Wealth Gaps Are Large & Growing ...

[Texas Proud]

Maybe so, but I think it's clear there's a mix of both. I sincerely wish I knew what the mix is between hard working/responsible 'victims' and 'screw-ups.' Is it 50/50, or some lopsided mix - I've searched many times, without finding anything? I know folks in both camps personally, but that doesn't give me any sense of which camp is larger, if either.

Those who speak only of victims may be just as misguided as those who speak only of 'screw-ups.'

I'd be more than happy to help out the victims, and equally unhappy to help out the 'screw-ups.'

+1.

I agree.... I saw one of the news magazines on people who were laid off and what has happened to them.... they were talking to this one guy who was mowing lawns... (IIRC, blowing the leaves).... I can not remember what he did prior, but I think he had a salary of over $100K.... I would put this guy in the hard work group...

And BTW, a good number of the people received 2 years of unemployment... that is a pretty good amount of time to adjust to the new normal....

 

[Midpack]

Hence, the stated necessity of coming to consensus on the matter. The point is you shouldn't be asking, "How much will it cost?" when deciding a minimum standard. A minimum standard is based on what is minimally acceptable on a qualitative level. You set the cost based on that level, not the other way around. That's why there is so much contention with regard to this issue: Some folks insist on deciding what's reasonable based on what's inexpensive.

And some folks want to decide what's reasonable with no regard for what it might cost. In that we can't afford the government we have, it's hard to believe we can afford more, as your position implies (correct me if that's wrong). I think we have to face what's reasonable and what we can afford together.

But we agree to disagree, no need to rehash this again (and again). Peace.

 

[sengsational]

But is there really a problem? I mean one that demands a solution? Or is it just a phenomenon, a fact? I think most agree that income/wealth inequality exists. Maybe "so what?" shouldn't be ruled out as a response to the "problem".

I just read The righteous mind : why good people are divided by politics and religion Charlotte Mecklenburg Library - Classic Catalog and it goes exactly to your point. Surprisingly, the book has very little to do with politics or religion. It's about how we're all wired differently. We're wired to be "groupish". So the humans that had the most kids were good at the whole "us and them" thing. I'm not doing the book justice. I'd recommend reading it!

 

[bUU]

You and my father would get along real well. He repeatedly says, if you confiscated all of the wealth from the rich and distributed it to the masses, they would have it all back in ten years.

Though I'm sure your father wouldn't have meant it as such, but that's actually precisely what would be best for the economy, money circulating through the entire cycle frequently, rather than sitting stagnant. The federal reserve reports corporate cash balances spiked to $1.93 trillion in 2011 – a 38% increase since the first quarter of 2009 – and are still very high above average levels, at about $1.6 trillion. A recent study by Pollin's institute found that if America's largest banks and non-financial companies moved just some of that cash into productive investments instead, that would give the economy a huge boost, creating about 19 million jobs in the next three years and lowering the unemployment rate to under 5 percent. [Sources: Wall Street Journal and Huffington Post.]

I'd be more than happy to help out the victims, and equally unhappy to help out the 'screw-ups.'

Without evidence to that effect, assuming that the 'screw-ups' are a significant component of the whole is uncharitable. Regardless, I feel that helping someone genuinely in need of help is at least an order of magnitude more rewarding that helping a 'screw-up' is disappointing.

In that we can't afford the government we have, it's hard to believe we can afford more

It isn't a matter of affording more. It is a matter of morally acknowledging that the human cost of not doing what's necessary is far higher than the financial cost of doing what is necessary. If all you care about is money, or even if you care about money simply more than you care about human beings, then that probably won't fly, but if you place people above money, it is a much clearer matter.

But we agree to disagree, no need to rehash this again (and again). Peace.

Agreed.

 

[ERD50]

I found the last chart startling, and I believe it says a lot about the growing concentration of wealth. According to that chart (based on 2011 tax data), 55.5% of the benefit of the lower tax rate on LT Capital Gains & Qualified Dividends goes to the top 0.1% of taxpayers!

