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Do you debate the fact that income, especially for those who do not have wealth to begin with, is, in fact, the primary source of wealth accumulation?
Do you debate that, on average, those in the lower income brackets, have accumulated little savings or possession of any assets that could be considered wealth? Do you believe any of that 44% of people who spent ten years in the bottom 1/5 quintile have accumulated ANYTHING?
Do you debate that, on average, the highest income earners, also, have the highest net value and the most accumulated wealth?
I refuse to accept your argument that the bottom rungs of the income brackets are littered with people who are rolling in houses, stored cash and investments. The fact that such a minute fraction of people in the top 3 quintiles fell to the lowest quintile would support this. The only other explanation would be that a large majority of people STARTING in the lowest bracket of income are trust fund babies who report little to no income and we know that is a load of crap.
The bottom rungs of the income brackets are littered with people working at McDonalds who dont have two dimes to rub together, not trust fund babies who have large amounts of wealth but no income.
What are you talking about, the figures I gave you come directly from the first table in the report. I dont know how blatantly more obvious it could be. Less then 10% of people in the top three quintiles moved to the bottom quintile over 10 years.
Other income sources? Like food stamps? Ive already shown that only 10% of the US in 2008 received food stamps, which is less then half, at best, of the lowest quintile.
I am bias, but I never simply ignore data to prove my point.
They are not statistically significant, and he is using them as a major point in his accusation of fallacy.
He has no unbias data supporting his claim that people spending on debt largely had higher incomes in the past. If he did, it would completely contradict the US Treasury data, which was pulled directly from tax returns.
It completely counters his point. His point is that debt spenders were once higher income people, and thats simply bunk. Over 40% of people who were in the bottom 1/5 quintile in income ten years ago, were in the bottom quintile today, and another 17% of the 2nd quintile (also lower incomes) moved down to the lowest. So, about 59% of people who were broke 10 years ago, still are broke today. That is over HALF of all people in the lower quintile. Additionally, I can almost assure you, the nearly 20% of new entrants to the lower quintile between 1996 and 2005 were children or close relatives of those reporting incomes in the bottom two. Children who come from wealth rarely EVER start at the bottom.
He is completely bias to the point of ignoring data and outright lying to prove his point.
He might not be wrong on all points, nor am I currently attacking all of his points, but he is wrong in his assumption that people using credit to supplement their income qualified for it when they were at a higher income bracket and then "fell" in to the lower brackets. This is bull. Seventy five percent of people or more who are currently in the lower two brackets, have ALWAYS been in the lower two brackets, and over 50% in the lowest bracket have ALWAYS been in the lowest bracket. There was no point in time which they "qualified" with a higher income. They obtained credit with low income, and likely, bad credit, and are often using that credit to substitute for the wage gap that was created when we shifted from manufacturing to "service".
Credit is not additional "income", it is debt.
Wealth is not material possession. Wealth is cash and cash equivalents, which can be short term or long term non depreciatable assets less debt. Someone who has 30 flat screen TVs is not wealthy if he owes more then they are worth. In fact the guy who has no debt, but not a penny or asset to his name, is wealthier.
I will reiterate the very last point. Later I may cover the other points after I read the report with more detail.
I do not want to get into semantics here so OK, let me add separately wealth and material possesion then. With this in mind I will re-state my the point, gap between rich and poor.
Point 1. If I am going to say the rich and the poor gap is increasing it is important to see what is the material possessions and wealt comparison between the same rich and poor people when compared ten years from now.
Point 2. How do they compare in age groups in material possessions and wealth? Most likely the older groups will fare better.
Point 3. What is the age group distribution between the different people of different material and wealth brackets?
Most of the items you contend above are based on income. Income does not necessarily equate to material possesions and wealth. They simply say how much money people are making.
It is important to look at long term and see the different groups by age as how they fared over time and see what that gap by looking at how much material possessions and wealth the have.
Actually these point are the real indicators of the rich/poor gap than income. You and I can go over and over numbers on income stats and mobility up an down but the bottom line those number do not say how wealthy people have become and how much they amazed over time.
