and rate of change cannot last for too many more years. I don’t have my head in the sand.
You have no solution but to spread the misery around. All the social spending has only resulted in more people being dependent on handouts. Look at the facts. They back me up.
And by the way, Steven H – your post above was a good one. I appreciate your point of view and the diplomatic way you presented it in the last post. (The one with “end of rant”)
However, you seem to be railing against an ideology I don’t see represented on here – the 1% who says they are victims and don’t want to share the wealth. I have said multiple times that I don’t feel this way (and you acknowledged this). Maybe Peter N is representing this point of view but I don’t see any other 1%’ers in here (Ken for instance) that are echoing this point of view.
As I have moved up the “income ladder” and into different communities and circles, I have personally been really taken aback at how generous people are in the 1%. Sure, you could minimize this by saying “they can afford to be” – which is somewhat fair – but nobody forces you to be generous and giving. For me personally, I know I feel this way because I am both grateful to be in the situation I’m in – and sympathetic to those who struggle every day as I once did.
My point – the situation is not what it is because the 1% is greedily stepping on the heads of the middle class. And I think you’d be surprised how many 1%’ers would be willing to pay more in taxes if they had ANY confidence that it would be spent wisely.
Think about this…. as it stands now, you are asking the wealthiest people (who are likely very smart with their money) – to give more to a completely incompetent administration to apportion where they see fit. One with a President with weak negotiating skills that openly vilifies the wealthy and a Congress that refuses to support anything the President does and allows them to be controlled by extremist groups. To help fund a health care plan, social security system and medicare program where the math just doesn’t add up – or to help build “democracy” in the Middle East.
After being in the 99% for years and now arriving in the 1% – why would I want to “give back” by giving this government more money? I’d rather give back by being charitable, creating jobs and supporting the labor force around me instead.
” Casting the richest people in creation as slaves is so ludicrous, I would never have believed anyone could be so deluded as to make the statement.”
So what do you call it when someone is forced to work for someone else?
No reply to my last post I see. Practical, personal solution as to how I can help the community in a small way. What do those who want to take from the rich and give to the poor via an even higher progressive tax curve propose that is practical – not idealistic. Something you can personally do right now to change the world even if it is in a small way.
What issues will more money given to the gov’t solve? They need less money so they can make better decisions on the money they have. Starve the beast. Most people working for the govt can find jobs in the private sector is necessary.
Interesting point. I do reject the idea that the government getting more money solves anything. No matter how much they have, they will always spend more $1.25 for every $1.00 for political gain.
“I do reject the idea that the government getting more money solves anything. No matter how much they have, they will always spend more $1.25 for every $1.00 for political gain.”
Peter, you are usually quite sensible, but your statement above is absurd. Think about it. Most on this thread (including you, if I recall correctly) have already agreed that it is politically remote if not impossible to bridge the debt gap with only cuts. If that is true, then how do you bridge the debt gap without also increasing revenue?
I could bridge the debt gap with only cuts. It would be simple. I would simply take a look at what the gov spends money on that isn’t mentioned in the Constitution. Those things that aren’t deemed necessary in the Constitution but are truly necessary I would force the states to ratify an amendment. If the states didn’t think what I thought was important then so be it but I would do it according to the Constitution and the procedures specified within.
This would allow states like Oregon and Massachusetts experiment with their own health care system. This is the way it should be.
Improve the economy. And not only cut expenses but reform the major albatrosses that are driving the debt up and reform the political process so that we actually have people with our best interests at heart instead of their own.
“What issues will more money given to the gov’t solve? They need less money so they can make better decisions on the money they have. Starve the beast.”
JB, the attempts to starve the beast are what drove debt so high. If Reagan and the Bush’s could not starve the beast, with their tax cuts, what will adding more debt with even more revenue cuts solve. Nothing.
We CAN bridge the debt gap, and it can’t happen by starving the beast. You have to add revenue (economic growth plus some reasonable tax increases) and constrain spending.
Philosophical policy like starving the beast, that ignores the arithmetic of economics, is what got us into this mess.
No, the war in Iraq drove the debt in the early 2000’s. We had a surplus in the 90’s. Now, I don’t think the gov’t should be making a profit. They can adjust taxes if revenues far exceed spending, but we did spend less at one point in relation to the revenue coming in. That probably drove the Bush tax cuts, but it was a trillion dollars in tax cuts. The few billions here and there is an aircraft carrier or nuclear submarine.
MOR and Steven H.
I get aggravated no one else wants sacrifice. The Supreme Court has indeed usurped the Constitution. I guess the states will pay for the signs ofn150 years ago forever.
I still havent seen:
Any plans for sacrifice by ANYONE but the 2%.
Why citizens of Alaska and Florida, Nebraska and New York have the same needs.
BTW I maintain Soc Sec is a forced savings plan, not a wealth transfer. So far. The rich are capped on FICA, but also taxed on benefits. Medicare is just a huge group insurance plan. Of course, the rich pay disproportionately. They pay taxes all the way up on income, but receive the same or less benefits.
Of course there are inly two results I see: The liberals are as without movement as are the conservatives. Thus:1) we will have revolution with the heads of the rich on pikes. It seems this may satisfy some of the left. I am sure you will find a way to justify stealing and slaughter. Remember the French have never regained the power they lost in their revolution . Or 2) there will be stagflation and the poor, who own no real assets, will be crushed. Maybe both.
You have moved zero and offered up nothing in the way of sacrifice in 6 monhts. So you truly are greedy, trying to take from those who have lawfully earned.
I’m out.
Sorry to lose your voice Stevendad. Maybe you will see this and maybe not. But there are compromises that have been offered. You have offered some ideas which are good. But you are being as stubborn as I am. You oppose every mention of more taxes on the rich, when those taxes probably won’t even fall on your plate, but on new marginal rates at the 1 mill, 10 mill and maybe 100 mill levels. You oppose higher minimum wage (apparently on philosophical grounds) and contrive a scheme much more complicated involving fines for employers that would create MORE government involvement and that would ultimately not work. Peter has compromised on several points, admitting that tax rates need to be higher as long as social programs are also brought in line, and MOR and JTM have done a good job at negotiating the middle ground. I have tried to get away from language I initially used about rich not earning their money. It is earned, in that is received legally according to law and contract. Peter and I both have said it is impossible to determine exactly what is deserved (the alternate meaning of earn) and that markets determine that data point. Where Peter and I differ (I think) is that I believe the rules of the market are arbitrary and determined by government policy, and that they need to be changed back to something like they had been in more stable economies, and then the market formulas would select different salaries at all levels.
I think once the economy picks up some speed, taxes may be increased on everyone to finish closing the gap. But there is no reason to demand a lot of sacrifice of the lower 90% because they are already earning (receiving) about 25% less than history suggests that they earn (deserve). Whether or not you want to admit it, you are very fortunate. As are most of the regulars on this forum, who seem to be in the upper 10% if not the 1%, o.5%, or 0.1%. I doubt anyone here is in the Forbes 400, but we are all doing well. Most of our problems are “First World Problems”.
https://www.youtube.com/watch?v=bwvlbJ0h35A
Clearly there is a debt gap. Clearly we cannot politically close that gap only with taxes, or only with program cuts. Economy growth is the best way out, but we need to apply both of the other techniques as well. Even though we just raised taxes. We also just had sequestration. Ideas discussed here about improved training, more free or sponsored schooling for the poor and unskilled, are all steps in the right direction. On my end, I need to not demonize the rich. On the other end, there is still (by some) too much demonization of the poor and unemployed. Many HAVE skills, HAVE intelligence, HAVE motivation. If there are deficiencies in the labor force, there are even more in the economic structure itself.
We need cooperation of businesses and colleges, more enforcement of monopoly laws, entrepreneurship clubs in high schools, simpler rules and processes for starting small businesses, higher minimum wages, more rigorous welfare to work processes, lower corporate tax rates and fewer corporate tax loopholes. We need a lot of things. Sacrifices by everybody. But you also have to recognize the significant sacrifices in lost wages, lost jobs, lost mortgages, that have already been forced on most of the population. And it really isn’t just their own fault.
JB. Lets just make our rich neighbor pay for all that stuff. I am too victimized to pay for any thing myself.
Cynicism does not suit you, Stevendad. You are too smart for such small thoughts.
Let’s say you are going to start a new country. How did the country pay for stuff before the 1900’s? Taxing stuff made vs income taxes? Taxing beer and alcohol increases the price thus only those that buy the product pay the taxes. Gas taxes the same way. Would you want a 100% usage tax? Fireman show up to your house to put out a fire and you get a bill the next week? How would all those firemen get paid? Same with the Police. Do you just tax everyone a few hundred bucks a year? If you enroll your kid in school, should you just fork over a check for a few thousand dollars?
Fail to see your point. Are you advocating for tax by sales and usage only? And the 100% usage tax discussion makes no sense.
Income tax could be explained as a sort of usage tax. If you make a million dollars using the economic, social, and physical infrastructures of the country, you have clearly “used” those assets more than someone who earned $100K, so you get a correspondingly greater usage tax. The progressive rate is simply to counteract the destabilizing centralization of income and wealth that is inherent in capitalism. Or to keep the rich from eating the poor, as Jefferson might put it.
If a company can’t find qualified workers the salary goes up to attract viable candidates. WalMart requires no skills to work a cash register. A machinist has skills and if nobody is applying for a job, the salary must be increased. Nobody is a slave in this day and age. We don’t have a feudal system of kings and peasants. Anyone has the ability to increase their education and get a better job. Motivation is holding them back.
What you described is indeed how the markets are supposed to work. Two problems:
1) There is some indication that the alleged “skills gap” often mentioned is actually a reluctance of business to apply the principles you just stated – they don’;t want to offer the wages that will actually attract the existing talent. That talent is going elsewhere for better wage, or is holding out (a negotiation tactic) for the market wage. (See the articles I posted in response to Peter above – search page for “online.wsj”)
2) Motivation is not the issue when there are 2 to 3 times as many people searching for jobs in each industry – skilled AND unskilled – as there are jobs available.
“1) There is some indication that the alleged “skills gap” often mentioned is actually a reluctance of business to apply the principles you just stated – they don’;t want to offer the wages that will actually attract the existing talent. ”
This is absurd. If a company can make a good ROI on a person’s skills they will hire him or her.
“2) Motivation is not the issue when there are 2 to 3 times as many people searching for jobs in each industry – skilled AND unskilled – as there are jobs available”
Yet, the jobs go unfilled. The reason why is that the employers have doubts about being able to make money off the employee’s efforts. It is that simple. Some people are simply unemployable.
“Income tax could be explained as a sort of usage tax.”
Your thinking is all backwards.
You get paid to do or create something. This doesn’t necessarily mean you are using anything. People should be taxed on using resources. If A uses twice the resources as B to produce the same thing then A should pay more. You should penalize B the same as A.
Put it another way. If A and B use the same resources but A is much more productive, why do you want to tax him more? This discourages being more efficient with resources.
The nations’ infrastructure IS a resource. The roads carry your material in and goods out. The internet allows marketing and information exchange. The stability of the country is insured internally by sound courts, laws, and police and externally by military. Globalization is made possible by worldwide communication (internet and communication infrastructure) but is also a trade policy established by government (misguided in its implementation IMHO, but still a policy that benefits businesses). Business would be impossible without this infrastructure. Those who benefit the most, economically, from its existence should pay for most of it.
So if Mr. Vanderbilt took his railroad money and built the railroads without the gov’t, the gov’t still benefits in the taxes created by the Railroads making money. Roads are paid for by gas taxes so the gov’t isnt funding road construction with money out of thin air. There is a budget for roads and bridges, which is part of the Ways and Means committee. They don’t have unlimited funds.
MOR:None of that is in the Constitution. Clearly should be a function of the states by that document. Income tax not started until about 130 years later. It was not originally progressive, but had very high exclusions. Then the Roosevelt years was raised and both parties took the money and ran and are still running. Lincoln said a man should build his own house and not tear down another’s. (paraphrased) Lots of great Americans can be quoted for it against. It still does not put that concept in the Constitution as a Federally appointed power. Again, you can continue to raise taxes that will not be enough as Congress will continue to increase spending. Must have restraint at some point. Or just get the Liberal Progressives together and with the great popularity of your ideas and change this to a Communist or Socialist state. Most people do not believe as you do. Just a very vocal minority who are disproportionately heard due to the press and academia.
Stevendad, I disagree that it is a vocal minority that wishes to keep the social programs that have been instituted in the last century. Quite the opposite. It is a very vocal minority who have been opposing them (upper 1% plus Tea Party). Support for SS, Medicare and Medicaid is very strong. Even the overly-maligned Obamacare gets majority support in polls that ask whether we should keep it and fix it, vs. scrap it.
There are Supreme Court decisions that you and I each disagree with, but we have to accept. I think the Citizens United decision was a travesty, and will likely be overturned in the next decade. The taxation/public welfare decisions are opposed by small government conservatives but they have been upheld for many decades and are unlikely to be reversed. Whether are not you judge them to be Constitutional becomes irrelevant, because the Supreme Court says they are, and the vast majority of the US population has become comfortable with the resulting society.
All of the quotes and points that MOR brought up are relevant because they defend the principles that were upheld in those later Supreme Court cases. It becomes difficult to say that the Constitution was never intended to support progressive taxation and public welfare programs when the authors of the document supported these ideas. Yes there were worries about big government, but also many worries about centralization of income and wealth. For instance, Jefferson (who was admittedly a small government guy) proclaimed that the rich are like animals eating the poor (paraphrasing) and that the farmer (common worker) should have his children educated at the expense of the rich with no cost to himself.
Just about 35 years ago, and for the previous 35 years, the upper 5% earned (received) about 22% of all income. Now that percentage goes to just the upper 1%, a 5x increase in centralization of income. This is dangerous, and is not what the founders intended with their Constitution. This disparity cannot be due just to some moral failing of most Americans or job skill mismatches or the sudden acquisition of intellectual superpowers by the elite 1%. It is a structural change to the economy due to the nation’s tax, trade, banking, business, monopoly and labor laws.
One last quote to alleviate your concerns about how the Constitution gets applied over time.
