SPLIT TOPIC: American society: the poor the unemployed

The rich are definitely getting richer.

...and there is certainly a lot of people out there who hold the opinion that this is a bad thing:

http://www.mybudget360.com/top-1-percent-control-42-percent-of-financial-wealth-in-the-us-how-average-americans-are-lured-into-debt-servitude-by-promises-of-mega-wealth/

(I link this article as an example only ...I do not agree with all its points)

As we have alluded, all of this seems to come down to a few central questions. Here's some favorites:

"When we determine that someone can't ever work, what should be their standard of living?"

"When we determine that one merely needs temporary assistance to get back on their feet, what should be the standard of living?"

"when someone does work, what should be their minimum standard of living?" [the discussion started with walmart and other big boxes afterall]

Perhaps because I consider myself a part of it, I argue that having a middle class is a good thing as well. Does government have a responsibility to make sure people like me continue to exist?

In the event we define what "middle class" means, what % of the workforce should be middle class?

Taking the article I link at face value, 1% controls 44% of the wealth. This is consistent with other articles I've come across. Is there any point at which we should try to redistribute wealth from the rich? Can the richest 1% control 65% of the wealth? Can the richest 3% control 85% of the wealth?

What if the situation arises where I am getting poorer not as result of any preference for eating out and overspending my credit cards, but as a result of health care expenses and things like -um- rent for an ultra cheap apartment someplace boring, like in Ohio. (note: I am trying to avoid a "move someplace cheaper" response)

...the paranoid guy in me believes that at some point the rich will be too powerful to tax at all. Forget all about capitalism and economics for a moment, is there a point at which we should implement more progressive taxes simply to protect our struggling democracy?

BG telling me what I should feel should be American priorities

Funny, I don't remember telling you should feel anything. *I* can explain how *I* would reorganize things.

The system is lacking b/c minimum wage is unlivable (you should be able to work full time and support a child). The system is lacking b/c we have the most expensive, least efficient health care in the developed world. The system is lacking b/c class mobility is dying. The system is broken b/c wealth has been astronomically concentrated in fewer and fewer hands over the past 3 decades.

There are a million things we could reorganize in order to pay for this stuff, but we could start with 1) true health care reform with cost controls, 2) increased taxes for the wealthy and super-wealthy (top 1%), reduced defense spending (20% of fed. budget), increased corporate oversight and reduction in foreign tax havens, more efforts to keep jobs from going overseas.

That's off the top of my head.

Why should the rest of the country bear that financial responsibility?

Because we all have a vested interest in having as few people live in financial misery as possible. If we have a financial or socio-economic underclass, which is essentially what we have now, we don't have a functioning society.

It is not an ok status quo.

as everything I've read from you seems pretty vague.

I mean, we are on an internet message board where most responses are limited to 500 words or so. But for the 800th time, you shouldn't assume I don't have more to say on the subject, all you have to do is ask specific questions.

Will your answers take the following statement into account?

"globalization will happen whether you spend your day with 22 year old anarchists throwing firebombs at the police, or whether you use the day to do your laundry."

Or, do you dispute the statement's truth? -WhyNot

I'm not sure what your implication is. Everyone is doomed to make 90¢ an hour in a factory and there's nothing anyone can do about it?

Will your answers take the following statement into account?

"globalization will happen whether you spend your day with 22 year old anarchists throwing firebombs at the police, or whether you use the day to do your laundry."

Or, do you dispute the statement's truth? -WhyNot

BG wrote: I'm not sure what your implication is. Everyone is doomed to make 90¢ an hour in a factory and there's nothing anyone can do about it?

I don't imagine the effect of globalization as being that brutal, but do imagine that we have only BEGUN to experience the downward wage pressure. I do fear we are going to have to use all of the assets at our disposal to maintain a standard of living for the vast majority.

In this light, I view the rich as one of our country's assets.

I'm ok with taking some of the rich's wealth in order to improve the lot of the rest of us, and buy natty's argument a growing of the present divide presents real risks of social unrest and the like.

