Goodbye, middle class

[msm859]

Here's a chilling statistic:

* For every dollar the Federal Government collect in taxes (of all forms, not just income and corporate taxes, but everything they collect), not only do they immediately spend that dollar, but THEY BORROW 43 MORE CENTS FOR EACH DOLLAR COLLECTED AND SPEND THAT AS WELL.

Actually, they don't even borrow all of that money, now they print/create it out of thin air.

We on this board know what happens when we spend more than we take in.

The hard reality we are facing is the end of an Empire. Most Empires start out as free countries and amass wealth through increased productivity. Think of the Romans and the British Empires.

Over time, their governments start entitlement programs and foreign policy (wars) of influence and plunder. (Do we really need US military bases in 135 countries?)

When the governments can no longer pay the bills out of current taxes, they borrow. (The French Empire did this....one should read about it. The French are now a mere shell of their former selves.)

When they can no longer borrow, they "cheat" by having the equivalent of their Federal Reserve (Central Bank) print the extra money. Check your history...you will see that Germany did this in the 1920s. It led to the people losing everything and actually ELECTING Hitler to power because he gave them hope.

Anyway, what we are experiencing is a normal cycle here on planet Earth. Some may ignore it (at their own peril.) My hope is that we see it for what it is and actually embrace it. A lot of good can come from having the current system erode and a new, better and freer one take its place.

When Rome collapsed, I'm sure their citizens had similar feelings. The loved their country (as do I.) But they were likely getting tired of their government taxing them like crazy, devaluing their currency which led to rising prices on everything and getting way too involved in their everyday lives.

At the end of the Roman Empire, a week of work got you a loaf of bread. Some people "escaped" by watching the spectacles of the gladiators and other nonsense - just like we escape via iPads and reality TV. However, some ignored these circuses and prepared by cutting back on non-essentials and "opting out" of the Roman currency by hoarding gold and silver whenever they got their hands on it. Finally, many Romans simply moved to greener pastures where the taxes and onerous laws no longer were enforced.

We need to think about our American Empire much like a Roman citizen would have in its latter years. Unlike the Romans, we have the advantage of knowing how the movie ends. I encourage everyone on here to think long and hard about what to do for yourselves, your family and your neighbors.

I've only come to these conclusions after studying a lot of detail on past Empires as well as monetary policy in the last few years. For those who have not done so (or perhaps for those who disagree with me) I simply encourage you to dig deeper and do the research yourself.

Best of luck to all - and Merry Christmas!

Totally agree! The Obama/McConnell tax "compromise" is a Trojan Horse that is going to hasten this process.

[helpme2010]

Without a middle class, we can proudly join the ranks of other 3rd world countries that only have the ruling elite wealthy and the extreme poverished! U.S.A. U.S.A. U.S.A.!!!

[chrisdfw]

Without a middle class, we can proudly join the ranks of other 3rd world countries that only have the ruling elite wealthy and the extreme poverished! U.S.A. U.S.A. U.S.A.!!!

There can be a middle class without that middle class living an artificially high standard of living fueled by debt and built on unsustainable energy consumption.

There was a time when middle class families owned one television, one car, and probably didn't have air conditioning. Who says middle class has to have an i-phone, internet, and cable television? The middle class in this country has an inflated sense of what a decent standard of living is. We consume consume consume.

[Meatstick]

There can be a middle class without that middle class living an artificially high standard of living fueled by debt and built on unsustainable energy consumption.

There was a time when middle class families owned one television, one car, and probably didn't have air conditioning. Who says middle class has to have an i-phone, internet, and cable television? The middle class in this country has an inflated sense of what a decent standard of living is. We consume consume consume.

That about sums it up.

[msm859]

There can be a middle class without that middle class living an artificially high standard of living fueled by debt and built on unsustainable energy consumption.

There was a time when middle class families owned one television, one car, and probably didn't have air conditioning. Who says middle class has to have an i-phone, internet, and cable television? The middle class in this country has an inflated sense of what a decent standard of living is. We consume consume consume.