An example of a stat that you may wan to look at yourself. Now is you please look at numbers presented by the Heritage Foundation.
In their website I gathered these numbers about the poor.
The title of the article is: How poor are America' poor? Examining the "Plague" of Poverty in America". It is dated August 27, 2007.
In it here are some data on the poor. The data comes from different from various government reports.
43% of the poor own a home. The average size of these homes is a three bedroom with one and a half bath, a garage, a porch and patio.
Only 6% of the poor households are overcrowded; two thirds have more than two rooms per person.
80% have air conditioning by contrast of 36% in 1970.
The typical poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. These comparison are to the average citizens in foreign countries, not those classified as poor.
About 75% own a car, 31% two cars.
97% own a color TV; over half own two or more color TVs.
78% have a VCR, or DVD player, 62% have cable or satellite TV reception.
89% own a microwave oven, more than half a stereo, and more than a third have an automatic dishwasher.
By no means this does not mean there are not people that are living in very dired conditions. There are those and we can help them but by demonizing people that may look like they are rich because they are in a high income bracket is not accurate and fair to them.
However, the numbers on material possesion of those classified as poor give a better picture than portrayed by the media and some politicians.
You can look more in those articles that cover on other types of material possesions by the poor. Look how many own personnal computers, large screen TV, washer and dryer, etc.
For the sake of argument let us say the gap is wide between the rich and the poor. Are the poor that bad when they own all these thing in their daily lives. Does the percentage of home ownership say they are suffering as portrayed?
Tell me about the real poor and I will join you in finding ways to help them but it is not fair to keep attacking companies and corporations when the those as classified as poor are not in as bad shape as portrayed.
[quote=elamigo;8392438]
Actually these point are the real indicators of the rich/poor gap than income. You and I can go over and over numbers on income stats and mobility up an down but the bottom line those number do not say how wealthy people have become and how much they amazed over time.
[/quote}
I ask you again, what exactly do you think a person spending ten years in poverty actually has amassed? They are buying everything with debt, including essential basic needs.
Quote:
Originally Posted by elamigo
An example of a stat that you may wan to look at yourself. Now is you please look at numbers presented by the Heritage Foundation.
In their website I gathered these numbers about the poor.
Do you read anything that isnt produced by right wing pundits?
Quote:
Originally Posted by elamigo
43% of the poor own a home. The average size of these homes is a three bedroom with one and a half bath, a garage, a porch and patio.
What is the definiton of "poor"? What is the definition of "owning"? I refuse to believe that 43% of the poor "own" anything. I would believe that they are engaged in paying a bank monthly payments in exchange for the home, they may eventually own. Further, what is the "value" of that home?
Quote:
Originally Posted by elamigo
80% have air conditioning by contrast of 36% in 1970.
You think technology has anything to do with that?
Quote:
Originally Posted by elamigo
The typical poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. These comparison are to the average citizens in foreign countries, not those classified as poor.
Nothing like comparing apples to oranges. Lets compare some of the most crowded cities in the world to America on average, which is largely made up of rural areas.
Quote:
Originally Posted by elamigo
About 75% own a car, 31% two cars.
Define "own"
Quote:
Originally Posted by elamigo
97% own a color TV; over half own two or more color TVs.
Define "own"
Quote:
Originally Posted by elamigo
78% have a VCR, or DVD player, 62% have cable or satellite TV reception.
Define "own"
Quote:
Originally Posted by elamigo
89% own a microwave oven, more than half a stereo, and more than a third have an automatic dishwasher.
Define "own"
You have largely proven nothing other then US citizens have alot of STUFF, as in disposable items purchased on credit. That is not a synonym for wealth. The reason the US citizenzry has so much junk can be found in the PER CAPITA US DEBT RATE. In fact, until recently, the US was SPENDING more as a whole then it made (a negative savings rate). Debt is not income, and items purchased on debt are not wealth.
Quote:
Originally Posted by elamigo
By no means this does not mean there are not people that are living in very dired conditions. There are those and we can help them but by demonizing people that may look like they are rich because they are in a high income bracket is not accurate and fair to them.
