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This is not about being jealous or being anti rich, it is about what needs to be done to correct the economy. I have nothing against the rich, in fact I hope to join them one day, but the question we need to ask ourselves is at this point in time what needs to be done to correct the economy and begin to create jobs. The truth is there needs to be some balance to the economy, if too much the money is concentrated among the top 1% as it is now, there is simply not enough left for the other 99% to function correctly. It is not the poison; it’s the dose that makes it deadly. If we truly had a free market economy this would not be an issue, but we do not. The wealthy have stacked the deck in their own favor by use of influence on politicians; they have changed laws and policies to increase their own profits at the expense of workers. So now, how do we even things back out so the economy can begin to grow? We must do what they did after the last depression. We must increase the spending power of the working class.
Do you feel the rich were being attacked in the 50's and 60's? They were being taxed at 98% then, and it was a period of prosperity for everyone.
We have made some mistakes in the past few decades and it is time to look at what works, and what does not.
Although I agree we don't have a true free market economy and the rich have been protected by politicians, I believe those are two different issues. I'm not one for corporate welfare and bailouts. I believe everything should be equal and the rich shouldn't be given any extra handouts, but also shouldn't have to pay extra either.
Yes, you mention the 1950's and the rich, but they were also taxed very highly in the 60's and 70's and the economy was terrible. We can take any decade with growth or decline and argue that it was because the rich were taxed too much or too little.
Although I agree we don't have a true free market economy and the rich have been protected by politicians, I believe those are two different issues. I'm not one for corporate welfare and bailouts. I believe everything should be equal and the rich shouldn't be given any extra handouts, but also shouldn't have to pay extra either.
Yes, you mention the 1950's and the rich, but they were also taxed very highly in the 60's and 70's and the economy was terrible. We can take any decade with growth or decline and argue that it was because the rich were taxed too much or too little.
Actually the economy was pretty good in the 60's and what happened in the 70's was self induced by inflationary government policies, and had nothing to do with the tax rate on the rich. When Nixon removed the gold peg from the dollar inflation skyrocketed, when you combine that with oil crises caused by short sighted Middle East policies, you have an economic nightmare. There were also other factors involved like abnormally high demand for raw materials world wide that contributed to inflation, but most of the problems were self induced.
Inflation benefits the upper class most. They own businesses and real property that benefits from inflation. The other groups are deep in debt, and inflation will cause them to hand over more of their income to the upper class.
Inflation benefits banks the most, they are able to multiply earnings by fiat money production. Inflation is caused in fact by too much money created by banks being put into the system driving up prices.
How can a post so small encompass such a large amount of common sense?
Were we to have a trade surplus we would be bringing money into our country anyway, resulting in all Americans getting richer. Last I checked, the Chinese have some of the highest savings rates in the world. Are they evil people that are hoarding money from others? They have one of the most prosperous countries in the world and over 90% pay CASH for their cars. Maybe everyone should give it a try...and watch our economy prosper and the trade deficit naturally turn toward a surplus due to our lower consumption and increased wealth building practice (something we used to do and something the Chinese have been doing for decades). This would naturally result in greater wealth for Americans across the board and an increased growth in our exporting companies (or the founding of new exporting companies all together).
This is a red herring; we cannot improve our exports by saving because that is not the cause of the trade deficit. The trade deficit is a direct result of off shoring, off shoring is a direct result of the rich having too much government influence, which allows them to set trade policy, the reason the rich have so much government influence is that they have all the wealth, and use it to buy politicians, the reason they have all the wealth is that the tax policies are written in their favor. This is not the first time this has happened, that is why the government raised marginal tax rates in the 30's and 40's, because it benefits the overall economy.
Loss of purchasing power results in lower employment levels which causes more loan defaults, which lowers property values, and reduces equity....
The root cause is the disparity of income that drove the middle and lower classes to support their purchases with borrowing instead of increasing incomes. .....By removing the cap on social security taxes and at the same time capping the amount of total wealth a recipient can have to receive benefits, we could slow the hemorrhaging in the social security program. .... The most productive years this country ever saw not to mention the time period where the middle class made its biggest gains was during the 50’s and 60’s when the top income tax bracket was 98%. ....This was also the time period where we were able to pay down the huge government debt incurred during WWII.
The country is clearly going in the wrong direction economically; it is now time to look for solutions to the problem while we still can.
I agree the tax structure should be returned to its former state, but you are overlooking a few major points:
Americans LET that happen because they were not participating in their political processes. They gave their power away, so they could go play. They are STILL not participating. From what I read here in the C-D forums, most do not even understand how the political processes work. Democracies of uneducated, willfully ignorant people do not work.
No one made people buy what they couldn't afford to pay for without credit. That was and still is a personal choice, and greed. Both are still on-going, now as before.
