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Author Topic: As spending by wealthy weakens, so does economy  (Read 5421 times)

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Offline RubySlippers

Re: As spending by wealthy weakens, so does economy
« Reply #25 on: August 05, 2010, 12:54:43 PM »
For me upper middle class would be a couple earning $120,000 a year. I know one couple getting by barely on $21k a year with a child in my area and that is not unique. They would look at this as the $200k couple and go they have all this stuff, they drive into my Burger King and in a big car and I have nothing. People are even whining about giving the working poor health care expansion in 2014.

Cars are a good point its pretty well commonly accepted owning a car in real value over a five year period if new is double the buying price factoring in everything. Yet they piss on mass transportation and make you a loser if your low income and don't drive. I don't know about you but most families earning together $60,000 in my area would be better off not buying a new car at $20k and put that away in investments or for a childs education at 4% a year. But that would mean investing money from roads to mass transportation and better urban planning long term an investment the lower income would use so is not worth the time to many that are weall-off..

Back to the topic if the wealthy were taxed years ago at 69% at the maximum why not do so again, encouraging them with tax breaks to make and keep jobs HERE. If you knock off 2% per 1% invested setting the maximum at 10% it would encourage domestic industries and jobs and they could have a markedly lower tax burden while making money. Seems that would make everyone happy. Have seven levels of taxation 10% to 69% and then reinvest this wealth to providing for everyone a basic sensible minimum of benefits in the US.

Offline Noelle

Re: As spending by wealthy weakens, so does economy
« Reply #26 on: August 05, 2010, 02:02:06 PM »
For me upper middle class would be a couple earning $120,000 a year. I know one couple getting by barely on $21k a year with a child in my area and that is not unique. They would look at this as the $200k couple and go they have all this stuff, they drive into my Burger King and in a big car and I have nothing. People are even whining about giving the working poor health care expansion in 2014.

I don't understand your point of view. It sounds to me like you're complaining that people are making more money than you or your friend. There's nothing wrong with being wealthy or having 'stuff'. I don't know what point you're trying to make with this -- I tend to sympathize with the poor, but working at Burger King...well, of course you're not going to earn much, how is that related to somebody else making more than them and why is that their fault?

As I said, wealth is not measured by what's relative to what you're making. What you consider wealthy doesn't actually mean they're rolling in cash and couldn't end up in your spot after one crisis. Vekseid did a good enough job of explaining this before, I suggest you go back and read it again.

Quote
I don't know about you but most families earning together $60,000 in my area would be better off not buying a new car at $20k and put that away in investments or for a childs education at 4% a year. But that would mean investing money from roads to mass transportation and better urban planning long term an investment the lower income would use so is not worth the time to many that are weall-off..

Why would a family earning 60k buy a car that expensive to begin with if they couldn't afford it? Being poor means you get by on what you have -- used cars do exist. I'm not entirely sure what that has to do with anything though. I'm having a hard time following your examples because...well, they seem kind of unrelated.

I agree with you that a better-developed mass transport system would be nice, but unfortunately, it's just not realistic anywhere but cities. For those living in more rural states, the need for a car still arises. The US is a big place, and in terms of transport, you can't compare us to Europe in that regard. You can get from the north to the south of France in about 6-7 hours by train. For some people, that's how long it takes to get across their state. We have a lot of open space in the US, which makes mass transport, especially on a large-scale level, hard to do.

Quote
Back to the topic if the wealthy were taxed years ago at 69% at the maximum why not do so again, encouraging them with tax breaks to make and keep jobs HERE. If you knock off 2% per 1% invested setting the maximum at 10% it would encourage domestic industries and jobs and they could have a markedly lower tax burden while making money. Seems that would make everyone happy. Have seven levels of taxation 10% to 69% and then reinvest this wealth to providing for everyone a basic sensible minimum of benefits in the US.

...Because it wouldn't make everyone happy. Did you read what anyone wrote at all? Excessively high taxation on the rich discourages their own work -- if you're supposed to be making 400k and you're getting taxed to the point you're only making 200k, where's your incentive to keep doing what you're doing? You have to work with both sides. You can't just piss on one side because they're in a better situation, you have to try and strike a balance that benefits both sides. Compromise, if you will.