People that are in a high income bracket should be wealthy, and if they are not, its their own doing. People in a low income bracket, often are forced to spend more then they make to survive, and therefore cannot accumulate anything of value.
Quote:
Originally Posted by elamigo
However, the numbers on material possesion of those classified as poor give a better picture than portrayed by the media and some politicians.
They dont paint any picture other then how good Americans are at going in to debt.
Quote:
Originally Posted by elamigo
You can look more in those articles that cover on other types of material possesions by the poor. Look how many own personnal computers, large screen TV, washer and dryer, etc.
Debt, debt, debt
Quote:
Originally Posted by elamigo
For the sake of argument let us say the gap is wide between the rich and the poor. Are the poor that bad when they own all these thing in their daily lives. Does the percentage of home ownership say they are suffering as portrayed?
Few of that 43% own anything at all. Most are "home owners" only in name. The bank owns their home, and they are in debt for it.
Quote:
Originally Posted by elamigo
Tell me about the real poor and I will join you in finding ways to help them but it is not fair to keep attacking companies and corporations when the those as classified as poor are not in as bad shape as portrayed.
They are in bad shape, maybe not as bad as some third world countries, and maybe they are in worse shape because some poor people do purchase items which they dont need, digging them in to debt that isnt needed. However, when a person is forced to depend on government handouts and debt to survive, dispite working 40 hours a week, they are in rough shape.
nice Random. Yes, own does have to be defined these days.
Do I own my house that has a mortgage ? When asked that question "do you own or rent ?" I reply that "I own the front door but the bank owns the rest". That usually gets a smile from them.
I do own everything else of mine..no outstanding loans or cc balances but no, I don't "own" my house.
Dude...you ain't right (again).
People in a high tax bracket are not necessarily wealthy.
People in a low tax bracket are not necessarily poor.
For example: Me!
I own my own house (2000 sq ft, 4 bedroom, attached garage) in a Los Angeles suburb. Value of house (per www.zillow.com) right now is $550,000.
I own two late model cars.
I have no bills other than utility bills, property tax, insurance, and food, and clothing.
I have an income of $89,000 a year after taxes.
Last year my tax bill was ZERO.
The previous year my tax bill was $584, based on an income of $89,000.
By your logic I should be poor. I am not.
Here is another example: My friend. His name is Don. Don owns a concrete sculpting company. Don is 4 years older than I am. Don had an income last year of $1,422,000. (I am not making this up--Don and I are good friends.) He paid $321,000 in taxes. His mortgage is $24,000 per month as he is buying a $4,500,000 house--quite expensive. He also is paying for three new cars, a total of $2,900 a month. His electrical bill for his house normally runs about 900 a month. His annual property tax is 67,500 -- This guy is nearly starving. If the economy doesn't turn around very soon for him--he will have to sell or walk away from his house. Is he rich? Not by my standards. The moron can't even afford to take his wife on a week-long cruise once a year.
Dude...you ain't right (again).
People in a high tax bracket are not necessarily wealthy.
People in a low tax bracket are not necessarily poor.
1. I never once made any arguments relating to "tax brackets". Tax brackets often have nothing to do with income, especially amongst people who derive a large amount of their income from investments.
2. To that end, the most wealthy people are almost always in the bottom few tax brackets, because they derive little of their income from taxable wages. Warren Buffett recently made a public mockery of this showing that he paid less of a percent of his income in taxes then a middle class employee of one of his holdings.
3. I did use the quintile argument, which measures INCOME, not tax brackets.
4. I made the argument that there is almost no movement from the top 3 quintiles to the bottom quintile, and that is supported completely by the report by the US treasury. I would wager that a majority of those are retirees who had little income producing savings or investments. Elamigo, and his line towing author, made the argument that people falling from the top quintiles to the bottom are common place, when they are pretty much statistically irrelevant. My argument is that the lowest quintile is largely made up of people who have been income poor forever, and the spawn of those people. That is also supported well by the treasury report. Elamigo made the argument that disposable assets purchased on debt spending equivalates "wealth". I argue that it does not equate to wealth, that it is mearly debt spending, and does not provide an accurate picture to the "wealth" status of the lower quintiles.
Quote:
Originally Posted by dcashley
For example: Me!
