Top 1% collecting 63% of economic growth since 2000

[Extra Stout]

National income, 2000: $8795.2 billion
National income, 2005, in constant 2000 dollars: $9697.2 billion

Increase in national income, real: $902 billion

Top 1% of Americans, share of national income, 2000: 9%
Top 1% of Americans, share of national income, 2005: 14%

Top 1% of Americans, total income, 2000: $791.6 billion
Top 1% of Americans, total income, 2005: $1357.7 billion

Increase in total income of top 1% of Americans, real: $566.1 billion

Percent increase in total real income of top 1% of Americans, 2000-2005: 71%

Percentage of total increase in real national income going to top 1%: 63%.

Discuss.

[Extra Stout]

U.S. population, 2000: 281,421,906
U.S. population, 2005: 295,734,134

Average increase in income, top 1% of Americans, 2000-2005: $177,809.

Average increase in income, bottom 99% of Americans, 2000-2005: -$241.72.
That's right, individual real income for the bottom 99% declined.

[mookie2001]

some leftists would blame Bush

[xrayzebra]

National income, 2000: $8795.2 billion
National income, 2005, in constant 2000 dollars: $9697.2 billion

Increase in national income, real: $902 billion

Top 1% of Americans, share of national income, 2000: 9%
Top 1% of Americans, share of national income, 2005: 14%

Top 1% of Americans, total income, 2000: $791.6 billion
Top 1% of Americans, total income, 2005: $1357.7 billion

Increase in total income of top 1% of Americans, real: $566.1 billion

Percent increase in total real income of top 1% of Americans, 2000-2005: 71%

Percentage of total increase in real national income going to top 1%: 63%.

Discuss.

Are you saying that the top one percent only got more by taking it
from the bottom percentage? I don't think so. It just doesn't work
that way.

[spurster]

We need to repeal the estate tax so they can make it to 100% and beyond.

[xrayzebra]

^^Someone is stirring the pot, me thinks!

[101A]

Many in the bottom 99% are so busy wringing their hands about the stolen 2000 election that they won't get back to work.

[Extra Stout]

Are you saying that the top one percent only got more by taking it
from the bottom percentage? I don't think so. It just doesn't work
that way.

In order to answer your question, I need to ask one of my own. Do you think that only the top few percent of Americans, i.e., the investor class, the controllers of capital, contribute in any significant way to economic growth?

Or do you think that a broad swath of the work force, aggregately, contributes to economic growth?

[Oh, Gee!!]

Many in the bottom 99% are so busy wringing their hands about the stolen 2000 election that they won't get back to work.

great contribution.

[xrayzebra]

In order to answer your question, I need to ask one of my own. Do you think that only the top few percent of Americans, i.e., the investor class, the controllers of capital, contribute in any significant way to economic growth?

Or do you think that a broad swath of the work force, aggregately, contributes to economic growth?

I think it is both. You must have investment to promote growth and create
jobs and you
must have a work force to sustain growth.

But one thing you and many overlook. Many in the so called "working class"
are also millionaires, did you know that. You don't have to be in the
first group mentioned to obtain that distinction. And many do. And
most stay in their middle class homes and live a middle class live style,
which is not wrong.

[boutons_]

The growth going primarily to companies and top individuals is why so many Americans aren't feeliing good about the economy. They aren't seeing their household income go up.

[xrayzebra]

The growth going primarily to companies and top individuals is why so many Americans aren't feeliing good about the economy. They aren't seeing their household income go up.

Where in the world are you getting your information? Most everyone
is feeling good about the economy. Well I know you aren't, but you
will if mid-terms turn out like you want and then you will want to take
all the credit for the good economy. Want you? :lol

[Extra Stout]

I think it is both. You must have investment to promote growth and create
jobs and you
must have a work force to sustain growth.

Then don't you think both groups should reap the benefits of economic growth? And if they aren't, would it not be fair to say that one group is benefitting at the expense of the other?


But one thing you and many overlook. Many in the so called "working class" are also millionaires, did you know that. You don't have to be in the
first group mentioned to obtain that distinction. And many do. And
most stay in their middle class homes and live a middle class live style,
which is not wrong.
According to the World Wealth Report, there are less than 3 million people in the United States with liquid financial-asset wealth exceeding $1 million.* How can "many" in a working class exceeding 200 million be millionaires?

86% of the financial-asset millionaires in the United States come from inherited wealth. Most of them are not just idle rich idiots like Paris Hilton, but rather, are actively using their wealth to create more wealth. Nevertheless, there aren't many "rags to riches" stories in America 2006. Fewer than 500,000 people in the entire United States have started life as poor or middle-class and become genuinely wealthy.

*This definition excludes "net worth" millionaires with low incomes, such as family farmers and fixed-income retirees.

[Ocotillo]

Where in the world are you getting your information? Most everyone
is feeling good about the economy. Well I know you aren't, but you
will if mid-terms turn out like you want and then you will want to take
all the credit for the good economy. Want you? :lol

Actually, my belief is people's feeling about the economy have very little to do with statistics, government reports and charts. All those numbers and news reports are abstract to the average person.

What people base their belief on how the economy is doing is more personal. Credit card debt, gas prices, did a neighbor or loved one lose a job (or did you?), cost of food, personal raises or lack thereof.

I think the general mood is uncertainy about the economic future at this time due to increased fuel costs. Mix that in with wages are somewhat stagnant and you have the basis for the gloom.

The reports are generally favorable about the economy which I think is attributed to the investor class is doing so well these days. Regular people are treading water these days and that is why gas prices send them over the edge.

[Spurminator]

One of the problems, IMO, is that it is much easier for the wealthy to become more wealthy than it is for the poor/middle class to become wealthy. In my young idealistic point of view, it seems like as one moves up the food chain, each step should be more difficult than the last.

