Mixed News on Wealth & Poverty

The Economist has an excellent short article about the latest census reports that indicates there are poor people in America, but - forget those old movies - poverty in America ain’t what it used to be.

BTW - The article and the report covers a lot about health insurance. I do not propose to cover that here, except to point out that Mitt Romney is the only candidate who has experience with a health care system that has a chance of working.

Re poverty - we measure it in such a way that we can never make any real progress. Many people advocate more government help for the poor. I agree that some of these programs, especially the earned income tax credits, are good. Unfortunately, these programs (such as government health insurance, food stamps and subsidized housing) are not counted when addressing poverty. A family might receive thousands of dollars in various types of help and it shows up not at all as progress. The figures also do not take into account taxes. The Bush tax cut put hundreds of dollars in my pocket, for example. Of course, the Dems may soon take it back, so maybe they do not want to call too much attention to take home pay.

These anomalies help explain why the poor are able to consistently spend significantly more than they ostensibly receive in income. The Economist points out that “a typical poor American lives in a three-bedroom house with a car, air-conditioning and two televisions. His children actually eat more meat than rich kids do.” They might also have pointed out that 31 percent own two or more cars. My parents never owned a car and I did not get one until I was 28, and we did not exactly lead a Grapes of Wrath life.

This article says little more about what it means to be poor in America. I know fat cats like John Edwards figure that anybody who cannot afford those $400 haircuts is poor and Hillary Clinton is surprised that no everybody travels in private jets, but most of us who live normal lives are not that surprised that someone has only one car or only three bedrooms (hey, that is what I have) and we all remember times before all of us had air-conditioning and microwaves.

Posted by Jack at September 1, 2007 10:47 PM
Comments
Comment #231428

6 years ago: Income was higher. There was less poverty. More Americans had health insurance.

I’m sorry man, but if you’re making 20 grand, have a family of four, are living in assisted housing, using welfare and food stamps to get by, you’re not in great shape. By the way Jack, without a car, many people cannot get to work or shop to eat and clothe themselves. It may not be a necessity for you, but it is for a lot of people. I wouldn’t look at that as proof that these folks aren’t hard pressed.

Also, the health insurance issue, which you are avoiding talking about, is a real tragedy for this country. Not just for poor folks, but for all of us economically that are going to have to shoulder the burden of skyrocketing emergency care costs.

Posted by: Max at September 1, 2007 11:25 PM
Comment #231433

Max

Families in America were better off during only two of the last 230 years of American history. There is a good chance that when the 2007 figures are in median income will reach all time highs. I think that the glass is much more than half full.

I do not mind talking about the health care issue. Mitt Romney has actually addressed it. Some Dems have talked about what they might do. It is just that we cannot talk about everything at the same time.

I have a practical problem with the assessments of poverty. If we do not correctly identify the problem, we cannot address it. The hystria about poverty is misplaced. We have a problem - that is true, but we do not have a worsening problem or an acute one, at least compared with other places in the world or times in our own history.

We need to recognize that poverty in America is not the kind of existential thing we see in old movies. It is relative deprivation.

It also makes perfect sense to look at consumption rather than income when addressing poverty. If I GET $100 worth of food, it does not really make sense to decry that fact that it is hard to make it on $50. You may well overfill the cup if you do not know how full it really is.

Posted by: Jack at September 1, 2007 11:50 PM
Comment #231434

Jack,

Last year, the poverty rate for minors in the United States was 21.9%, the highest child poverty rate in the developed world.

Posted by: Max at September 2, 2007 12:03 AM
Comment #231436

Max

What does that poverty rate mean? If you used what the poor actually consume (food, housing, goods and services) in the U.S. v other developed countries, most of them would have much higher poverty rates. A poor person in the U.S. has a larger home than an average (not poor) person in the EU. The poor person in the U.S. also has more food (and actually eats too much) and is more likely to own a car.

An analogy might be that the poorest player in the NBA is still probably better than you or me, but in comparison to his peers, he is a poor player.

That is precisely my point, that we are talking relative deprivation. That is why the figures are hard to figure. AND that is not to mention various statistical differences. We specifically do not count government aid, which makes up a really big part of a poor person’s “income”.

Posted by: Jack at September 2, 2007 12:15 AM
Comment #231441

I agree with you that government aid should be taken into account, but I hope we keep still keep the current standard, which is based on how much food costs, not what amenities the poor have.

Posted by: Max at September 2, 2007 12:39 AM
Comment #231451


Jack: The median household income rose .7% because more people are working per household. That was far less than inflation. The poverty level fell for the same reasons. Wages declined and people are making less money. What the economy is really saying is that we are losing ground and we will have to put the kids to work if we are going to make ends meet.

Do you think that if we were to relax the child labor laws we could put those poverty kids to work and eliminate poverty completely?

The census report looks like all the other Bush Administration reports. Really good till you get down to the nuts and bolts.

Who is the Bush Appointee over at the Census Bureau?

Posted by: jlw at September 2, 2007 1:23 AM
Comment #231483

Jack
Not another one of those,”There not really poor after all”post. Thats like when the feds claim inflation is low after they take housing and energy cost out of the picture.It just misleading.
BTW If you really think,as I do,that the EIC is a good program and should be expanded you should stop dissing Edwards. That is exactly what one of his major proposals involves.Give it read and give his haircut a rest.

Posted by: BillS at September 2, 2007 4:06 AM
Comment #231486

poverty in America is alive and well…

I personally take home about 26,000.00 a year own no car, and rent a 2 bedroom apt. that takes roughly 1/2 of that income. I have a wife and three children work 50+ hours a week my wife has had 5 major operations this summer alone, and my family doesn’t qualify for any government services because my pre tax income is 32500.00 a year. The reason that poverty in America seems to be less than it actually is is really simple. The Federal Government thinks that I am not poor. The FPL or federal poverty level is 1400.00 a month pre tax. The government thinks everyone lives in the bible belt where rents etc. are very low compared to many other states. I live in the poorest part of my town and still pay 1000.00 a month for rent.I am lucky if I can fill my cupboards in any given month. I can not afford health insurance for my family and owe almost 1/4 of a million in medical bills.
so I say, wow you live in a 3 bedroom home, have 2 cars and consider yourself poor? Brother you dont even know what poverty is.

Posted by: studentlawman at September 2, 2007 9:55 AM
Comment #231487

One thing I don’t see being addressed here is the amount of debt these poor families are carrying. Speaking from experience, it is way way way too easy to get up to your eyeballs in debt, especially if you have kids. Credit card companies are very happy to extend lines of credit to those who cannot afford to pay that kind of debt back. I can guarantee that these poor people did not get their color tvs, dvd players and cars with cash.

Another bit of hogwash is the nutritional information. Of course poor people eat fine, if you measure “fine” by calorie intake. It is very easy to eat a lot and not spend a lot, it is much harder to eat well and not spend a lot. I would be willing to bet that the meat that these poor kids eat more of is low-quality, fatty cuts, which are much cheaper. Also, and again I speak from experience, when both parents come home from crappy days at crappy, low paying jobs, they would much rather blow $20 at McDonalds than cook a good homemade meal. Take a look at this from the American Acadamy of Pediatrics, or just Google “obesity low income children” for about 3 dozen articles.

L

Posted by: leatherankh at September 2, 2007 10:06 AM
Comment #231500

Jack,

It doesn’t seem to matter just how much the “median” income rises.
If it continues to take more and more of that “median” income to purchase the same amount of goods and services what exactly is your point?