“Some men look at constitutions with sanctimonious reverence, and deem them like the ark of the covenant, too sacred to be touched. They ascribe to the men of the preceding age a wisdom more than human, and suppose what they did to be beyond amendment…But I know also, that laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths disclosed, and manners and opinions change with the change of circumstances, institutions must advance also, and keep pace with the times.” – Thomas Jefferson
I’m sorry SD, I don’t ever recall the income tax not being progressive. Lincoln’s income tax to fund the Civil War taxed only the wealthy, and so did the first income tax after the constitutional amendment in 1913. After that, it achieved “another method of silently lessoning the inequality of property (income & net worth) by exempting all below a certain point, and taxing the higher portions of property in geometrical progression as they rise”, just as Jefferson advocated.
We know that income taxes are constitutional, and the Supreme Court has ruled against every challenge of those who believe otherwise, which is it’s constitutional mandate. The constitution also states that the government is to “provide for the general welfare” of Americans, which is very broad and can include those areas that many on the extreme right call “socialist”.
¾ of the states with the consent of their populations ratified the constitutional amendment creating the federal income tax. I still believe it’s necessary just as Jefferson did, and I don’t believe a majority of Americans believe otherwise as you’d like to believe.
So far as “states rights”, the South lost that argument in 1865.
The bailouts started under Bush. Get your propaganda correct.
For all who wish to redistribute income. Please find the redistribution clause in the US Constitution.
Gosh, I thought that the framers of the constitution always had the intention to redistribute wealth. They were men of reason after all, unlike the plutocrats of today wh self serving lay “invest” in politics and politicians. Here’s what they said:
“Many of the opposition [to the new Federal Constitution] wish to take from Congress the power of internal taxation. Calculation has convinced me that this would be very mischievous.” –ThomasJefferson to William Carmichael, 1788.
“Taxes should be proportioned to what may be annually spared by the individual.” –Thomas Jefferson to James Madison, 1784.
“Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise.” –Thomas Jefferson to James Madison, 1785.
Tariffs (taxes)
“The rich alone use imported articles, and on these alone the whole taxes of the General Government are levied… Our revenues liberated by the discharge of the public debt, and its surplus applied to canals, roads, schools, etc., the farmer will see his government supported, his children educated, and the face of his country made a paradise by the contributions of the rich alone, without his being called on to spend a cent from his earnings.” –Thomas Jefferson to Thaddeus Kosciusko, 1811.
Welfare
“The poor who have neither property, friends, nor strength to labor, are boarded in the houses of good farmers, to whom a stipulated sum is annually paid. To those who are able to help themselves a little, or have friends from whom they derive some succor, inadequate however to their full maintenance, supplementary aids are given which enable them to live comfortably in their own houses, or in the houses of their friends. –Thomas Jefferson: Notes on Virginia, 1782.
But, quick, if you can rewrite history, maybe no one will notice.
NJ. OK, lots of variables. I pay self employment. I get a “break” at $120k but also benefits capped. I make up for the rest in 401k. I’ll venture that there aren’t 100 people who are in lower 60% that pay 53%. Clearly, I pay double in taxes what you make. Just lucky, I guess. The doctorate and post doc and 60 hour weeks have no relationship.
By the way, I found this interesting and relevant to these discussions. This is a counterpoint to all of the posters who think the unemployed are morally deficient, and just need to get a skill:
<>
Figure B shows the number of unemployed workers and the number of job openings by industry. This figure is extremely useful for diagnosing what’s behind our sustained high unemployment. If our current elevated unemployment were due to skills shortages or mismatches, we would expect to find some sectors where there are more unemployed workers than job openings, and some where there are more job openings than unemployed workers. What we find, however, is that unemployed workers dramatically outnumber job openings across the board. There are between 1.2 and 7.6 times as many unemployed workers as job openings in every industry. In other words, even in the industry with the most favorable ratio of unemployed workers to job openings (finance and insurance), there are still more than 20 percent more unemployed workers than job openings.
http://www.epi.org/publication/jobs-60-percent-job-seekers/
My headline disappeared for above article:
“Today’s weak labor market is not because workers don’t have the right skills”
Let’s face it. If you make $1,000,000 a year and you keep your expenses down to $100,000 a year, you have $600,000 a year in disposable income. It doesn’t help the economy to keep it all in the bank. 2nd homes, high end shopping, nice cars drive the luxury market. It did crash a bit in 2007-2009. For every $300M yacht that is built, there are permanent jobs to keep those ships afloat and going. 50 less of those ships out there is a ton of jobs. Pilots for Gulfstream jets are paid well. You have mechanices to service those jets and ships. So don’t tell me the rich don’t create jobs. They do. If you make $30,000 a year you are spending all of your money. That is life. You can’t make everyone middle class. There will always be people on both sides of the bell curve.
“You can’t make everyone middle class. There will always be people on both sides of the bell curve.”
“So don’t tell me the rich don’t create jobs. They do.”
The point is that there is very little trickle down when you have disparity like today. Are you telling me that pay levels don’t matter? What do you suppose would happen if you gave the lower paid 90% of Americans a 25% pay cut and transferred all of that money to the upper 1%? Don’t do it right away. Do it slowly, over a few decades, by suppressing pay of most folks and increasing rewards for high wage jobs. Do you suppose all of those jobs created by the increased incomes to the 1% and the trickle down and the investment opportunities to create new businesses would help the economy overall? Or do you suppose that the lower wages for most people would prevent there from being a sufficient market to create as many new profitable businesses? Might you imagine that the rich would still do quite well as the economy of the rich thrives even though GDP growth is less? Because the buyer of that $300K yacht gives his money to a company where the CEO gets paid well and those “tons of jobs” of people who build and maintain the boats are low-paid. And that CEO buys luxuries that benefit the upper management of other companies and provides a pittance to the tons of workers in those other companies. And then there is lots of unspent income to pass on to the next generation.
You probably disagree with my above portrayal of the economy. I’m sure you and I see things differently. But can you at least acknowledge that there can exist SOME level of disparity where the increased income to the wealthy and decreased income to the majority is less productive for the overall economy?
“You can’t make everyone middle class. There will always be people on both sides of the bell curve.”
The point is not about the perpetual existence of poor,middle and upper classes. The point is how poor, and how rich and how much in the middle. Talking in generalities about how rich people can create some jobs and how individuals can always improve themselves by being better than the next guy completely avoids the substance of the conversation: Specifically what income curve is most efficient for the economy and most beneficial for society?
My assertion is that today’s income curve is sub-optimal for both the economy and for the majority of society. GDP growth is below what it could be, employment is below what it could be, the potential of our country is not being realized. The conversation here should be about how we can improve this little corner of time and space we live in, not some fatalism about the perpetual existence of rich and poor people.
I am not sure how you come up with $700k in after tax income from $1m, but I assure you it is much lower than that when you factor in Obamacare taxes and state taxes. (unless you are a small business owner and write off a lot of expenses)
Obamacare taxes only matter on investment income, which is for the most part taxed at 20% and no employment taxes, so, it actually makes it much more likely to stay under a 30% effective tax rate. For earned income, yes, it would be much harder to have that type of tax rate when all taxes are considered. This is why those in the 400k-1m range are hurt the most, much of their income is earned from a job, the higher earners generally have the bulk of their income from investments, not earned income and are protected from the rate increases.
http://www.irs.gov/uac/Newsroom/Net-Investment-Income-Tax-FAQs
Why should my investment income have to help pay for ObamaCare? It is directly targeted at the rich and nobody else. It is an extra 3.8% tax because the rich have more investment income.
IDK, you tell me. I was only explaining it. Though the stories of people like Romney paying about the same percentage in taxes as the rest of us pay just in employment taxes likely has something to do with it.
I was only pointing out the fault in Allisonfaye’s logic. The obamacare tax on investment only has an effect on investment income, which is generally taxed at a much lower rate and one could end up with a total rate near 30% much easier than from earned income that has no obamacare tax attached. Her point is less valid because she included the obamacare statement. An investment tax rate of 23.8%(without employment taxes) is a lot less than an earned income tax rate of 39.6% (plus employment taxes). Not hard to figure out, right?
If we are going to have a discussion about taxes, we need to use real facts and scenarios, not just throwing out something that sounds good for whatever side you’re on. But many don’t understand taxes at all, not even our legislators, especially when it comes to marginal vs effective rates and the like.
NJ: 47% pay no income taxes. Sales taxes can be up to 16%,as low as zero, average 9%. Of course this only applies if you spend all your income on stuff, not rent or car or house payments. Property tax of 2.5% (high range) on median home of $150k is $3750. Soc sec and Medicare are 7.65%. Typically this might get to 20%. The other 13% pay a little more, but bit much. So this gets nowhere close to 60%. My 26 (Fed AMT) + 5.25(state) + 15.3(empl taxes) +4 (sales and use) + 3 (property) comes out about 53.55%. Enough for me. I suggest you calculate yours and give the percentage under 60 to charity. I don’t feel you need it…
I have to cry foul at using 7.65% for the low end and 15.3% for your tax rate. Yes it makes the difference greater, but it’s disingenuous, especially when a big portion cuts of at $120k.
Using RE/property taxes as a proportion of income is just about impossible. Using sales tax is also quite hard and generally skews higher with lower incomes ad they spend a higher percentage of income on taxable items.
Otherwise, yes, higher incomes Pay a higher rate. I think we have established this already. It’s why so many wealthy are complaining on here even though they are still historically low. Again, not suggesting they should go higher, just pointing out facts.
Normal Joe: My point is YOU live on 40% of what YOU make now. I am arbitrarily deciding you can afford it. What if a high earner is paying $100k to care for an aging/disabled parent? Can they afford ANOTHER tax increase? Again, it is very simplistic and condescending for you to decide what other people can afford.
Or if someone lives in SoCal, NYC or DC area….. Either way I hate this argument – what do you “need”? Not really the point
I think you missed my point that we all have our areas of comfort. I have not proposed that anyone give more than an equal share, a percentage of income after taxes. By taxes I would include all Federal, State, and Local levies supporting government activities such as sales and use, income, and property tax on real estate and personal property. Including all this strata will likely show that the bottom 60% pay a larger percentage of tax to income than the upper 40%. I am looking for data that would disprove this assertion.
Joe, I don’t think you will find data to show “that the bottom 60% pay a larger percentage of tax to income than the upper 40%”. Upper incomes clearly pay higher effective tax rates, as they should under a progressive system. You might look at these stats, as they show taxes by quintile
http://www.heritage.org/research/reports/2008/11/how-wealth-is-spread-distribution-of-government-benefits-services-taxes-by-income-quintile-in-us
although Heritage Foundation has a strong right political lean, so keep that in mind. I think their tax to benefit ratios are absurdly contrived, but the raw tax info may be useful.
Look at Tax Foundation and taxpolicycenter.org, and the Emmanuel Saez income tables for more data. Saez doesn’t break up data by quintile but tax policy center does.
JC. So those who pay no or negative taxes should not get any benefit? Is taht your argument? We don’t disagree with paying taxes, just the amount. Soc Sec, Medicare are forms of insurance, so no gripe there. Medicaid, SNAP are not. That is more of a bone of contention. Your disabled example likey gets most from the former.
By the way, since you all believe so much in charity for others, step up to the plate and donate all your income up to 60% (including taxes) and live on 40%. It is so utterly simplistic and condescending to decide what others can or cannot afford.
I could live quite well on 40% of $300,000. That would be an increase of 160%.
If people stop buying Iphones, those at the top of Apple won’t be getting raises or more stock options. Consumers control CEO wealth to an extent on certain products. If people shop Target instead of WM in droves, same thing.
In most cases, people don’t shop to vote approval or disapproval of company policies. They shop for convenience, quality and price. There are some exceptions. (I know people who used to shop at Hobby Lobby and now refuse to, for political reasons.) Consumers don’t control squat about CEO pay unless there is a concerted political movement to do so.
Regarding Gen Xers, generational sloth, and markets.
There seems to be more consensus than I expected about changes in work attitudes of either the whole society at this time, or of just the upcoming generation. Some are describing this as “I want it now” others as “work-life balance”.
If there is a change, it is now part of the equation. While I am certainly in favor of improving education, skills, ethics, civic-mindedness, and the work ethic among the young, middle and old of society, we also have to recognize that whatever we have in the employment pool now is part of the equation, and part of the market.
If you believe that markets are objective and set salaries objectively, it seems foolish to me to complain that workers are not flocking to fill certain jobs at the advertised wage and condition, and then to state that the wage and condition is enough and that the employment pool is flawed. Markets say that the job will be filled when the wage/conditions are raised to the market price. If the job is not being filled, the wage/condition must be below market.
I hear the objection that any job at any pay must be better than no job. That is not always true, for a variety of reasons. Taking a job removes opportunities for getting a better job. I hear the complaint that poor are getting government assistance, and if they were starving without assistance, they would be more desperate to take any job. That is probably true. But that is not the society we choose to create. It is better to force the market rates up a bit for low end jobs, so that people can support themselves with those jobs. It is not really good for society to allow wages to sink to poverty and sub-poverty levels.
If people are not taking jobs at a given wage level, it must be below the market wage, right? If anyone objects, can they explain how it can possibly be otherwise?
Also, the folks demanding work-life balance and higher wages may finally be objecting to the sub-historical income percentages we have been talking about on this thread. They are using their negotiating power to increase wages and do their part in decreasing income disparity. Negotiation is one of the market forces. So perhaps the market is trying to finally correct itself to a more stable income slope.
Steven H:
Nice treatise about anecdotes, but your answer is tangential. I asked you to give some facts that support that a significant proportion of those on assistance are not gaming the system with no real goals of bettering themselves. There is a huge percentage on SNAP for over 5 years. Not a temporary hand up to me.
“fraud levels in SNAP appear to be as low as with the other “pure welfare” programs we just touched on: “Payment error” rates — money sent in incorrect amounts and/or to the wrong people — have declined from near 10 percent a decade ago to 3 to 4 percent today, most of it due, again, to government error, not active fraud. The majority of food-stamp fraud appears to be generated by supermarkets “trafficking” in the food stamps. Beneficiaries intentionally ripping off the taxpayers account for perhaps 1 percent of payments.”
http://www.theatlantic.com/politics/archive/2013/08/just-how-wrong-is-conventional-wisdom-about-government-fraud/278690/
The data I just provided is sparser than I would like, but informative. Of course, no one has stats on recipients’ intentions “to better themselves”.
