The widening income gap

[Guest]

was an article on today's Comcast.net news. The article quoted that the Richest Average income was $93,000 and the Poorest average was $5,800. If you calculate the Federal minimum wage of $6.55 an hour, at 40 hours a week, times 52 weeks one gets $13,624.

Is the widening income gap caused buy the unfair income growth of the top earning average, or the increase in the number of teenagers, immigrants, and an increasing number of retirees working part time?

The immigrant population is growing every year and many of them are not educated enough to work at jobs that pay more than minimum wage.

The number of teenagers born to immigrants increases also and they, like all teenagers, fill the retail, short hour positions that only pay minimum wage.

A growing number of baby boomer are retiring and many want to stay busy and work part time to stay busy and earn a little income. How many of us "getting older" people work at Publics for example, and make minimum wage.

Do the increasing low end numbers really make the income gap appear larger than it really is? What do you feel?

[Guest]

One of the hidden factors in the rate of home foreclosures is the fact that incomes have not risen the way we have come to expect. In the past you stretched the budget for a while to make a home payment, knowing that your income would go up. This in no longer true for working people.

The gap IS widening at an unprecedented rate all over the world, but is especially painful to see it here in such a land of plenty.

You also could always count on a boom economy during war time. Since we shipped all of our manufacturing off shore, we don't make anything anymore. Of that doesn't scare you, nothing will.

[Guest]

BUSH REDISTRIBUTED TO THE WEALTHY: An analysis by the Center for American Progress Action Fund shows that President Bush's economic policies have "redistributed wealth to the richest Americans and left the majority with stagnating wages and declining household incomes." Looking at the effects of the first three Bush tax cuts, the Congressional Budget Office concluded that "the percentage by which the effective tax rate was cut for high-income families was nearly twice the rate cut for those in the middle of the income spectrum." Meanwhile, the administration's failure to raise the minimum wage coupled with its poor enforcement of federal wage and hour laws, trade agreements, and union rights further undermined the economic security of middle and lower-income Americans. Data prepared by the IRS from tax returns filed during the post-9/11 recovery (2002 to 2006) reveals that household income grew by $863 billion during the period. "The 15,000 families at the top of the income scale saw their annual incomes go from about $15 million a year to nearly $30 million," accounting for more than 25 percent of all of the growth in income for the entire country. The remaining 1.7 million families in the top 1 percent of households accounted for nearly another 50 percent. But while the "top 10 percent of families accounted for 95.3 percent of the nation's income growth between 2002 and 2006," the average real income for families in the bottom 90 percent of households increased by about $300 to a little less than $30,700."
MCCAIN WOULD DOUBLE DOWN: McCain claims that "in this country, we believe in spreading opportunity." But his Bush-like economic policies would only further America's income inequality. In fact, by extending Bush's tax cuts to the wealthy and proposing $175 billion in tax breaks to America's largest corporations, McCain's regressive economic agenda would redistribute wealth to the richest Americans during a period of stagnating wages and growing economic anxiety. The bottom 60 percent of taxpayers would see only 12 percent of the benefit from McCain's plan to extend Bush's tax cuts, while over 100 million middle class households would receive nothing from McCain's proposal. Moreover, even though corporate profits increased by an estimated 66 percent between 2000 and 2006, McCain's plan to slash the corporate tax rate to 25 percent from 35 percent would give even more benefits to America's richest corporations. According to a Center for American Progress Action Fund analysis of McCain's plan, the 200 largest companies stand to gain $45 billion a year from McCain's proposal. Highly profitable industries like energy companies and merchandising and retailing companies would receive billions from additional tax breaks.
MOBILITY THREATENED: America's income concentration is at its highest level since 1928. According to the OECD report, "the richest 10 percent earn an average of US$93,000 -- the highest level in the OECD. The poorest 10 percent earn an average of US$5,800 -- about 20 percent lower than the OECD average." But income inequality is cause for even more concern than the simple numbers suggest, since it also has an effect on mobility. In fact, just "7 percent of children born to parents in the bottom wealth quintile make it to the top quintile in adulthood," and "36 percent of children born to parents in the bottom wealth quintile remain in the bottom as adults." As OECD Secretary General Angel Gurria has pointed out, "greater income inequality stifles upward mobility between generations, making it harder for talented and hard-working people to get the rewards they deserve."

[Guest]

Nice speech but it doesn't hold water...........You don't have to be a Rocket Scientist to figure out that if you want some benefit out of a tax cut , You give it to the people who pay taxes......and don't tell me the same old yada yada about the upper third of the country doesn't pay taxes because neither does the bottom third..(give or take a few) So the middle class ( the people who make things happen ) are the ones taking it in the neck...And I'm not giving back my new LINCOLN no matter what you say..............


allergic to gas..............fumar

[Guest]

One of the hidden factors in the housing market crash is that income has stagnated during the Bush reign of terror on the middle class. People in the past could stretch for a while to make mortgage payments assured that their income would rise and so would the value of their property. The perfect storm happened when "trickle down" never became a reality with the greedy keeping all the benefits to themselves.