[DarkReign]

One of the problems, IMO, is that it is much easier for the wealthy to become more wealthy than it is for the poor/middle class to become wealthy. In my young idealistic point of view, it seems like as one moves up the food chain, each step should be more difficult than the last.

One would think so, but it isnt true. Every step up is easier than the last.

I come from a very affluent area, lots of richy-rich types. Trust me, they keep getting a whoooole lot more rich.

you never hear about rich people losing it all (lottery winners excluded), yet middle-class folks regularly slip in and out of poverty all the time.

[2centsworth]

86% of the financial-asset millionaires in the United States come from inherited wealth. Most of them are not just idle rich idiots like Paris Hilton, but rather, are actively using their wealth to create more wealth. Nevertheless, there aren't many "rags to riches" stories in America 2006. Fewer than 500,000 people in the entire United States have started life as poor or middle-class and become genuinely wealthy.

*This definition excludes "net worth" millionaires with low incomes, such as family farmers and fixed-income retirees.What's your source? Because Dr. Tom Stanley in the book the Millionaire Next Door argues that 80% of millionaires are 1st generation.

[Extra Stout]

What's your source? Because Dr. Tom Stanley in the book the Millionaire Next Door argues that 80% of millionaires are 1st generation.
It depends how you define millionaire.

There are a lot of statistical "millionaires" with their "wealth" tied up in illiquid assets.

The switch from defined-benefit retirement plans to defined-contribution retirement plans by itself will create a lot of paper "millionaires."

[2centsworth]

It depends how you define millionaire.

There are a lot of statistical "millionaires" with their "wealth" tied up in illiquid assets.

The switch from defined-benefit retirement plans to defined-contribution retirement plans by itself will create a lot of paper "millionaires."
First, wealth is wealth whether your assets are illiquid or liquid.

Second, money in 401ks are usually invested in Stocks, Bonds, and or Cash. Those three assets are more liquid than real estate. I can cash in my stock portfolio and get a check tomorrow if I want.

So again I ask where you get your information because it directly contradicts Dr. Tom Stanley's research on Millionaires.

[Extra Stout]

First, wealth is wealth whether your assets are illiquid or liquid.
Oh, I profoundly disagree with that.


Second, money in 401ks are usually invested in Stocks, Bonds, and or Cash. Those three assets are more liquid than real estate. I can cash in my stock portfolio and get a check tomorrow if I want.
In the context of retirement accounts, that money is taking the place of earnings potential. Right now, I earn X dollars per year. I don't add up the next thirty years of anticipated salary at X dollars/year and calculate that as part of my net worth, but the money I squirrel away to support myself once I stop working does count as net worth. This is just an accounting distinction.

Also, in past decades, companies were the ones doing the saving and investing. They were the ones with the assets. Now, the companies are contributing money to people's individual accounts. In the past, when determining whether somebody was a millionaire, you wouldn't look at the NPV of their vested pension. But now that people have personal investment portfolios for the same purpose, it counts as net worth. But the people aren't actually any richer. Their income is essentially the same as it would have been had they been getting a pension check from the company rather than the interest from an annuity or perpetuity. But now, suddenly, they're "millionaires." It's all on paper.

And you can't get at that money until the age of 59 1/2 without major penalties. And, it hasn't been taxed yet. So there's an enormous a gap between the value on the quarterly statement (which would be used to calculate "net worth") and its actual liquid value.


So again I ask where you get your information because it directly contradicts Dr. Tom Stanley's research on Millionaires.
My data on the wealthy comes from the World Wealth Report. My insight on how the proliferation of personal retirement investment creates millions of new "millionaires" that are nothing more than an accounting artifact is my own.

[Extra Stout]

I just realized I made an obvious error in my above reasoning.

The switch to personal retirement accounts from defined pensions, for those who manage their retirements wisely, is a HUGE transfer of wealth from corporations to individuals.

If a have a pension, once I die, the flow of income is gone.

If a have a nest egg saved up in a 401(k), and just live off the interest, unless medical costs wipe out my savings, my heirs will have a substantial estate.

[Guru of Nothing]

http://www.laxandmandel.com/german%20choc%20cake.jpg

[xrayzebra]

One would think so, but it isnt true. Every step up is easier than the last.

I come from a very affluent area, lots of richy-rich types. Trust me, they keep getting a whoooole lot more rich.

you never hear about rich people losing it all (lottery winners excluded), yet middle-class folks regularly slip in and out of poverty all the time.

You got to be kidding me. Middle-class folks regularly slip in and out of
poverty. Do you have a middle class education or what? First, how
would you know. Are you from the rich "class" or the middle "class" or
just from the "no" class. I think from the later. Naw, just a loser. That
is more you class. :lol

[xrayzebra]

Actually, my belief is people's feeling about the economy have very little to do with statistics, government reports and charts. All those numbers and news reports are abstract to the average person.

What people base their belief on how the economy is doing is more personal. Credit card debt, gas prices, did a neighbor or loved one lose a job (or did you?), cost of food, personal raises or lack thereof.

I think the general mood is uncertainy about the economic future at this time due to increased fuel costs. Mix that in with wages are somewhat stagnant and you have the basis for the gloom.

The reports are generally favorable about the economy which I think is attributed to the investor class is doing so well these days. Regular people are treading water these days and that is why gas prices send them over the edge.

Have you been on loop 410 of 1604 lately. I don't think all those drivers
are from the rich. I felt like it was rush hour at 1 pm yesterday.

[Ocotillo]

Have you been on loop 410 of 1604 lately. I don't think all those drivers
are from the rich. I felt like it was rush hour at 1 pm yesterday.