Here is the problem from the City/County/State/Federal side. I am paid by the taxpayers. I don’t get a raise every year, I have a basic office, we don’t have a ton of benefits to being a gov’t worker. I did get a raise by coming to the County. I have only been here two year. I am guaranteed a promotion when my boss retires in 18 months. (Whole other story, but it part of the job I do). Our county doesn’t give across the board raises just because you breathe. Our “CFO” does want to pay like the private sector, but not just willy nilly to everyone. Our tax clerks and other JP clerks aren’t paid a ton and they haven’t recevied raises in a few years. We have 4 County Commissioners that oversea 4,000,000 people and they just a raise after like 6 years to $160,000 a year. That is a not a “large” salary compared to the number of people they represent. My wife makes more than that I make about 1/2 as much. Our County Treasurer makes about $120K. In the Corporate world depending on the company, he might be a bit underpaid. But here is the issue, a private company can increase revenues by puttting out a better product or a product people want, like Ipad, Iphones etc. the more they sell the better. We in the county don’t produce anything. 99% of us are in Admin positions making sure the taxpayers are getting services. We have a budget. It is the property taxes that every homeowner and business pay. None of us want to pay anymore than we have to. Housing prices keep going up and some people have to move due to increased property taxes. On the other hand, rising home prices mean the County can do a few more things. We can hire more law enforcement or build roads/bridges, maintain parks, etc. We have a fixed amount of money.
The Federal gov’t can keep printing money. We can’t. So, many public sector employees are not paid well, but we have really good pensions. That is what most people hate with the police and firemen and that is the “scare tactic” politicians use to cut budgets. There are plenty of ways to streamline processes. Law Enforcement is I think our biggest expense at like $450 Million dollars. It costs a ton to process and keep prisioners, especially the ones that need medication.
And yes, I see plenty of people that need to move on, but they are milking the system until they retire. I know that 3 people in my department are retiring within 2 years and they won’t be replaced.
Very different on the state, county and local levels. They actually operate (usually) within a budget – novel concept! And yes, they can’t print money and incur unlimited amounts of debt like the Fed can.
Our County should be debt free in about 5 years. Not many counties have that aspiration.
Same sex marriage and pot legalization are the two issues pitting states against the Federal gov’t. Some laws should be state by state and some should be Federal. I think most criminal activities like stealing, killing are Federal, but State to State there are many different laws.
Pot legalization is handled by states. The conflict with feds is that feds have been treating pot as illegal even if the state legalizes. I agree the states should get priority on this, and the Feds need to leave state residents alone when the state has legalized.
My working 50 to 60 hours a week has taught my children NOT to do this. You learn from examples. Generally doing the same…or the opposite.
Gen X is getting screwed 4 ways: Debt, Soc Sec, Medicare and Obamacare (we need to recruit the young to pay for the old). I personally the over 65 tax break should be eliminates and guven to the under 30 group.
I am a Boomer and have rare skills that make me a good living. My concern is for America and Americans, not myself. I am not stupid and wanting to pay more taxes, however! 45 % or more is enough. (total)
“My working 50 to 60 hours a week has taught my children NOT to do this. You learn from examples. Generally doing the same…or the opposite.”
Agree absolutely. When you and I started out, we felt like working those extra hours would get us somewhere. Gen Xers probably feel less confident in that reward down the road, and so are less willing to sacrifice their entire existence to their job.
Gen Xers are getting screwed with Debt. I’m not so sure about the other three. Without Medicare and SS, they would also have to worry about supporting their parents. ObamaCare is still proving itself, and is a big benefit to many, including my 28 yr old daughter, who could not afford insurance otherwise, even though she has a full time job.
In order to stop screwing the younger generations with Debt, we need the Grand Bargain: a compromise on social programs to make them sustainable, AND MORE REVENUE. I know. Taxes already went up. I heard. But we still need to close the gap, and more taxes will need to be raised.
JTM: I thought I said Gen X may be right. However, my point is they ARE different. Steven H sees the young unemployed only victims of Greed and malice by the wealthy older generations. From a pure business standpoint, they are not as desirable.
I agree, just explaining my thoughts as a gen Xer. Every generation has different experiences they draw on. My grandparents were greatly effected by the depression and you can see it in how they lived and today’s youth are starting to show who they are.
It irks me when some (not saying you) play off the youth as lazy and wanting everything now, their may be some truth, but not much more than older generations that have taught them this and created the tech that allows it, they really just have different ideals formed through what has happened around them. Older generations always seem to feel the younger is more privileged and lazy, yet they forget they are the teachers. Society is ever evolving, we will make it through if we work together.
Yeah when I say that people want everything now I didn’t mean to single out youth. It is our culture across the board. We need some leadership to change this – basically the opposite of what the current President has been doing.
How is the “culture of wanting everything now” any different than the “culture of having more than anybody else and not wanting to give some back”?
I know. You pay a lot in taxes. And taxes were just raised recently. And you think I am telling you that you don’t need/deserve the money you worked very hard to earn. That’s not it. You earned your money, because you were dealt a random hand in life, you played by the rules, worked hard, and obtained your fair winnings. Fine.
I am just saying that it is no more selfish for people in today’s culture to ask for what they feel they deserve, than it is for you or anybody else to try to retain what you feel you deserve. Why? Because people feel like they are getting the short end of the stick. You think you are getting attacked and treated unfairly re taxes. They see income and wealth escalating for a few people and stagnating for others. And as much discussion as is on this thread about the reasons for the income disparity being due to the moral, ethical, or intelligence failures of the unemployed, under-employed or lesser paid, most of the actual people being maligned feel pretty strongly that they have been studying, working and struggling just as hard as anybody in any generation. You can always point to a few lazy ne’er-do-wells, but you would be wrong to paint the whole group of unemployed, under-employed and low-paid in one such dismal color.
You defend your position very well. Can you see theirs, without generally disparaging the group of them in some way as unworthy? Do you understand WHY the majority of the country might look upon the wealth and income of the various stratas of the 1% with disdain? Do you understand that when people talk about rebalancing the economy and lessening the income disparity, it is not envy, and not greed, and not a desire to grab something undeserved, but instead a natural longing to get what they feel they have earned (deserved), but have not yet earned (received)?
I am not asking you to agree with my perspective or theirs. I am just asking if you understand and empathize with it.
I have never disparaged the group you refer to. I have many friends and family members as a part of this group as well – so I know better than to paint a whole group with one brush. If you read back, you’ll see that it is you that is doing that, not me. You speak for how “the people” feel – I am only speaking for myself and other people I have personal relationships with. When I talk about “lazy people”, I’m just referring to those that I have seen with my own eyes. Neither of us have any idea what percentage of the struggling fall in this category. I have seen many hard working people struggling as well. It’s not black and white.
That said, I am the last thing from selfish financially. I am not part of a ‘culture of hoarding what I have earned’ as you describe. I gainfully employ many people and am very generous with them. I give heartily to charity. I tip very, very generously.
My #1 biggest expense is Federal taxes. And it is the most wasted portion of my budget thanks to the incompetence of the people making the decisions. I just don’t want more of my money to go down this rabbit hole.
I understand “their” perspective, but I don’t understand yours. I don’t see how someone who is struggling can point at others as the reason for their plight. I empathize with anyone who has been dealt a bad hand or who is struggling – but I never EVER will understand any perspective that blames others and makes oneself a victim. It is just not the way I think and find that sort of victimization hard to sympathize with.
Sorry Peter, but it seems egos get bruised too easily here. Yours, mine, everybody’s. We have to be able to state some generalizations in these brief posting spaces without having to insert an exception in each post for each individual poster present. When you say “There is a entitlement attitude as well that is shocking. I want it all….and i want it now. That I don’t understand.” it does SEEM as if you are painting most of a class of people with one brush, but I know you are making a generalization, and not applying it to me or every single person. When I say “culture of having more than anybody else and not wanting to give some back”, I think it is obvious that I am applying it to those who actually oppose paying back to society, which is not necessarily you or anyone else that the boot does not actually fit. It is a generalization that I think applies to many in the 1%. I realize the need to speak respectfully but geez!, can we not be so brittle?
““There is a entitlement attitude as well that is shocking. I want it all….and i want it now. That I don’t understand.”
I agree otherwise people wouldn’t keep getting voting for politicians that promise them what they can’t deliver without ruining the country. Few think any further ahead than their next hand out. The unions will vote for those that allow them to keep their jobs no matter what the cost and the politicians are only too happy to buy their votes with other people’s money.
Responsible politicians don’t get heard because they propose tough solutions.
The unemployed are victims of the economic crash to the degree that there are about 10.2 million job seekers for only 4 million jobs. You can still be a desirable, competent applicant but be out of luck because of the stats. You are trying to paint all of the unemployed as morally deficient. I am saying there are not enough job openings.
From a pure business standpoint, there are 2.5 times more job seekers than jobs. 4million jobs and 10.5 million people seeking those jobs. More job seekers than jobs in every industry, skilled and unskilled. It doesn’t matter if you get a new skill. There are already more people than openings in that market.
“It doesn’t matter if you get a new skill. There are already more people than openings in that market.”
So? You have no chance without the skills. You would call the people that make it lucky but without the skills there is no opportunity to be lucky.
Why not create a job? I have pointed out that in other countries people do what they need to. They sell food they grow or things they make at market.
Do you think these people should just give up and sit on the sofa collecting unemployment,drinking beer and whining?
BTW, there are technical jobs where there aren’t enough people to fill them.
“BTW, there are technical jobs where there aren’t enough people to fill them.”
I have heard mixed messages on this.
Explanations are all over the map.
Here is one that sort of takes your perspective:
http://moneymorning.com/2013/07/29/u-s-unemployment-three-million-jobs-in-america-are-waiting-to-be-filled/
“There is another side to the U.S. unemployment problem: Believe it or not, there are three million jobs going unfilled.
Employers can’t seem to find the right match for more than 200,000 manufacturing jobs alone.”
And others have different explanations, blaming business itself to veering degrees:
http://online.wsj.com/news/articles/SB10001424052970204422404576596630897409182
“With an abundance of workers to choose from, employers are demanding more of job candidates than ever before. They want prospective workers to be able to fill a role right away, without any training or ramp-up time.”
“Some of the complaints about skill shortages boil down to the fact that employers can’t get candidates to accept jobs at the wages offered. That’s an affordability problem, not a skill shortage. ”
“Unfortunately, American companies don’t seem to do training anymore. Data are hard to come by, but we know that apprenticeship programs have largely disappeared, along with management-training programs.”
http://www.forbes.com/sites/realspin/2013/05/31/there-are-4-million-u-s-job-openings-why-are-the-positions-unfilled/
“An objective look at the job market, however, clearly shows that while technology is increasingly deployed in higher-level recruiting efforts, it is underutilized in services and support sectors – such as retail – that require less specific skill sets and tend to have high turnover among predominantly low-wage positions. These jobs should in theory be relatively easy to fill, but many businesses are failing to recruit well-qualified candidates – and too many jobs remain open.”
http://www.wtsp.com/story/news/features/2014/08/14/job-openings-how-to-get-hired/14048343/
“Not all jobs posted will be filled. Sometimes businesses post jobs with no intention of actually filling them. They’re looking for applicants to put in their files so that they have a supply of candidates when a job does open up. ”
“Companies often look for a “perfect fit” that doesn’t exist. With unemployment being high, many employers expect that the perfect candidate will just show up at their door. The problem is, it’s rare to find a person who’s exactly right, with all the relevant skills. People who can do everything an employer is looking for want to move to a higher job to further expand their skills. Therefore, there’s a lack of fit.”
Yet there is 6% unemployment. Strange since we have 3x as many people looking for jobs as jobs themselves.
I love the idea that people are sitting at home in protest of low wages. Not sure how my kids and wife would feel if I did that.
“I love the idea that people are sitting at home in protest of low wages.”
That is a broad generalization that is quite insulting and I doubt applies to very many people. What logic or data do you have to back that up?
I have a question that I can’t seem to find an answer to. Does anyone know what the total taxable real estate number is in the United States? My home is $3500, and my office complex is $15,000. But is there anywhere that totals all of the property in this country?
Thanks
What do you mean? Is there a cap on the real estate taxes you pay based on value?
Tax rates vary greatly by city, from 0 to 2.5% or more of assessed value. Are you looking for the value of properties or the total taxes collected for real estate? Total property value will most likely be the easiest to find.
http://www.foxnews.com/politics/2014/08/11/liberal-mayors-slam-obamas-economy/?intcmp=latestnews
Obama may be over stating his success but he is not at fault. The liberal mayors are too stupid to realize what is happening. What do they expect Obama to do? He can’t make people smarter. Only the people can do that.
The jobs that were aren’t anymore. Can it be any plainer? It is technology and the global economy that are changing things faster than people can adapt.
I sincerely hope that you know that your favorite source of information supporting your assertions, Fox News, while being the most popular cable news organization, it has been found that their “viewers have more misconceptions than those who get their news from other media outlets.”
http://www.sourcewatch.org/index.php?title=Fox_News
Steven H:
Numerous sociologists, economists and historians not an attitude in gen X and millenials. I’d suggest you read the 13th Generation by Strauss and Howe. Also Ty follow up the Fourth Turning. They talk about how generations en masse think due to different rearing due to external forces. Gen X (born 11/23/63 to 1/12/81 in my book) is sometimes rash and impulsive and not much for protocol. But they are pragmatic and accept that they are going to get screwed. Millenials (1/1981 to 9/11/2001) are destined to rebuild after the cataclysm in about 2020. Perhaps it’s your revolution. They feel entitled to a good life with or without sacrifice. Those after 2001 are still children and yet to be named. Regardless, each group has a different psyche from us Boomers. The above books really go through how in some detai. Less duty to man kind but more appreciation for what theyet. Less dedication to job and more to self and family. Not judging, that may be better. But clearly different.