It wasn't our lack of purchasing power that lost our jobs. Those were lost because we continually chose cheap, disposable products over quality, enduring ones. Companies could not support our price points at our labor demands, so they took their businesses to other labor markets. Again, our choices brought our results.
We Americans have allowed ourselves to be cowed into submission in exchange for being able to go to sleep. It doesn't appear that the majority of us can wake up.
People who have acquired millions in assets are being deprived of nothing. They have benefited from the system at a disproportionate degree compared to the middle and lower classes. For them to collect even more from a bankrupt system is both greedy and irresponsible.
Isn't it greedy for the irresponsible who have not saved to expect the savers to bail them out?
I agree the tax structure should be returned to its former state, but you are overlooking a few major points:
Americans LET that happen because they were not participating in their political processes. They gave their power away, so they could go play. They are STILL not participating. From what I read here in the C-D forums, most do not even understand how the political processes work. Democracies of uneducated, willfully ignorant people do not work.
No one made people buy what they couldn't afford to pay for without credit. That was and still is a personal choice, and greed. Both are still on-going, now as before.
It wasn't our lack of purchasing power that lost our jobs. Those were lost because we continually chose cheap, disposable products over quality, enduring ones. Companies could not support our price points at our labor demands, so they took their businesses to other labor markets. Again, our choices brought our results.
We Americans have allowed ourselves to be cowed into submission in exchange for being able to go to sleep. It doesn't appear that the majority of us can wake up.
Excellent post! I agree with everything you have said, and that is why these discussions / debates on CD are so important. It is impossible to participate in these debates without learning, regardless of your predisposition. The more people learn, the more they understand and eventually will begin to connect the dots.
At some point in the future, there will be some very severe suffering of the lower and middle classes because of this economic situation. At that point, people will be driven to action, the question is will they have the necessary understanding to demand changes that will actually change things for the better, or will they be a confused mob who has no real direction or agenda. Their level of understanding will decide. It is human nature to act in ones own best interest, the problems come from when people are so ignorant they do not understand what is in their best interest, and what is self destructive. We have clearly been on a path of self destruction. Hopefully enough people will experience enough pain to drive them to search and to understand why this all happened and what it will take to correct it.
Isn't it greedy for the irresponsible who have not saved to expect the savers to bail them out?
I understand where you are coming from because I am a saver too and it is hard to sacrifice to save and then be hit again because others did not. What you have to understand is that Social Security was never meant to be a savings account or a retirement account, it is an insurance policy. I have paid homeowners insurance for 30 years and never filed a claim and do not expect to. Others who decide to live in areas where they are more at risk for disaster are the ones who will benefit from my premiums. Is that fair? Probably not but it is a system that works for the society as a whole. In the case of Social Security we have a system that has been mismanaged and is in real trouble. People who are rich, lets say for example over $5 million in assets are not in any danger of poverty if they do not receive their benefits. While they may be getting cheated as far as that program goes, they have definitely benefited from other parts of the system that have allowed them to prosper. At the other end of the spectrum there are people who have struggled their whole lives working low paying jobs and their ability to save has been restricted. They truly need their benefits to survive. As a society we have an obligation to ensure a certain level of fairness to all the people. To deprive some of necessities so others can have more luxuries is hardly fair by any standard.
We have all seen the statistics that the top 1% of Americans now controls 42% of the wealth. That concentration of wealth at the top of the food chain has resulted in the middle class loss of purchasing power that has resulted in the downward spiral of the economy we see now. Loss of purchasing power results in lower employment levels which causes more loan defaults, which lowers property values, and reduces equity. It becomes a vicious cycle that feeds on itself until something changes the root cause of why the cycle began to begin with.
The root cause is the disparity of income that drove the middle and lower classes to support their purchases with borrowing instead of increasing incomes. So the question is if we have reached the point where it is necessary to correct the income disparity, and what would be the best means to do so. A restructuring of the taxes could be used that would lower tax burdens of the lower and middle classes and increase taxes on the top wage earners who are now strangling the economy. By removing the cap on social security taxes and at the same time capping the amount of total wealth a recipient can have to receive benefits, we could slow the hemorrhaging in the social security program. By raising the tax rates to 90% on all income over $1 million dollars, and offsetting that raise with equal reductions for middle and low income earners, we could free up badly needed capitol to be spent in the marketplace where it would improve the economy. The most productive years this country ever saw not to mention the time period where the middle class made its biggest gains was during the 50’s and 60’s when the top income tax bracket was 98%. This was also the time period where we were able to pay down the huge government debt incurred during WWII.
The country is clearly going in the wrong direction economically; it is now time to look for solutions to the problem while we still can.
Wow, what an insane concept.
The rich would just say-- big deal, we're moving to canada!
The rich would just say-- big deal, we're moving to canada!
Living overseas does not exempt you from owing US taxes. Although you are exempt from the first 75K of income.
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