And there was a time when the CEO's made 25x's what the average worker of the company made, now it is about 275x. And a time when 50% of the wealth was not owned by 1% of the population. Perhaps the middle class high standard would not be kept "artificially" high if there was in fact more equality. Society is not better off by the above facts. I believe it is a select few's inflated sense of greed that has contributed to our current crisis. I would start the blame game there before we chastise the middle class for wanting a piece of the pie.

[banca rotta]

And there was a time when the CEO's made 25x's what the average worker of the company made, now it is about 275x. And a time when 50% of the wealth was not owned by 1% of the population. Perhaps the middle class high standard would not be kept "artificially" high if there was in fact more equality. Society is not better off by the above facts. I believe it is a select few's inflated sense of greed that has contributed to our current crisis. I would start the blame game there before we chastise the middle class for wanting a piece of the pie.

And this is all the fault of the middle class. The poor have no money so we really cannot blame the poor. So many rich are cheap skates so we cannot blame them.

The middle class shops till we drop and even invests 401k money in these companies. I guess the middle class is being wiped out by our own actions.

[chrisdfw]

And this is all the fault of the middle class. The poor have no money so we really cannot blame the poor. So many rich are cheap skates so we cannot blame them.

The middle class shops till we drop and even invests 401k money in these companies. I guess the middle class is being wiped out by our own actions.

That is absolutely correct!

The rich do not spend every dime to buy the absolute largest house they can afford. They may buy a mansion, but they keep it in proportion to their income. If the middle class wants to build wealth then they need to by cheaper cars and cheaper houses in relation to their income. The average house size has exploded in the united states. When the income distribution and wealth distribution was more equal children shared rooms, and people had more reasonable utility bills and home sizes.

If you want to become rich, spend less and invest. Buy or build a business. Buy real estate. If you buy a 200,000 house on a 50,000 income you will never get ahead and if everyone does it the middle class is doomed. There is always a new iphone or toy to buy.

Taxes will never fix this. Class warfare is not the answer, individuals own behavior largely determines if they win or lose financially.

[msm859]

That is absolutely correct!

The rich do not spend every dime to buy the absolute largest house they can afford. They may buy a mansion, but they keep it in proportion to their income. If the middle class wants to build wealth then they need to by cheaper cars and cheaper houses in relation to their income. The average house size has exploded in the united states. When the income distribution and wealth distribution was more equal children shared rooms, and people had more reasonable utility bills and home sizes.

If you want to become rich, spend less and invest. Buy or build a business. Buy real estate. If you buy a 200,000 house on a 50,000 income you will never get ahead and if everyone does it the middle class is doomed. There is always a new iphone or toy to buy.

Taxes will never fix this. Class warfare is not the answer, individuals own behavior largely determines if they win or lose financially.

Taxes could "help" fix this. If we had a progressive tax system like we had in the 1950's then maybe the middle class would not have to spend as much on education and so on. Today parents pay now pay for the bus for their kids to go to school, sports, higher education is far more expensive etc. Perhaps if the government did not have to cut so many programs the middle class would have more money for other things instead of using credit to buy things. It then becomes a vicious cycle. People pay higher interest rates because they are competing against the government in borrowing money. ALL of this is caused by massive deficits the government maintains. The most recent tax "compromise" is going to add $4 Trillion Dollars to the debt in the next 10 years! Taxes could fix this. Clinton passed a tax rate increase in 1993 and we ended up with a budget surplus (and a vibrant economy). We should go back to those tax rates. Class warfare is coming. The question is going to be at what point. Right now 1% own 50% +.
Although you are right that the middle class contributes to their plight, the deck is too stacked against them for real upward mobility. Greed has in fact overcome corporate America. Continuing on this projection at some point we will have our own French Revolution.

[banca rotta]

"Taxes could "help" fix this".



Hate to disagree MSM but this tax thing is more of the same and probably just another reason why we are here in the first place.

The middle class pay the highest tax rate especially the small businesses and professionals such as doctors.

The poor pay very little and the rich pay less then the poor because of all the loopholes and the loopholes are here to stay.

Whenever any taxes go up it's always the middle class that pays no matter what.

I am not pretending to have all the answers but I guess an across the board flat tax for all income earners makes the most sense. We won't know until we at least try it.