I am Gen X, right in the middle of it. I would agree a bit. We have been told since grade school that we are screwed, the SS will not be there for us unless congress makes changes, changes they are not willing to take for fear of losing their jobs by pissing off boomers. Boomers who kept giving themselves more knowing it was the following generations who would pay, of course that’s what their parents did to. Congress has continued to get worse, more polarized, not better. Also, from a young age, we were told there is no longer such a thing as a company man, corporations no longer care about employees, just near term profits, that seems to continue to hold and be getting worse. It’s hard to make a career when you can’t feel secure in your job and feel your employer doesn’t really care they just need a warm body. We also learned while watching more and more mothers enter the workforce and we became latchkey kids, that money and career isn’t everything, there are more important things that create more happiness. It just leaves more opportunity for those who care more about money. What is wrong with that? We still have many who work hard, start businesses and create wealth, but our priorities are different. These priorities were helped set in place through our experiences and guidance of our boomer parents, many of whom told us to follow our dreams after the big companies torched theirs in the name of profit after many years of service, or went bankrupt and they lost their pensions.
I’m right in the middle of Gen X too. I agree – I definitely have a more cynical attitude which is one of the stereotypes of Gen X. However, that made me think from a young age that anything I got in life I was going to have to do myself – I never thought about waiting for government, my parents, a corporation, or anyone else really helping me or giving me anything. In a lot of ways I think this has made me work harder – knowing it’s all on me.
Totally agree about your comments about corporate America and the changing culture – part of why I knew even in high school that I wouldn’t be able to function in that environment and would need a career where I was “my own boss”. I did get very lucky in that the first path I chose was the right one for me. So many of our generation are still searching and I feel for them…much harder to do all the things we have talked about when you have a family to take care of. And you are so right – it is all about the search for happiness and finding that balance.
Thanks for the reference and summary. Not sure when I can get to it in my reading list, but it sounds like good research.
What I get from this is that attitudes of the workforce have changed, and that the unfilled jobs in earlier posted examples (or at least the recent ones about the welders and wire tie-ers and finance planning recruits) must be, by definition, due to lower than market wage offerings, and not some moral deficiency in the labor pool.
I’ve lived in OK almost my whole life. It is odd such a conservative state has free tuition and mandatory preK, both very liberal agenda items. But, I think ur illustrates that states cn do the right thing (usually) without Uncle Sam telling them what is best.
Which also illustrates that both sides have good ideas, that the best results are by working together for the common good. Federal government does get too involved at times, but it’s usually because of some perceived problem that is not being handled properly in many areas. If it were left to states, we’d likely still have slavery in some form.
Stevendad,
I can’t provide proof regarding stories that you and Peter are describing to me. That makes no sense. I’m just saying that you and Peter are providing stories that are individual and not statistical.
Nevertheless, your first-person account of people you interview for work is more credible than third-person stories about welders, or accounts from decades back. And Peter’s account of employment problems from his industry lacked details.
All that said, let’s play devil’s advocate here, regarding your applicants. If the market, somewhere, is not offering the conditions they demand, then where are they getting the ideas to demand them? Are they really lazy, or have they perhaps accumulated even more debt than your generation, and see more need to pay back quickly? Do they rely more than your generation on a second income and so their home life is more strained? I am not making assertions here, just raising possibilities. I know that engineers at the beginning of my career could look forward to company retirement plans, regular annual pay increases and SS retirement guarantees that felt secure. Young engineers have their 401Ks, no company-funded retirement plan, less assurance of pay raises over inflation, and little confidence in the SS system. And yet I have not seen the sloth or unwillingness to work extra hours you describe. If it’s not generational sloth and laziness, then is there some other reason that explains what you see? Are the returns in the medical profession less than what they were, relative to the large educational investment? Are the applicants truly asking above market wages and work conditions? What’s going on? I’m just reluctant to jump to generational sloth as the primary and only problem here.
Steven H. The stories are over and over. Roofing, fast food cooks, simple construction. All double digit per hour pay. They ARE NIT isolated. Please give solid proof they are as you tout over and over. The concept of work life balance is all about moving into a career in a mid level position that pays well and doesn’t require more than 40 hours a week. Anything less is not worth the trouble to a big group if our population. No sacrifice, no paying dues, no moving for work, no working your way up. I want it now, at good pay and regular hours. Even physicians we interview are like this. If you don’t think the under 45 cried thinks differently than those older, you are delusional.
This is very true. Any of us who employ people have seen a shift in the general attitudes of the workforce. It is palpable. The way I would explain it though isn’t the lazy and unwilling angle Steven H keeps harping on. I think it is just the instant gratification needs of our current society. People – for whatever reason – don’t seem willing to invest in anything with a slow burn…..whether it is a career, health and fitness, or in our politics. Not sure why this is – maybe an offshoot of the technological revolution? Maybe it is the way this generation was raised? The odd thing is that is not just the younger people – it is sort of creeping into society at large.
Personally I think our leadership – and by that I mean Obama – has fed into this mindset too much with his rhetoric. I for one was really excited when he got elected. Whether he could actually get policy change or not, I thought he could be an inspiration to people to achieve the American Dream. Instead, he became quickly frustrated with Congress and Washington (and rightfully so) and turned to partisan, divisive language and politics. I don’t mean to imply that the mindset of the American worker is Obama’s fault – far from it – but wish he would do more to inspire people rather than add to their self-victimization. People are capable of so much more than they give themselves credit for.
There is a entitlement attitude as well that is shocking. I want it all….and i want it now. That I don’t understand. I stuffed envelopes until 1 AM making $20k a year but all the while knew I was impressing my employer with my work ethic and would pay off for me later. The stories of people doing stuff like that today seem very scarce.
There used to be more of a loyalty bond between employers and employees. Perhaps it still exists in smaller companies … perhaps in yours … but in most large companies it is gone. When I first went to work for a large multi-national after college, the first month was spent in training and touring local facilities. There was a retirement plan. There was an employee club with many free or low cost activities. There were employer sponsored opportunities to pursue higher degrees. It all felt like a club and like the company had an interest and an investment in me, the employee. It spurred a certain amount of loyalty and willingness to accept less now, because I felt like I could be rewarded later.
There are fewer of those company “extras” these days, and so it is not surprising that there is less employee loyalty and more demand for what can be given now instead of promised later. People don’t trust the companies to follow through on those later promised opportunities.
This is true but not entirely the fault of the companies. People hop from job to job now more than ever. This has increasingly been the case for decades. Simply a culture change which has some good and bad repurcussions. Very different times.
True, it’s sort of a feedback loop. Less loyalty/more mobility goes hand in hand. Not a flaw of the employer or employee. But it may explain part of why employees are less likely to take a chance on low pay/long hours now for a remote shot at big payoff later. There is not that loyalty and trust beween employer and employee.
This is also partly why something like ObamaCare had to happen. It provides mobility to healthcare that was already provided with retirement accounts and everything else. It was a bit of an anachronism to have to stick with a particular employer ONLY because the next employer’s health plan would not cover your pre-existing condition.
This is also partly why something like ObamaCare had to happen. It provides mobility to healthcare that was already provided with retirement accounts and everything else. It was a bit of an anachronism to have to stick with a particular employer ONLY because the next employer’s health plan would not cover your pre-existing condition.”
When we were forced to change health insurance companies BECAUSE of Obamacare the new program didn’t cover all the things our old program did and yet it cost more. I don’t see the gain from Obama care. On top of that I have to pay the 3.8% tax to support some other loser.
It’s not about wanting it now without working for it. Many may ask for 40 work weeks, but that is in knowing that we will most definitely be asked to work more especially if we are salaried. The corporate world has changed also. Management often views employees as numbers, not people. And government only cares about the voting power of boomers, screwing the later generations. What is wrong with wanting some work life balance when often you don’t feel your work is valued? When companies are willing to cut your pay (or job) without notice to make their numbers, not just survive? Sure those under 45 think differently, the world is a different place, but it’s no more about instant gratification for us than our boomer parents (they raised us after all).
Oklahoma tuition is free for households making less than $50k. Program is called OLAP.
Thanks.
Ken: A reprise of my ideas of revenue and cost cutting changes that make a difference and don’t directly cut entitlements. Criticize, change or whatever.
Several ways to reduce deficit:
Make large corps pay back govt benefits paid to their employees. Walmart $8.6 billion alone, although not all Federal. Let’s say $20 billion.
Yes, stop foreign aid. $20 billion.
Become energy independent by encouraging leasing and drilling on Federal lands. $1 trillion industry in US. So increase by 25%, $250 billion. Let’s conservatively say gov gets 20% in leases,payroll and income taxes and corp taxes: $50 billion.
Meanwhile, energy independence reduces need for patrolling Persian Gulf. Say $10 billion, though that’s likely low.
Leave countries with vibrant economies that have over six decades of US presence (Germany, Japan and S Korea). Save another $50 billion or more.
So far $150 billion. I am not the CBO, but regardless, a lot of money.
Stop growth of non defense discretionary departments. Zero growth for 2 years (they grow 5% per year per several Congressmen), then inflation. $700 trillion times 5% $35 billion for 2 years, then $21 trillion.
Tax securites for top 1% of wealth holders. I guarantee they know exactly what they own already, so no record keeping whining. So let’s take $75 trillion, $40 trillion owned by very wealthy, more than half in securities, so $20 trillion times 2 percent is $400 billion a year. Maybe Warren Buffet, with a billion in new taxes, will pay taxes a bit closer to his secretary. Property and auto taxes are paid now so exempt them. These do demonstrate that taxes on property are acceptable.
Means test Soc Sec and Medicare to reduce these to zero for top 2% (income) and 50% for top 10%. That should save 6% of $1.2 trillion ($72 billion).
Pass tort reform and drop 10% of medical costs in defensive medicine by giving doctors and hospitals “safe harbors” against law suits if they “checked the boxes” on appropriate protocols. That is likely low. $75 billion from Medicare and Medicaid.
Now at $725 billion, $400 B in revenue and $325 B in reduced spending.
This will also save $15 B($725 x 2% or so) in interest year one, $30 in year two and so on.
The reality is none of this will happen and the 48% who pay taxes now without much or any roll back of Bush tax cuts might get soaked. Raising taxes 10 to 20% to the “2%” wouldn’t cut it. At that level, they are paying 60 to 75% in total state, Fed and local income taxes in some locales, much less payroll and property and sales and everything else taxes. Still not enough money can be generated. If they don’t expatriate with their skills and capital. There is a modest chance this overall will happen.
Or we inflate our way out of debt (my personal theory), paying old debt with less valuable dollars and crush the poor and screw the bondholders. This is the course we are on and, since nothing can get done by Congress, where we are likely headed.
“Or we inflate our way out of debt (my personal theory),”
We can only inflate our way out of the severe debt to a lessor debt. The congress will always spend more than it takes in to buy votes.
I would like to raise the pay for congress to $1M or more but the debt is taken out of their pay first. Then they would spend money as if it was their own.
I can’t find the original thread to the question about proposed fixes to the fiscal mess. Too many posts to wade through, I guess…. so I will respond here.
We now have a federal debt approaching $18 trillion. It seems to me that given this situation we cannot continue business at usual. Even with the nice breakdown provided by someone showing mandatory versus discretionary spending, and how much of the budget goes where, I think that in order to solve the debt crisis in the long term I think all parts of the budget should be fair game, and in particular parts considered “mandatory”, which often are ignored.
1. Defense. We spend more than 10 times as much as the next highest spending country. Having said that, there’s a reason for it, namely that for decades other countries haven’t paid their fair share to defend themselves, and have shifted that cost and responsibility to the U.S. We should shift some of it back.
2. SS As much as I think means testing punishes a lifelong series of prudent personal economic decisions, I think that in order to save the system, means testing seems like a reasonable proposal. Maybe increasing the full retirement age…. again….too. Then we need to plug the loopholes in SS where benefits are paid to people who don’t need them, such as year-long payments to parents of premature infants. What is that???
The whole thing with spousal and survivor’s benefits bothers me a bit, too. Seems like a vestige from a bygone era which assumed that there was only one breadwinner. And in the case of spousal benefits, that spouse oftentimes never have paid a dime into the system, yet in many cases received tens of thousands, or maybe hundreds of thousands, in benefits over a liftetime. Maybe over time we move to a system where in order to get any benefits, you have to qualify for them on your own (?). Current beneficiaries grandfathered in, but future beneficiaries gradually grandfathered out as of a certain date. I know there as down sides to that, but it seems like a solution that could fly. You get benefits only if you, yourself, paid into the system.
And what’s this with cost of living adjustment thing for SS? Does anyone else in society get COLA from their pension, assuming they even have one? How about reducing or eventually eliminating that?
Well I guess I’ll stop there for now. Defense and entitlements are the two big hitters in the budget. So that’s where some real headway could be made, if we wanted to.
What we can’t afford is more of the same rinky dink, “temporary”, “incremental” adjustments that affect .0000001% of the budget …. or “cuts” that are just a lower-than-expected increase in next year’s budget …… with politicians then patting themselves on the back for how much they “saved”.
Totally agree. One comment on social security….. I’m not sure if I agree with eliminating COLAs. Federal government retirements, military pensions, and state and local government pensions all have COLAs with them. The corporate world has largely moved away from pensions. This could severely impact a retiree who would see their purchasing power dwindle every year.
I’d rather move the retirement date WAY back. Possibly to 72-73 years old. People live so much longer than before and are much healthier at 65-66 than they were years ago. They are capable of working. Retirement at 62 is a very, very early age in today’s world – and a “privelege” not a right or even a “floor”.
While the supporters of the ACA will say that every American has the right to affordable health care – this is a different argument. Why should every American have the right to retire?
Defense spending, totally in agreement there. We spend too much and other countries not enough. It also gets us into trouble, creates enemies where we don’t need them. The world would be better if we kept to ourselves a bit more.
Means testing for SS, again, I agree. I don’t like it as I will likely get hit for saving, but to keep it solvent it seems inevitable. Moving back retirement again seems inevitable as it keeps more payers longer and decreases benefits paid out, though hopefully not as far back as Peter suggests. Eliminating COLAs also would be hard to do, especially since most increases are eaten up by medicare before they even get to the retired. Spousal benefits should not be eliminated. Why do you want to penalize a woman(generally) for staying home to care for their family? This should not be discouraged.
re: spousal benefits
True, but the way it works now is kind of stupid…. Assume my wife and I are the same age and both work. When we turn 62, I can elect to take social security and she can elect to take half of mine (rather than taking her own). This allows her to defer her benefit to age 70. Then at 70, she stops taking 1/2 of mine and takes the larger benefit. This gives us both much more money in the long run than if we both took it at 62.