Like all of us, (...CTK included...) I would try to do it in a manner that it did not destroy their incentive to take on risk in exchange for profit. ...I also would not to tax the rich to the degree that they would all simply buy warm coats and then move to Canada.

P.S. Spending the day with Anarchists is fun on occasion. Drinking cheap beer with them beats doing laundry. ....however, getting tear gassed by cops sucks.

Inequality: The rich are getting richer. And I have no problem with this. And they contribute taxes. But they should. After all, our government protects their property. Our government opens markets for them. Our government provides opportunities for them. Opportunities are provided through military build ups which help the likes of Carlyle Group, Lockheed Martin, Boeing, GE, United Technologies, Booz Allen, etc, etc. Opportunities are provided through government sponsored medical research, where most of the profits are garnered by private industry. Opportunities are provided through explicit or implicit government guarantees. And government also created opportunities through de-regulation. This lowered regulatory compliance costs for many businesses. Government has also stood by and let the elite manipulate the labor market. True owners of public corporations have very little control over labor decisions made at the firms they own. So boards are friends of the executive suite, exorbitant pay packages are rubber stamped, etc. This has been remarkably persistent. And it is not a free labor market, but one controlled through collusion and manipulation. I have a hard time believing that most CEOs are worth 200 to 500 times the average salaries at the companies they run. Since our government benefits them, I question the assertion of many in this class that they need to pay less taxes. A rise in taxes is necessary.

At a minimum, at least 50% of the working population has not seen their standard of living raised in at least 30 years. That’s a long time. It can be argued that this class has seen its standard of living shrink. It’s hard to have any assets of any value if you can’t keep up economically. I don’t think we can eliminate inequality. I’m not sure we should try. But I am sure we have far, far too much of it. And I’m sure there is no free market reason why this should be. But we don’t live in an entirely capitalist economy. Even the elite who extol the virtues were bailed out en masse two years ago. Given what I’ve seen over the past 2 years, I see little correlation between worth and decision making prowess (or hard work).

Healthcare economics: Healthcare is expensive because the market for its services is not competitive. Not even remotely. What makes it not competitive? Let’s start with the need (and it is a need) for insurance. A problem with the way insurance is implemented is that it is used as the principal means for primary care. This shields the end user from the real price. A reason (not the only reason) insurers pay for most care is to control moral hazard—as some will neglect their health until a real emergency emerges. But nonetheless, it is a problem. Another problem is information asymmetry. The provider is much, much, more informed than most end users. That gives the provider a level of control over which services are provided for a particular need. The result is usually provision of the more profitable service. Yet another problem is adverse selection. When given the choice of paying for healthcare at a fixed rate, those who are healthier (and for whom the cost would be lower than the fixed rate they are presented), will balk at the price and not pay. This leaves a pool of relatively less healthy people, who see the price and think it is a bargain. Next year, prices rise and the pool becomes even less healthy (self-selection). Competitive markets are in the national interest. That’s why the government—whose duty is to protect its constituents—regulates industry. A quick aside: Insurers are exempt from anti-trust. The reason (and I don’t buy into this reasoning) is because they all calculate rates based on the same underlying data. Theoretically (actuarially), the rates for similar pools of candidates should be identical.

All employable individuals are assets. All of these individuals deserve a chance to help the current economic climate.

I blame the rich for the tragic misallocation of resources over the past 5 years. That disaster resulted in their taking resources for their own benefit. And those resources (financial capital) no longer exist to help alleviate the causes of poverty. Many more people are unemployed than otherwise would have been absent some really poor decisions made by some really powerful people.

Sacrifice? Please. No sacrifices need to be made. None should be asked for. If we did ask, the answer will always be a firm, NO. If some feel it is unfair to pay higher taxes, well, too bad. Life is unfair. Do the wealthy want their assets protected? Pay taxes. Do you want a good economic climate, with educated professionals ready to help your firm get to the top? Pay taxes. Want first rate infrastructure so your trucking company can deliver freight? Pay taxes.