Posted by: Rocky at September 2, 2007 12:30 PM
Comment #231516

Dammit, there just aren’t enough poor people starving and dying in the streets like the good old days.

I mean, look at poor old Tony Snow. He can’t make a living in DC on 168,000 dollars a year with full primo medical.

Posted by: alien from the planet zorg at September 2, 2007 3:09 PM
Comment #231530

Jack said: “We have a problem - that is true, but we do not have a worsening problem or an acute one, at least compared with other places in the world or times in our own history.”

Therein lies the fallacy and illogical nature of the thrust of your article Jack. If a poor family in the Mississippi Delta has a deteriorating structure to call home which is paid for, with electricity which is subsidized, a TV and a 25 year old pick up truck, no job, and aging parents with the nearest medical facility 45 miles away, they are indeed vastly wealthier than refugees in Darfur.

But, comparing poverty across cultural lines is an illogical comparison leading to many false rationales and conclusions. Poverty is a state of mind (experience) as much as it is a lack of options and choices, as much as it is a lack of resources. The suffering of the family in the Mississippi Delta described above is little better than a refugee family living in a camp in the Sudan. Both families experience the same lack of options, and resources to create options.

And the comparison is inherently illogical, because poverty is defined by the context of the society in which the word poverty is also defined. Some Borneo aboriginal tribe members living nearly as their ancestors had, do not own a vehicle despite their remote accommodations. Ask them if they are poor. Many will say no. Ask them if not having a TV impoverishes them? Most will say I don’t want or need a TV, I have no electricity here anyway and don’t want it.

Society as context is crucial to defining poverty. Hence, your argument is both illogical and leads to false conclusions about poverty and the poor in America. In America, precisely because the poor DO have TV’s, they are daily reminded of their poverty by comparison with what they see on TV. There are no jobs for the poverty stricken elderly in the Mississippi Delta. These people are poverty stricken even if they hold lien free title to their dilapidated and falling down home structure.

Posted by: David R. Remer at September 2, 2007 5:31 PM
Comment #231531

leatherankh, the credit problem is compounded by the 32% usurious credit card rates Republicans permitted under during their war for the affluent. Prior to Republican rule, usurers rates were capped. Lifting the caps was a green light to soak the poor and middle class and to the unregulated sub-prime mortgage industry to have their way with riskier borrowers.

Now, our economy must pay the price for the Republican war for the affluent, lowering their taxes while soaking the non-affluent through usurious interest rates and profitable foreclosures on homes within an escalating real estate valuation bubble.

The Bubble burst, and the sub-prime industry is hurting, and Bush this week announced his plan to rescue the lenders, banks, and mortgage industry with tax dollars, paid less by the affluent and more by the non-wealthy, under his tax cut policies of the last 6 years, which also transferred much of his spending budgets onto the future workers of America via the National debt of 9 trillion dollars (5.65 trillion when he took office).

Posted by: David R. Remer at September 2, 2007 5:42 PM
Comment #231533

The definition of poverty is. The state of being poor; lack of the means of providing material needs or comforts.

The article indicates that there is a need to redefine what determines poverty in the US. Thirty years ago what was considered needs and comforts was not the same as they are today. The advent of mass credit has changed the appearance of what one feels they need to live comfortably. The ever widening partition between the wealthy and poor is further serving to give the appearance of a greater disparity between the two. Massive debt is the stimulus that gives the poor the means to exist at the lower level of todays standards. Wages for the working man have stagnated over the last six years while profits are at all time highs for the wealthy. I heard on NPR yesterday that unions are once again growing. People are becoming fed up with working more to keep up with inflation while wages remain the same. I have received more pre-approved credit offers in the mail over the last month than I can ever remember in the past. I immediately trash them. But I wonder how many of those hoping to live the good life and in need of a means to pay those ever growing bills accept them. Common sense dictates that it is only a matter of time before a vast majority of this debt can not be repaid if indeed the disparity between classes continue to grow while wages remain stagnant. The adjustable rate mortgage crisis is just the tip of the iceberg. It is estimated at this point that over 2,000,000 families will default on their home loans. This is no small number. To top all this off the number of families without any health coverage is rapidly growing. In a nutshell what this says is that people are living beyond their means. How long can this continue before the bottom drops out. The government can not continue to mask these very real problems in order to sustain a level market forever. I contend that when the bottom does drop out the true amount of impoverished will be easily seen and they will be massive. As a few have said on these blogs, the day of reckoning is coming.

Posted by: RickIL at September 2, 2007 6:26 PM
Comment #231580

Jlw

Adjusted for inflation, the median wages are near all time highs. I know that two years in American history were better. If you look at the patterns, this is the way it works. The last recession downturn ended in 1991. Seven years later, by 1998 median incomes had begun to move forward in real terms. The latest downturn ended in 2002. Dems are lucky. Clinton came in when the economy was swinging up and got out just when it was going down.

BillS

Some people are poor. Many people pass through poverty sometime in their lives. I did; you probably have too. Life is tough. The truth, however is that there are fewer poor and poverty is the U.S. is relative to a very high general standard of living.

I know you guys get mad when I point this out. But it is important to identify the correct problem. The truth is that we vanquished poverty if we define it by standards used until the 1960s. Our problems now have more to do with culture, training, habits & controlling risk. The New Deal type programs that were effective against the type of poverty we had in the 1930s do not work well in the new realities.

I am glad Edwards agrees with president Bush re the earned income tax credit. His other class conflict rhetoric is just BS, however. His love of his hair and beauty at $400 a pop is relevant to his credibility.

I cut my own hair, BTW. My wife bought me a clipper for my birthday in 2004 and I have not spent a dime at the barber since. I understand that few people are blessed with my sort of hair, but even when I had hair and cared about it, I never considered paying so much for a haircut.

Studentlawn

I know what poverty is. I have experience very low income. I am not poor now. In fact, I consider myself rich. BUT the average “poor” family has a three bedroom house and many have two cars. (We have only one, BTW).

I regret your wife’s medical conditions. It sounds like your individual case is a hard one and it does not make you feel any better that general poverty is declining.

L

Poor people often make poor choices. It is possible to eat well on relatively little money.

Rocky

We are talking about the median income adjusted for inflation.

David

Please see above what I wrote to BillS. The problem is diagnosing the wrong problem. If we continue to address poverty as it was, we cannot solve the problem as it is. In the U.S., very few people suffer from actual poverty of things. Most families could have sufficient food, shelter etc if they managed property. If we continue to simply advocate giving more, we will never solve the problem.

The Mississippi Delta is a particular culture of poverty problem. That problem cannot be solved with the current methods.

RickIL

Yes. Poverty is not what it used to be. I agree re all those credit offers. What do we do? Do we take away poor people’s access to credit because some of them abuse it? I really do not know. I always strive to live BELOW my means. More things do not make people happier. In America we have reached the point where most people have enough IF they understand it.

Posted by: Jack at September 2, 2007 11:52 PM
Comment #231595

Jack said: “The Mississippi Delta is a particular culture of poverty problem. That problem cannot be solved with the current methods.”

So, let them die in poverty and the problem is solved? Is that your implication? You did say giving them more is not the solution. What other option is there? I fail to see your logic or compassion in such a comment.

Posted by: David R. Remer at September 3, 2007 2:08 AM
Comment #231598

Jack said: “The truth, however is that there are fewer poor and poverty is the U.S. is relative to a very high general standard of living.”

Jack, poverty anywhere in any culture has one common feature: lack of options. The poor in America today who have a TV and a car, and even a home, but not a personal computer are, in fact, impoverishing the children growing up in that home. For our entire society has become transformed in mere decades to the point that children who are not exposed and learn to be proficient with computers at young age are seriously limited in options as they face adulthood and productive lifestyle in America.