[chrisdfw]

Taxes could "help" fix this. If we had a progressive tax system like we had in the 1950's then maybe the middle class would not have to spend as much on education and so on. .....
Although you are right that the middle class contributes to their plight, the deck is too stacked against them for real upward mobility. Greed has in fact overcome corporate America. Continuing on this projection at some point we will have our own French Revolution.

I completely disagree, if you look at what the middle class is doing, they aren't largely spending more money on education, they are spending more money on the second car, utilities, cell phones, cable television, internet and lots of other amenities nobody needs to live.

Education spending is generally inversely proportional to achievement. Look at the districts that spend the most per pupil and in many cases they have the worst student achievement. Education can't be fixed with money.

The deck is stacked against them because of the progressive taxes. Its hard to get ahead when you make 70,000 a year and are facing a marginal tax rate of 40%+ (25% income tax + 15.3% self employment taxes).

I doubt we will ever agree, because I believe that a person has the right to the fruits of their efforts and the governments role is liimited to protecting the rights of peoples life, liberty, and property. If you believe that millionaires should give up half of their earnings to pay for poor peoples medications, then you have a different belief system. I believe everyone has a right to support themselves, some will succeed and some will fail, but the governments role is to enforce the rules, not to try and determine the outcome.

Why if I save and prosper should the government have the right to take 55% of what I might have when I die? There is no morally defensible reason if you believe in property rights and freedom.

I'm not sure what to say, why should one group of people have to pay for stuff for another group.

There was a time in this country's past when an entire class of people was forced to work and give thier labor to others. Is it better if we just take 50% of someone's labor and give it someone else? Just how much of my labor is it ok to take and give to someone else? How much of me should be a slave? What fraction of slavery is ok?

[chrisdfw]

I guess an across the board flat tax for all income earners makes the most sense. We won't know until we at least try it.

Here is why.

Once everybody pays taxes and supports the government, there would be too much scrutiny of spending. As it is, only about half of the income earners pay federal income tax, so half the population automatically wants to vote themselves more stuff that the other half pays for. if you knew you could get more education funding and the "others" will pay for it, why not. Hey, why not get larger food stamp benefits that the "others" pay for. Where does it end?

[msm859]

I completely disagree, if you look at what the middle class is doing, they aren't largely spending more money on education, they are spending more money on the second car, utilities, cell phones, cable television, internet and lots of other amenities nobody needs to live.

Education spending is generally inversely proportional to achievement. Look at the districts that spend the most per pupil and in many cases they have the worst student achievement. Education can't be fixed with money.

The deck is stacked against them because of the progressive taxes. Its hard to get ahead when you make 70,000 a year and are facing a marginal tax rate of 40%+ (25% income tax + 15.3% self employment taxes).

I doubt we will ever agree, because I believe that a person has the right to the fruits of their efforts and the governments role is liimited to protecting the rights of peoples life, liberty, and property. If you believe that millionaires should give up half of their earnings to pay for poor peoples medications, then you have a different belief system. I believe everyone has a right to support themselves, some will succeed and some will fail, but the governments role is to enforce the rules, not to try and determine the outcome.

Why if I save and prosper should the government have the right to take 55% of what I might have when I die? There is no morally defensible reason if you believe in property rights and freedom.

I'm not sure what to say, why should one group of people have to pay for stuff for another group.

There was a time in this country's past when an entire class of people was forced to work and give thier labor to others. Is it better if we just take 50% of someone's labor and give it someone else? Just how much of my labor is it ok to take and give to someone else? How much of me should be a slave? What fraction of slavery is ok?