Of course in my case my wife doesn’t work, so basically my social security benefit in retirement will be 1.5x since she will get the spousal benefit. I suppose I could see this being eliminated. We have lived off of one income for years, why should we need two in retirement? I don’t know that eliminating spousal benefits is as bad as you think. Certainly we do need it in the event of death, however.
I get what you are saying, and I (like most) don’t know much about the special benefits and tricks to get more. Reform of these types of giveaways sounds appropriate. As long as there we are not discouraging people to properly care for their families, I’m good. A dual income life is fine for those that choose, but there should not be a penalty for having a single provider home. This will only become magnified with the other changes that are likely with SS.
part of the problem in the IT world is people were getting overpaid and now they anchor to their old salary and won’t take a job that pays less. Guess what, that higher paying job might not come around. Take a job hopefully in your field and start over again. it is better than being unemployed. I have never been overpaid, but have always gotten a raise when I have changed jobs. It was usually a better job with more responsibilities. I have only done a lateral job once with same pay due to being let go of a company. Longer story, but I busted my boss abusing her Purchase card.
That’s a great point too….happening everywhere in the “real world”. People unemployed because they are waiting for their jobs to pay what they used to.
Steven H. Yes,I read the whole article. The overtone is a threat. He said it, but you brought it to the table. France was a great leader in thought and innovation before thr French Revolution. They have NEVER caught up since. And they were nearly bankrupted after Napoleon stepped into the power vacuum. Remember how about a quarter of America was bought for $3 million?
Maybe EVERY unemployed couldn’t find a job, but it would be a great start. You never responded to a FREE education being available to the poor in my state. It is astounding to me they don’t all take advantage of it. Tell me what is stopping them from going to college But that would require hard work and self responsibilty. The US is constantly in need of importing talent in IT and medicine. Do you ever hear the business side of the immigration debate?
1) I doubt that actual revolution would happen here. More like a voter revolt.
2) I just saw your post about free education in your state for families under $50K income. Do you know how many use this and what the limitations are? I imagine there is a high school GPA requirement, and possible enrollment limits. These may be some reasons that not everyone participates.
3) Hard work and responsibility is also a skill that needs to be taught. That is something our grade school system does not necessarily focus on, and which needs to be taught at ALL economic levels, along with ethics. Schools used to have civics classes on community responsibility and pride. I’d like those to be re-instated.
If gov’t gets out of the way, tax revenues will increase based on sales and income. The gov’t does NOTHING and gets tax revenue from alcohol and cigarettes and now pot. Less Police expenses more revenue. There are layers of govt jobs enforcing the rules for booze. Just get out of the way and you will get your taxes without having the expenses of people making sure every drop is accounted for. The Moonshiners aren’t going to make the gov’t bankrupt.
If you actually have to qualify to get into a vocational college and the gov’t pays for it once you finish with a job waiting, I am OK with that. What I don’t like is the Liberal Arts colleges charging $30K a year for degrees without job prospects. What does a History degree get most? Or an Art degree? You don’t need college to learn about Art and History or German Polka….
A college degree shows you have the ability to learn, it’s not just about learning job specific skills. When I was hired years ago, I was the only one with a related degree (comp sci), among the others were poli sci, liberal arts and business degrees. Actually, having a broad background can help, it helps you think outside the box and innovate. But I don’t expect you to understand that is possible or even likely.
Vocational degrees are a bit different though, to. They should work with businesses to be up to date with what is needed currently and in the future. Businesses should be happy to help in any way they can as they who benefit greatly.
Agreed. I met a guy with a music degree, with one college class in programming and one in finance. I met him at my college co-op job for a utility, where he was programming to generate the financial projections for the division. He was diverse in his knowledge and skills, and quite successful.
Steven H.
There is free school. In my state college is free for families who make less than $50K.
What state? I’m guessing it’s only for those considered instate? Most states I know of it’s no where near free, costs just continue to skyrocket due to actual increased costs, decreased government funding, and easy loans. If education is necessary, we should provide an easier path than current. I know of many who don’t feel they could ever afford college, it’s not the work involved or ability to learn holding them back.
I also feel any free schooling(degrees or trade) should be tied to achievement. If you aren’t making the grades, you don’t deserve a free ride. I could also see a tiered approach tied to income, less help for those who should be able to afford it, but to me more education is the real goal.
I generally agree that students need to show they are working to maintain their grades. But I want to be careful not to make this a thinning exercise to only reward the top 10% or 20% students. We need programs that educate and reward 95% of students (assuming 5% will slack off).
That’s generous and forward-thinking for your state. Other states should follow. I know mine used to have very reasonable in-state tuition but it has gone up a lot in the last 3 decades.
Right 3.8% Obamacare. My gripe is you NEVER hear that a huge proportion if the 2% got NO benefit from Bush tax cuts. Middle class got and still has their benefit. Sometimes, it’s not the taxes but the rhetoric that irritates me. What is a fair share any way? Again, what moral imperative or constitutionally granted right gives people money for existing?
I can’t contribute to a deductible IRA or a Roth IRA. That isn’t fair. That is a tax increase in stealth mode.
“Right 3.8% Obamacare.”
I got hit hard with that one and that is after my company provides health insurance for our employees and the company pays all the premiums. I have to pay the equivalent of a years health insurance for some one else.
” Again, what moral imperative or constitutionally granted right gives people money for existing?”
Ditto.
I still like Thomas Sowell’s “What is your fair share of other people’s money?”
We don’t get an answer from the( I’ll classy this time ) liberals .
The liberals have no respect for those that actually produces wealth. You can see it through out this thread.
This is why I am bitter.
That is true of some people on here but not all. Think several people who want to take more from the wealthy have been very reasonable and respectful in articulating their opinions. Of course, not all…
Peter N – I am not a liberal, I give and take from both sides because I don’t feel either has all the answers and each some good ideas. I try to be practical and realistic. There is only so much that can be made up by cuts to spending without hurting the economy overall. Likewise, there is only so much that can be taxed without hurting society as a whole. In the end, with our do nothing government, we will most likely all end up paying far more than if they would just get their @#$! together and stop kowtowing to some extremist groups.
This deciding one has all the answers and not wanting to budge or truly listen to what someone else has to say because their viewpoint is different, that is why I’m bitter. I’m sure if you and other conservatives would actually listen to some of those “libtards” or those of us in the center instead of immediately shutting down and complaining taxes are too high already and the poor just need to get educated and work harder, there could be some positive discourse. Until you have more to say than that, you add little if anything to the discussion.
You think it’s wrong that you should have to pay for 1 more persons healthcare. Someone like a paraplegic person who went through the “disability insurance” that you constantly complain about having to pay but which only pays about 10% of that persons debt due through no fault of his own. Or would you just rather that because you believe that he is no longer useful to you, he should just die or be euthanized so you can keep your extra 3.8%.
Try this scenario: You stop paying all taxes. But to keep from paying taxes ever again you must pay for the education, training, health, livelihood, defense, infrastructure, transportation, life, liberty, and pursuit of happiness etc. for every one of your employees directly, from birth to death. Think you can do it?
“Try this scenario: You stop paying all taxes. But to keep from paying taxes ever again you must pay for the education, training, health, livelihood, defense, infrastructure, transportation, life, liberty, and pursuit of happiness etc. for every one of your employees directly, from birth to death. Think you can do it?”
Easily.
The real question is “will” you do it?
Would I be allowed to have a mini gun for defense?
I don’t see why you think this is so hard to do. I, the company and employees pay more in taxes than the services they use. The employees and the company already pay a lot in property taxes. The company already pays 100% of the health care premiums.
Education isn’t a problem. We already compensate employees fees for college courses.
I really don’t understand this question. Where do you think the gov’s taxes come from? You seem to be implying companies don’t pay their own way and free load off the government. Some may but the gov only taxes and imposes obstacles on small business.
After thinking about this a little more. I would be like a mayor of a small community with one important difference. All the people would have jobs. I could fire or kick out of the community anyone that doesn’t pull their weight. Mayors of real cities can’t do that.
First, your proposition that you personally become responsible for the health, safety, and welfare for their entire lives smells a lot like feudal Europe where the king in his castle holds dominion over all the serfs in his lands. This is not liberty or living for your employees whom you could dispatch like a proverbial beheading whenever the mood suits you if the rest of the world did not function by your rules. Based on many of your posts on this forum, it would be hard to think otherwise.
Second, as a former Mayor of a small community, I would like some of what you are smoking. Did you say you lived in Colorado?
“First, your proposition that you personally become responsible for the health, safety, and welfare for their entire lives smells a lot like feudal Europe where the king in his castle holds dominion over all the serfs in his lands.”
Read the whole thread. It wasn’t my suggestion. It was JC’s idea and it pertained to taking care of the employees in the company. You are taking things out of context. Since my company creates wealth and are taxed accordingly we would have no problem taking care of other needs if taxes would disappear. The company doesn’t have any free loaders.
“First, your proposition that you personally become responsible for the health, safety, and welfare for their entire lives smells a lot like feudal Europe where the king in his castle holds dominion over all the serfs in his lands. ”
This is a libtard example of using words with negative connotations again. You use the word serfs to plaint a bleak picture when you know they are free to leave when they want. My ‘serfs’ are well paid to keep turn over low. I use the term ‘tribal knowledge’ a lot because a lot of us have been around so long.
BTW, as a small business owner you do have some responsibilities for the ‘serfs’. Due to Obama Care we had to change our health insurance. Our previous health insurance was pretty good but it didn’t meet all the requirement for Obama Care. The new insurance does not cover a cancer drug that one of our employee’s wife needs. The company is paying for that drug directly out of pocket. It is expensive. The goal is to take care of our own very well. We can do it without the government using force.
The ‘serfs’ here can leave as they please but they don’t because it is the best deal around. And yes, we have ‘beheaded’/fired some employees. I think every company has found people that don’t fit in and pull their fair share.
The conservative media had better wise up to how the liberal press frames questions and uses words with negative connotations like serfs. They do it all the time.
Normal Joe, if I told you the whole story you would be jealous of our ‘serfs’.
Peter N – You complain about libtards using pie terminology. Fact is conservidunces do the same. And don’t try to paint all/most media as liberal, it’s simply not true, not today. The silliness of the far right is as well represented as that of the far left.
Peter N,
Without taxes, there would be no government. Without government, there would be no law. There would only be anarchy. Do you really want to live a “Mad Max” existence?
In every civil society, government spending usually aids half of the people disproportionally more than they spend while the other half benefit less. (Call it redistribution if you want, but that’s IS the function of governments) Hopefully, those who are aided are those most in need, but that isn’t always the case, and our .01% at the top are now aided by various laws to accumulate a a growing share of the wealth while many more than half are seeing their wages and net worths deminish.
Were you ever to advocate that you could provide all services privately that the government now provides, you would appear very foolish indeed.
“Or would you just rather that because you believe that he is no longer useful to you, he should just die or be euthanized so you can keep your extra 3.8%.”
I didn’t say anything like this but the tax is outright thievery.
So to turn this around.
I resent you, and others like you, forcing your liberal religion on me, taking my money and confiscating my property and threatening force if I don’t comply. That is the kind of thing ISIS would do.
“Peter N,
Without taxes, there would be no government. Without government, there would be no law. There would only be anarchy. Do you really want to live a “Mad Max” existence?”
Another example of libtard exaggeration. I never said I wasn’t willing to pay taxes for those things listed in the Constitution. It is all the un-Constitutional taxes that take from me and give to some one else I object too.
“In every civil society, government spending usually aids half of the people disproportionally more than they spend while the other half benefit less. (Call it redistribution if you want, but that’s IS the function of governments)”
So when the Constitution was written the US was not a civil society?
” Hopefully, those who are aided are those most in need, but that isn’t always the case, and our .01% at the top are now aided by various laws to accumulate a a growing share of the wealth”
Hey, blame Obama and the Federal Reserve. They bailed out the failing companies, bought votes, made money cheap so there is no where else to put it but in the stock market and the stock market is only high because there is no other place to invest money. Even banks find it more profitable to invest the money than to loan it.
“while many more than half are seeing their wages and net worths deminish.”
We have been over this over and over again. If these people were good enough so they could run a successful business on their own or someone could make a good ROI by hiring them there would be no problem. Basically they don’t have the skills for the new technical economy.
Post by Peter N August 16, 2014 at 11:10 pm in reply to JC
“Try this scenario: You stop paying all taxes. But to keep from paying taxes ever again you must pay for the education, training, health, livelihood, defense, infrastructure, transportation, life, liberty, and pursuit of happiness etc. for every one of your employees directly, from birth to death. Think you can do it?”
“”Easily.””
Absolutely nothing was taken out of context, but it is a well worn whine when called on agreeing with another point of view.
You are no conservative, you are nothing but a greedy, belligerent bully with an overblown sense of entitlement. The true welfare queen of the 21st century. Your repeated insistence that only by creating wealth, whatever that may mean to you, has blinded you to the point of being incapable of engaging in a respectful conversation when you are faced with opposing point of views. I can assure you that any legacy you leave on this world will more than likely be ground into obscurity as the worst of this era.
I eagerly await the slings and arrows from an overgrown adolescent.
“You are no conservative, you are nothing but a greedy, belligerent bully with an overblown sense of entitlement.”
More libtard lies.
I am not greedy. I just want to keep what is mine.
I am not a bully. I have said before you are free do what you want until it affects me unlike you libtards that want to impose your liberal religion on others.
“The true welfare queen of the 21st century.”
This is libel.
“Your repeated insistence that only by creating wealth, whatever that may mean to you, has blinded you to the point of being incapable of engaging in a respectful conversation when you are faced with opposing point of views.”
The conversation has soured over the course of the thread because of statements like the one you made above that have no shred of truth.
If I am willing to let you live your life without imposing my will on you why can’t you do the same for me? When you voted for Obama you raised my taxes, I have had to change my insurance and that has been a huge hassle costing me time and money. I blame all of those that voted for Obama.
