I came across this post from about three years ago that seems to apply to my recent posts on tiny houses and simplicity. Take a look… I think it applies more today than it did even three years ago… Click on the image below to go there.
But maybe the “death of the middle class” conclusion isn’t obvious at all. And perhaps there is more to the Donald Trump phenomenon. Yes, the modern left instinctively sees such studies as further confirmation that inequality is the nation’s premier economic challenge. Much of the media agrees. The rich are gobbling up more and more of the economy’s bounty, leaving less for everyone else. Case closed.
The Pew results are more complex and nuanced than that, however. One reason the middle class — say, three-person households making between $42,000 to $126,000 annually — share is declining is that the upper class is expanding. Back in 1971, 14 percent of households were upper class, and 61 percent were middle class. Today it’s 21 percent upper, 50 percent middle….
Now, none of this is to downplay the particular economic strain on lower-income Americans, especially those without a college degree. There is evidence that real wages for male workers without college degrees have been stagnant or falling for decades. And those are Trump’s biggest supporters. But the billionaire is competitive even among the better educated. When growth goes away or even recedes a bit, bad things happen to the American psyche. Now combine that with fears college is becoming more necessary and more unaffordable in a time of expanding automation. The emergence of Trump or some populist like him seems inevitable.
This is a very interesting Pew study that kind of confirms what I have thought all along. That is that there are still plenty of households who have more than enough discretionary spending to keep the economy going. If there wasn’t then who are the targets for all the extravagance shown by most cable TV shows.
If you are to believe what you see on TV then all of us should be striving or at least dreaming of backyards filled with fire pits, outside dining and living areas and covered with expensive slate. If there is no discretionary spending left then who are all these people? After all a billionaire only needs so many fire pits.
I have to admit that when I was making close to a six figure income I didn’t consider myself well off. Maybe that was because of my continuing penny pinching from my poorer years. I just couldn’t see constantly spending more and more. When I retired in 2000 we bought a 1928 farmhouse that had gone through a couple of badly done rehabs. We spent about 70% of the original purchase price in renovations. Since that time our only expenses have been repairs. We are satisfied with the way things are and don’t have much desire for all the latest “improvement” so many say we must have.
Getting back to the original thoughts here, yes the middle class is definitely shrinking but still, as shown above, it accounts for half of all American families. Only about 20% of us really worry if we can put food on the nightly table but that is 20% too many. Then there is that 1% whose power has grown exponentially and have more money than they could ever spend but still savagely seek more and more. And they are getting it thanks to decreases in taxes beyond sanity…
I dread to think about how our totally politicized Supreme Court is going to rule on the latest attack on affordable healthcare for almost ten million of us. Will they essentially make those folks walk the plank as Steve Sack shows in this editorial cartoon. It is widely known that most of the yahoos on the court vote primarily on their political alignment. The law and original intent just doesn’t seem to mean much to them.
I also see where the Republicans have recently come out with their budget proposals for the coming year. Take a look at that very little orange slice of the current budget pie to the right. That shows our current food stamp allocations. It seems that tiny slice is where they want to do the severest cuts. Part of their budget is to increase the dark blue area even more! They don’t think it is big enough yet. Please tell me how anyone can actually believe that they are serious about their budget proposal when they take the elephant in the room off the table for cuts???
Why does it seem that we are living in an upside-down world right now???
By its own estimate, the government made about $100 billion in payments last year to people who may not have been entitled to receive them — tax credits to families that didn’t qualify, unemployment benefits to people who had jobs and medical payments for treatments that might not have been necessary. Congressional investigators say the figure could be even higher. The Obama administration has reduced the amount of improper payments since they peaked in 2010. Still, estimates from federal agencies show that some are wasting big money at a time when Congress is squeezing agency budgets and looking to save more.
Government waste is one area where I pretty much agree with my Republican friends. I worked hard to pay my fair share of taxes to keep our nation in business and it makes me mad when I see so much of it is wasted. The chart above show that $36 billion was paid out to perhaps fraudulent Medicare billers in 2013.
I know that the total Medicare spending for that year was almost $600 billion and that makes the fraud about 6% of the total spending. Those folks in Washington probably deem that an acceptable level and in reality that might be right in that we would probably spend more than that to catch the criminals bilking the system. But to me it is more a matter of principle. It would almost be worth it to spend more than we save to catch the offenders.
The number two thing on the list is the Earned Income Tax Credit. I’m not sure how this credit is abused to the tune of $15 billion? It goes to families with annual income up to $51,000. The amount of the credit is dependent on the number of children in a family. Are families claiming children they don’t have? I don’t know.
The current gridlock and the Republican’s constant demands to cut all budgets, except the military of course, it is more likely that these abuses will increase rather than decrease in the coming years especially now that the GOP has control of congress. There seems to not be a government budget that they don’t want to cut. But again if the Democrats were in charge they would probably spend it on other things. How do we get ourselves out of this mess???? I think maybe the only answer it to keep voting the “ins” out of office until they get the message…
Can a capitalistic consumer driven society survive when so many have so little money to spend???
If nothing changes I guess we will soon find out the answer to that question…