Welll let me give you an example here in town. I have a friend who is in sales like I am. He makes close to six figures but he is debt up to his eyebrows. He lives paycheck to paycheck and is worried about whether he will keep his job because if it goes, for whatever reason, he is in a world of sh*t with a wife and two kids. He is conservative Republican and he is nervous about the economy because he can't afford inflation (perhaps triggered by rising energy costs) or a lay off.

So, he is making a good living, the local economy is generally considered good but he is nervous.

His situation has nothing to do with what the GDP is or the latest unemployment numbers, whatever economic statistic you can dig up. His situation is his own fault but his perception of what is around him is colored by it.

That's all I am saying.

(And I bet you lots of those people on 1604 and 410 are carrying too much debt at this time and living beyond their means)

[gtownspur]

^You're Republican freind is irresponsible. He needs to prioritize his money.

[Cant_Be_Faded]

But Capitilism is the only method by which every human being has equal rights to do anything he wants to with enough "hard work" !!!

[gtownspur]

Capitalism, is the only economic system that actually awards "hard work".

Socialism does not recognize hardwork since working hard won't be awarded.

[Nbadan]

Socialism does not recognize hardwork since working hard won't be awarded.

Tell that to the 2 billion Chinese.

Every country is some mix of socialism and Capitalism, it just so happens that despite our large economy, as a percentage of our GDP, Americans do less for the poor, mentally ill, disadvantaged, old, and past war veterans than any other developed country.

[xrayzebra]

Tell that to the 2 billion Chinese.

Every country is some mix of socialism and Capitalism, it just so happens that despite our large economy, as a percentage of our GDP, Americans do less for the poor, mentally ill, disadvantaged, old, and past war veterans than any other developed country.

Gee dan, we could do like your "model" countries and just kill them. Would
that be okay?

[Extra Stout]

Tell that to the 2 billion Chinese.

Every country is some mix of socialism and Capitalism, it just so happens that despite our large economy, as a percentage of our GDP, Americans do less for the poor, mentally ill, disadvantaged, old, and past war veterans than any other developed country.
China is fascist now.

[velik_m]

China is fascist now.

sad, but true. State run capitalism.

[xrayzebra]

Now ES, I want you to read this column from todays E-N and tell me one more
time how the rich are screwing over everyone. Okay!


T.R. Fehrenbach: 'Fix' the tax code? Someone will pay

Web Posted: 04/30/2006 12:00 AM CDT

San Antonio Express-News

I planned to publish this column prior to April 17, but then I read that: 1) we devote about 3.5 billion hours to doing tax returns (26 hours each); 2) we spend $140 billion on tax preparation and compliance each year; 3) some 61 percent of American taxpayers hire professionals to do the dirty work. I didn't want to add to the agony or interfere with the business.

You know all that or some version of it. Every year, at least since Jimmy Carter said our tax system is a disgrace to the human race, publications and politicians rail at its complexity and confusion. Of course, you know nothing is ever done, or will be done, about it. In fact, the system keeps getting worse.

Blame Democrats. Democrats generally resist real tax reform because they fear it would result in lowered taxes and revenues, which is against their religion. Or give the rich a bigger break, which would break their little redistributionist hearts.

Blame Republicans. Republicans believe in tax reform, but not if it tampers with current exceptions and exemptions that they have craftily engineered. The GOP approach is incremental, doubling the tax breaks for education costs and energy companies since 1995. This adds to complexity: Since 2000, Republican Congresses and president have added some 20,000 pages to federal tax regs, also increasing the number of IRS forms from 475 to 582.

Nobody now approves of the tricky alternative minimum tax, designed to catch the super-rich (who, being able to hire super-accountants, largely avoid it) but now snags millions of middle-class folks. The AMT punishes deductions and exemptions, such as those for medical care, dependents and state taxes. However, the AMT is not triggered by munis, that is, tax-free income. Local governments had too much clout in Congress for that. However, what do you replace the AMT with, if you give it a deserved deep-six?

To reform the tax system, it inevitably requires that we tax somebody less, and somebody more, than we do now. If you believe this is politically easy, observe the pain of the Texas Legislature juggling school taxes.

Unfortunately, much of the tax-cutting of recent years has not resulted in as much relief as proponents claim. This is because it was offset by cutting exemptions and deductions. For example (and the funny papers rarely point out this), people with incomes of $110,000 lose credits and exemptions, which actually raises their tax rate.

The most common gripe about the tax code is that it's not fair. The question, however, is, what is fair? What one family might see as fair another sees as robbery.

No tax code in foreseeable time frames is going to reduce American incomes to anything approaching equality or engage in much greater redistribution than we have now. The Framers deliberately left economic parity out of the Constitution. I think most current unfairness is created by the code's byzantine complexity, in which nearly every economic activity is treated differently. Actually, the code is quite progressive — more progressive than formerly, even after the so-called tax breaks for the rich.

The top 0.1 percent now pay at an over-30 percent rate; the top 1 percent slightly under that; the top 20 percent average out at 25 percent; the middle 20 percent at 15 percent; and the bottom 20 percent pay at less than 5 percent.

This is clearly progressive — unless the aim is redistribution. We already have some of that with the earned income tax credit; lower-income households with children have a negative 10 percent tax rate. The bottom 60 percent pay only 0.6 percent of all income tax.

Forty-three million filers (32 percent) pay nothing or receive payment. Most Americans pay more payroll taxes, which go to Social Security and Medicare, than income tax.

In short, the poor derive far more from government than they pay for. Blame unfairness on society, not the tax code.
Online at: http://www.mysanantonio.com/opinion/columnists/trfehrenbach/stories/MYSA043006.3H.fehrenbach.1365939a.html
================================================== =============

Now did you notice how many people don't pay any taxes or in the negative
tax rate?