The only way to maintain a long term robust economy is to make things. We have given away all of our manufacturing and have such a trade imbalance that we will probably never recover our position in the world.

Sadly the only good that ever came from a war time economy, was prosperity from the building of the war machine. Now we don't even produce the steel that covers the tanks! That should scare anyone that can think about the repercussions of need to import war products.

When the factories are all offshore, where will Rosie the Riveter work?

[Guest]

The form of economic theory most embraced by the current administration is much the same as "Reagonomics" introduced by President Ronald Reagan.

That is, you create an economy and a taxation system wherein the wealthiest are left with a greater amount of resources with the expectation that they will invest in new and existing businesses and create additional jobs. The income paid to the newly employed workers will then continue to "prime the pump" of economic growth. With this type of economic theory one of the most important measures to be controlled is inflation, which if permitted to rise would slow the entire economic engine.

For decades this system worked. Worked pretty well, in fact. But something has happened that has stopped the cycle of investment and new jobs. We see it as the current financial crisis and the freezing of the credit markets. The causes for this development are complicated--too complicated to begin to discuss here.

What does seem apparent is that the cycle of trickle down economics that has worked reasonably well has been interrupted. To restart that economic engine would likely take a very long time--probably years.

The short-term need to re-start the cycle is not to wait for new jobs to be formed by investment by the wealthy, but to get spendable funds into the hands of the lower and particularly the middle class. They will spend immediately, and if they spend on the right things--furniture, appliances, electronics, instead of t-shirts, cigarettes and beer--the engine should begin to regain momentum.

In my opinion, probably both economic theories have validity. The McCain approach would take a lot longer to result in recovery than the Obama approach. Probably the best approach might be the Obama tax plan initially and then in a couple years a return to the skew of the Bush tax rates.

But what do you think the chances are of thst happening?

[Guest]

It's a rainy day on the Jersey coast and I decided to do some research on what an Obama cabinet might look like. I was particularly interested in who was under consideration for the Secretary of Treasury. I was delighted to find that Tony Resko's name was only mentioned by one source. I think it was a joke.

Several names surfaced. Some surprised me as they were Republicans. Sheila Bair, chairman of FDIC, a Republican for one. Timothy Geithner, president of the Federal Reserve Bank of New York, is believed by many to have the inside track. Larry Summers, the former president of Harvard and Clinton Secretary of the Treasury is also mentioned. He gives a revealing assessment of the distribution of wealth between 1979 and today. It gives a clue as to how he might lead this important position. It is thought provoking and lends itself to classic debate about American economy and taxation.

If you scroll to the lower portion of this site, you will see Larry Summers in a recent and interesting video. Don't be alarmed by the source.

http://www.huffingtonpost.com/2008/10/16/potential-obama-treasury_n_135233.html

Several other candidates surfaced during my research. Man, I wish I had internet access like this when I was in college. If you have idle time and check the backgrounds of those under consideration, you may be comforted or outraged depending on your perspective.

Fumar, once again you move us to greater awareness with your voice of reason, logic and imagery. The picture of you clinging to the wheel of your Lincoln when the wealth redistributors try to take it from you is inspiring....and from the perspective of the "change" meisters, even counter revolutionary. No gas intended. Well said.

Kahuna...I believe we need the tax relief and deficit reduction up front. I know that sounds like a contradiction but we have some of the most creative, ingenious economic scholars in the world working on the problem. Surgical excisions of current and future entitlements would help and maybe Fumar can keep his Lincoln. .

[Guest]

One of the hidden factors in the rate of home foreclosures is the fact that incomes have not risen the way we have come to expect. In the past you stretched the budget for a while to make a home payment, knowing that your income would go up. This in no longer true for working people.

The gap IS widening at an unprecedented rate all over the world, but is especially painful to see it here in such a land of plenty.

You also could always count on a boom economy during war time. Since we shipped all of our manufacturing off shore, we don't make anything anymore. Of that doesn't scare you, nothing will.

In my parents day and their parents day, and I guess in our day also, one needed 10%-20% down to buy a home and very few would dare sign for a mortgage payment greater than their current earnings. The idea was to show the bank that you had the discipline to manage your money and were therefore a good credit risk. Nobody back then would get a no down payment or interest only loan. Nobody in their right mind would sign for an ARM. Why would they want a mortgage that would increase in payments.