I don't know why that should be surprising, people on the low end of the economic scale aren't likely to have much/any in LT Capital Gains & Qualified Dividends, so they wouldn't get much of the benefit. If they own stock, most of it is probably in a 401K, or invested for them in the name of their pension fund - which has a whole different set of tax implications and benefits.

I could quote all sorts of figures from the other end of that spectrum - 100% of the EIC credit goes to low-mid earners, and most many credits and deductions phase out as income increases.

And as has been pointed out here before, a tax on LTCG can be very unfair at any rate - sometimes there was no real gain at all, due to inflation.

You and I probably both agree the tax code needs an overhaul, but those numbers don't really point to any real 'problem', IMO.

-ERD50

 

[haha]

We are finding that even our best high school students are woefully unprepared for college. That is a function of the material not being presented to them in HS, not IQ.

This does not seem to be true, at least around here. Our best high school students are not only prepared, but often prepared for advanced placement. And your statement about "it's not IQ" is also highly questionable. I remember from my own high school, the students who took AP and excelled turned out to be the same students who aced the verbal and math aptitude parts of the SATs.

The best combination is intelligent students with intelligent parents who value education and whose friends and schoolmates come from similar circumstances, so that doing well on tests and learning the material ranks higher than walking around with your pants down below your boxers. A Gangsta culture in a school could ruin Einstein, if his parents were negligent enough to let him be there. When I was in high school my family moved to a bigger city, and they did not know the lay of the land. My Mom drove me to school, and picked me up the first day. She took a look around and told me, don't worry, you don't belong here, I'll have you in a better school within 2 weeks. And she did, an excellent magnet school full of the brightest, most motivated and nicest kids I had ever met in my life. Many of them are still my valued friends.

Much as I love Seattle, if I were a young father without enough income to send my kids to private school, I would be across the Lake to Bellevue in a flash.

Ha

 

[haha]

IMO, the biggest reason why all Americans should be concerned about the sharp increase in the concentration of wealth in the past couple of decades (aside from the obvious moral reasons) is that if this concentration continues and keeps getting worse, it will inevitably result in serious social unrest. There's no telling what form that might take.

The countries growing fastest and having the most solid finances are mostly very lopsided countries- China, Singapore, Mexico, and some South American countries like Brazil, Colombia, and to lesser extent Chile. And let us not forget Russia! Who knows what the Russians might accomplish if they slowed down their drinking?

The US can never be Finland or Switzerland, our history and demography have closed that possibility off.

Ha

 

[explanade]

Concentration of wealth may be the cause of slow growth. Someone raised the point about people needing good jobs to be able to consume the products made by American companies.

Well consumption is 2/3 or more of the GDP. But when fewer people have a lot of the money, there is only so much they can consume. If 5 people have the wealth equivalent to the next 100 people say, it's not as if those 5 people would buy 100 cars or buy food and clothing equivalent to what 100 people would buy.

The 5 people with the wealth will buy nicer cars, food and clothes but still won't necessarily equal the money spent by 100 people on lower-priced goods. That's why we can't build and sustain an economy on luxury goods production only. It's the Chevys and Fords that fueled the US economy, not Bentleys or even Cadillacs.

I think the velocity of money is declining at the same time the concentration of wealth is increasing.

Concentration of wealth is said to be greater now than in the Roaring Twenties -- we know what followed that decade.

 

[ERD50]

...
Concentration of wealth is said to be greater now than in the Roaring Twenties -- we know what followed that decade.

Correlation does not imply causation - Wikipedia, the free encyclopedia ?

I could have sworn it was Prohibition!

Prohibition in the United States was a national ban on the sale, production, and transportation of alcohol, in place from 1920 to 1933.

-ERD50

 

[anethum]

The countries growing fastest and having the most solid finances are mostly very lopsided countries- China, Singapore, Mexico, and some South American countries like Brazil, Colombia, and to lesser extent Chile. And let us not forget Russia! Who knows what the Russians might accomplish if they slowed down their drinking?