I own my own house (2000 sq ft, 4 bedroom, attached garage) in a Los Angeles suburb. Value of house (per www.zillow.com) right now is $550,000.
I own two late model cars.
I have no bills other than utility bills, property tax, insurance, and food, and clothing.
I have an income of $89,000 a year after taxes.
Last year my tax bill was ZERO.
The previous year my tax bill was $584, based on an income of $89,000.
By your logic I should be poor. I am not.
1. $89,000 after taxes would equate to well over 100k in taxable wages. That is hardly poor.
2. I never made the argument that those who make a whole lot of money, are not "poor" in the wealth sense. I did, however, comment that people who are in the top 2 income brackets and have no wealth, it is largely their own doing, as opposed to those in the bottom two, who often are spending all of, or most of their income on basic neccessities, and cannot achieve "wealth" of any substance.
Quote:
Originally Posted by dcashley
Here is another example: My friend. His name is Don. Don owns a concrete sculpting company. Don is 4 years older than I am. Don had an income last year of $1,422,000. (I am not making this up--Don and I are good friends.) He paid $321,000 in taxes. His mortgage is $24,000 per month as he is buying a $4,500,000 house--quite expensive. He also is paying for three new cars, a total of $2,900 a month. His electrical bill for his house normally runs about 900 a month. His annual property tax is 67,500 -- This guy is nearly starving. If the economy doesn't turn around very soon for him--he will have to sell or walk away from his house. Is he rich? Not by my standards. The moron can't even afford to take his wife on a week-long cruise once a year.
He isnt rich, not at all, but you prove my point that those who make obscene amounts of income, are largely themselves to blame for not being wealthy. If this guy had a reasonable house, he could be comfortably retired in 3 or 4 years.
My argument never once was that a person cant have a high income and not be "wealthy".
Kudos, randomdude, another common sense response to the "the poor ain't doing that bad" dismissive crowd. I cannot for the life of me understand how somebody could suggest with a straight face that material possessions obtained from the incursion of debt can be considered a halfway decent benchmark for arguing a person is NOT poor, which is what elamigo tried to suggest with the article that argued that homeloanership among the working poor was proof positive that they weren't bad off at all, I won't even go into the microwave, TV, air conditioner rent-a-center dynamics the article swept under the rug and also pawned off as proof positive of not being really poor at all.
Ditto for the trust fund babies and retirees. To suggest these folks represent a majority of the low-income non-poor crowd is beyond disingenuous. Elitists and poverty dismissers of course disagree, but why wouldn't they, coming from their working construct?
People really do not understand the concept of marginal utility. Defenders of the rich always incorrectly assume that the dollar for dollar relationship is linear. If one really wishes to compare the poor and the rich, you have to substract cost of living line. Then and only then you can actually assess the real purchasing power of two individuals. Substract the same cost of living amount from their income and you begin to see how the rich are running away with the show where the poor don't even have an economic incentive to work, while the median income earners are just spinning their wheels trying to stay above the cost of living line. It's ridiculous. But it's easier to make moral adjudications out of people's statistical shortcomings (if you're not rich it's because you're morally bankrupt and lazy) in an scarce-resource economic system that cheers on capital monopolies at its own detriment. We are our own worst slaves, as a collective.
Once naysayers recognize renting money from a bank does not constitute owning a home, once these folks recognize financing consumption (negative savings rate) does not qualify as accumulating wealth, material or otherwise, and once people recognize that trust fund babies and retirees make up a statistical irrelevancy of the low-income reported crowd, then it becomes painfully clear how widening the gap between the "rich" and "poor" has become in our society, and how the middle class, by the median definition of income, has the game stacked against them to be more likely than not to become part of the "poor" column than the "rich" column. Which is why the middle class is going away if we don't change our societal attitudes towards the working poor, which is quickly becoming all of us.
YAY!!! You and I finally agree on the importance of personal responsibility...Good job, Dude, you're learning!!! Good job.
Please do not make the fallacy of uniting my comment towards a person who already had everything systematically making decisions that led him to lose it, with any of my other arguments, which are seperate, unique, and independent.
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