Well I guess we will agree to disagree. However, certain objective facts are on my side. We had a tax rate under Clinton that gave us a budget surplus and a vibrant economy. We then had a tax rate under Bush which gave us the largest deficits ever and an economic meltdown. Supply side economics does NOT work. I suggest we go back to the tax rates we had under Clinton - for everyone. Conspicuously missing from your list of "cuts" is military spending. Without that on the table there is ZERO chance of balancing the budget with spending cuts alone. Your "austerity" plan for middle class living is not realistic. Most people have 2 cars because both parents now work. Getting rid of internet? That would be penny wise and pound foolish. Go to a sixth grade class today and watch the reports given by a child with a computer and internet at home and one without. My comment about education expenses had more to do with the "extras" that parents now have to pay for that they did not before. As to your claimed marginal tax rate for a self employed person -- if you are one -- then both you and I know that is not a realistic figure. How many extra "write-offs" does a self employed person have that benefits him that a person working for a pay check does not.
As to inheritance tax, why is that more sacrosanct than any other type of tax -- Pure Propaganda promoted by the top 1/2 of 1% of the people. How about if we eliminate income tax and only have inheritance tax? That to me would seem more fair. Let ME spend my money when I make it. If there is any left it is subject to tax -- probably help stimulate the economy. What is morally wrong is a Plutocracy -- which is exactly where we are headed (if not already there). Getting rid of the inheritance tax will only further hasten/solidify that. What is morally wrong is living in a country were the concentration of wealth is so completely out of balance. Some may argue at what percent that may be. When the top 1% owns 60%, 70%, -- 99%? Not sure were you would see a problem -- if you would. Might also want to read some historical perspective about inheritance tax. Andrew Carnegie thought one of the worse things a parent could do for his kids was leave a substantial inheritance -- he thought it should all be given away. How is it morally defensible to tax a common man on every dollar he earns even when it means he must scrape by to support his family - pay for health services, medicine etc. Yet it would be "wrong" to tax the $3 million dollars I just inherited because I had a rich uncle who bought $10,000 of Apple stock 20 years ago and since he just died and left it to me I get a stepped up basis and can sell it tomorrow and make $3 million TAX FREE!. How is that morally defensible?
I too don't like waste or excess welfare. For me anyone collecting welfare should be on Norplant. After 1 or 2 kids I would promote paying some people to get fixed.
As to the purpose of government you don't have to look further than the preamble to the Constitution - "We the people of the United States in order to form a more perfect union, establish justice.....promote the general welfare.....".
If we can't provide some basics to the people at home let's get out of these wars. If we are going to stay they need to be paid for now. Not tomorrow by our children and grandchildren. In WWII there were actually surtaxes to pay for the war. Bush gave us 2 wars and tax cuts -- it doesn't get much more irresponsible than that.
I am not for high taxes. I am for social justice and fairness. I have no problem with hard work being rewarded. I do believe we should have a level playing field and that you do need rules because without it greed will take over.

[chrisdfw]

I have no problem with any concetration of wealth as long as it is earned under a fair market system where everyone plays by the rules. Our current system does not do that. It actually exacerbates the problem with regulation aimed to help big businesses and punish small businesses and individuals. I don't think concentration of wealth is the good, I just disagree on how we get there. I believe we have to reduce regulation and taxes and burdens on individuals who want to start a business, not punish sucess.

I am not a fan of anyone running the country lately and I would cut defense. Mainly bey pulling out of overseas bases where we spend money to defend other countries. I would invest in missle defense, secure our borders, and inspect shipments into this country. I would make people who are shipping their stuff here pay for the inspection of their cargo. We spend far too much on defense because we have lost the nerve to win a war. The last war we won by devastaing our enemies. Peace is won by men with backbones, men who dropped two atomic bombs on Japan, to end a war. We are stuck in wars like vietnam, iraq, and afganistan because we no longer have a backbone. So I would end the wars, by winning. By killing our enemies in such great numbers they dare not risk striking back. It would save a lot of money too.

Bush is a pansy, like the others before him and after.

But that has no bearing on why it is that some individuals need to be taxed to pay for goodies for others.