A young person brought up in the impoverished areas and culture of Detroit for example, are severely limited in their options as they enter adulthood. Their speech, mannerisms, values, education, exposure and ability to relate to people NOT brought up in the inner city of Detroit, can and will limit their options for jobs, advanced education, training, and even mobility to other places in the country.

Poverty in America is NOT just a matter of financial resources. It is also education, cultural exposure and acclimation, skills development, and the all important sense of security. Raise newborn rats in a hostile and fearful environment and even the most successful of them in mastering that environment will be permanently disabled from adapting to other kinds of environments. Same is true of chimpanzees who also demonstrate physical developmental retardations in weight, height, and posture.

Human children raised in hostile and insecure environments are also less adaptive, less creative, less healthy physically, more prone to illness and psychological maladies, therefore impoverished, even if they have a TV, phone, PC, home, and food to eat.

Constant low level or fluctuating levels of stress are proven to reduce the state of health for human beings. Try living in this country raising children without health insurance. There can be no greater and volatile stress for a parent, and in many cases induces parents to be overprotective and limiting on the experience and activities their child is permitted. Which impoverishes the diversity of experience for that child.

There are many ways to measure poverty. But, whatever measure is used, lack of options is common to them all.

Posted by: David R. Remer at September 3, 2007 2:26 AM
Comment #231607


Jack, does the “median income adjusted for inflation” account for the fact that a gallon of whole milk has more than doubled in the last few years?
The only obvious thing that the price has truly come down on is electronics such as Plasma TVs and computers.

Posted by: Rocky at September 3, 2007 6:48 AM
Comment #231610

Jack said “The New Deal type programs that were effective against the type of poverty we had in the 1930s do not work well in the new realities.”

Jack specifically what programs are you referring to,is social security included in that group?

Posted by: j2t2 at September 3, 2007 8:56 AM
Comment #231612

Jack,

A poor person in the U.S. has a larger home than an average (not poor) person in the EU.

EU inhabitant density is 6 times higher than in US.
I guess it explain way more why real estate is far cheaper in US than here… we’re just 6 times more wanting the same land space.

The poor person in the U.S. also has more food (and actually eats too much) and is more likely to own a car.

Yeah. Poor people in rich countries are not dying of starvation anymore. Now they die from low lifestyle side effects. Let’s call this a progress…

You’re comparing apple and orange, using space and time to put widest spread between one poor and one another. Such comparisons are pointless. The middle age lord’s incomes will make him quite poor by today US lifestyle cost. Your comparison should be contextually fair.

Alone, nobody is poor. It’s the cost of his everyday live environment that make one poorer or richer than average. And life costs more and more in our rich nations, that’s no magic. Wages don’t increase as the same rate, hence why a more and more larger minority of people “fall” in poverty.

What’s worrying is that more and more poor people have actually a job or two. Working hard is no anymore a warrant to earn enough to keep your family above the water level. It used to be.
And some are wondering why the mythical “work” value is less considerate these days!?

Posted by: Philippe Houdoin at September 3, 2007 10:07 AM
Comment #231613

Jack

Say you only have about $100 to spend on groceries for a month for a family of 4. You need to clip coupons, buy generic, and do everything in your power to make that c-note go as far as possible. You walk over to the meat counter to buy some ground beef to go with your store-brand Hamburger Helper. On one hand, you have a pound of 95% lean ground sirloin for $4.29, on the other hand you have bulk-packaged, 80% lean ground chuck on sale for $.99 a pound. In that situation, what would you buy?

And for the love of God, don’t give me that “it’s their fault they got into debt” crap. We live in a society that glorifies materialism and brainwashes us from near-infancy to believe that stuff=happiness. Then you have companies like Discover that hit low-income families with easy-to-get credit cards with teaser rates that shoot up to 31.99% after 6 months, and you say it’s the poor people’s fault that they get in over their heads? What a load of heartless, conservative bull.

L

Posted by: leatherankh at September 3, 2007 10:24 AM
Comment #231614

j2t2

I include Social Security. It worked very well for many years, but just like the Ford someone owned in 1935, it Social Security today does not perform to the standards we will require. We have to update it and incorporate the many improvements.


Rocky

You have to measure somehow. Inflation adjustment actually over estimates how hard things are. People are smart. If one product becomes more expensive they substitute something else or use it in different qualtities.

David

Re the Delta, it is unlikely you can bring prosperity to the Delta with the current population levels and dispositions. People matter; places less. Many people might need to go somewhere else. Much of this will happen naturally. We make a mistake when we try to fix people in places that no longer work for them.

The education system also needs revamping so that people have the skills to get jobs elsewhere. In any case, the idea that we would subsidize poverty is the immoral one.

Re people having a TV, but no computer - these days a TV costs less than a computer.

Poverty in the U.S. is MOSTLY about culture, education and habits. The old anti-poverty methods pretend that just giving people money or programs will address poverty. Some people are simply having bad luck. If they get a chance, they can take. The successful programs of the 1930s etc addressed MOST of these sorts of people. Even today, most poor people do not stay poor very long. The long term poor are usually in that dire condition because of their culture, habits or education.

We make a really big mistake with what Condoleezza Rice calls the soft bigotry of low expectations. It does not apply only to the racial or ethnic groups she is talking about. We have often relax standards for the poor or the poor performers when what they really need is a standard to live up to.

People need challenges. Most people are not victims. We should not cast them in that role because if we tell them long enough, they may start to play the part. That is where we do the most harm.

I do not preclude some government help. Many government programs help people over the rough spots and create opportunity. I graduated from public universities with subsidized student loans. I know many people who have been helped by farm loans or emergency aid. But the point of all of this should be to get the person up to speed so that he not only can help himself, but can be a productive member of society that pulls more than his own weight.

The government programs I object to are those that create permanent dependency or the idea of victimhood. Government programs should build captial, human, social and physical. It should not be a maintenance program..

Posted by: Jack at September 3, 2007 10:26 AM
Comment #231617

Philippe

Good to have you back.

I meant no disrespect for France and I understand the density. That brings up precisely too the point. The poor in America have access to lots of material goods. Their poverty is relative to other Americans in 2007, who have even more.

Your example also shows the importance of behaviors. People in Europe with material levels similar to American poor are not poor. France is a rich county. I lived in Poland where almost everybody lives with a lower material standard than the American poor. Yet most live good and very fulfilling lifestyles, in many ways better than average Americans.

We (Americans) have lots of choices and options. It is possible to live well with what we have. One way we failed as a society is that we have not explained that to everybody.

Posted by: Jack at September 3, 2007 10:51 AM
Comment #231618

Sorry about the double post, but there’s a question I want to see if anyone knows the answer to.

I always see all this information about the median income level, but one thing I’d love to know is the difference between the median income level and the mean income level. I would think the differential between the two would be an interesting economic indicator, since it would be a good measure of income distribution.

Let me explain, for those who don’t get my point. Median equals the midpoint in a range of numbers, mean equals the average. So let’s take two societies of 10 people. In Society A, one person makes $1/year, another makes $2, all the way to the top wage earner, who makes $10 a year. In this society, the mean income (average of 1-10) would be 5.5, as would be the median income (midpoint of the sequential range of 1-10). In Society B, 9 of the 10 people make $1/year, while one lucky guy makes $46/year. While the mean income would be the same as Society A (46+9 1s=55 div by 10= 5.5), the median income would be only $1/year. Thus the more evenly distributed the wealth in a society would be, the closer the mean income would be to the median.