To repeat myself again, domestic industries will hurt the middle class. American workers demand more pay than someone in China. We have labor laws that limit the duration and conditions of labor here, which means it takes more time to make whatever it is they're making, and the cost of upkeep in the factory is also higher. That extra cost trickles down into the price of manufacturing, and guess who makes up the difference? The cost of everything manufactured here then goes up, meaning the rest of us who are still earning the same wages we did before we moved industries back are paying more, thus creating an even wider gap of wealth distribution.

Offline Remiel

Re: As spending by wealthy weakens, so does economy
« Reply #27 on: August 05, 2010, 02:14:06 PM »
Quote
Anyone else think it's disturbing that the wealthy have so much power and influence over our economic health as an entire nation?

Not at all.   That's why Republicans and Libertarians are so passionately anti-tax; when the tax rates start going up, everyone feels it.   Unfortunately, this doesn't necessary mean that the converse is true; as we found out during the G.H.W. Bush years, lowering the tax rate on the rich doesn't necessarily translate into "trickle down" success. 

Quote
...even though the average laborer earns $100k.

By 'average', do you mean median, or mean?  Because if you mean median, holy crap, I'm underpaid.  >:(

Offline RubySlippers

Re: As spending by wealthy weakens, so does economy
« Reply #28 on: August 05, 2010, 08:07:54 PM »
Marx was right Captialism and its excesses exploiting the poor will lead to social communism and its only a matter of time and how this transition occurs.

Offline Noelle

Re: As spending by wealthy weakens, so does economy
« Reply #29 on: August 05, 2010, 08:37:12 PM »
Maybe you should talk to China and Russia before you decide that Marx was right.

Online Vekseid

Re: As spending by wealthy weakens, so does economy
« Reply #30 on: August 05, 2010, 08:56:20 PM »
Not at all.   That's why Republicans and Libertarians are so passionately anti-tax; when the tax rates start going up, everyone feels it.   Unfortunately, this doesn't necessary mean that the converse is true; as we found out during the G.H.W. Bush years, lowering the tax rate on the rich doesn't necessarily translate into "trickle down" success. 

By 'average', do you mean median, or mean?  Because if you mean median, holy crap, I'm underpaid.  >:(

Mean. Add up all wages, divide by number of laborers.

It's really quite sickening. It's not the people making six figure salaries that are throwing this off, either - the families making ~$200k are about where the average family should be right now, if maybe a bit better off, if the policies that began in the 1970's were never enacted. They mostly represent the educated class - those who have been able to keep up and haven't had the misfortune of falling behind.

During the dot com bust there was a guy who - I forget his name - awarded himself a six hundred million dollar bonus. Guess who tort reform laws were legislated to protect?

Companies have of course quietly paid out billions in shareholder lawsuits despite those tort reforms for crap like that.  But that asshole pushed the mean up five dollars for the whole country, for a sum that could have fed the nation's hungry for a week. Lawsuits don't prevent the economic disruption and its associated costs, either. Justice delayed is justice denied. People starve and suffer.

I find it particularly insidious, personally. Try to get the people making $20k begrudge the people making $200k so the people making $20m can enjoy themselves while the 'lesser classes' fight it out politically. Many major political players are hellbent on creating divisions between large classes of people like this, and it's not for any supposed moral reasons.

Make people afraid of blacks. Make them afraid of gays. Make them afraid of immigrants. Make them afraid of muslims. Make them afraid of China. Blame the 'wealthy', and make sure what wealth actually is does not enter into the common conscience. Gloss over the fact that most people are in fact good at heart - just highlight the bad apples where you can, as hard as you can, and if you can't find one, a little creativity can take care of that.

It's not a conspiracy because it isn't exactly secret. It's just brushed over and ignored by the media.

It's interesting, though, how aware people are of this in general. Conservatives know Obama is in the pocket of big banks. So do liberals. But even the right wing media is very quiet about Obama's support of and by the ultra-rich, even though many Americans are quite aware of this.