As far as Clinton and the booming economy, there is very little correlation between tax rates and immeadiate economic effects. Taxes may affect long term growth, but the idea that taxes have much immeadiate impact is misguided. Democrats and Republicans use this as an excuse to have a meaningful debate about what kind of economy we want to have. We can't raise taxes in a recession... that is BS, just an excuse to push the decision a few more years out after another election. We might as well have the debate, do we want a country where we provide cradle to grave government welfare, or do we want a free market, where men are free to keep the fruits of their labor, do we want a country of free men, or a country of slaves working to support the interests of others. Its a debate we need to have, not push down the line. Unfortunately, neither of the current political parties has the will to confront the issue. They are both pawns of large and wealthy special interests. Companies that want you to believe the government is limiting their power and regulating them, but it is not true, the government is sanctioning them and limiting their competition through taxes and regulation. Big corporations and big government go hand in hand, I would prefer to see less of both, less slavery, and more freedom. Tax cut under Bush, tax increase under clinton, neither was the cause of the economic booms or busts. It is the long term that I worry about. When we no longer have incentive to produce. Unfortunately we may already be there.

The bottom line is if you take money from me and give it to a welfare case, that is not morally defensible. If you tried it on the street, its called robbery, so instead people vote for elected representatives to steal it for them. Theft is theft, even with 51% of the vote. There are such things as public goods, and the public should pay for them. But to take my money and give it to a poor person on welfare, or a rich banker on wall street, that is a private benefit, taken from one private citizen and bestowed upon another by the government.

I merely want equal treatment. Flat taxes and no special treatment. No taking from one group to give to another. That goes for rich corporations and welfare cases alike. No more of the government picking winners and losers, stealing from one for another, keeping small businesses from competing to benefit large banks and corporations.

Sadly, too many special interests have hijacked the country, labor unions, powerful banks, large corporations, the welfare class.

I have very little hope that we can avoid full blown socialism here. Too many people already live on the dole.

[msm859]

I have no problem with any concetration of wealth as long as it is earned under a fair market system where everyone plays by the rules. Our current system does not do that. It actually exacerbates the problem with regulation aimed to help big businesses and punish small businesses and individuals. I don't think concentration of wealth is the good, I just disagree on how we get there. I believe we have to reduce regulation and taxes and burdens on individuals who want to start a business, not punish sucess.

I am not a fan of anyone running the country lately and I would cut defense. Mainly bey pulling out of overseas bases where we spend money to defend other countries. I would invest in missle defense, secure our borders, and inspect shipments into this country. I would make people who are shipping their stuff here pay for the inspection of their cargo. We spend far too much on defense because we have lost the nerve to win a war. The last war we won by devastaing our enemies. Peace is won by men with backbones, men who dropped two atomic bombs on Japan, to end a war. We are stuck in wars like vietnam, iraq, and afganistan because we no longer have a backbone. So I would end the wars, by winning. By killing our enemies in such great numbers they dare not risk striking back. It would save a lot of money too.

Bush is a pansy, like the others before him and after.

But that has no bearing on why it is that some individuals need to be taxed to pay for goodies for others.

As far as Clinton and the booming economy, there is very little correlation between tax rates and immeadiate economic effects. Taxes may affect long term growth, but the idea that taxes have much immeadiate impact is misguided. Democrats and Republicans use this as an excuse to have a meaningful debate about what kind of economy we want to have. We can't raise taxes in a recession... that is BS, just an excuse to push the decision a few more years out after another election. We might as well have the debate, do we want a country where we provide cradle to grave government welfare, or do we want a free market, where men are free to keep the fruits of their labor, do we want a country of free men, or a country of slaves working to support the interests of others. Its a debate we need to have, not push down the line. Unfortunately, neither of the current political parties has the will to confront the issue. They are both pawns of large and wealthy special interests. Companies that want you to believe the government is limiting their power and regulating them, but it is not true, the government is sanctioning them and limiting their competition through taxes and regulation. Big corporations and big government go hand in hand, I would prefer to see less of both, less slavery, and more freedom. Tax cut under Bush, tax increase under clinton, neither was the cause of the economic booms or busts. It is the long term that I worry about. When we no longer have incentive to produce. Unfortunately we may already be there.

The bottom line is if you take money from me and give it to a welfare case, that is not morally defensible. If you tried it on the street, its called robbery, so instead people vote for elected representatives to steal it for them. Theft is theft, even with 51% of the vote. There are such things as public goods, and the public should pay for them. But to take my money and give it to a poor person on welfare, or a rich banker on wall street, that is a private benefit, taken from one private citizen and bestowed upon another by the government.