What went wrong was the Government trying to make the lending system "fair" to those people that didn't qualify for loans under the standard lending practices. People that should never have gotten mortgages now were able to get them. No money, low money, interest only and ARM s. Once the rules were changed they were also open to speculators, who used the relaxed lending rules to try to flip homes to make a profit on rising home values. The government allowed a base week stack of cards to be built and it collapsed. The housing collapse resulted in the economic collapse.

The income gap is widening, in my viewpoint, because of the ever increasing educational levels in countries like the former soviet union and china and the increased level of free market participation of countries like them. The more people are released from the old communist, socialist, caste systems the mare opportunities they have to archive a high income level.

I do agree that in order to maintain both a strong military and a strong economy the government should purchase American, as long as doesn't preclude us from technologies we don't produce here in the US.

[Guest]

BUSH REDISTRIBUTED TO THE WEALTHY: An analysis by the Center for American Progress Action Fund shows that President Bush's economic policies have "redistributed wealth to the richest Americans and left the majority with stagnating wages and declining household incomes." Looking at the effects of the first three Bush tax cuts, the Congressional Budget Office concluded that "the percentage by which the effective tax rate was cut for high-income families was nearly twice the rate cut for those in the middle of the income spectrum." Meanwhile, the administration's failure to raise the minimum wage coupled with its poor enforcement of federal wage and hour laws, trade agreements, and union rights further undermined the economic security of middle and lower-income Americans. Data prepared by the IRS from tax returns filed during the post-9/11 recovery (2002 to 2006) reveals that household income grew by $863 billion during the period. "The 15,000 families at the top of the income scale saw their annual incomes go from about $15 million a year to nearly $30 million," accounting for more than 25 percent of all of the growth in income for the entire country. The remaining 1.7 million families in the top 1 percent of households accounted for nearly another 50 percent. But while the "top 10 percent of families accounted for 95.3 percent of the nation's income growth between 2002 and 2006," the average real income for families in the bottom 90 percent of households increased by about $300 to a little less than $30,700."
MCCAIN WOULD DOUBLE DOWN: McCain claims that "in this country, we believe in spreading opportunity." But his Bush-like economic policies would only further America's income inequality. In fact, by extending Bush's tax cuts to the wealthy and proposing $175 billion in tax breaks to America's largest corporations, McCain's regressive economic agenda would redistribute wealth to the richest Americans during a period of stagnating wages and growing economic anxiety. The bottom 60 percent of taxpayers would see only 12 percent of the benefit from McCain's plan to extend Bush's tax cuts, while over 100 million middle class households would receive nothing from McCain's proposal. Moreover, even though corporate profits increased by an estimated 66 percent between 2000 and 2006, McCain's plan to slash the corporate tax rate to 25 percent from 35 percent would give even more benefits to America's richest corporations. According to a Center for American Progress Action Fund analysis of McCain's plan, the 200 largest companies stand to gain $45 billion a year from McCain's proposal. Highly profitable industries like energy companies and merchandising and retailing companies would receive billions from additional tax breaks.
MOBILITY THREATENED: America's income concentration is at its highest level since 1928. According to the OECD report, "the richest 10 percent earn an average of US$93,000 -- the highest level in the OECD. The poorest 10 percent earn an average of US$5,800 -- about 20 percent lower than the OECD average." But income inequality is cause for even more concern than the simple numbers suggest, since it also has an effect on mobility. In fact, just "7 percent of children born to parents in the bottom wealth quintile make it to the top quintile in adulthood," and "36 percent of children born to parents in the bottom wealth quintile remain in the bottom as adults." As OECD Secretary General Angel Gurria has pointed out, "greater income inequality stifles upward mobility between generations, making it harder for talented and hard-working people to get the rewards they deserve."

Numbers can show whatever you want them to show and considering the information coming from the Center for American Progress Action Fund, I don't believe half of what they say. The organization is quoted in Wikipedia as being "Liberal (read Democratic) Political Policy Advocacy Organization." Not surprising considering the the information quoted.

You point out the number of people (15,000 + 1.7 million) in the top percent, but lump the remaining 90% as being in the average. Are there no upper middle, middle and lower middle class that make a living wage? How large is the middle class as compared to the bottom? Included in the bottom are students, mothers working part time, elderly working to supplement their income, the 4% of chronically unemployed and not considered to really considering having a job. Do they not get included in the bottom 90% average?

The term "slash" was used to describe reducing the top wage earners from 35% to 25%. They already pay 50% of the taxes in the country. Is paying 45% or 40% fair to them? Imagine, 10% of American workers paying 40% to 50% of the tax load, HOW UNFAIR IS THAT. At that your 35% to 25% was corporate, not personal taxes and shouldn't be used in a comparison of personal income taxes.