That is where you are blind to reality. The conservative narrative has undermined unions, refuses to let the minimum wage keep pace with inflation, egregiously asserts that the American worker is in competition with third world countries, and takes increasingly larger shares of the economy’s increased productivity, and fosters high unemployment to artificially keep wages low. Not only has no Republican president since Richard Nixon has lowered the annual budget deficit, but in most instances has been responsible for increasingly larger ones. Conservatives such as yourself can’t win elections without gerrymandering districts and voter suppression as well as plot and scheme to destroy policies and institutions that only you do not need to the detriment of the majority of the citizens of this country. When a conservative takes advantage of a tax write off or federal subsidy you call it good business practices, but when the ordinary person trying to make it one day at a time does the same, it is class warfare and taking what is rightfully yours. You are much like the Mafia Don claiming that it’s just business. Conservatives, Republicans, Libertarians, Democrats, and Liberals all have a share in today’s problems. There is no such thing as a conservative or liberal solution to our situation. And your browbeating those who disagree with you is gaining you no added veracity. I’m just thankful that there are some business leaders who have not lost their compassion, empathy, and common sense by rejecting what you preach. Based upon the mouth it comes from I take your epithet “libtard” as a compliment and badge of honor when compared to what you represent. There is an often repeated axiom taught at many a law school that fits this situation: “When you have the law on your side, pound the law. When you have the facts on your side, pound the facts. When you have neither, pound the table.”
“That is where you are blind to reality. The conservative narrative has undermined unions, refuses to let the minimum wage keep pace with inflation, egregiously asserts that the American worker is in competition with third world countries, and takes increasingly larger shares of the economy’s increased productivity, and fosters high unemployment to artificially keep wages low.”
Unions have done themselves in. If unions workers provided more value than non-union workers there wouldn’t be a problem.
http://www.freerepublic.com/focus/f-news/1503982/posts
I don’t see how this is productive. This is the reality I see.
http://www.governing.com/blogs/by-the-numbers/most-gerrymandered-congressional-districts-states.html
“Conservatives such as yourself can’t win elections without gerrymandering districts and voter suppression as well as plot and scheme to destroy policies and institutions that only you do not need to the detriment of the majority of the citizens of this country”
First, I am more of a libertarian but look at this:
If you read it it looks like the democrats have gerrymandered Maryland and want to keep it that way. So are you just making this stuff up? It sure looks like it or it is simply more libtard lies and distortions.
http://www.governing.com/blogs/by-the-numbers/most-gerrymandered-congressional-districts-states.html
“When a conservative takes advantage of a tax write off or federal subsidy you call it good business practices, but when the ordinary person trying to make it one day at a time does the same, it is class warfare and taking what is rightfully yours. ”
I don’t agree with subsidies. That is corporate welfare and just as obnoxious to me as personal welfare. Tax write offs are a different issue. It only makes sense that companies are able to write off expenses.
I don’t have time to debunk your distortions faster than you can make them so have some proof of your statements.
Looked it up. That 3.8% isn’t anywhere near as onerous as it sounds as it doesn’t apply to earned income, only investment income. So, unless the majority of your earnings are from investments, it will not come close to 3.8% of total income. Not sure how this would effect those like Romney with carried interest. No judgement, just clarification, as I’m sure others (like myself) don’t know this and could otherwise be led to believe it’s on all income.
Never said is applied to earned income, It is just an extra tax on those that have saved money. Why does investment income have to be taxed for Obamacare? I don’t advocate cigarette taxes, alcohol taxes and sin taxes, but if you eat healthy, you shouldn’t have to pay for other people’s insurance. Why not use the money for roads and bridges? It is an arbitrary tax that only affects the rich. I paid an extra $600 last year. Many people probably paid more. Why not just take part of the budget and allocate it to obamacare, why have a special rich person tax when most of the people paying the surcharge aren’t on obamacare. Those that aren’t rich say we have the money to pay it and again, that isn’t the point. why discriminate on the rich. everyone should have a share in it. I am all for usage taxes and fees like tolls. Use the product, pay the tax. Rental car taxes are the most onerous, but only paid by those renting cars. Same with the hotel taxes.
Never said that you implied that. Just wanted to clarify for others as it was unclear to me exactly what the tax covered. Yes it is arbitrary unfortunately that’s the best one can hope for with today’s congress.
Great point and an important distinction.
Rates went up another 3.8% for the Obama investment tax as well.
Zero change in AMT. The rise in exemptions only has to do with triggering tax, not exempting income. 26%, starting from dollar one.
Yes, I understand a bit how it works. So, that being the case, how does anyone getting hit by AMT for the past decade argue that their tax rates are going up? And, for those with income too high to hit AMT, how can they complain that rates they pay are the highest ever? I’m only asking for reasonableness among the rhetoric. I’m not arguing. I’m asking for answers to better understand, but so many on here would rather whine and argue their opinion than give facts. You, Stevendad, actually provide support for your opinions, so I’m obviously not trying to hit at you.
JTM: Again, Bush tax cuts had no effect on most of the top 2% of earners as they were/ are paying the Alternative Min Tax. We received nothing. Everyone else did. So don’t blame us or act like we got this great deal.
Not blaming you or thinking you got a great deal. Never said that, not even close. Wasn’t my point at all, just that rates are similar now as to before Bush and have been similar or higher before. it has been pointed out several times on here that tax rates just keep rising on the rich, when it’s simply not true as we are really just coming off historic low tax rates. Would you rather we went back to the 80s or before!?!?!?!
If you are getting hit by AMT, how have your rates changed? They’ve been the same for decades with the limits moving up gradually and regular tax rates don’t matter if you are hit by AMT.
For all you wealthy on here who continue to complain about how your taxes only seem to rise, this is a recent phenomena and due mostly to the expiring of Bush tax cuts. You are still paying less than 2000 and less or equal to almost anytime you ever have before that(excluding Bush Sr years). If your income has dramatically increased over the years, obviously the tax increase is more because of that than the government changing tax rates.
This not to argue whether tax rates are too low or too high, but to argue that rates just keep going up is not true, it’s a short time period if you want to take that view. The Bush cuts were never designed to be permanent, though they’ve been extended many times.
Here is a nice calculator for the years 2000-2014:
http://www.moneychimp.com/features/tax_brackets.htm
Totally agree. But when people say “we need to raise taxes on the wealthy” it is fair to say…”we just did”. It just isn’t ever enough for some folks. Why don’t we stay with what he have just done – which is significant – for a while.
And don’t forget when you are saying rates in the top brackets are lower than 2000 to remember that we have several surtaxes (one to pay for ACA) that actually make the rates higher than what you see on paper. Effective tax rates in top brackets are much higher than they were in 2000 due to this and loss of deduction.
I’ve no problem keeping rates where they are. I think they are fairly reasonable and not stopping investment. I’m worried about the debt and decreasing taxes will make that worse. I’m trying to be realistic, we need to pay for what has already been spent and interest in future years is going to become onerous even if we can get rid of the deficit. That is what worries me about the fools that threaten to not push up the debt ceiling, if we default our interest costs will skyrocket.
Exactly, in our current do nothing government, that is the “solution” to everything.
I’m not sure inflation is a solution, but is the default if we don’t do anything.
The gov’t doesn’t need to be manipulating the car market. If 4,000,000 people today decided to drive their cars for 2 more years, the auto industry could collapse again. Most cars will go for 15 years, EASILY. Just because you are getting 5 more MPG doesn’t mean doodlysquat if you paid $35,000 for a car you didn’t need to just to get some money from the gov’t. And all the fuel efficient cars are causing the gas tax revenue to drop, putting our roads and bridges in danger. Just let people drive gas guzzlers if they can afford to. If they can’t put gas in the car, then I guess they can go buy a used car at a now inflated price instead of a new car. Thousands of people buying cars in private sales denies the car dealers revenue. Some people like Tesla don’t even want dealerships. Drive the car, order it, have it delivered. There shouldn’t be a car loan more than 4 years. If you can’t save money for a car and pay cash, then you are buying too much car. How you would like the gov’t to impose that rule? Or to say your car purchase can’t be more than half of your income. How many people making $45K are buying $35K cars because they get 0% interest for 72 months. These people need to be taught some financial lessons. Cash for Clunkers accomplished NOTHING…
Yes, they didn’t need to do it. They were trying to spur auto sales and decrease consumption of fuel. Of course, the study pointed out that many of those sales were for cheap, econo cars, not those for $35k, and that was part of the reason it actually hurt auto sales. In the long run, many of these people will likely realize savings due to the low priced vehicle and the savings on fuel and maintenance. The government of course knew that fuel taxes would go lower as a result, they have been for a while because of higher CAFE standards and the dramatic increase in fuel costs after 9/11.
I agree about buying a vehicle, many purchase beyond what they should. Of course, putting a 4 year limit is going too far, especially since vehicles are lasting much longer with fewer issues. The longevity is one of the reasons why 6 year loans are becoming more standard. Another reason is the low low interest rates, they make the cars significantly cheaper when people buy based on monthly payment. Unfortunately, many purchase by monthly payment, they don’t worry about the upfront price. Most people are not financially savvy, unfortunately we don’t teach it school.
They need to teach financial management in schools just like they teach art, PE or math.
Here was a waste of $2B dollars.
http://dailycaller.com/2014/08/09/obamas-economy-in-action-data-shows-cash-for-clunkers-was-an-epic-debacle/?utm_referrer=http%3A%2F%2Fwww.caintv.com%2Fturns-out-cash-for-clunkers-wa
And … if you go back through each and every president you likely find instances of the similar waste and things that didn’t work out as expected. What’s your point?
Hindsight is almost always 20-20. If we constantly dwell on past events that can not be reversed, how can anyone have any ability to see into the future? Absent from any of these analyses was the net effect if no automobile sales occurred. If I remember correctly, the auto industry was in it’s worst doldrums of modern history and without this program may have more than likely not sold any automobiles off the lots that subsequently folded up shop.
We have bought one car in the last 4 years. I bought a car in 1998, bought my current car in 2010. My wife hasn’t bought a car since 2001 and probably won’t buy another one until late next year. If people like us were the majority, Big Auto would sell 7,000,000 cars a year instead of 15,000,000. People that lease cars keep them in business.
No need to be defensive of Obama here. Just pointing out a recent example of waste. There are lots of them. Why do we have 11 aircraft carriers when no other nation feels the need to have 2? And oh yeah – we are building another one. And the case was made for it by saying it provides jobs.
Exactly, and not defending Obama, don’t think he has done a great job. He was elected almost solely because he was the opposite of Bush and he was a feel-good choice. Romney would have had my vote and others if he didn’t have such an extremist running mate.
MOR:
Several ways to reduce deficit:
Make large corps pay back govt benefits paid to their employees. Walmart $8.6 billion alone, although not all Federal. Let’s say $20 billion.
Yes, stop foreign aid. $20 billion.
Become energy independent by encouraging leasing and drilling on Federal lands. $1 trillion industry in US. So increase by 25%, $250 billion. Let’s conservatively say gov gets 25% in leases,payroll and income taxes and corp taxes: $50 billion.
Meanwhile, energy independence reduces need for patrolling Persian Gulf. Say $10 billion, though that’s likely low.
Leave countries with vibrant economies that have over six decades of US presence (Germany, Japan and S Korea). Save another $50 billion or more.
So far $150 billion. I am not the CBO, but regardless, a lot of money.
Still not worth taking a piss for I’m sure.
Stop growth of non defense discretionary departments. Zero growth for 2 years (they grow 5% per year per several Congressmen), then inflation. $700 trillion times 5% $35 billion for 2 years, then $21 trillion.
Tax securites for top 1% of wealth holders. I guarantee they know exactly what they own already, so no record keeping whining. So let’s take $75 trillion, $40 trillion owned by very wealthy, more than half in securities, so $20 trillion times 2 percent is $400 billion a year. Maybe Warren Buffet, with a billion in new taxes, will pay taxes a bit closer to his secretary. Property and auto taxes are paid now so exempt them. These do demonstrate that taxes on property are acceptable.
Means test Soc Sec and Medicare to reduce these to zero for top 2% (income) and 50% for top 10%. That should save 6% of $1.2 trillion ($72 billion).
Pass tort reform and drop 10% of medical costs in defensive medicine by giving doctors and hospitals “safe harbors” against law suits if they “checked the boxes” on appropriate protocols. That is likely low. $75 billion.
Now at $725 billion, $400 B in revenue and $325 B in reduced spending.
This will also save $15 B($725 x 2% or so) in interest year one, $30 in year two and so on.
I know, still not significant to you.
The reality is none of this will happen and the 48% who pay taxes now without much or any roll back of Bush tax cuts might get soaked. Raising taxes 10 to 20% to the “2%” wouldn’t cut it. At that level, they are paying 60 to 75% in total state, Fed and local income taxes in some locales, much less payroll and property and sales and everything else taxes. Still not enough money can be generated. If they don’t expatriate with their skills and capital. There is a modest chance this overall will happen.
Or we inflate our way out of debt (my personal theory), paying old debt with less valuable dollars and crush the poor and screw the bondholders. This is the course we are on and, since nothing can get done by Congress, where we are likely headed.
Stevendad – Thank you. Problem is, there are many more who just say cut my taxes by cutting spending on the lazy, drug addicted poor and call those with differing opinions names like libtard instead of offering real solutions.
And yes, inflation is the most likely solution, not real growth.
Why do we need a National department of Education when every state has their own set of standard? Why do we really need TSA when the airlines could pay for it and charge us the same ticket tax? Why do we have the CIA, NSA and FBI. Just make one alphabet department that does it all.
Those are all good questions, questions that our ‘leaders” need to start answering instead of laying blame on the other party.
Great points. Although the FBI is really different from the other two agencies you talked about, much could be combined.
Usually, such agencies are created because they are more efficiently organized and coordinated, or have greater authority and thus are more effective, or are simply less expensive to operate due to the economy of size. Medicare for example, is 16% less expensive to operate by the government on average than private Medicare Advantage plans due to less administrative overhead.
Your questions are valid and are asked continuously by many in government bureaucracies in order to increase efficiency and decrease costs. It’s an ongoing process just like in private industry.