So my question is twofold. One, do you all think this would be a good indicator of economic fairness in a society, and two, has anyone used it before? I can find plenty of information online about both mean and median income, but nothing that compares the two in the way I show above for an entire country.

L

Posted by: leatherankh at September 3, 2007 10:53 AM
Comment #231619
«I’m sorry man, but if you’re making 20 grand, have a family of four, are living in assisted housing, using welfare and food stamps to get by, you’re not in great shape»

Holy smokes…and poor little Tony Snow couldn’t get by on $168,000 a year! Is $168,000 the new poverty line cut-off????

Posted by: Rachel at September 3, 2007 11:11 AM
Comment #231628

Jack,

For a brief moment last year in New Orleans, a rare window was opened, giving the world a glimpse of the sickening, third world-like poverty in which many Americans live. For a moment, the lie that all Americans are born with with the same chances in life was shattered. This in a country with 269 billionaires, the highest number in the world.

- 37 million Americans live in poverty. The highest percentage in the developed world.

- Under Bush an extra 5.4 million have slipped below the poverty line. His defense budget has slashed billions from welfare programs.

- Most of the poor have jobs. Many have two. Most are one piece of bad luck - a medical bill or factory closing - away from disaster.

- The minimum wage of $5.15 an hour has not risen since 1997 and, adjusted for inflation, is at its lowest since 1956.

- While 45.8 million Americans lack any health insurance, the top 20 per cent of earners take over half the national income. At the same time the bottom 20 per cent took home just 3.4 per cent.

Poverty in the US is mostly about culture. Culturally, we ignore it. We pretend it isn’t there. It seems contrary to reason that so many in this country would be destitute.

This poverty costs us dearly. When the poor go to emergency rooms, it costs us more than if we supplied reasonable healthcare. When the poor are uneducated, it costs more than educating them would.

I understand your philosophy that people who are given a handout will not be motivated to create their own successes, but wake up. This is not the 80’s. These people have less support today than at other times in our history. The goal is to get people off of welfare, but historically, to do that, you need the right policies, support system, and attitudes. The Republican attitude that these people are simply lazy, have enough anyway, and that the best thing for this country is to concentrate wealth into the hands of the rich is illogical, historically wrong, and just not helping.

Republicans seem caught in a through the looking glass philosophy that pretends to harken back to Reagan. Unfortunately, the glass is warped. Bush thought if he simply applied Reagan’s philosophy of borrowing to the hilt and giving the to rich it would add up to 80’s like gains. What went wrong? Like the war, or the deficit, Bush simply went way too far. He took Reagan’s lessons as maxims. Don’t just give the rich tax breaks - give them ALL the money. Don’t just trim fat from social programs - DESTROY them. And now some of us are waking up to the nightmare he’s created.

Some of us, anyway. Republicans seem to still have their heads in the clouds: The war is being won, the economy is great, there are no poor. These are patently false, absurd suggestions, and finally, finally, finally people are beginning to see it. I guess it’s really true what they say about not being able to fool all the people all the time, but I’m not sure anything was ever said about how to help those that fool themselves. I don’t expect what’s left of the diehard core of Republicans to wake up anytime soon.

Posted by: Max at September 3, 2007 12:23 PM
Comment #231637

Max add to your statistics that 95% of the work force has experienced stagnant wages when adjusted for inflation since 2001. This is unprecedented in American economic history that 5 years into a recovery from recession, wage growth has not taken place in a broad sweeping way.

Posted by: David R. Remer at September 3, 2007 1:56 PM
Comment #231638

leatherankh asked: “I always see all this information about the median income level, but one thing I’d love to know is the difference between the median income level and the mean income level.”

Median income equals one half of all income earners below X and one half of all income earners above X where income earners are lined up lowest to highest income. It is the population dividing point for income. Think of it as a balanced teeter totter with the fulcrum dead center, and half of earners with lower income on one end and the other half of higher incomes on the other end. The fulcrum is the income level associated with the middle person that divides workers in half. If there are 301 income earners with incomes arranged from lowest to highest, the income of person # 151, would be the median income.

So if the total of income for persons 1-150 total 100 thousand, and the total of income for persons 152-301 total 100 billion, this would seem to tell you that the bottom half of income earners are significantly less well off than the top half. But, that would not be accurate. The reason is that persons 152 to 300 may have the same earnings as persons 1 to 150, but, person 301 is Bill Gates skewing the income above the median dramatically.

Mean income is the average income for all income earners: including investment dividends, retirement payments, and interest earnings. It is computed by adding up everyone’s income in a year, and dividing by the total number of income earners.

Mean wages is the total of all salaries and hourly wages, divided by the total number of wage earners.

It is important to note the distinction, some clever folks will make their argument using Mean Income or Mean Wages instead of the other, as suits their argument best, and rely on their adversary to fail to recognize the difference or misapplication.

Other oft quoted statistics are mean and median Household Income which includes the sum of money received in the calendar year by all household members 15 years old and over, including household members not related to the householder, people living alone, and other non-family household members. Included in the total are amounts reported separately for wage or salary income; net self-employment income; interest, dividends, or net rental or royalty income or income from estates and trusts; Social Security or Railroad Retirement income; Supplemental Security Income (SSI); public assistance or welfare payments; retirement, survivor, or disability pensions; and all other income.

Posted by: David R. Remer at September 3, 2007 2:07 PM
Comment #231643

David:

I think leatherankh meant he wanted to know the difference in value between the current mean and the current median, and compare that to the differences in the two values historically. Not the difference in the definitions. His premise was that the closer these two numbers were to one another, the more evenly wealth would be distributed across our entire population.

Posted by: Jarandhel at September 3, 2007 4:21 PM
Comment #231650

Jarandhel, thanks.

In 2006, the median annual household income according to the US Census Bureau was determined to be $48201. This is less than the peak established in 1999 of $49,244, with a trough in 2002 and rising each year since.

Overall the mean household income in the United States according to the US Census Bureau 2006 was $66,570. This is less than the peak established in 2000 of $66,895, with a trough in 2003 and rising in 04 and 05.


Posted by: David R. Remer at September 3, 2007 5:09 PM
Comment #231651

L

The mean income is significantly higher than the median and it has grown faster. I include median because I think it is a better measure for more people. The mean income is not as good a measure also because a small number of people can pull it way up. Nobody can have an income of less than zero, but there is almost a limitless upside on income.

The difference between the mean and median will probably grow for an ordinary math reason. The bottom figure is always zero, while top number can keep on going up.

It CAN be a good measure increasing inequality. I do not know if it is a good measure of fairness. Fairness is not the same as equality. In fact treating unequal contributions equally is very UNfair.

Max

Again, when you say poverty is highest percentage in the developed world, you are making an invalid comparison. The U.S. poverty rate compares Americans and Americans. The European rate compares Europeans to Europeans. If you want to compare them to each other, you have to come up with the common measure. If you use ability to purchase goods and services, ownership of homes, cars etc, America has poverty rates similar to other developed rich countries.

Americans are poor if their pre-tax income falls below $20,614 for a family of four. If we take this number and convert it to other currencies (at PPP) we would find that about half the people in countires such as Spain or Portugal are “poor” (since their median income is below this amount) and even about a third of the Swedes. International comparisons always suffer from this sort of thing. YOu have to adjust.

David

After the downturn that ended in 1991, it took eight years (until 1996) for median incomes to regain their 1988 levels (adjusted for inflation) and that was w/o the big disrutions of things like 9/11 and in one of the most benign world environments possible. I think the glass today is more than half full. The “terrible” thing is that we are about as well off as we were in 1998 and better than every other years except 1999 & 2000.