Income inequality does not stifle the upward mobility of the populace. The inequality is more accurately a result of generational social/cultural upbringing. Grandparents and parents that grew up in social/cultural ignorance do not raise their children to progress in the opportunities available to them. How many blacks have been called "trying to be white" by their peers because they try to do well in school? How many grandparents, parents and children did not finish high school because they were never encouraged or made to do so.

Peoples from other cultures, particularly Asians, come to America and SUCCEED, because they and their parents put in the effort to take advantage of all our great nation offers. They work hard, learn the language, buy homes, start businesses, all with coming from poor starts that would make being on welfare seem rich. The difference? They don't expect the government to be their "Parent" and provide for them. They came here for opportunity and relish the chance to participate. They are "the talented and hard working people that get the rewards they deserve" because they did it the American way.

[Guest]

One of the hidden factors in the housing market crash is that income has stagnated during the Bush reign of terror on the middle class. People in the past could stretch for a while to make mortgage payments assured that their income would rise and so would the value of their property. The perfect storm happened when "trickle down" never became a reality with the greedy keeping all the benefits to themselves.

The only way to maintain a long term robust economy is to make things. We have given away all of our manufacturing and have such a trade imbalance that we will probably never recover our position in the world.

Sadly the only good that ever came from a war time economy, was prosperity from the building of the war machine. Now we don't even produce the steel that covers the tanks! That should scare anyone that can think about the repercussions of need to import war products.

When the factories are all offshore, where will Rosie the Riveter work?

We have not 'given away' our manufacturing. A global workforce with an increase in quality, and lower wages/taxes, made the American tax/wage heavy industries move to the places where they could produce the same goods at a lower price. It's a new world! No longer can we compete on wages with India, China, Vietnam, or with their increase in education, or with their new found Capitalism. The government can not dictate where a business can produce it's goods. We don't even do a good job competing with foreign car manufacturers. Over and over again articles from publications like Consumer Reports tell us that cars like Toyota beat us on quality and dependability.

What we need to do to stay a strong economic country is produce better quality/dependable products, so that Americans will prefer to buy American. We also need to realize that we need to develop high tech industries that our workers can perform at a good wage, and not expect that labor intensive jobs like the auto industries and steel industries can compete globally, or in fact within our own economy, when less expensive, high quality products are available to us.

[Guest]

Those countries mentioned, have governments that subsidize their industries and tariff imported products. American quality and productivity is unequaled, but we cannot compete with countries that do not have bothersome rules like child labor laws or minimum wage or 8 hour workdays, or OSHA & environmental laws. Do we really aspire to become a third world economy? Equal trade only for equal trading partners! Even the playing field!

I cringe when I see those "God Bless America" bumper stickers on an Import. We have left ourselves very vulnerable with such a trade imbalance. UAW President, Walter Reuther, was a crucial contributor to our success in WWII when he suspended all labor disputes and helped turn the Auto Industry into the major producer of the tools of war for the allies. When all of our industries are off shore, where will Rosie the Riveter work? Today's friends often prove to be tomorrow's enemies.

[Guest]

What if every person that wanted a job, was givin a government job, like repairing roads and bridges, and infra structure, like during the Great Depression? If all of the money spent on the bail out was shifted to fixing what needed to be fixed all over the country, everyone wins. Displaced workers walk away with a valuable trade, and the country gets to tend to its long negleted maintence.

[Guest]

What if every person that wanted a job, was givin a government job, like repairing roads and bridges, and infra structure, like during the Great Depression? If all of the money spent on the bail out was shifted to fixing what needed to be fixed all over the country, everyone wins. Displaced workers walk away with a valuable trade, and the country gets to tend to its long negleted maintence.


Exactly what our country doesn't need. A government that is the employer of last resort. Maybe you never worked around CETA workers 20 years ago, but I did. Jobs created to employ people who couldn't find real jobs because of poor education, poor work skills and alcoholism. Simply, make work jobs. The American worker needs and wants REAL jobs.

The number of unemployed in this country is still what, 5.5%? Hardly the numbers of unemployed during the Depression.

Maybe we should just Give houses to all that want to. How about a car? If the American public want something they don't have, the government will provide.

As I have said in another thread, the Great Depression was caused by the Failure of the government to make the funds available to the Bank of America in New York, causing a panic that spread throughout the banking system. Now you say we shouldn't bail out the banks? We have bailed them out this time and look how bad the economy is. Imagine how bad it would be if we let them all fail?

[Guest]

Why wait to reward the banks for poor decision making and lending practices? They are still giving bonus checks out to their CEO's today. Let's give them some more corporate welfare. Deregulation and greed, a partnership that will never benifit the middle class. Why not bail out the Automotive industry? Why not Steel? Real living wage jobs is what stimulates the economy. Should we wait until the unemployment rate gets to double digets?

The Bush government is currently the largest and most expensive beuracracy in history. How's that for a "compassionate conservitive" at the helm?