[Vashner]

Who do you think spends money to open these new businesses dumbass?

Poor people?

[xrayzebra]

^^Who are you talking to? :huh

[Vashner]

to the original post.

Most of the time here I go off the original post.. Cause I have almost every leftist here on ignore.

[Cant_Be_Faded]

Capitalism, is the only economic system that actually awards "hard work".

Socialism does not recognize hardwork since working hard won't be awarded.


I think this is where human beings as a whole come to a fork in the road: one road is labelled "Socaialism" with all its proven faults, and the other is labelled "Capitalism" with all its effects we see today.

The majority seem to take Capitilism route because of its better results than Socialism. However, the faults are still present in the Capitalistic System. Furthermore, due to bling bling and consumer driven morals we have today, we actually see many of the adverse effects in a good light. I think its time someone smart in this so called greatest country in the world comes up with a better system.

Think outside the box. There is no excluse dichotomy of Capitalistism and Socialism outside the human brain. We created these sytems, and can create more. Why stop at Capitalism?

1% collecting 63% of economic growth is a moral tragedy: a sin. Any true believer of any fucking faith would realize that. All that money in 1% of people's hands, yet we still have starving people in the world, and in our own country.
This country's on the highway to hell unless we change something. The gap between Uber Rich and Moderately poor will continue to widen.

I REMEMBER IT'S BEEN WIDENING SINCE I WAS LIKE 10 YEARS OLD. Since back in the day, I remember hearing news like this. And it continues. Probably has been widening since the moment we set up our independent economy.

At what point will it be too much?

And this doesn't apply to all you upper-middle and upper class neocons who want so desperately to be in that top 1% that you ignore the common welfare and pretend you are rich too. Ya'll are posers, and yes-men. I think it will "be too much" once you yourselves start experience the effects of this gap widening.

[RandomGuy]

One would think so, but it isnt true. Every step up is easier than the last.

I come from a very affluent area, lots of richy-rich types. Trust me, they keep getting a whoooole lot more rich.

you never hear about rich people losing it all (lottery winners excluded), yet middle-class folks regularly slip in and out of poverty all the time.

Actually he was agreeing with you, re-read his post.

It is hard for lower and middle class americans to achieve income growth because of the fact that they have to spend almost all of their income on "the basics", food, shelter, etc.

They have little or no money to invest to increase income. Aggravating this cycle is the lack of financial education that robs them of the ability to make good economic decisions when they DO have available capital.

Wealthy types do tend to spend more on food and shelter and so forth, but they still have quite a bit of spare capital to invest.

Both poverty and wealth cycles tend to be stable over time for the above reasons. The thing about the increasing share of national wealth going to the wealthy is that investment income tends to follow an exponential growth model, as more income becomes available to invest.

[xrayzebra]

Actually he was agreeing with you, re-read his post.

It is hard for lower and middle class americans to achieve income growth because of the fact that they have to spend almost all of their income on "the basics", food, shelter, etc.

They have little or no money to invest to increase income. Aggravating this cycle is the lack of financial education that robs them of the ability to make good economic decisions when they DO have available capital.

Wealthy types do tend to spend more on food and shelter and so forth, but they still have quite a bit of spare capital to invest.

Both poverty and wealth cycles tend to be stable over time for the above reasons. The thing about the increasing share of national wealth going to the wealthy is that investment income tends to follow an exponential growth model, as more income becomes available to invest.

You are so full of it. "It is hard for lower and middle class americans to achieve income growth because of the fact that they have to spend almost all of their income on "the basics", food, shelter, etc." You really do need a course in reality.

[RandomGuy]

You are so full of it. "It is hard for lower and middle class americans to achieve income growth because of the fact that they have to spend almost all of their income on "the basics", food, shelter, etc." You really do need a course in reality.

Ok explain why this is incorrect, and please try to use reasoning backed by some economics, your non sequitur is a bit puzzling to me.

[xrayzebra]

Because what you said is an untrue statement. All their money
on basic's. Get real.

[RandomGuy]

Because what you said is an untrue statement. All their money
on basic's. Get real.

"because I said so" is not an explanation. Please elaborate as to WHY it is untrue.

[RandomGuy]

to the original post.

Most of the time here I go off the original post.. Cause I have almost every leftist here on ignore.


HAHAHAHAHAHAHAHAHAHAHAHAHA

Attilla the Hun would be a "leftist" in your book.

[Extra Stout]

Who do you think spends money to open these new businesses dumbass?

Poor people?
I think it's funny that you consider me a leftist, BTW.

I understand how the economic model is supposed to work. If it were working, and the wealthy were spending the money to open the new businesses so that the middle class would get better-paying jobs, then the economic numbers would look different.

So something is not working.

[Extra Stout]

Now did you notice how many people don't pay any taxes or in the negative
tax rate?
I think you are largely correct. Lots of people don't pay taxes. However, I don't think you grasp my point.

What has taken place is a shift of the tax burden from the investor class to the middle class professionals and to small business owners, not to the working poor or lower middle class.

This is not Republicans preying on Democrats. This is one group of Republicans exploiting another Republican constituency, and figuring we won't notice because we are conditioned to think that anybody who asks questions must be a pinko liberal communist Jane-Fonda-loving hippie protest-marching queer. You and Vashner have been conditioned quite nicely.

Both parties are in the tow of big business and don't give a crap what happens to ordinary folks. The Republicans try to pull the wool over our eyes with "tradtional values" while they rob us blind. The Democrats try to pull the wool over our eyes by getting us addicted to the government dole, so they can keep us poor and stupid. They're all out to get theirs, and to feast at the trough of tax revenues for themselves and their buddies.