I merely want equal treatment. Flat taxes and no special treatment. No taking from one group to give to another. That goes for rich corporations and welfare cases alike. No more of the government picking winners and losers, stealing from one for another, keeping small businesses from competing to benefit large banks and corporations.

Sadly, too many special interests have hijacked the country, labor unions, powerful banks, large corporations, the welfare class.

I have very little hope that we can avoid full blown socialism here. Too many people already live on the dole.

Actually my point about the Clinton tax rates is that contrary to the statement of the day that the economy was going to implode and they would be a disaster - one of the reasons the Republicans won big in 1994 -- proved false. Supply side economics does NOT work because our rates are not high enough to have a differential stimulative effect. The further reality is that extending the Bush tax cuts over the next 10 years will add $4 trillion dollars to the debt! Not sure what interest rate the Chinese are charging us, but at 3% that will costs $120 billion a year just to service the debt -- in perpetuity since we are always running a deficit. Thus, that would pretty much wipe out the savings you might be realistically able to achieve with what most would perceive as draconian cuts to the discretionary side of the federal budget. Your call to cut taxes will NEVER get us out of this cycle. We are now on a course that very soon we will reach critical masse that our entire budget is being consumed by non-discretionary, defense and interest payments. At that point the only way out will be hyper inflation. So not only can we not lower taxes, the truth is we need to talk about raising them. As you indicated the relationship between taxes and the economy is not as dramatic as politicians have us to believe. I would NEVER have voted to extend the Bush tax cuts. One of the long term effects on having them for the last 9 years and continuing will be dramatic. And if you are worried about long term I suggest you start worrying about our continued deficits.

As to special interests hijacking the country, not sure how you can lists the welfare class -- they do not have any lobbying force and I suspect their impact is relatively small on the budget. I believe every thing in the budget should in fact be on the chopping block and that we need to start creating a surplus to get rid of the debt. Once that has been achieved I will be happy to talk about lowering taxes.

Again as to morality not sure what you are referencing when you say a "welfare case". Are there abuses - absolutely. Should we try to clean the system up - absolutely. Do you completely dismantle the system - absolutely not. I suspect I could give you as many examples of a proper case as you could of an abusive case. Welfare is NOT the problem. (Example of a morally defensible welfare case -- husband a soldier in Afghanistan is killed -- wife at home with 2 young children can no longer support herself -- should we provide her welfare? Absolutely yes!) Government generally only gives them crumbs to placate them to avoid a mass uprising. As to the abuse cases -- generational welfare, that is why I previously said we should pay some to get "fixed". If you really want to worry about the future of this country watch the movie Idiocracy -- stupid movie, but the premise might be quite predictive.

Socialism is not what I am worried about, if anything we have have a Plutocracy see --

http://www.truth-out.org/bill-moyers-money-fights-hard-and-it-fights-dirty64766

Health care crisis is only gong to get worse. We need a public option -- everyone should have the option to buy the exact same health insurance as congress -- at the exact same price they pay. That would force them to find a real solution. However, a bigger problem that no one wants to talk about is given the huge growth of obesity in this country demand for health care services is going to outstrip supply. We should be taxing fast food, junk food, alcohol and tobacco to help offset some of these increased costs.

Glad to hear you would cut some defense but it probably needs to start with us getting out of Afghanistan. We can not win that war. Read history about all who have failed. Washington has gone beyond dysfunctional, we no longer have a democracy and special interest are controlling everything at the expense of the good of the country.

[Meatstick]

Here is why.

Once everybody pays taxes and supports the government, there would be too much scrutiny of spending. As it is, only about half of the income earners pay federal income tax, so half the population automatically wants to vote themselves more stuff that the other half pays for. if you knew you could get more education funding and the "others" will pay for it, why not. Hey, why not get larger food stamp benefits that the "others" pay for. Where does it end?

It never ends for many. They get on the government "teet" and never get off. Prime example is what's happening with UE right now with massive amounts of people demanding benefits be extended until jobs can be created. Problem is jobs aren't being created and the jobs that are there, some people think they are above and why bother since UE pays more. I sure hope people have the same outlook when/if the economy gets better and those that do lose their jobs are afforded the same cushion that is being provided today.