Offline itsbeenfun2000

Re: As spending by wealthy weakens, so does economy
« Reply #31 on: August 05, 2010, 11:27:04 PM »
A few things before we blame the woes of everything on "the wealthy"

Communism failed why would we try it again?

The number one nation in charitable donations by its private citizens is the United States. We actually gave more privately when the tsunami hit then any government in the world. A lot of our wealthiest citizens donate large amounts of their wealth to charity. Seems to me if you tax them more they will not be able to give as much.

I think someone else pointed out that wealthy is relative. People in third world countries would see most Americans as wealthy compared to their standard of living.

The question is how to improve the economy. Everyone that has a job has been saving more of their income the last few years. Once they see its OK to start spending again the economy will rebound

Offline RubySlippers

Re: As spending by wealthy weakens, so does economy
« Reply #32 on: August 10, 2010, 03:12:47 PM »
Maybe you should talk to China and Russia before you decide that Marx was right.

They in fact deviated from Marx in their policies, Marx looked to a time when production of goods and services would be evened out to the need of the people, where all would offer what they could and get what they needed. And I will point out as a Christian the first Jesus followers right after Pentacost lived in a communist system where all shared what they produced to provide for those according to their needs - seems odd its a Biblical system that is considered an abomination by many.


Offline Oniya

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Re: As spending by wealthy weakens, so does economy
« Reply #33 on: August 10, 2010, 03:17:45 PM »
Both communism and democracy are reasonably effective in their pure form when applied to small groups - key word is small.  Once you get larger than 100 or so people, both become unwieldy without modifications.

Offline OldSchoolGamer

Re: As spending by wealthy weakens, so does economy
« Reply #34 on: August 11, 2010, 09:46:49 PM »
This entire post is awful, but the last paragraph is the worst. Who would decide  how much is too much wealth?  Why would should the wealthy be penalized for succeeding? A lot of people work hard for their money and to se it taken away so they can only take home a much smaller amount will piss off a LOT of people.  All of that hard work done for nothing. 

 Why would someone work their ass off to make $300/400/500k when they can only keep $200k? It removes a lot of inventive for people to work when they are taxed at a much higher rate simply because 'They can afford it' That sort of thinking is stupid and dangerous.

Implicit in your post is the assumption that the people getting rich are the ones who work the hardest and are the most productive.  This is a rather dubious proposition in America these days.  There are people who made much more than even the sums you're describing creating bogus "securities" and "collateralized debt obligations" and other financial legerdemain that was instrumental in triggering our current collapse.  And how is dribbling a ball around a wooden court and throwing it through a hoop an endeavor that is hundreds of times more "productive" than teaching children to read and write?

There are a few rich who worked hard, innovated, etc.  But most cheated and conned their way into their fortunes, or inherited them, or got their wealth doing activities the market economy vastly overrates in terms of their importance to society.

Offline Noelle

Re: As spending by wealthy weakens, so does economy
« Reply #35 on: August 11, 2010, 10:04:31 PM »
I think you're misappropriating a bit; people making their 'fortunes' aren't usually the ones making 200k. It's entirely relative to what you do and where you live. Yes, you get paid more in NYC than you do in Omaha, but the cost of living is also drastically higher.

Also, those who tend to make it rich tend also to invest. Just sayin'.

Offline Oniya

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Re: As spending by wealthy weakens, so does economy
« Reply #36 on: August 11, 2010, 10:08:53 PM »
That's because those who make it rich have the spare cash to invest.

Offline Lyell

Re: As spending by wealthy weakens, so does economy
« Reply #37 on: August 11, 2010, 11:41:02 PM »
Those who make it rich also have the most money to donate to charities and non-profit organizations.

Offline Zakharra

Re: As spending by wealthy weakens, so does economy
« Reply #38 on: August 11, 2010, 11:57:56 PM »
Implicit in your post is the assumption that the people getting rich are the ones who work the hardest and are the most productive.  This is a rather dubious proposition in America these days.  There are people who made much more than even the sums you're describing creating bogus "securities" and "collateralized debt obligations" and other financial legerdemain that was instrumental in triggering our current collapse.  And how is dribbling a ball around a wooden court and throwing it through a hoop an endeavor that is hundreds of times more "productive" than teaching children to read and write?

