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Old 12-17-2013, 03:26 PM
 
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AP survey: US income gap is holding back economy - The Washington Post
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Old 12-17-2013, 03:37 PM
Status: "Are you as ready for spring as I am?" (set 7 days ago)
 
Location: Suburban Dallas
50,438 posts, read 40,580,409 times
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I don't particularly agree with many portions of that article. When anyone has any chance of spending money, it's always good for restaurants, retailers, hotels, specialty businesses, and other outlets where transactions always get made. What the writer of that article must understand is that income inequality will always be a way of life in America. Many folks are always going to earn more than I, but I will always (well, at least, for now) earn more than others out there, and so on. Different jobs are going to earn different wages, and they're all commensurate on the skill level of each job or career. You will always have different levels, and there's no getting around it. If people don't earn a certain amount of money, it has plenty to do with the job at hand and the career that individual has selected, and also where the individual is in life. I'm also not saying that people don't have opportunities to make more money, either. They're out there.

The economy can't hinge on people's income levels. Now, if people are losing their jobs and not getting a paycheck (which, by the way, is getting more and more frequent in many parts of the country), then you see a downturn in the economy, at least on a local and regional level. No paycheck means no spend..........on anything.
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Old 12-17-2013, 03:47 PM
 
28,900 posts, read 49,273,246 times
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No. What's holding the American economy is more about:

1) Reform Dodd Frank. The stupid Dodd Frank action which basically throws gears into any kind of lending endeavor. Oh, sure, some corrections needed to be made to curb the market excesses prompted by the government jumping feet first into the housing market. But this is ridiculous.

2) Repeal Obamacare. Suddenly healthcare is not just costing a lot more people a lot more money, thereby hurting discretionary spending, but it also creates a great deal of uncertainty in 20% of the American economy. What a stupid, stupid bit of legislation.

3) Reduce corporate taxes to the same level as the EU. Right now, European economies have lowered their corporate tax rates from 15%-23%. Ours is ten points higher than Sweden's. This is ridiculous and a pluperfect job killer.
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Old 12-17-2013, 04:02 PM
 
Location: West Paris
10,264 posts, read 11,016,258 times
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What's holding the American economy are the real unemployment rate and the low incomes .Almost 50 millions of food stamps .They are not consumers
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Old 12-17-2013, 04:19 PM
 
1,474 posts, read 3,267,161 times
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Multiple problems holding down economy.

1. Sorry state of public education. Too many American students not up to speed in the math and sciences.

2. Loss of manufacturing. Don't make stuff with value added products. Ross Perot was right.

3. Rural areas of nation are not good potential sites for job creation.

4. Labor force too old.

5. High cost of healthcare even before Obamacare. OC just makes it worse.

6. Too many nonproductive government "jobs".

7. Racially divided.

8. Politically divided.

9. Culturally divided.

10. 7,8,9 above equals private, narrowly focused agendas which means no unity of effort. Lobbyists rule the DC roost.

11. Not chic to be a patriot, i.e. my country comes first. Too much involved around the world.

12. Too many low information voters or voters with narrow agendas eg. Medicare/Social Security/Medicaid/Defense even if it breaks the follow on generations.

13. Too much talk, too little action.

14. Unfriendly business climate especially for small business start ups.

15. Belief in magic fixes. No pain. No loss. Won't happen to me. "If we just elect the right this or that person."
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Old 12-17-2013, 04:22 PM
 
Location: southern california
61,305 posts, read 79,703,650 times
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our basic system and i do mean basic is founded on capitalism. this means you have to contribute to the society to get some money from it. 54% of americans dont do that. a major factor in income inequality.
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Old 12-17-2013, 11:07 PM
 
Location: Heartland Florida
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Just end the Fed. Government runs on debt, no fed and government has to shrink. Laws will be reduced and new businesses can thrive. The Fed is the problem and has to go.
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Old 12-18-2013, 09:34 AM
 
12,035 posts, read 5,114,768 times
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I would say have people look to China. How are they able to accelerate the movement of their entire country up from 3rd to second world in such a short time? And then how will they be able to move up to 1st world?

Just how do people think this can happen without the massive creation of new Yuan and Yuan based debt? It cannot without basically doing the same as we have done since WW2. Money creation, debt creation and distribution throughout the world. Only China hopes to shorten the time line. And they might if they do everything right, along with a bunch of good luck.

But the point is, money here and in China is central fiat, without any natural or inherent limit on its creation. The Chinese simply understand the nature of modern money better than we do. And they will next make sure that the new money gets directed more towards their people this next generation, as they move towards 1st world status.

Avoiding the Fall: China's Economic Restructuring: Michael Pettis: 9780870034077: Amazon.com: Books

Middle class consumerism is the key. And if the middle class is weak in jobs, earning and spending, the whole thing lags or crumps. This is where central Gov't should come in to augment.

For instance lower taxes on the middle class/workers. Continued social and economic supports to the middle class.

More radical methods would be for the central Gov't to give $5K per capita to each state to do as they please. Or a Federally funded, locally administrated Employer of Last Resort Program.

http://www.google.com/url?sa=t&rct=j...,d.cGU&cad=rja

The key point being to get money into the pockets of our middle class for them to spend.

Six Myths that Hold Back America: And What America Can Learn from the Growth of China's Economy: Frank N. Newman: 9780983988519: Amazon.com: Books
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Old 12-18-2013, 10:10 AM
 
131 posts, read 195,907 times
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Quote:
Originally Posted by french paris View Post
What's holding the American economy are the real unemployment rate and the low incomes .Almost 50 millions of food stamps .They are not consumers
Sure they are. They're just doing it on someone else's back.
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Old 12-18-2013, 01:29 PM
 
1,724 posts, read 1,343,248 times
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While the economy would be in a better shape to harbor recoveries if we had a stronger, more robust middle class, I am skeptical of the claim that rising inequality is significantly holding back our current recovery.

Over the decades, we have seen an erosion of the middle class, stagnate wages, stagnate economic mobility, decreased economic mobility among the ends, and consumer fuel debt combined with rising healthcare and educational costs. If this did not occur, and we had a stronger middle class than I don't think the damage would have been as severe.

However, this is simply not showing up in the data. In fact, real personal consumption expenditures have rebounded nicely.
Real personal consumption expenditures (DPCERX1A020NBEA) - FRED - St. Louis Fed

Our demand problems are primarily coming from the housing sector.
Private Residential Fixed Investment (PRFI) - FRED - St. Louis Fed

And government spending on goods and services.
Real Government Consumption Expenditures & Gross Investment (GCEC96) - FRED - St. Louis Fed

While I believe that rising inequality, erosion of the middle class, debt-fueled consumption, and stagnating and declining economic mobility are problems that we should be discussing, I don't see it showing up in the data.

As far I as I know, the literature is largely inconclusive with regards to the link between inequality and growth.
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