[Extra Stout]

Because what you said is an untrue statement. All their money
on basic's. Get real.
In the blue states, where the cost of living is exorbitant, what RG says is largely true. One might ask whether execution of the local ideology has anything to do with the inhospitable economic environment for the working classes.

But that has nothing to do with my point.

[RandomGuy]

I think you are largely correct. Lots of people don't pay taxes. However, I don't think you grasp my point.

What has taken place is a shift of the tax burden from the investor class to the middle class professionals and to small business owners, not to the working poor or lower middle class.

This is not Republicans preying on Democrats. This is one group of Republicans exploiting another Republican constituency, and figuring we won't notice because we are conditioned to think that anybody who asks questions must be a pinko liberal communist Jane-Fonda-loving hippie protest-marching queer. You and Vashner have been conditioned quite nicely.

Both parties are in the tow of big business and don't give a crap what happens to ordinary folks. The Republicans try to pull the wool over our eyes with "tradtional values" while they rob us blind. The Democrats try to pull the wool over our eyes by getting us addicted to the government dole, so they can keep us poor and stupid. They're all out to get theirs, and to feast at the trough of tax revenues for themselves and their buddies.

Bingo.

[RandomGuy]

In the blue states, where the cost of living is exorbitant, what RG says is largely true. One might ask whether execution of the local ideology has anything to do with the inhospitable economic environment for the working classes.

But that has nothing to do with my point.

It is true in both the blue and the red states. The red states tend to have lower costs of living, but also lower levels of income and education. I grew up on one red state and moved to another, heh.

I will not hold my breath waiting for Xray to back up his knee-jerk, "whatever-RandomGuy-said-must-be-wrong-because-HE-said-it" post. I merely hold up the lack of intelligent, reasoned response as proof that Ray couldn't reason his way out of a paper bag... :lol

[xrayzebra]

It is true in both the blue and the red states. The red states tend to have lower costs of living, but also lower levels of income and education. I grew up on one red state and moved to another, heh.

I will not hold my breath waiting for Xray to back up his knee-jerk, "whatever-RandomGuy-said-must-be-wrong-because-HE-said-it" post. I merely hold up the lack of intelligent, reasoned response as proof that Ray couldn't reason his way out of a paper bag... :lol

You response shows you have no sense of reasoning. By your standards
most people are on the verge of starvation. Not many people stay in the
"lower levels of income" their whole work life. They move on up the ladder as
they gain in experience and longevity on the job. Your lack of common
sense shows with every one of your post. Just as most people do not
continue to hold burger flipper jobs their whole life, although some, through
their own choice may stay with the chain and work themselves up into
management positions, which pay some pretty good money. Just as
some who go to work for Wal-Mart, work themselves on up in management and make
some big bucks.

[Extra Stout]

You response shows you have no sense of reasoning. By your standards
most people are on the verge of starvation. Not many people stay in the
"lower levels of income" their whole work life. They move on up the ladder as
they gain in experience and longevity on the job. Your lack of common
sense shows with every one of your post. Just as most people do not
continue to hold burger flipper jobs their whole life, although some, through
their own choice may stay with the chain and work themselves up into
management positions, which pay some pretty good money. Just as
some who go to work for Wal-Mart, work themselves on up in management and make
some big bucks.
You have given an accurate description of the kind of career one could expect back in the days when you were starting out.

It's not the same now. In Texas, it's better than in most places, because the economy is growing.

[Extra Stout]

It is true in both the blue and the red states. The red states tend to have lower costs of living, but also lower levels of income and education. I grew up on one red state and moved to another, heh.

I don't necessarily agree with this. The real cost of living, even adjusted for regional income gradients, is much higher along the coasts. I've seen the comparisons between working-class families in Houston, Atlanta, Los Angeles, and Boston. Living in the first two, all things being equal including access to services and education, is considerably more affordable.

You may have been thinking about economically depressed areas like Louisiana. It's dirt cheap to live there, but almost nobody has any money, so they're strruggling to survive anyway.

[2centsworth]

I think this is where human beings as a whole come to a fork in the road: one road is labelled "Socaialism" with all its proven faults, and the other is labelled "Capitalism" with all its effects we see today.

The majority seem to take Capitilism route because of its better results than Socialism. However, the faults are still present in the Capitalistic System. Furthermore, due to bling bling and consumer driven morals we have today, we actually see many of the adverse effects in a good light. I think its time someone smart in this so called greatest country in the world comes up with a better system.

Think outside the box. There is no excluse dichotomy of Capitalistism and Socialism outside the human brain. We created these sytems, and can create more. Why stop at Capitalism?

1% collecting 63% of economic growth is a moral tragedy: a sin. Any true believer of any fucking faith would realize that. All that money in 1% of people's hands, yet we still have starving people in the world, and in our own country.
This country's on the highway to hell unless we change something. The gap between Uber Rich and Moderately poor will continue to widen.

I REMEMBER IT'S BEEN WIDENING SINCE I WAS LIKE 10 YEARS OLD. Since back in the day, I remember hearing news like this. And it continues. Probably has been widening since the moment we set up our independent economy.

At what point will it be too much?

And this doesn't apply to all you upper-middle and upper class neocons who want so desperately to be in that top 1% that you ignore the common welfare and pretend you are rich too. Ya'll are posers, and yes-men. I think it will "be too much" once you yourselves start experience the effects of this gap widening.
what's a sin is you believe what you read on a message board. Capitalism is the only economic system that works in a FREE Society.

[2centsworth]

Oh, I profoundly disagree with that. Support your disagreement with facts.