Posted by: Jack at September 3, 2007 5:14 PM
Comment #231653

Jack, the glass can be half full or better IF we can address the work and income and quality of life issues children living today will face as adults in America.

A single moment’s snapshot of economy nor a history of economic performance can address changing needs and factors in the future. There is a reality facing America economically that is not being addressed, and failure to do so with each passing year only hasten’s the depth and speed at which our economy shall fail today’s children in their lifetimes, as well as middle age workers at the end of their careers and in retirement.

A glass half full is as easily tipped over as an empty one.

Posted by: David R. Remer at September 3, 2007 5:52 PM
Comment #231654

The Mixed News on Wealth is that the rich are doing just great, while the middle class and the poor aren’t doing well at all. Most of us have been aware of this fact for a long time. Jack has steadfastly refused to acknowledge it, which is why he keeps writing articles like this one.

From a New York Times article from back in August:

Total income listed on tax returns grew every year after World War II, with a single one-year exception, until 2001, making the five-year period of lower average incomes and four years of lower total incomes a new experience for the majority of Americans born since 1945.

The White House said the fact that average incomes were smaller five years after the Internet bubble burst “should not surprise anyone.”

The growth in total incomes was concentrated among those making more than $1 million. The number of such taxpayers grew by more than 26 percent, to 303,817 in 2005, from 239,685 in 2000.

These individuals, who constitute less than a quarter of 1 percent of all taxpayers, reaped almost 47 percent of the total income gains in 2005, compared with 2000.

People with incomes of more than a million dollars also received 62 percent of the savings from the reduced tax rates on long-term capital gains and dividends that President Bush signed into law in 2003, according to a separate analysis by Citizens for Tax Justice, a group that points out policies that it says favor the rich.

The group’s calculations showed that 28 percent of the investment tax cut savings went to just 11,433 of the 134 million taxpayers, those who made $10 million or more, saving them almost $1.9 million each. Over all, this small number of wealthy Americans saved $21.7 billion in taxes on their investment income as a result of the tax-cut law.

The nearly 90 percent of Americans who make less than $100,000 a year saved on average $318 each on their investments. They collected 5.3 percent of the total savings from reduced tax rates on investment income.

The I.R.S. data showed that the number of Americans making less than $25,000 a year shrank, down by 3.2 million, or 5.5 percent.

Nearly half of Americans reported incomes of less than $30,000, and two-thirds make less than $50,000.

The number of taxpayers making more than $100,000 grew by nearly 3.4 million and accounted for more than two-thirds of the growth in the number of returns filed in 2005 compared with those in 2000.

The fact that average incomes remained lower in 2005 than five years earlier helps explain why so many Americans report feeling economic stress despite overall growth in the economy. Many Americans are also paying a larger share of their health care costs and have had their retirement benefits reduced, adding to their out-of-pocket costs.

This article seems to miss the fact that it isn’t only health care costs that have gone way up. The cost of everything has, but wages for average and lower earners don’t reflect that.

Posted by: Adrienne at September 3, 2007 5:52 PM
Comment #231657

If you use ability to purchase goods and services, ownership of homes, cars etc, America has poverty rates similar to other developed rich countries.

If our poor have similar means to buy goods as Europeans, than what’s left to compare? Social security? Healthcare? The number of hours they work and conditions worked in to get by? Diet? Ability to utilize public transportation? If the ability to purchase goods and services is about the same - where are you thinking our poor have it better off than Europe’s? Having some T.V.s and a car? That’s comical.

Our current system says you are poor if you do not have three times the money it takes to purchase food to have a balanced diet. You want to factor in assistance. Okay - they’re not poor anymore. But that’s the point of these measurements - to determine how many people probably do not have enough money to eat on their own. If you want to spin the results to say that people who are on welfare are not poor, well… isn’t that oxymoronic? The primary outcome of that would be to confuse people into thinking there are less Americans in need of assistance than there are.

There is no apple to apple comparison. Jobless folks in Europe would never have their assistance taken away, and always have health care. That means their worst is always a helluva lot better than ours. It’s commonsense to choose healthcare over a T.V. This is a pretty amazing conversation to be having on labour day, because as far as I’m concerned the U.S. has been shafting its workers needs for some time now.

Posted by: Max at September 3, 2007 7:27 PM
Comment #231661

Adrienne

From your NYT article - The I.R.S. data showed that the number of Americans making less than $25,000 a year shrank, down by 3.2 million, or 5.5 percent.
The number of taxpayers making more than $100,000 grew by nearly 3.4 million and accounted for more than two-thirds of the growth in the number of returns filed in 2005 compared with those in 2000.

I know this is reported as bad news, but think about it. The number of Americans making less than $25,000 shrank by 3.2 million and the number of Americans making more than $100,000 grew by 3.4 million. This would be a good thing. We would want to have fewer low income Americans and more high income Americans.
The figure always compare today with the two best year ever in American incomes – i.e. 2000. That was the top of a bubble. When the bubble burst, incomes dropped.


I acknowledge that the median American is only about as well off has he/she was in 1998. Only two years in U.S. history (1999 & 2000) were better years. I cannot get too upset about this. If you look at the median income figures, you see that median incomes after the recovery of 1991 did not reach 1989 levels until the end of 1996. You can read the numbers yourself so that you do not need to believe me or rely on the NYT spin.

The downturn that began in the last year of the Clinton Administration (March 2000) ended in 2002. Look at the chart. Median incomes began to decline in 2000. It took around seven years last time. This time is about the same. BTW – when the median income declined in 1978, it took until 1986 to get to a new high.
Dems try to spin this all as uncommonly bad news. The real numbers do not support their point of view.

I know that you guys dislike being pinned down the bottom line, but look at the numbers and tell me why you are so much more upset about this than you were in the 1990s. You can also look at the graph on page 11 of this report. This looks a lot like the 1990s.

BTW - The chart only goes to 2005. The median income for the United States in 2006 was $48,451. It is still going up.

Max

You have got it. We do not have a direct comparison in this way. You have come to the correct conclusion, however. All in all American poor and European poor are in similar boats, so there is not much need to quote that statistic you did re the U.S. having more people in poverty. If we come as close as we can to a valid comparision, that just is not true.

Posted by: Jack at September 3, 2007 9:15 PM
Comment #231664


This is the wealthiest nation on earth and we have about 3 million wealthy people to prove it.

Capitalism is the mechanism used to concentrate wealth and power into the hands of the few. Those few have used that power and wealth to wage a never ending class war against the many.

Posted by: jlw at September 3, 2007 9:31 PM
Comment #231665

Jack said: “The number of Americans making less than $25,000 shrank by 3.2 million”

Does that include or exclude the 12 to 20 million illegal aliens earning less than $25,000 per year? Inquiring minds want to know. Does that include cash basis only persons, amongst the 54 MILLION of working age who for a variety of reasons ranging from choice to disability are not on any official payrolls?

Posted by: David R. Remer at September 3, 2007 9:34 PM
Comment #231666

jlw

We have a market economy. I prefer not to use the word captialism. It is so 19th century and has so many interpretations and conotations. Our market economy has brought us health, well being and proserity only dreamed of by those who would have planned our economies.

David

I donno. It is Adrienne’s article. I am just saying that the numbers look good to me. If we are cursed with that sort of a society, I hope we never recover. It just seems to me that making more than $100,000 is better than making less than $25,000 and if we get more of the 100s and fewer of the 25s, I won’t complain.