MOR — Thoughts on this article from the New England Journal of Medicine? It seems to indicate that Medicare has higher, not lower, operating costs as compared to private Medicare Advantage plans.
http://www.nejm.org/doi/full/10.1056/NEJMp1114019#t=article
http://www.washingtonpost.com/blogs/govbeat/wp/2013/12/12/the-d-c-suburbs-dominate-the-list-of-wealthiest-u-s-counties/
I think one of the ironies of this discussion is what has happened in the DC area – where I live. This area now has 8 of the 13 counties with the highest income. Real estate values and overall wealth have risen dramatically. Personally, I have seen my income rise dramatically during the last 15 years (particularly in the last 6). Many others around me are all sharing the same good fortune. A normal 4-bedroom house within 5 minutes of the Beltway will easily go for $1 million. The MEDIAN income is over $100k. Literally every govt employee I meet with makes at least this. Those that contract or work directly with the govt make 2 and 3 times this. This growth in the DC area is surely contributing to the income inequality we have been discussing. The whole area is in the 1% – or at least the 5%.
Why has the DC area seen such a boom? Because government spending is out of control. We have seen such a rise in spending that our local economy has exploded. We haven’t seen any of the recessionary turmoil that places like Vegas, Cleveland and others have seen. Because the careers and incomes of the people in the DC area are either directly funded by the spending (debt) of the US Govt or are benefactors of the growing wealth in the area. Kind of ironic isn’t it?
Even with all this, I want the spending under control. It can’t be sustained.
What many of you fail to miss when you attack me is that I stand to lose far more personally if government spending is cut dramatically. This would be way worse for my personal situation than higher taxes. It is honestly not even close…..
But it needs to be done. And we can all make a list do all the things and say “what do we cut.” and scratch our heads….but it will take sacrifice. From all of us.
One of the ironies of this discussion is the oft assertion that government doesn’t create jobs. The increase of incomes and life styles are both directly and indirectly linked the the business of government. If one were to use the California Gold Rush as an example, many people went to California to make it rich. Many did. But most made it on servicing those that came to prospect for gold. Only a very few made any money prospecting, but the support system set up to supply the needs and comforts of those with gold in their eyes made a real killing. This is why states fight vigorously to keep military bases, they understand how they affect the local economy. The same holds true overseas. The local economies know beforehand whenever it is Uncle Sam’s payday. The same argument can be made for increasing wages for the lowest 40%. That money would make it’s way back into the economy driving local economies and demand creating more jobs. There are those who claim that wealth is created. I argue that it is accumulated. The wealth of a nation is a testament to the success of it’s society on the whole. This top heavy behemoth is tottering on collapse. The question for all is do we do it with the full knowledge of what has worked in the past and do it easy, or do we insist in doing it the stupid way and let it just happen to us and make the suffering more painful than it needs to be.
Every gov’t job is more taxpayer dollars out of my pocket. There are thousands of unnecessary jobs in gov’t, but since there is zero accountability, someone will just decide to open a gov’t agency and get funded. The Pentagon is the largest office building in the world. A 5% cut would be easy. Many jobs could be done by the private sector. That might just be a re-allocation of resources, but they will at least have to make money to survive. No gov’t agency is tasked with making money, but losing billions isn’t a solution either. The USPS should be out of business. They lost $2B dollars last quarter yet they keep trucking along. Not cutting a day of delivery or cutting the levels of authority. They do have to prefund the pension, which is really what is killing the system. They must deliver to every address in the US. Fedex and UPS only have to deliver if they have something to deliver. Junk mail doesn’t pay enough to keep the system afloat.
Very true. If UPS lost $2b I promise they would make some changes. It is interesting how people look at the government jobs and pay so differently than corporate jobs and pay. Maybe it’s because government jobs aren’t predicated on the underlying entity actually making a profit.
Just kind of notincing a theme here – how the same people who want basic wages to be higher in the corporate world seem to abhor Federal spending cuts (meaning wages should remain high with the government even if the entity is losing money). Therefore everyone across the board makes more money, which in turn is good for the economy.
However, we have to pay for these wages – either in higher revenues (which I know some believe will happen if we just pay everyone more as they will have more to spend). So the ONLY way to do this is to reduce the pay of the high wage earners. On a corporate level, it means paying higher level people more equal to the rank and file. On a Federal level it means a higher progression to our tax rates than even the higher rates we have now (2014).
Obviously, I don’t agree with this although I see how people might come to this conclusion.
My questions about this theory –
1) Who is to say what is enough? If you pay everyone $20/hr to answer the phone, after a while this becomes the norm. Then people will want $25/hr. Same thing with tax rates on the wealthy.
2) Does this truly feed the economy?
3) Does it constrain innovation and the entreprenurial spirit? For instance, I know many people love supporting small business – mom/pop shops. Why would anyone open their own business when pay is so good with the private and public sector? Why take the risk?
4) Is this the playing field that we really want in America?
5) And who is to say that if we do see increased revenues that we won’t just spend more? Politics are all based on year-over-year comparisons. They all love to say “we reduced spending by 5% from last year” or “so-and-so cut $1b from the education program”. So if we bump up Federal spending (i.e. govt employee wages) to much higher levels, there will be a political push to keep increasing these.
The one thing I know for sure about people is that in general, most have a capacity to spend between 95 and 115% of their income. No matter what it is. The whole theory is predicated on this – that the middle class will spend the money and fuel the economy. Problem is, by doing that – they still need raises. They still aren’t planning for the long-term.
This approach doesn’t solve the true problem which remains the “I want it now” disease that dominates our politics, our personal financial planning and our general culture. It just kicks the can down the road.
It’s not just “I want it now”. Boomers fought hard to keep SS and medicare. That is why politicians never properly fixed SS. It could have been fixed decades ago without big changes, but the risk of having to answer for doing what what needed and losing their job stopped congress. Now we will all pay a much higher price, rich, poor, young and old (mostly young). We need to start asking more of our politicians. We need to ask them to make the hard decisions, to stop following some silly ideology and do what makes sense. Ideology is a great starting point, but ideology doesn’t work in reality.
The USPS is a total other problem. They could fix a lot of expenses and generate more revenue, but they are not allowed to because people keep telling their congressman they need it to stay the same. They can’t live without delivery 6 days a week, etc. Quite silly really.
MOR: we owe $2.6 trillion to Soc Sec trust fund. Chump change to you I’m sure, but part of the deficit.
Corrected above as well. 16% of the debt.
Yes, it’s owed TO the trust, SS payments haven’t caused the debt to increase. Big difference there.
I don’t care what the libtards say. In the end it is those that are most adaptable to the current conditions that will do the best.
I didn’t make the rules. It is the way it has always been and the way it will always be.
You are all doomed unless you can find a solution where you make yourselves better instead of trying to make others poorer.
Really classy there Peter N.
Yep, Peter N always keeps it classy. Wealth buys classiness. He also knows the best way to get “the other side” to listen to your argument is to put them down and perpetuate the idea of class warfare. He forgets at times that we are all truly on the same side, just coming at things from different experiences, thoughts, and beliefs. His feelings of superiority and indignation, get in the way of explaining things beyond “I’m rich, I built this, so I am therefor right”, kind of like “wealth makes right”, instead of trying to have a real discussion. He should run for office, he’d fit right in with the current groups that are uncompromising and instead prefer to blame the other party for everything wrong. He also seems to get easily offended at times while having no problem dishing it out from his end. Yep, classy all the way.
I am not trying to be classy but I am not saying that wealth makes right or anything like that. I am saying that one must be able to adapt to the current conditions. So many cannot no matter how much money you give them. Can you find a solution that doesn’t involve taking from others?
BTW, inflation will not work quite the way you think it will. At the first hint of inflation the short term rates will go up causing a big increase in what the gov must pay to borrow. This will cause havoc and loans will be unaffordable due to high interest rates. Those that have money will try to buy hard assets. Those without money can’t do much but their credit card debt will be easier to pay off. The problem with this method is that the pain/uncertainty will last for years
What I think will happen is what happens in the Latin American countries. The dollar will be devalued by 3 to 5 to 1 overnight. The pain is over quickly. All those that have money in CDs and bonds get the shaft. So do lenders.
In the end it will not change anything except foreign made goods will be very expensive. Job growth may increase here but not that much because the unskilled workers still need to compete with machines.
“He also seems to get easily offended at times while having no problem dishing it out from his end.”
This is because what the libtards are proposing will directly affect me. I am not proposing anything that will affect you. There aren’t ANY solutions that will not hurt a lot. It is just a matter of who get hurt. It just better not be me. I didn’t screw things up.
I don’t think inflation is the answer. But, our great leaders often seem count on it and economic growth to get us out of our problems instead of making the hard choices. Inflation of the sort you mention could actually make it harder for machines to complete as machines take natural resources that will inflate at a faster rate than wages. If you look at developing countries, labor is often too cheap to replace with machines. I would rather we get spending/debt under control before the interest becomes completely unmanageable (if it hasn’t already).
Actually agree with what Peter N says “may” happen The devaluation of the dollar could be swift. And next recession we can’t print money like we did this time. The irony is that this unwinding of things will hurt the average citizen worse than the rich.
I don’t disagree either. Peter N seems to think liberals are the cause of all evil though, and that is just not true as many conservatives have done their damndest to get us here also. I don’t see how he is not going to get hurt in the cleanup, we all are. I also agree that the average citizen is most likely to get hurt the worst, those with assets that can weather the storm will come out better than the rest.
“Inflation of the sort you mention could actually make it harder for machines to complete as machines take natural resources that will inflate at a faster rate than wages.”
While that is true I don’t people will stop using the machines that are already running and paid for. Like I said above. I do think more people will be hired but the devalued dollar will only bring their pay in line with foreign workers. Don’t expect any big changes for the better.
“Peter N seems to think liberals are the cause of all evil though, and that is just not true as many conservatives have done their damndest to get us here also. ”
If conservatives were ACTUALLY running things we wouldn’t have a debt. We wouldn’t have all those welfare programs and other programs not mentioned in the Constitution. States like Oregon and Massachusetts would be free to have their own health care systems but there would be no federal one. What is funny is that Oregon had a big head start on adapting to the Obama care program. The spent millions and failed. I could have run things better.
BTW, we moved our business from Oregon to Washington because of taxes. We voted with our feet. This is the same thing that big companies do but they can do it internationally.
“I also agree that the average citizen is most likely to get hurt the worst, those with assets that can weather the storm will come out better than the rest.”
So who’s fault is that? It isn’t the people with assets fault. They didnt need all those deficit causing welfare programs.
In the end those with assets may not do that well either when it comes to paying capital gains taxes on the property. What will be the cost basis?
JTM – totally agree. I don’t see any real difference between liberals and conservatives on this issue. Both spend way too much money – both love getting involved in every international conflict they can – both make choices for their own personal and political party gain rather than making hard long-term choices. This is why I think we need a completely new political party or a true renegade to come in and put some sense into the discussion. Or at least someone who can negotiate. A lot of the back and forth on this site has illuminated those whose minds have been poisoned by the polarized rhetoric we hear on TV and radio. Both sides. You can see some people on both sides of the argument who can debate reasonably and others who are full of their party’s doctrine without any ability to understand other views or compromise to a solution. I bet you that Congress’ discussions sound a lot like a debate between Peter N and Steven H.
Peter – AMEN! Unfortunately, the election process allows extremist groups like the tea party and individuals like the Kochs and Soros to have an out-sized influence on whom the rest of us even have a chance to vote for.
I’ve felt the same for a long time, a new party or two is needed, or maybe a disbanding of the current parties. Of course, many parties have come and gone over the years and even those minor parties with staying power never seem to be able to gain much influence. A great negotiator would even have a hard time gaining acceptance by those at the extremes and may not be able to make it to the point of getting on the final ballot due to lack of extremist support during primaries.
Peter N – “Don’t expect any big changes for the better.” – Umm, I don’t, I seriously don’t and don’t see why you would try to make this out as my viewpoint. Workers will be fighting against machines for jobs far into the future, but the investment in new machines will be lessened as the advantages will be decreased.
“So who’s fault is that? It isn’t the people with assets fault.” – Again, isn’t what I said, not my viewpoint.
“If conservatives were ACTUALLY running things we wouldn’t have a debt. We wouldn’t have all those welfare programs and other programs not mentioned in the Constitution.” – We have many of these because the Great Depression, many have been implemented/increased by Republicans. Obamaphones may as well be called Reaganphones, Bush Jr gave us Medicare part D, etc. A quote about Part d “It was widely believed that if the federal government used its buying power to pressure drug companies to cut drug prices, the cost of providing drugs to Medicare recipients would be substantially reduced. But forcing down drug prices would diminish the drug companies’ profits and Republicans were adamantly opposed to that.” yep, looks like the Dems are evil and wanting to give away tax dollars to corporations by paying multiples of other countries for the same drugs, wait, oops.
” I could have run things better.” – Maybe, maybe not, a lot of people think they could do better. It is why many get into office in the first place.
“It is just a matter of who get hurt. It just better not be me. I didn’t screw things up.” – Neither did I nor most anyone else. Our great leaders from BOTH parties screwed things up, this is decades in the making, they’ve known for decades while all sorts have been in office, nothing has been done. We will all pay and pay higher because of their unwillingness to do something sooner.
“There aren’t ANY solutions that will not hurt a lot. It is just a matter of who get hurt. It just better not be me. I didn’t screw things up.” — Peter N.
The true basis of all of Peter N. philosophy, finally revealed. He doesn’t care if OTHER innocent parties get nailed to the wall. Just so he doesn’t have to relinquish a penny of his own.
“He doesn’t care if OTHER innocent parties get nailed to the wall”
Who do you think is innocent? Those pigs that feed at the government trough?
I don’t think I have made it any secret that I believe in what the tea party and libertarians stand for.. Less government, less meddling in people’s personal business like health care but more personal responsibility. I don’t see this happening.
I think people should be allowed to be stupid and irresponsible as long as it doesn’t affect others. Unfortunately even our elected officials are stupid and irresponsible or we wouldn’t be in the mess we are in.
Even Peter calls the tea party extreme but it will take extreme measures to save the country if it can be saved at all.