Some very wealthy and powerful individuals recognize the need for (somewhat) higher taxes and a broader base of the affluent. Among them are Buffett and Soros. Even Pete Peterson recognizes that cutting goverment spending in the short term is self-defeating, though he is not crazy about raising taxes. And CEOs from the most powerful firms have been clammering for universal (government paid) healthcare for quite some time. They feel that we (the U.S.) is at a competitive disadvantage without it (the costs of government paid healthcare don't show up on an income statement).

CTK-

As you are aware, I perceive myself as a moderate. On rare occasions, I've even voted republicans (mostly when the democrats run a complete idiot).

While you seem to want to focus this conversation on personal responsibility (and I agree with you that such factors play a large part in what keeps people poor in this country), I have largely given up on trying to change the negative habits of others ....especially on some large scale.

Instead, I would be delighted if we could merely provide opportunity to those who currently do have their acts together to help themselves.

While you view health care as something you do not want to pay for because you feel it is inefficient and overused by people with bad habits, do you also feel government should not have a role in providing people with things they are unlikely to overuse?

whynot wrote:

Lots of things put us at a competitive disadvantage relative to the rest of the world.

....many countries are now further ahead of us in terms of high speed trains, internet infrastructure, electrical power grid.

As you point out, private industry often has no incentive to invest in such things.

This is in part because they have the luxury of relocating to a country that has the mix they require.

....this is where government is needed. Government is largely the force that built the high speed trains, electrical grid and internet infrastructure that other first world nations enjoy.

If one can overlook its irritable neighbor, S Korea is quite an enviable country in this regard. As a result of having a highly educated populous, hard working culture, and supportive government, it has made astounding gains over the past 20 years.

....I'm pretty sure it provides its residents health care as well.

Should the US government somehow have less of a role than these other governments, also located in capitalist countries?

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Why?

Some Americans would benefit from some subsidies. Certainly the earned income tax credit has been a success. While we are talking about government subsidies, please feel free to include the wealthy. Subsidized farming (most are large corporations who benefit), implied guarantees on banking, tax deductions on debt (overwhelmingly benefits the wealthy), grants and wholesale giveaways of valuable government assets like patents, and subsidized infrastructure projects (like water and sewer) for McMansions. Shall I go on? I can you know. What an amazing double standard.

High earners (and I'm talking about people who earn north of $500K per year, and in some cases much, much more)pay (or should pay) high taxes. But they benefit from the government and the American system. Now they need to pay their share. They need to because that's where the majority of the money is. Funny how that works. These people are (almost) by definition the leaders of our society. They certainly command its resources to their benefit.

Our deficit grows out of control because the majority of voters consistently vote to keep taxes low while simultaneously keeping government services high. So voters want the services, but not to pay for them. I'm all for cutting spending (at some point in the near future but not right now), but also (moderately) higher taxes. There should be giving on both sides. After 30 years of lower taxes, reduced regulation, globalization, and capital re-allocation, it's time to go slightly in the other direction. Not alot. Just a little. Focus on those areas where the market clearly fails. I say that as a U of Chicago Economics School of thought believer.

I'm sorry to hear that you believe the 68% who do pay positive taxes are treated unfairly. Wow, I just thought they were relatively prosperous. Certainly they are all entirely self-made and can start their own autonomous country and be just fine. And I'm sure we're all so grateful for their agreeing to pay taxes at all, given they can afford to. It's just sooo unfair. (an aside, I wish I had a dollar for every working poor individual who gets a tax deduction for driving a hybrid. I'd never have to work again.).

The poor are (in general) obviously less capable of pulling themselves out of poverty and in need of education, perhaps welfare, and medical subsidies to stay affloat and improve themselves. Perhaps we should insist that they rely on the generousity of the wealthier classes and give up these government interventions in their lives. Would save alot of government spending. And the numbers who are able to improve their (financial) lot will be greatly diminished. Abolish public education. Abolish public health. Let's do that then. What a crowning vision for our future. Can't wait to live there.