Posted by: Jack at September 3, 2007 9:52 PM
Comment #231671

All in all American poor and European poor are in similar boats

A jobless person in Europe will always have support, a home, food, and health insurance. None of that is true in the States.

Posted by: Max at September 3, 2007 10:38 PM
Comment #231672

Jack, I wouldn’t complain either, but, that is not what the stats support. My questions were actually facetious. Obviously those numbers don’t include the illegal aliens nor the cash basis only employed, both groups of whom have much to lose by being monitored or polled. Ergo, the government’s stats on the number below $25,000 is grotesquely understated.

Let’s be conservative. Let’s say only 1/4 of the lower numbered 12 million illegal aliens are earning less than $25,000 and of the 54 million age eligible non-working Americans 5% are employed on a cash only basis at under $25,000 per year.

That means the Bush administration’s feel good shrinkage by 3.2 million of those making under $25,000 is actually and increase of 3.5 Million workers making $25,000 or less per year. Which means by conservative estimation, those making under $25,000 outnumbered those moving to above $100,000 per year. Those making poverty incomes could possibly have doubled those moving above $100,000 per year.

To provide such statistics as have been touted by the government without even an asterisked footnote to these other statistics is fallacious and deceptive. But, what’s new about cherry pickers in D.C., eh?

Posted by: David R. Remer at September 3, 2007 10:44 PM
Comment #231675

Max

I lived in Europe for 12 years. It depends where you go.

I personally like the Euro lifestyle. It is a great place to be if you are already established. But it is not the heaven you think. The slums outside Paris are as frightening as anything we have in America and they are more hopless.

I think Phillippe will back me on the latter point.

I am not saying that the U.S. is great and other developed countries are not, but I also do not hold to the opposite point of view.

David

Illegal aliens have been moving in for a long time. Whatever trends and numbers that were in place probably are in place. The statistics would include such things.

Your argument is similar to the one people make about our low unemployment rate. They say that it does not accurately measure. I suppose that is true. But it is the measure we have been using for a while. What we are looking at is trends and changes.

Posted by: Jack at September 3, 2007 11:19 PM
Comment #231678

Perhaps the NEWs should be:

    What Is Happening to Our Country?

  • Year 1929: 1% of population had 40% of all wealth

  • Year 1976: 1% of population had 20% of all wealth

  • Year 1983: 1% of population had 30% of all wealth

  • Year 2007: 1% of population has 40% of all wealth (see: 1929 above)

  • 60% of the U.S. population has only 5% of all wealth.

  • 40% of the U.S. population has a net worth of only $2,000.

  • 20% of the U.S. population has a negative net worth of -$9,000.
  • Median income and incomes of bottom 3 quintiles stagnant or decreased since 1999.

    In 2007:

  • a 1997 dollar is now worth only 77 cents?

  • a 1987 dollar is now worth only 55 cents?

  • a 1967 dollar is now worth only 29 cents?

  • a 1957 dollar is now worth only 16 cents?

  • a 1947 dollar is now worth only 11 cents?

  • a 1937 dollar is now worth only 07 cents?

  • a 1927 dollar is now worth only 08 cents?

  • a 1913 dollar is now worth only 05 cents?
  • BOTTOM LINE:

    • The system is lopsided.

    • The corrupt tax system allows the wealthy to pay lower percentages of income to income taxes. Warren Buffet paid less tax as a percentage of income than a secretary making $60K.

    • National Debt is $9 Trillion.

    • The fiat-funny-money-system is corrupt and dishonest. 89% (9:1 ratio) of every new bank loan is new money. M3 Money Supply increased from $150 in year 1950 to $10.15 Trillion (a factor of 75.2) while the population doubled. Banks earn interest on money created out of thin are. The best example of our situation is playing the game of Monopoly in one person can print all the money they want … before long, everyone else is broke, foreclosed, or deep in debt. How can everyone doing the work and creating wealth be in debt to banks?

    • Incessant inflation erodes income, creates bubbles, and destabilizes the economy. We’ve been programmed to believe 3% or 4% inflation is OK. But that’s a 1913 dollar is now worth 5 cents.

    • Social Security surpluses ($12.8 trillion in debt) are still being plundered.

    Posted by: d.a.n at September 3, 2007 11:51 PM
    Comment #231679

    M3 Money Supply increased from $150 Billion in year 1950 to $10.15 Trillion (a factor of 75.2)

    Posted by: d.a.n at September 3, 2007 11:55 PM
    Comment #231681

    Jack said: “But it is the measure we have been using for a while. What we are looking at is trends and changes.”

    But, the trend becomes ever more inaccurate as 12 to 20 million people are brought into the picture and not accounted for. It demands a reformulation of measurement to account for the changed circumstances. After all, you wouldn’t measure poverty standards today by those of the 1930’s. As circumstances change, so, must the statistical modeling to accommodate that change.

    And the 54 million of eligible work age not working statistic SCREAMS for an accounting of WHY they aren’t working from a policy perspective, if in fact, they aren’t working. We may be shocked and jolted into action at the size of the underground economy workforce and trend of its growth. I know ignorance is reported to be bliss, but, that was never meant to apply to policymakers in a representative form of democracy. It smacks of incompetence and ineptitude.

    Posted by: David R. Remer at September 4, 2007 12:34 AM
    Comment #231682

    d.a.n, the money is worthless, save as a promissory note of exchange of goods and services. When and if one major player (like the U.S. in the deep of boomer retirement) fails honor its notes on time, the whole house of cards comes tumbling down. And not just for the U.S., but globally.

    Posted by: David R. Remer at September 4, 2007 12:38 AM
    Comment #231688

    David and d.a.n. great posts.
    I don’t know about you guys, but I’ve grown so tired of reading posts about our economy where all of us seem to agree (despite our varying political viewpoints), but where Jack keeps claiming that all of us are simply dead wrong, and that everything is really going great.

    Posted by: Adrienne at September 4, 2007 1:05 AM
    Comment #231689

    Adrienne

    I do not say that things are going great. Rather that this is a generally good time, much like 1998. You guys seem to want to make it look more like 1938.

    If you guys really believe all you say, I would expect you to hunker down in the hills and await the collapse. In fact, my bet is that, like most Americans, you are doing fairly well. Most Americans own a late model car (usually more than one). They have a decent job. They live in a home they own and although they have significant debt, their net worth is higher than it was five years ago.

    An interesting trend in reporting about the economy is that most Americans say that the general economy is bad, but that their situation is okay. Why is this? I think it is because the Dems have convinced people that things are bad, but in the part of the economy the people REALLY know, i.e. their own, they KNOW it is going well.

    Beyond that, in much of this I detect the partisan point. Most of the economic trends d.a.n. refers to are very long term. You often imply that this is a Bush problem. If this is true, you have to account for the fact that most of the negative trends began before he took office. The economy started down almost a year before he came in. The median income began to decline a year before too.

    So if you want to argue that our long term economic prospects have been trending bad for a long time (as d.a.n. does) you can make that argument. I disagree, but that is not a partisan argument.

    David

    Illegal immigration is a different issue. If you are arguing that it should be addressed, I agree. Nobody is doing much. Write congress and get them to move.

    If the argument is that we are worse off because of this immigration, I really do not know. I think we might be. But if you are arguing that the economy was good in 1998 and bad today, even though the statistics are almost the same, BECAUSE illegal immigration has so changed the results, I do not think you have a case. There were plenty of illegals then too.

    It is important to keep a consistent measure. We can and should adapt it, but we should compare what we can properly compare.