If you keep doing the same thing you will keep getting the same results.
“You are absolutely wrong about government spending not creating jobs.”
No, I am not. The gov can’t create jobs without first taking from the private economy that would have created jobs more efficiently. The second option is that the government can create jobs using future money that the younger generations must pay back/
Where do you think the money to create jobs comes from?
“The gov can’t create jobs without first taking from the private economy that would have created jobs more efficiently.”
But the private economy has plenty of money to create jobs and the more money that goes to the investor/business class over time, the fewer jobs have actually been created here in the US. Your theorem does not hold water.
“But the private economy has plenty of money to create jobs”
Yes but they don’t have money to waste like the government does on creating jobs that create no wealth. What government job creates wealth?
The point is that private industry is more efficient that government and if you take away money from private industry you take away the option to create jobs that create wealth.
The government of the US is the voice and strength of its people. Government of the people, by the people and for the people. For society.
It is not the job of government to be efficient at creating jobs, or at creating wealth. To imply that government is failing because it does those things poorly is to completely misunderstand the function of government. It is the function of government (grouping national, state and local gov’t functions) to look after the needs of the people; to defend them, provide police and courts to keep order and defend laws, to provide legislatures to create those laws, and when deemed necessary to provide social programs for the benefit of society. These programs have included public education, social security, and various safety nets for the poor, the old, the sick and the needy.
You could argue that some of these are economic issues and that Business should take care of the situation. But Business is really “failing” at meeting these societal goals. Is that a fair assessment? No. Business is amoral (not immoral), and its only functions are to make money for the business owners and stockholders.
Get it?
It is not the duty or province of business to improve society, and it is not fitting to judge business on that yardstick. Business’ duty is generally to create wealth, within the bounds the laws and rules of business deemed suitable by society.
It is not the duty or province of government to create wealth, and it is not fitting to judge government on that yardstick. Government’s’ duty is generally to improve society by keeping it organized, providing social and physical infrastructures to support the quality of lives of it’s people, and incidentally, also providing infrastructure to aid business, and rules to govern business to assure that business is a benefit and not a detriment to society.
“It is not the duty or province of government to create wealth, and it is not fitting to judge government on that yardstick.”
Why not? I can and I do.
There have been a few cases where the gov has created wealth. Dams and canals for one. These are structures that pay for themselves over time and are still paying.
What the government spends its money on today is largely gone with no return on investment.
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“But the private economy has plenty of money to create jobs”
Peter N.: “Yes but they don’t have money to waste like the government does on creating jobs that create no wealth.
====
There are many MANY jobs in private sector that create no wealth or that destroy wealth. My point was that the private economy has plenty of money to create jobs, but they are not DOING it. Because more money to the private sector does not guarantee creation of jobs or wealth. The DISTRIBUTION of money within the economic classes of the private sector is a large determinant of the efficiency at which the private sector makes money. That is the thesis we are discussing.
In the simplest of models, if all of the money goes to the producers, and little to the consumers, who will buy the goods? Goods are left in inventory, businesses fail, jobs are lost. The solution is not to give more tax cuts or tax incentives to the producers. That makes the problem worse! The solution also does not involve telling consumers they need to quit their low-level jobs at the current producers’ businesses and start their own business. That does not address the primary problem of the producers not paying the consumers enough as employees to actually buy goods as consumers!
Not everyone can be the 1%. Not everyone WANTS to be the 1%. We need to stop ONLY telling the lower classes how to get out of the lower class, and actually improve the lot of the lower class by (a) matching jobs to skills and skills to jobs, and (b) paint even the lower classes, who serve necessary societal functions, a decent living wage.
pay, not paint, the lower classes a living wage. Darned autocorrect.
“There are many MANY jobs in private sector that create no wealth or that destroy wealth.” There are jobs that are necessary like picking up garbage, lawyers, accounts etc so the rest of us can concentrate on creating wealth but destroying wealth? Unless you think demolishing an old structure in order to make way for a new one I just don’t see it.
” My point was that the private economy has plenty of money to create jobs, but they are not DOING it. ” The would if there was a ROI. Regulations, healthcare etc make getting a ROI more difficult. It is easier to buy machines.
“The DISTRIBUTION of money within the economic classes of the private sector is a large determinant of the efficiency at which the private sector makes money. ” The distributing money by the government doesn’t make the economy more efficient. People buying what they need or want is much better.
OT, Government can’t be trusted. These are from this morning’s news.
http://www.foxnews.com/politics/2014/08/15/republicans-question-hhs-officials-instruction-to-delete-internal-obamacare/
http://www.foxnews.com/politics/2014/08/15/report-tax-credits-meant-to-help-poor-communities-spent-on-doggie-day-care/?intcmp=trending
“In the simplest of models, if all of the money goes to the producers, and little to the consumers, who will buy the goods?”
Duh, even the producers consume.
” The solution is not to give more tax cuts or tax incentives to the producers. ” We have the second highest taxes in the world. We deserve a break. It wouldn’t make things worse if our taxes dropped enough then a lot of overseas profits could come home and companies wouldn’t be “inverting”.
“The solution also does not involve telling consumers they need to quit their low-level jobs at the current producers’ businesses and start their own business. ” Why not? They should try. The good one will succeed. The other will know how hard it is.
“That does not address the primary problem of the producers not paying the consumers enough as employees to actually buy goods as consumers!” Producers are consumers too and they have money. As for hiring, there usually must be a return on investment when hiring people or why bother?
Destroying wealth: There were billions of dollars of wealth destroyed in the last economic crash, caused largely by investment banks seeking to evade risk and get rich. Who destroyed that wealth? It wasn’t the duped mortgage seekers. Vulture capitalists also destroy wealth for others in order to accumulate a small amount of existing wealth for themselves.
Distribution of money: I’m not talking about distribution by government, but by under-regulated capitalism that is out of control.
Trust: Centralized power and money is always a magnet for corruption. Humans must always be regulated and watched. Big Business is scarier than Big Government, because the people can oust elected officials easier than heads of business.
Producers consume: The 1% don’t consume that much relative to the 24% of all income they receive.
“As for hiring, there usually must be a return on investment when hiring people or why bother?”
PRECISELY: If there are no customers (because the employee/consumers have no money, and the producer/consumers don’t consume that much relative to the money they receive and control) then there will be no new jobs. More businesses and more jobs are unnecessary until there is a market, a consumer-base, to support those businesses and jobs.
“We have the second highest taxes in the world.”
By what measure? The US revenue/GDP is around 60th of a large list of countries here:
http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP
Corporate tax rates are supposedly high, but the loopholes are such that US receives much less of its revenue from corporate taxes than it used to. While the corporate tax rate on paper is 40%, the effective rate paid by large companies averages 12.6%, or about
U.S. corporate tax collection totaled 2.6% of GDP in 2011, according to the Organization for Economic Cooperation and Development. That was the eleventh lowest (or 17th highest) in a ranking of 27 wealthy nations.
http://money.cnn.com/2013/07/01/news/economy/corporate-tax-rate/
““We have the second highest taxes in the world.”
By what measure? The US revenue/GDP is around 60th of a large list of countries here:”
I was wrong. We have the highest business taxes.
http://taxfoundation.org/blog/us-has-highest-corporate-income-tax-rate-oecd
“The point is that private industry is more efficient that government and if you take away money from private industry you take away the option to create jobs that create wealth.”
No, that is wrong. If you take away money from private industry in the INVESTOR class, especially in its upper realms, when that class is NOT efficiently creating jobs, you have zero impact on job creation, but you allow government to pay its bills and provide necessary social protections and functions.
As many have noted, if giving ever more money to the wealthy created jobs, we would currently be drowning in jobs. We are not, ipso facto, it does not.
“As many have noted, if giving ever more money to the wealthy created jobs, we would currently be drowning in jobs. We are not, ipso facto, it does not.”
You implying that money is being given to the wealthy to create jobs.
Who is giving money to the wealthy to create jobs?
Who is getting this money?
Again: The wealthy are receiving more income and more wealth in raw dollars, real dollars, and percent of economy than they ever have over at least the last century. The rules of business and tax and trade, altered by political influence of the wealthy themselves, allow this larger than historically normal growth in income and accumulation in wealth.
Most of this money is not being used to create jobs. The larger percentage of income and wealth to the upper 1,0.1, and 0.01% do not correspond to increased jobs, but actually to higher unemployment and unstable markets. Therefore, removing it via taxation to pay bills will not decrease jobs, nor damage the economy, but is more likely to improve the economy,and decrease debt. And if we can decrease the income disparity, more jobs will be created as well, by building the middle class, both in increased wealth and skills.
“Again: The wealthy are receiving more income and more wealth in raw dollars, real dollars, and percent of economy than they ever have over at least the last century.”
You are implying that the wealthy simply receive money. They don’t earn it or get a return on their investment for taking a risk.
Again, receiving money from whom?
You have the liberal vocabulary down pat. You always use words with negative connotations.
Earn means to receive pay for effort. Look it up We all receive money when we work for it. There is nothing negative about that.
Earn has a second definition which means deserve. It is impossible to determine what we deserve, so the word earn is ambiguous.
That is why I often use the more correct word, receive.
“I was wrong. We have the highest business taxes.”
No You’re still wrong. We have the highest business tax RATE on PAPER.
Effective rate is low low low. It doesn’t matter what the rate is if nobody actually pays that rate.
OK, smart ass. You know this how? Do you run a business? No and you don’t know.
We deduct things like rent, salaries, insurance, heating, electricity etc. The only thing we deduct that might not be typical is R&D costs but we must document this carefully incase we are audited.
You only pay taxes on profits but the tax rate but tax rate from 100K to 335K is 39%. What is flawed is that the tax rate actually falls to 35% above 335K. The 100K to 335K hits just about every business but seems to target individuals or sole proprietorships.
What is really sad that that the owners/shareholders effectively pay this 39% and then people like me must pay my personal taxes on that plus the Obama Care 3.8% investment tax.
Steven H, you are a broken record. You have no other solution than “Tax the rich, feed the poor until there are no rich no more” Alvin Lee.
We can live quite nicely with out you and others like you whereas you need others that can create wealth. If you don’t think you are getting your fair share of other peoples wealth then tough nuggies.
Peter N.,
There was some informative data in your last post. And while I was not trying to be a S—- A–, you have once again fallen to that level of communication. Most of the data I had read was on large corporations who have low effective tax rates. The tax rates you quote on small business do indeed sound too high, and I appreciate your explanation, even with the unnecessary expletives. Pre-1980, (before “tax simplification”), corporate managers might be tempted to try their hand at small business because individual tax rates on their high desk job salaries were high, but corporate rates were lower. Now we seem to have it upside down. Perhaps we need to lower small business rates and raise individual rates to compensate for the lost revenue. And close the loopholes on the big businesses who really ought to pay most of the corporate taxes.
” Most of the data I had read was on large corporations who have low effective tax rates.”
Not on their profits. They are as shown. What you may object to is how companies are allowed to expense equipment, depreciate equipment and take R&D write offs. Retailers have very low profit margins so even if they sell a lot they don’t make much money. Some companies must retool every so many years and their capital equipment costs are high. You need to be able to read a profit and loss statement.
“Steven H, you are a broken record. You have no other solution than “Tax the rich, feed the poor until there are no rich no more” Alvin Lee.
We can live quite nicely with out you and others like you whereas you need others that can create wealth. If you don’t think you are getting your fair share of other peoples wealth then tough nuggies.”
===
Well, Peter N., if that is what you think, then you have ignored about 80% of this thread. There have been a lot of solutions offered and discussed. I have offered a few and agreed with those from others. The fact that you won’t accept one more dollar of taxes on your income makes you the broken record not me. All you can do is talk about the moral failings of the poor and how parents need to be punished because they don’t care enough.
Go ahead and retire when the economy changes and you have to give up another precious 3 or 4% of your income to improve the country. Entrepreneurs in America are not a scarcity. You are not as irreplaceable as you think. Others will be happy to fill your shoes.
” There have been a lot of solutions offered and discussed.”
Only tax the rich by you.
“The fact that you won’t accept one more dollar of taxes on your income makes you the broken record not me.”
Why should I when it will be wasted and I pay more than my fair share already. I have seen other posts from JB and Peter basically saying the same thing.
Like Peter said recently. Taxes are my biggest expense by far. I pay enough.
“Entrepreneurs in America are not a scarcity.”
They are more scarce than they should be due to regulations and high taxes.
” You are not as irreplaceable as you think. Others will be happy to fill your shoes.”
I have a niche. It may be possible over time but it won’t come easy.
The government creates jobs just like any private employer. It collects taxes for services needed by all, and hires people to provide those services.
Actually, the government does create jobs in many ways, some direct and others indirect. Let’s take the most obvious to start with.
1. The business of governing, that is the daily activities necessary to fulfill core responsibilities as defined in the constitution and promulgated through regulations and guidelines. We have our paid elected officials. They have support staffs to assist them in fulfilling their duties. And, they are concentrated in Washington. These people need food, shelter, and transportation to meet their daily responsibilities. This takes shops, apartments/homes, and taxis/trains/automobiles. This is the support structure that grows in concert with the quantity engaged in this process. This stimulates the local economy which in turn creates jobs.
2. The USA has the second largest military in the world in quantities of personnel and the largest by total expenditures. The personnel are stationed in the US and abroad. Wherever there is a military base there is created a support structure to satisfy the needs of the personnel that are not satisfied by the government. This includes housing, personal services, food, and transportation. This is the main reason you find politicians worldwide lobbying to retain the military bases in their respective bailiwicks. This military serves as a hedge against piracy and political turmoil that threatens the world’s economy.
3. One area that needs dire attention is our aging transportation infrastructure. The infrastructure that supports the free movement of goods and services from where it is concentrated to where it is needed. Failing to address this growing need is a direct threat to the viability of our economy. When the government invests in maintaining this infrastructure it creates construction jobs, some lasting for years. These construction jobs brings workers that need to eat, drink, sleep, and even relax on their downtime all bringing an influx of money to the local economies again creating even more jobs.
What this scenario does point out is that without demand, there is absolutely no reason to invest capital in increasing capacity when there is no demand to take advantage of that capacity.
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