There are a few rich who worked hard, innovated, etc.  But most cheated and conned their way into their fortunes, or inherited them, or got their wealth doing activities the market economy vastly overrates in terms of their importance to society.

 You are also being very biased in your last paragraph. You're automatically assuming that most rich people do nothing to earn it ans that they are cheats and crooks. Which is BS pure and simple. Do many get it as an inheritance? Yes. But most do earn it and most do work for ir. Just because they are not doing hard physical labor doesn't mean they are not working. They earn money, money which is spent.

 Remember, what is wealth to one person is not wealth to another.  It varies with the area you live in.

 If someone wants to pay a sports player millions of dollars to preform, let them. What skin is it off of you to  let that person be paid that much?  Or business owners, board members, managers, financial people, innovators?  Why would you want to punish success, and yes they ARE successful in their business, by taking away from then 'because they can afford it'?

 Percantagewise, the wealthy pay far more income tax than the entire middle and lower class in the US. By far. If you take too much money, you run the serious risk of killing the golden goose.

Offline JudeTopic starter

Re: As spending by wealthy weakens, so does economy
« Reply #39 on: August 12, 2010, 12:43:56 AM »
Can we maybe pull out statistics instead of claiming that other people are wrong without offering any proof?

Offline Lyell

Re: As spending by wealthy weakens, so does economy
« Reply #40 on: August 12, 2010, 01:18:13 AM »
Hold on, lemme pull this chart out of my ass that statistically displays how many people earned their money through an honest living against those who did it through under the table dealings and scamming others. Oh, wait, that data isn't really monitored close enough by anyone to get real figures going? Whoopsie.

Offline JudeTopic starter

Re: As spending by wealthy weakens, so does economy
« Reply #41 on: August 12, 2010, 02:07:33 AM »
Inheritance is under the table dealing and scamming?  You'd simply need to find studies of wealth versus inheritance in the upper class.  I googled for like 5 seconds and found one--sadly it's worthless because it's self-reported and done by a wealth management service (which presents a biased sample), but you'd be surprised what kind of force you can lend to your arguments when the facts you use are actually facts and not opinions.

EDIT:  By the way if you can't find statistics, it's probably not a good idea to assume what you want to (but to realize you don't know)
« Last Edit: August 12, 2010, 02:10:10 AM by Jude »

Offline Caeli

Re: As spending by wealthy weakens, so does economy
« Reply #42 on: August 12, 2010, 02:18:54 AM »
Try to hold the sarcasm, please, and play nicely.

Also, if you're going to make claims, it would be best to back them up with statistics, figures, or numbers.


Thanks for your cooperation.

Offline Lyell

Re: As spending by wealthy weakens, so does economy
« Reply #43 on: August 12, 2010, 03:05:19 AM »
Inheritance is under the table dealing and scamming?  You'd simply need to find studies of wealth versus inheritance in the upper class.  I googled for like 5 seconds and found one--sadly it's worthless because it's self-reported and done by a wealth management service (which presents a biased sample), but you'd be surprised what kind of force you can lend to your arguments when the facts you use are actually facts and not opinions.

EDIT:  By the way if you can't find statistics, it's probably not a good idea to assume what you want to (but to realize you don't know)

I hope this isn't an example of playing nice. I suppose it would have been more politically correct of me to include an "other" bar or perhaps a disclaimer that said the data didn't include people who inherited their wealth, though I assumed it wasn't necessary. I realize now that was a poor assumption and that I should lower my expectations.

Your comment about pulling out statistics instead of claiming others were wrong was clearly directed at Zakharra and OldSchoolGamer. (and if it wasn't, you probably should have quoted someone) Their exchange was over who legitimately came into their wealth versus those who did not. I was insinuating, in response to your comment, that no such data can be accurately procured. How does one record how many people who are illegitimately wealthy?