In the context of retirement accounts, that money is taking the place of earnings potential. Right now, I earn X dollars per year. I don't add up the next thirty years of anticipated salary at X dollars/year and calculate that as part of my net worth, but the money I squirrel away to support myself once I stop working does count as net worth. This is just an accounting distinction.
Someone's ability to consume is not a measurement of wealth. Simple Net Worth calculation is a better measurement. Plus, the X dollars you save have nothing to do with earnings potential, your ability to earn more money does. In addition, your savings accounts do earn income but on a tax deferred basis. Nevertheless, I don't see how your misunderstanding of finance leads you to believe that most millionaires inherit their wealth. Again, studies show 80% of millionaires are FIRST GENERATION!


Also, in past decades, companies were the ones doing the saving and investing. They were the ones with the assets. Now, the companies are contributing money to people's individual accounts. In the past, when determining whether somebody was a millionaire, you wouldn't look at the NPV of their vested pension. But now that people have personal investment portfolios for the same purpose, it counts as net worth. But the people aren't actually any richer. Their income is essentially the same as it would have been had they been getting a pension check from the company rather than the interest from an annuity or perpetuity. But now, suddenly, they're "millionaires." It's all on paper.ALL on Paper, DUH. What do you want the cash stored in your garage? How about $1,000,000 in gold coins, is that better. Stocks, bonds, and cash is paper money but it's real. It spends just the same as whatever you use for money.


And you can't get at that money until the age of 59 1/2 without major penalties. And, it hasn't been taxed yet. So there's an enormous a gap between the value on the quarterly statement (which would be used to calculate "net worth") and its actual liquid value.again, you're out of your element. You argue about the benefit of income over wealth and then you complain that income is taxable. Money is in your account and you can gain access to it before 59 1/2 without penalties. Net worth whether in real estate, a business, or in a retirment account if invested over a long period of time will have some built up taxable gains. No one sells all of their assets and spends it in one year unless you're some type of drug addict. Most intelligent people live of the interest, Now that's REAL wealth.

BTW, there's no enormous gap. The economic value of the Pre-TAX contribution more than makes up for any taxes you pay later in life. Unless, someone does as you suggest and spends the savings in order to act wealthy.






My data on the wealthy comes from the World Wealth Report. My insight on how the proliferation of personal retirement investment creates millions of new "millionaires" that are nothing more than an accounting artifact is my own. Your own because no one who undestands finance would argue the same.

[RandomGuy]

You response shows you have no sense of reasoning. By your standards
most people are on the verge of starvation. Not many people stay in the
"lower levels of income" their whole work life. They move on up the ladder as
they gain in experience and longevity on the job. Your lack of common
sense shows with every one of your post. Just as most people do not
continue to hold burger flipper jobs their whole life, although some, through
their own choice may stay with the chain and work themselves up into
management positions, which pay some pretty good money. Just as
some who go to work for Wal-Mart, work themselves on up in management and make
some big bucks.

Thank you, I appreciate it, and apologize for being a bit of a jerk above.

Along the way they also tend to get married and have kids, which mitigates the increased earnings to some extent.

BUT

I did not mean that people's income didn't rise as they got older. Merely that the amount of income available for saving and investing was proportionately much smaller.

Wealthy people's share of income from work is small compared to income from savings and investments. THIS is where all of that growth in income has come from.

Education is the best way to move up in income followed by saving and investing. But the cost of higher education AND health care have been rising faster than inflation for 20 years while wages have stagnated.

SOOOOOOO the "less-than-wealthy" have seen their proportion of income available for investing drop as their wages (in the aggragate) have not risen, but health care and higher education for themselves and their children has more than eaten up any gains.

Of course people earn more over time, Ray. But the amount they have available to invest and REALLY improve their incomes is small because of the "bottom" line of available investment income.

Consider:

Two people. Both need, say $10,000 in food, shelter etc. Person one makes $10,500. Person two makes $15,000.

After their expenses the second guy has TEN TIMES the amount of available income to invest than person two, even though person two only earns about 48% more.

This is what I was describing.

[Extra Stout]

Thank you, I appreciate it, and apologize for being a bit of a jerk above.

Along the way they also tend to get married and have kids, which mitigates the increased earnings to some extent.

BUT

I did not mean that people's income didn't rise as they got older. Merely that the amount of income available for saving and investing was proportionately much smaller.

Wealthy people's share of income from work is small compared to income from savings and investments. THIS is where all of that growth in income has come from.

Education is the best way to move up in income followed by saving and investing. But the cost of higher education AND health care have been rising faster than inflation for 20 years while wages have stagnated.

SOOOOOOO the "less-than-wealthy" have seen their proportion of income available for investing drop as their wages (in the aggragate) have not risen, but health care and higher education for themselves and their children has more than eaten up any gains.

Of course people earn more over time, Ray. But the amount they have available to invest and REALLY improve their incomes is small because of the "bottom" line of available investment income.

Consider:

Two people. Both need, say $10,000 in food, shelter etc. Person one makes $10,500. Person two makes $15,000.

After their expenses the second guy has TEN TIMES the amount of available income to invest than person two, even though person two only earns about 48% more.

This is what I was describing.
Assming, of course, that either of them has the good sense to invest anything, rather than blowing it on spinner rims.

[xrayzebra]

Thank you, I appreciate it, and apologize for being a bit of a jerk above.

Along the way they also tend to get married and have kids, which mitigates the increased earnings to some extent.

BUT

I did not mean that people's income didn't rise as they got older. Merely that the amount of income available for saving and investing was proportionately much smaller.

Wealthy people's share of income from work is small compared to income from savings and investments. THIS is where all of that growth in income has come from.

Education is the best way to move up in income followed by saving and investing. But the cost of higher education AND health care have been rising faster than inflation for 20 years while wages have stagnated.

SOOOOOOO the "less-than-wealthy" have seen their proportion of income available for investing drop as their wages (in the aggragate) have not risen, but health care and higher education for themselves and their children has more than eaten up any gains.