The US can never be Finland or Switzerland, our history and demography have closed that possibility off.

Ha

In Brazil & Mexico, the 2 largest economies in Latin America, the trend is the opposite of the US. The middle class in both of those countries has been growing substantially in recent years. The same is true in Chile & Colombia.

The same trend can be seen in China, where the middle class is now larger than the entire population of the US.

 

[ERhoosier]

C
Concentration of wealth is said to be greater now than in the Roaring Twenties -- we know what followed that decade.

No doubt there is a wealth-concentration in US, but cannot agree that it even approaches situation of late 20's. There were a precious few SUPER-rich with (relative) fortunes dwarfing today's wealthiest Americans. JD Rockefeller's personal net worth in that era is often estimated at $5-600+ Billion, or 1/65th of ENTIRE US GDP owned by 1 man!!! By comparison, today's richest in US, Bill Gates & Warren Buffet, are "only" worth roughly ~1/10th of what old JD was.
The World's Billionaires List - Forbes
In the late '20's-mid '30's there was no safety net of social programs so the extremely poor truly had nothing. They wore rags, often had no shelter, and sometimes literally starved to death. In US today our major malnutrition issue is OVER eating (obesity), with evidence suggesting that lower-income areas have HIGHER rates of obesity.
Lower-income Neighborhoods Associated With Higher Obesity Rates
Today there are gov't programs like food stamps & medicaid, along with various cash assistance programs. Interestingly, the US gov't poverty calculation does NOT include non-cash benefits, nor does it include capital gains or even net worth (inc. current value of annuities/pensions/SS).
How the Census Bureau Measures Poverty - U.S Census Bureau
And according to US Gov't's own 2005 stats, most poor families in US have at least 1 car, multiple TV's, air conditioning, cable/satellite TV, and cell phone service.
http://thf_media.s3.amazonaws.com/2011/pdf/bg2575.pdf
IMHO- Evidence indicates the actual "wealth" (i.e. value of goods/services inc social pgms, SS, pensions, etc) of the poorest 10-20% of citizens is far greater today than it was in late 20's-early 30's. And back then those very few super-rich like JD Rockefeller & contemporaries would have made Gates & Buffet look like (relative) paupers.

 

[haha]

In Brazil & Mexico, the 2 largest economies in Latin America, the trend is the opposite of the US. The middle class in both of those countries has been growing substantially in recent years. The same is true in Chile & Colombia.

The same trend can be seen in China, where the middle class is now larger than the entire population of the US.

True enough. But you are talking trend, not structure, and the US starts from a very flat structure. Also, as a poster below points out, these "middle class" Latinos include many who have a lower material standard of living than many US welfare clients.

Ha

 

[tjscott0]

Breaking Inequality | Watch Free Documentary Online

[QUOTEBreaking Inequality is a documentary film about the corruption between Washington and Wall Street that has resulted in the largest inequality gap in the history of America.
It is a film that exposes the truth behind the single event that occurred back in the early 70′s that set us off on this perilous journey that we are currently on.
The inequality gap is presently the worst that it has ever been and there is no solution in place to repair this crippling problem.
No country in the history of the world has ever remained a super power without a middle class and the road we are currently traveling doesn’t include this all-important segment of the population. The old saying “As goes the middle class… so goes the nation” holds true even more today than ever.
We live in a world where governments can create as much money as they want in order to fund all kinds of wasteful projects, wars, handouts, and banker bailouts. The current system by design has transferred the wealth from average everyday Americans to an elite few who care not about the majority.
][/QUOTE]

This documentary indicates that the cozy relationship between financial sector is responsible for the widening inequality gap & economic bubbles.
It is argued that ending the gold standard opened the door for the nefarious financial entities to begin their shenanigans.