    Posted by: Jack at September 4, 2007 6:55 AM
    Comment #231696

    David

    To provide such statistics as have been touted by the government without even an asterisked footnote to these other statistics is fallacious and deceptive. But, what’s new about cherry pickers in D.C., eh?

    This one paragraph pretty much says it all in a nutshell David. It has become common place by our government agencies to ask the right questions and interpret the numbers in such a way as to reflect a desired effect. Omission and manipulation of numbers can easily make a cheeseburger look like a twenty dollar steak. For the less economically savvy of us (me especially) it is difficult to determine right from wrong. I may not be able to look at a problem and tell you specifically what is wrong, but I am not so stupid as to not be able to distinguish water from fire. Most of us common Americans with no formal economic education fall into this category. It does not take a genius to see that if he or she is earning $50,000 a year and carries $10,000,000 in debt while still relying on additional borrowing to be able to spend, is in serious trouble. It only stands to reason that eventually the cash highway will end, we will hit a wall and it will come crashing down on us.

    I contend that it is this common knowledge and realization that is spurring the fears of economic failure. We as a nation are merely along for the ride in hopes that somehow our fears are wrong and somehow all this massive debt will just magically go away with no financial repercussions. How many times can the feds mask the problem and forestall the inevitable by flooding the system with more borrowed money and at the same time continue to encourage a not so healthy status quo.

    Posted by: RickIL at September 4, 2007 10:03 AM
    Comment #231701


    In actuality, poor people have more cars than the rich. I know a lot of them who have 3 or 4 cars sitting in their yards. They have grass growing around them for protection from the elements.

    Posted by: jlw at September 4, 2007 11:48 AM
    Comment #231702
    Jack wrote: I do not say that things are going great. Rather that this is a generally good time, much like 1998. You guys seem to want to make it look more like 1938.
    No Jack. Now is more like 1928.
    David R. Remer wrote: … the whole house of cards comes tumbling down. And not just for the U.S., but globally.
    Yes, the current rash of foreclosures proves the possibility of an impact on a global scale.

    Jack’s right about one thing: Things have been worse. But that is not the importatn point. The important point is the near future and the high probability that we are moving toward worse economic conditions. Perhaps worse than the Great Depression of 1929? But partisan loyalties get in the way of reality; that is, until reality is biting them on the ass and it can be ignored no longer. Hindsight is 20-20, but blinders keep you from seeing how close you are to the edge of the cliff.

    David and d.a.n. great posts… . but where Jack keeps claiming that all of us are simply dead wrong, and that everything is really going great.
    Adrienne, Thanks! This economy is being propped up with growing debt and massive and excessive money printing (which is why a 1913 dollar is now worth 5 cents; a 1987 dollar is now only worth 55 cents). But, like playing Monopoly in which one person can print all the money they want, it can’t last forever. Eventually, everyone is broke or in debt to that one person (the banks). When that happens, the system collapses.

    Also, it is increasingly difficult for even the FED and others in the rose-colored glasses crowd to overlook the worsening economic factors, and the potential for them (as David R. Remer wrote) to [bring down] :

      the whole house of cards comes tumbling down. And not just for the U.S., but globally.

    Yes, the potential is there.
    The economy arguement is somewhat similar to the global warming arguement. None of us can predict what will happen 12 months from now (for either).

    But you don’t have to be a rocket scientist to understand that pumping billions of tons (annually) of Carbon Dioxide into the atmosphere will exacerbate global warming, and that massive debt, excessive money printing, and so much fiscal and moral irresponsibility will increase the chances of an economic meltdown (gloabally). It isn’t far fetched at all. It has happened many times before. To think it can’t happen again invites another one.

    Posted by: d.a.n at September 4, 2007 11:50 AM
    Comment #231703
    In actuality, poor people have more cars than the rich. I know a lot of them who have 3 or 4 cars sitting in their yards. They have grass growing around them for protection from the elements.
    Good point. Funny! Posted by: d.a.n at September 4, 2007 11:51 AM
    Comment #231705

    D.a.n.

    I can predict the weather and economy in twelve months. That’s easy. It will be similar to today’s economy and weather. While I don’t think it pays to be cavalier about either, we aren’t at the edge of complete chaos. We are still pretty stable in both categories.

    If we couldn’t, the stock market would really be in the toilet. Investors aren’t morons.

    Posted by: alien from the planet zorg at September 4, 2007 12:00 PM
    Comment #231709
    alien from the planet zorg wrote: I can predict the weather and economy in twelve months. That’s easy. It will be similar to today’s economy and weather.
    alien from the planet zorg wrote, Maybe the economics and weather are different on your planet?

    Are you so sure? I doubt anyone can be that sure. If we are going to use history, I believe it will substantiate the need for concern. Not complacency.

    As you just said yourself, it is not wise to be “be cavalier about either”.

    Earth’s weather varies.
    The last little ice age contributed to the death of millions. It contributed to the end of the Vikings. The Great Depression as not that long ago. Recessions and depressions come and go. It will happen again. The path we are on now probably guarantees it.

    The nation’s problems are growing in number and severity.

    It’s not that the problems are unfixable.
    It is a that no one cares.
    But they will when the consequences become painful enough.
    Eventually, pain trumps laziness, complacency, and greed.
    Have you not noticed the trends?
    Have you not noticed the growing disparity in wealth (worldwide)?
    Have you not noticed the declining quality and climbing cost of education?
    Have you not noticed the incessant inflation?
    Have you not noticed the growing corruption in Do-Nothing Congress and the Executive Branch?
    Have you not noticed the massive debt?
    Have you not noticed the excessive printing of money?

    To ignore and belittle the growing potential for an economic meltdown is partly what contributes to the probability of it occurring. Especially in this era of complacency, selfishness, massive nation-wide debt ($48 Trillion) fiscal irresponsibility, and voters that don’t care (as evidence by 40% that don’t vote, most voters that don’t know their own Congress persons, much less their voting records, most voters blindly pull the party-lever, most voters blame the OTHER party, and repeatedly re-elect and reward irresponsible incumbent politicians for the rampant corruption; rewarding Congress with a 90% to 95% re-election rate).

    Yes, we will see. When 77 million baby boomers meet $9 Trillion National Debt + $12.8 Trillion Social Security Debt + $450 Billion PBGC Debt + growing inflation + short falls in Social Security and Medicare + competing with younger Americans for decreasing number of jobs; when they are jobless, homeless, and hungry … we will see.

    Those that think another Great Depression is impossible do so at their own risk.

    alien from the planet zorg,
    I hope yours and other rosy predictions are right. But I doubt it. I’m not taking any chances. Thus, my homes, land, autos, and all debt are paid off in full, because foreclosures and repossessions in the next recession (or depression) will make the current rash of foreclosures look mild. We can only hope people don’t resort to civil unrest when millions are jobless, homeless, and hungry.

    alien from the planet zorg wrote: If we couldn’t, the stock market would really be in the toilet. Investors aren’t morons.
    Ha! The stock markets looked great right before the crash of 1929 too. Historically, using the stock markets as an indicator of approaching economic downturns has proven to be very inaccurate. Besides, have you not noticed the recent volatility and its impact globally?

    Other than that, everything is very rosy.

    Posted by: d.a.n at September 4, 2007 1:26 PM
    Comment #231715

    Jack

    This is a recurring theme and I appreciate your willingness to continually reexamine how we’re doing economically. I think the overall picture is that wealth is being created, but that all that increased wealth is going to the very uppermost income group, and additional wealth is flowing to them from the working class. This seems like “class warfare” in that the group in power is using its economic might to squeeze the lower classes. I do not see this as healthy either economically or politically.