Of course people earn more over time, Ray. But the amount they have available to invest and REALLY improve their incomes is small because of the "bottom" line of available investment income.

Consider:

Two people. Both need, say $10,000 in food, shelter etc. Person one makes $10,500. Person two makes $15,000.

After their expenses the second guy has TEN TIMES the amount of available income to invest than person two, even though person two only earns about 48% more.

This is what I was describing.


You have a very negative outlook on life. One not based on experience.
I have one that is based on experience and I will tell you that most
people, there are always exceptions, prosper as they age. There is
an old adage, you cant afford children till after they are grown. Which
is a very true statement. But people have children and they do afford
them. People now days live in bigger houses, own more cars, most families
have two or MORE, have color televisions in every room and have more
time off than ever and make more trips than I did or my parents did or
my Grandparents did. You have no idea what your forefathers went
through. Many had no indoor plumbing, no central heat, no refrigeration,
maybe one car and one radio in many cases battery operated because
they had no electricity. And it is just in my lifetime, I have seen things
progress to the point that most of these conditions no longer exist. And
believe me when I tell you the later description of life was the norm for
many people. It is existed for my grandparents for many years on their
small farms. You need to stop and smell the roses and thank the good
Lord for what you have and will have in the future because opportunities
abound in this world. Not only in the United States but everywhere.

You know many people think that if people obtain wealth or grow their
wealth that someone is losing out. That is an outright untruth. Wealth
is created not by taking from others, but by ones efforts, hardwork in
most cases. Inherited wealth cannot be sustained unless it is taken
care of and will be lost with neglect, which has been proven in case
after case.

[RandomGuy]

Assming, of course, that either of them has the good sense to invest anything, rather than blowing it on spinner rims.

A very valid point.

Savings rates have declined alarmingly and have even dipped into negative (meaning spending faster than earning) numbers.

That is another thing that I think we as a society could/should be doing better at: educating our kids about finance topics.

This summer I will be donating some time/effort into the Texas Society of CPA's finance education program that goes to schools and provides lectures, and I will probably help deliver some of those lectures in the fall.

[RandomGuy]

You have a very negative outlook on life. One not based on experience.
I have one that is based on experience and I will tell you that most
people, there are always exceptions, prosper as they age. There is
an old adage, you cant afford children till after they are grown. Which
is a very true statement. But people have children and they do afford
them. People now days live in bigger houses, own more cars, most families
have two or MORE, have color televisions in every room and have more
time off than ever and make more trips than I did or my parents did or
my Grandparents did. You have no idea what your forefathers went
through. Many had no indoor plumbing, no central heat, no refrigeration,
maybe one car and one radio in many cases battery operated because
they had no electricity. And it is just in my lifetime, I have seen things
progress to the point that most of these conditions no longer exist. And
believe me when I tell you the later description of life was the norm for
many people. It is existed for my grandparents for many years on their
small farms. You need to stop and smell the roses and thank the good
Lord for what you have and will have in the future because opportunities
abound in this world. Not only in the United States but everywhere.

You know many people think that if people obtain wealth or grow their
wealth that someone is losing out. That is an outright untruth. Wealth
is created not by taking from others, but by ones efforts, hardwork in
most cases. Inherited wealth cannot be sustained unless it is taken
care of and will be lost with neglect, which has been proven in case
after case.

I have already agreed with you on this point: People do tend to "prosper with age".

As for a "negative outlook": :lol I am an optimist in the long-term, despite what you seem to think. I have been called overly optimistic by a liberal on another forum, and overly negative by a conservative on this one. For the frecord: I am an optimist about the future. For the present: I am a pragmatist/realist.

As I stated above in a post that you don't seem to have read all the way through, there are two ways of growing income: earned and investment.

If you don't have disposable or "marginal" income, one of those avenues is closed to you.

[2centsworth]

If you don't have disposable or "marginal" income, one of those avenues is closed to you.
It's not closed. Get a second job or reduce your expenses. It's that simple unless childcare is an issue, but even that can be figured out.

[RandomGuy]

It's not closed. Get a second job or reduce your expenses. It's that simple unless childcare is an issue, but even that can be figured out.

Up to a point, you are right. But there is a very definite point and this point is reflected in the "poverty line" that the government uses, past which you aren't giving up, say cable TV, you are instead giving up things like food.

There is a certain amount of money one must spend for very basic items for simple physical survival (ala maslow's heirachy of needs), such as shelter, clothes, and food. Past this point, one simply gets better food, better shelter etc. This point is also reflected in the tax code in terms of standard deductions and personal exemptions that are deducted before any income tax is paid, but that is another topic.

From what I have read, Americans tend to be overly materialistic and tend to expand their spending habits to fit their incomes, especially at the expense of saving.

[RandomGuy]

It's not closed. Get a second job or reduce your expenses. It's that simple unless childcare is an issue, but even that can be figured out.

Aye, there's the rub.

TWO jobs. If you are working two jobs because you presumedly can't make ends meet, do you have the time to get the education that is required to move "up the ladder"? (hint: the answer is not "yes")

We are slowly phasing out the minimum wage by not raising it, and in return we have been doing our children enormous damage by taking parents away from their children with longer work weeks to make ends meet.

[Aggie Hoopsfan]

1. Live within your means.

2. Invest.

The original post reminds me of something one of my economic professors told me - rich people invest in the stock market and mutual funds. Poor people invest in the lottery.

[RandomGuy]

1. Live within your means.

2. Invest.

The original post reminds me of something one of my economic professors told me - rich people invest in the stock market and mutual funds. Poor people invest in the lottery.

And if you have no money to invest?

[RandomGuy]

It's not closed. Get a second job or reduce your expenses. It's that simple unless childcare is an issue, but even that can be figured out.