Why is there a cozy relationship. Follow the money:
Goldman Sachs: Recipients | OpenSecrets
Citigroup Inc: Recipients | OpenSecrets
JPMorgan Chase & Co: Recipients | OpenSecrets
Bank of America: Recipients | OpenSecrets

 

[tjscott0]

Oh yeah the documentary gets a little preachy at the end. they of sending a petition to congress demanding a return to the gold standard. But that ain't gonna happen. It will be business as usual between congress & TBTF banks.

It is my thinking that it doesn't matter which party is in office. They're prety much bought & paid for. Reminds of that syatement;"If voting chamged anything, they would outlaw it."

Another trend is accelerating the inequality is the reduction of middle income jobs due to technology/automation. The thread below more fully explains that thesis:
http://www.early-retirement.org/forums/f27/middle-class-income-jobs-aint-coming-back-64741.html

 

[FUEGO]

Why bother? Why not forge a clear understanding of the living conditions that you wouldn't mind being subjected to living under yourself, come to consensus about that with everyone else, and establish that as the floor. Work to foster an economy that provides sufficient access to such ("an edifice which produces beggars needs restructuring"), and in the meantime ensure safety nets provide that floor. There's no need to make it more complicated by adding a level of indirection, separating the analysis ("optimum level" presumably of spending on "social programs") from the impact. Just ensure the standard is satisfied, and also work to make the system such that it makes that standard its default output.

Oh I figure about $40-50k a year ought to do it for me. Now where's the line start, I want mine. I'm entitled to it. And you keep working, ok? Of course if I can't get that $40-50k, I guess I might as well work. You might even say that giving me $40-50k per year, while meeting my self defined bare necessities, would be a disincentive to work. But you would be wrong, my friend. I am simply unable to work. Can't do it! So where's my $50k check? The kids (I have 3 after all) need new sneakers, and they don't come cheap ($150 a pair at least). Someone has to take responsibility for all these kids.

 

[jollystomper]

Another trend is accelerating the inequality is the reduction of middle income jobs due to technology/automation. The thread below more fully explains that thesis:
http://www.early-retirement.org/forums/f27/middle-class-income-jobs-aint-coming-back-64741.html

+1

Having been involved in computers since high school and working in IT for 34 years, the advance of technology and automation has been a double edged sword. It has been a big factor in making workers more productive, but more productivity also means fewer jobs, because companies do not have the incentive to grow jobs, at least well paying jobs in the U.S.

Technology has also enabled the global economy, which means companies aren't as dependent on U.S. consumers, and have more incentive to increase jobs elsewhere, to enable their goods and services for markets beyond U.S.

It is hard to see the U.S. middle class growing as it has in the past due to these factors.

 

[bUU]

Oh I figure about $40-50k a year ought to do it for me. Now where's the line start, I want mine. I'm entitled to it.

Who said you were entitled to money?

 

[Hiredgun]

I believe that might be a problem with how our education system is set up. We spend a lot of time and effort and money and attention on the top ten percent. These kids need the least help. They need to be put in the self check out lane. Self paced curriculum with guidance as needed. We also need some tough love. Instead of drug testing welfare recipients which is a total crock, let benefits be dependent on their child's truancy up to a certain age.

Sorry but that is B.S. We short change the top 10%. The gifted students, of which my son is one, get kicked to the curb when it comes to funding. All the $$ goes to kids with disabilities and A.D.D. The proportion is not even close. Sadly, the top 10% who are our best and brightest receive very little in resources and funds. Why do you think the U.S. lags so far behind in test scores. Other countries support and fund their intellectual stars who will be future leaders, inventors and job creators. Unfortunately, such common sense is not politically correct in the U.S. Thus, our economy and competitiveness will suffer accordingly. But hey, we will feel good.

 

[bUU]

Sorry but that is B.S. We short change the top 10%. The gifted students, of which my son is one, get kicked to the curb when it comes to funding. All the $$ goes to kids with disabilities and A.D.D.

Why is it an either/or? Supporting the education of those suffering from disabilities is a moral imperative, and supporting the education of the gifted is an economic imperative. Even though moral considerations deserve higher priority than economic imperatives, both are worthy. The decision to only raise enough money through taxes for one of them (and therefore only the moral imperative) is short-sighted and a reflection of collective greed, which is the problem that needs to be confronted, not the fact that the needs of the disabled are being addressed.

