Top 1% collecting 63% of economic growth since 2000

[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 ing 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 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": 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.

[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.

[Extra Stout]

One of biggest cultural failings is the sense of en lement 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 nuts , is what happened to America.

[Oh, Gee!!]

One of biggest cultural failings is the sense of en lement 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 nuts , 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 ac ulation 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.