    A typical poor American lives in a three-bedroom house with a car, air-conditioning and two televisions.

    The article doesn’t give a source for this, and I find it hard to believe, given the little bit of knowledge I do have of people in poverty (i.e., the needy folks in my studies rent small apartments and are unlikely to have a car to themselves). Do you know what source they rely on?

    Posted by: mental wimp at September 4, 2007 2:13 PM
    Comment #231716

    One other observation. The tendency over the last seven years has been to reduce taxes for those very wealthy and at the same time run up huge deficits to fund the war and defense. In the long run, this is another transfer to the wealthiest from the less wealthy, using the government tax system to do it.

    Posted by: mental wimp at September 4, 2007 2:16 PM
    Comment #231720

    Jack said: “There were plenty of illegals then [1998] too”

    Jack, there numbers are estimated to have been growing by about 1 Million per year. 9 years ago meant 9 million less. These are numbers which cannot be ignored, by the government or you. Your comment above ignores the growth factor in illegal aliens. Is one illegal immigrant going to have an economic impact? No. How about 1 million new illegal immigrants per year? Yes. You cannot argue 1998 is the same as today regarding income distribution when today’s numbers ignore these 9 million and fail to inquire into the 54 million of work age not in the work force. These are growing and significant economic numbers and changes in circumstance and context.

    Posted by: David R. Remer at September 4, 2007 2:41 PM
    Comment #231728

    Jack,

    Sounds like you are arguing for government subsidies because it isn’t the market economy making life better for the poor.

    A conservative thanking government subsidies? Do we need more subsidies or less?

    Posted by: chris2x at September 4, 2007 4:33 PM
    Comment #231734
    One other observation. The tendency over the last seven years has been to reduce taxes for those very wealthy and at the same time run up huge deficits to fund the war and defense. In the long run, this is another transfer to the wealthiest from the less wealthy, using the government tax system to do it.
    Precisely. Too bad it takes 7+ years for the middle class to catch on to this. I’m not sure they have yet, since the Congress responsible for it still enjoys a 90% to 95% re-electtion rate.

    Jack, Illegal immigration is costing U.S. citizens (and this is a very conservative figure) at least $70 Billion in NET losses annually. California is hit the hardest (roughly $10.5 Billion). And those numbers are a few years old. But you can estimate the net losses yourself without too much trouble.

    However, David R. Remer and I live in Texas and you live in Virginia? So you may not appreciate the illegal immigration problem. Wait until some illegal aliens are cutting down some of your trees like they did on my 30 acres in New Mexico. And, no doubt, the thousands of victims of crime and homicides (at least 3.6 per day; double the norm; some estimates place it as high as 12 to 26 deaths per day) by illegal aliens motivates others out of their complacency. Last year, Brian Jackson (a Dallas policemen) was shot and killed by an illegal alien. Have you been to Los Angelos lately. Give it time. At the current rate, you’ll have millions in your neighborhood like we do now (over 1 million illegal aliens in the north-east quadrant of Texas).

    Posted by: d.a.n at September 4, 2007 4:54 PM
    Comment #231735

    Victims Of Crime By Illegal Aliens (VOCBIA.COM)

    Posted by: d.a.n at September 4, 2007 5:00 PM
    Comment #231781

    d.a.n.

    On the planet Zorg we have long since left the need for weather, economics and politicians. That is why it is so much fun to watch you earthlings torture yourselves and others (well, at least, the CIA).

    While I don’t disagree that our national debt and trade deficits are problems, that doesn’t undermine my anti-alarmist statement that we still are a stable political and economic entity.


    I’ll make a bet with you d.a.n., One year from today that major economic indicators, may show a recent or even continuing recession, but my basic statement that things are pretty much the same will still stand. The weather won’t be significantly different either.

    Posted by: alien from the planet zorg at September 4, 2007 11:42 PM
    Comment #231790


    Jack: I decided to check out my county to see how we compare with the nation as a whole. Since 2000, the poverty rate in my county has increased by 7.3 percent from 19.3 percent to 26.6 percent. The median income is $32,769 which is 46 percent below the state and 49 percent below the national average. Inflation adjusted household income has decreased over the same period by 13.5 percent. Jobs increased by 16.5 percent with nearly all of them concentrated in the real estate sector.

    We have a manufacturing base which turns out one product for export, our young people. A lot of our kids join the military. For many it is their only way out.

    In 1968, the year I graduated from High School, my little village was a small city and we had the largest income per capita of any city in Ohio. Then the steel mill closed down and 7,000 middle class jobs were lost. In additon, over a hundred small business establishments were lost. That was replaced by K Mart, Walmart, pizza hut, KFC, etc. There is no comparison.

    Posted by: jlw at September 5, 2007 12:15 AM
    Comment #231791

    alien, that won’t be a true or valid statement for 2016, just nine years from now, as boomers retire and make the greatest demands upon our empathy, medical system, insurance companies, lending institutions, and government, ever in the history of our nation. A situation for which we are not prepared and for which our government or society has yet to take any steps to prepare for. In fact, all our actions to date, have exacerbated the problems ahead, through medical advancements and increased longevity, deficits and national debt, and refusal to deliberate and agree on ways to both retain solvency and prevent massive suffering, poverty, and abuse of our elderly over the next several decades.

    Posted by: David R. Remer at September 5, 2007 12:18 AM
    Comment #231810
    I’ll make a bet with you d.a.n., One year from today that major economic indicators, may show a recent or even continuing recession, but my basic statement that things are pretty much the same will still stand. The weather won’t be significantly different either.
    First of all, good response on the planet zorg take-off.

    Now … One year from now is too easy; too safe?

    How about 5 years from now?
    How about 10 years from now?
    How about 15 years from now?

    Next year will probably be a recession.

    Future recessions will be increasingly difficult to recover from with so much debt, corruption, 77 million baby boomers (13,175 becoming eligible for entitlements per day), shortfalls in Social Security and Medicare, etc., etc., etc.

    Yes, we will see. I think the U.S. will see a continued decline in many ways. There is the potential for a depression, due to growing corruption in an increasingly FOR-SALE government, some people telling us everything is rosy, and an uncaring, complacent, apathetic electorate that will become more interested when it is too late.

    Posted by: d.a.n at September 5, 2007 2:42 AM
    Comment #231882


    The next predicted date for the demise of the Planet Earth is the year 2012. It is very unlikely that we will do much of anything about our problems before then but worry about them. So, I suggest we borrow like crazy and party like Hardy until then and If by chance we wake up on Jan.1,2013 with a really bad hangover, may be then we will be able to swallow the bad medicine and start the recovery process.

    Posted by: jlw at September 5, 2007 6:05 PM
    Comment #231886

    jlw,
    Sadly, I think you are right.
    But there is a built-in self-correction mechanism.
    When will voters finally care (if ever)?
    When their apathy, complacency, and laziness finally becomes too painful.
    And that may not be too far away (again).

    Posted by: d.a.n at September 5, 2007 7:02 PM
    Comment #232136

    Jack,

    I personally like the Euro lifestyle. It is a great place to be if you are already established. But it is not the heaven you think. The slums outside Paris are as frightening as anything we have in America and they are more hopless.

    I think Phillippe will back me on the latter point.

    Yes, except for the “more hopeless”, as I haven’t see any obvious fact about it. But, indeed, EU is different than US, but neither better neither worse. The tradeoffs are made in different areas, that all.

    Posted by: Philippe Houdoin at September 7, 2007 11:59 AM
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