 

[Midpack]

Without evidence to that effect, assuming that the 'screw-ups' are a significant component of the whole is uncharitable. Regardless, I feel that helping someone genuinely in need of help is at least an order of magnitude more rewarding that helping a 'screw-up' is disappointing.

If the 'screw ups' turned out to be 75% what would you say? I honestly don't know, and it would make a huge difference if we all knew...

It isn't a matter of affording more. It is a matter of morally acknowledging that the human cost of not doing what's necessary is far higher than the financial cost of doing what is necessary. If all you care about is money, or even if you care about money simply more than you care about human beings, then that probably won't fly, but if you place people above money, it is a much clearer matter.

Again, we disagree. Where did I ever say I care more about money, spare us the moralizing for once. Your views are no better or worse than anothers...

 

[FUEGO]

Who said you were entitled to money?

You asked me to come up with the minimum living conditions I was willing to live under, and that is my answer. I demand a cash payment of $50,000 per annum. To spend as I like in accord with my own individual desires.

Since you have stated money shouldn't be an issue, let's just give the $50,000 per year to everyone. Ignore the fact that that would be a totally untenable situation, right?

The reality is our good will and "moral imperatives" ARE in fact constrained by economic reality. It's great to come up with a big long list of social spending and safety nets, but you can only fund so much. I, for one, wouldn't start spending money to keep able bodied layabouts in some minimum standard of living conditions.

It seems like we have a fundamental difference of opinion. You are in favor of aiming for equality of outcome (this minimum living conditions everyone is entitled to). I am in favor of aiming for equality of opportunity, and letting individuals sort out their own outcome.

 

[Gatordoc50]

Sorry but that is B.S. We short change the top 10%. The gifted students, of which my son is one, get kicked to the curb when it comes to funding. All the $$ goes to kids with disabilities and A.D.D. The proportion is not even close. Sadly, the top 10% who are our best and brightest receive very little in resources and funds. Why do you think the U.S. lags so far behind in test scores. Other countries support and fund their intellectual stars who will be future leaders, inventors and job creators. Unfortunately, such common sense is not politically correct in the U.S. Thus, our economy and competitiveness will suffer accordingly. But hey, we will feel good.

There is a big difference between the 1 percentile and the ten percentile in IQ. The difference between the tenth percentile and thirtieth is usually work ethic, organization, etc. My point was that the money spent on structured teaching of these kids is inefficient. I would prefer self paced with guidance. I'm speaking of high school students. And by self paced, I mean a system that allows and rewards those that accelerate their learning process beyond what is currently taught. These kids would spend most of their days reading and performing exercising and very little time listening to lecture.

 

[Gatordoc50]

There is a big difference between the 1 percentile and the ten percentile in IQ. The difference between the tenth percentile and thirtieth is usually work ethic, organization, etc. My point was that the money spent on structured teaching of these kids is inefficient. I would prefer self paced with guidance. I'm speaking of high school students. And by self paced, I mean a system that allows and rewards those that accelerate their learning process beyond what is currently taught. These kids would spend most of their days reading and performing exercising and very little time listening to lecture.

Exercises not exercising.

 

[Texas Proud]

Why is it an either/or? Supporting the education of those suffering from disabilities is a moral imperative, and supporting the education of the gifted is an economic imperative. Even though moral considerations deserve higher priority than economic imperatives, both are worthy. The decision to only raise enough money through taxes for one of them (and therefore only the moral imperative) is short-sighted and a reflection of collective greed, which is the problem that needs to be confronted, not the fact that the needs of the disabled are being addressed.

OMG... it is so easy to spend other people's money...

[mod edit]

I am starting to smell bacon....

 

[MichaelB]

A most interesting discussion. Thanks to all the participants

Porky Pig Cartoon Ending "That's All Folks!" - YouTube