The other problem of course is that when you have to work so hard, that you can't be around enough to be a good parent, you end up with kids that end up being a drain on the system anyways.

[xrayzebra]

The other problem of course is that when you have to work so hard, that you can't be around enough to be a good parent, you end up with kids that end up being a drain on the system anyways.

More negative thoughts from a progressive.
:lol

[Extra Stout]

The other problem of course is that when you have to work so hard, that you can't be around enough to be a good parent, you end up with kids that end up being a drain on the system anyways.
But during the Depression, both parents would have to work -- if they were lucky enough to find it. And often the kids had to work too.

Yet those kids ended up being some of the highest achievers of any generation in history.

[xrayzebra]

But during the Depression, both parents would have to work -- if they were lucky enough to find it. And often the kids had to work too.

Yet those kids ended up being some of the highest achievers of any generation in history.

You are so right!

[Extra Stout]

You are so right!
The culture was different back then. In those days, it was the American Dream to work hard, get a decent job, buy a house with a white picket fence, and provide for your kids so they could do even better.

Now the American Dream is to get paid for doing nothing.

[Extra Stout]

Back then, we also didn't have the overwhelming consumerist mentality that we do now. It starts getting beat into kids' heads from the first time they get sat down in front of a TV.

[xrayzebra]

Back then, we also didn't have the overwhelming consumerist mentality that we do now. It starts getting beat into kids' heads from the first time they get sat down in front of a TV.

Guess we can take credit/blame for that. Most wanted better for their
kids than they had. And you see even more of that today. Just look at
the "toys" they have for children. My goodness, I would never have
thought of spending the amount of money that parents do today on their
kids, just for toys. But again, my kids do it for theirs, and maybe it was
what they were taught. But seems I used to get into trouble for refusing
to buy what I considered junk for the kids.
:madrun

[Extra Stout]

One of biggest cultural failings is the sense of entitlement that we now instill in our children. We've also taught them that the key to happiness and success in life is buying things. The kids aren't expected to work hard for any of it.

So, we get a society of people with no work ethic, who expect handouts, and bury themselves in debt buying stuff on credit, waiting for somebody to pay it off like Mommy and Daddy used to.

That, in a nutshell, is what happened to America.

[Oh, Gee!!]

One of biggest cultural failings is the sense of entitlement that we now instill in our children. We've also taught them that the key to happiness and success in life is buying things. The kids aren't expected to work hard for any of it.

So, we get a society of people with no work ethic, who expect handouts, and bury themselves in debt buying stuff on credit, waiting for somebody to pay it off like Mommy and Daddy used to.

That, in a nutshell, is what happened to America.

What responsibilty lies with the corporations who market so heavily to the American consumer, especially to the children? And the credit companies who target college freshman with easy lines of credit? And the rent-to-own and payday loan companies who target poor people? And the home equity financing companies that target the elderly?

[101A]

What responsibilty lies with the corporations who market so heavily to the American consumer, especially to the children? And the credit companies who target college freshman with easy lines of credit? And the rent-to-own and payday loan companies who target poor people? And the home equity financing companies that target the elderly?

None. They did what they did to/with consenting adults.

Unless you want to take away ignorant people's rights to choose what they do with their own money/credit....

[Extra Stout]

What responsibilty lies with the corporations who market so heavily to the American consumer, especially to the children? And the credit companies who target college freshman with easy lines of credit?
PLENTY.

And while I understand that parents have the responsibility to monitor the messages their kids are exposed to, parents don't have a team of marketing whizzes and PhD psychologists at their disposal like the advertisers do. The dynamic truly is predatorial. And the financiers have cultivated the kind of consumer population they want.

It does take clear thinking and wisdom to see past the dominant culture.

[Extra Stout]

None. They did what they did to/with consenting adults.

Unless you want to take away ignorant people's rights to choose what they do with their own money/credit....
This isn't a political argument; this is a cultural argument. People who are wrapped up in the consumerist mentality impoverish themselves.

Though your point about "consenting adults" does not apply to the markwting towards children. That marketing is insidious and manipulative. You may think it's up to the parents to fight that. Fine. Keep in mind that the advertisers spends millions reseraching ways into communicating to kids how to manipulate their parents to give them what they want. They intentionally present the profligate lifestyle in shows targeted toward children and teens as "normal." So even if kids are isolated from these messages in media, they become so pervasive in youth culture that it becomes futile to prevent your childrens' exposure to it.

But I do not claim that it is acceptable to acquiesce to these influences. Vigilance by the parent is compulsory, especially for those who understand what is going on. But far too many are oblivious to this because they too are conditioned to think this is the way things are supposed to be.

I don't think that government is the solution, however. I think that neighbors, civic organization, churches, non-profits, etc., should be getting the word out, because government has too much of a conflict of interest.

-----------------------------------------------------------------------

Upon review, I must bow to 2centsworth on this issue about accumulation of wealth. I reviewed my own finances, and have determined that even to the moderate degree to which I have constrained my standard of living compared to my peers, I will have a hard time not saving a couple million dollars by the time I reach my fifties. And I didn't start out with a silver spoon, and I don't earn a spectacular salary. I just don't blow it all on spinner rims.

[xrayzebra]

Companies have always advertised. Kids, young people, and yes adults don't
necessarily have to believe that junk. I remember some years ago in a management
class they had a film, I think it was called: "You are what you are when you were"
or something like that and the man who made it was a Professor from the University
of Colorado. His point was even within families, each person was a different
generation and influenced by the world around them. I never quite bought into the
whole thing he was trying to present, but I did get a little insight into what may
influence children. But never, never leave out the influence that parents have
on their children. Many kids return to their roots later in life after trying the
junk put out and finding out Mom and Dad weren't so dumb after all.