Seeing as I have made my own vague statement about the wealthy having more to contribute;

"[...]But in the USA, there is no great difference across the social classes. Over there, the super-rich and the working poor give away roughly the same proportion of their income.[...]" -Andy McSmith Wednesday, 27 June 2007 "The Independent"

"The 40 names that have pledged to date have a combined net worth surpassing $230 billion, according to Forbes. Several of them have said they plan to give away much more than 50 percent of their wealth. Buffett has promised to donate more than 99 percent of his wealth." -msnbc  8/11/2010 40 billionaires pledge to give away half of wealth

"Even as the economy slipped into recession, America's wealthiest individ­uals were giving record sums to charity.
At least 16 individuals announced gifts of $100-million or more last year, more people than have ever done so in the 12 years that The Chronicle has kept a tally of the biggest charitable commitments announced each year. In 2006, at least 15 people gave that sum, and in 1998, 12 did so." -Maria Di Mento "Chronicle of Philanthropy"


Offline JudeTopic starter

Re: As spending by wealthy weakens, so does economy
« Reply #44 on: August 12, 2010, 03:19:14 AM »
Yes, it was aimed at them, not you.  I thought inheritance was a legitimate example of people obtaining money not through work, but luck.  The thing is, though, I don't come down on either side of that issue directly.

I'm not against estate taxes, because the idea of inheriting vast wealth and living your life without doing anything of worth (but still sponging off of everyone else's) seems so in opposition to what capitalism is supposed to be to me, but I don't know how prominent that is either.

Offline itsbeenfun2000

Re: As spending by wealthy weakens, so does economy
« Reply #45 on: August 12, 2010, 11:21:04 PM »
Let us remember the question is how to get the economy started. Right now the two reports I have read it seems the upper and middle class need to start spending money again for this to happen. Hopefully the fears of losing ones job will subside soon and people will start spending again.

Offline Wolfy

Re: As spending by wealthy weakens, so does economy
« Reply #46 on: August 13, 2010, 01:28:44 AM »
Well...on a lighter night that has to do with spending, Bill gates has gotten several over billionares, along with himself, to donate half of their total wealth to charity...:D

so..that's something positive...please return to discussing. ^-^

Offline fallen paradise

Re: As spending by wealthy weakens, so does economy
« Reply #47 on: August 13, 2010, 09:01:07 AM »
Much of the arguments we have seen here come down to a fundamental issue:

Should it be the role of government to redistribute wealth?

When we talk about taxing on a sliding scale, any sliding scale, that is what we are doing. Currently our tax system is, in part, a wealth redistribution system. For as long as I have been alive the tax system has been skewed so that the wealthier members of society are paying more in taxes than the poorest members, so we could, to some degree, see how the system has worked so far. Has our current system of wealth distribution helped close the poverty gap? From what has been said already in this thread I think it is safe to assume it hasn't done an excellent job of doing so. Would increasing the system so that the wealthy are taxed even more and the poor taxed even less solve the problem? I personally don't think it would.

I also think that we worry far to much about "gaps" in America. As an educator one thing we always are talking about, the achievement gap between blacks and whites. Rather than concern ourselves with the "gap" I think we should worry about just meeting a base line standard of education. If all blacks are getting an education that sufficiently prepares them for college or beyond who cares if the whites happen to be scoring higher on a testing measure? As a society we seem far more concerned lately with equality than we are with success, and I personally think that is a dangerous paradigm shift. If all we care about is making everyone equal we aren't pushing to the truly brilliant to excel.

Offline Noelle

Re: As spending by wealthy weakens, so does economy
« Reply #48 on: August 13, 2010, 03:21:10 PM »
You're basically talking about equality in giving people the same resources to begin with, as well as assuming that wealth equals possibility to succeed. How do you even measure success to begin with? Success in a career for an artist will never pay as high as success in a career as a professional sports athlete or an actor, but that doesn't mean you can automatically ignore the gap that exists between those professions and assume anyone who falls under X line isn't equal.

Offline Phaia

Re: As spending by wealthy weakens, so does economy
« Reply #49 on: August 19, 2010, 01:42:36 PM »
http://www.washingtonpost.com/wp-srv/style/longterm/books/chap1/millionairenextdoor.htm

This whole article is an amasing discussion on wealth and how it works and why!

I was stunned at how little my hubby and I, have compared to what we should have based on their guides.

Phaia