Permanent decline of the middle class

[church mouse guy]

An article in the American Thinker by someone named Jack Curtis notes that the decline in the middle class began about 1970. That is when women were once and for all forced into working because of ever-increasing federal taxes. The author thinks that the unique conditions that made the USA so wealthy are now gone with the wind.

The rich are where the growth is occurring. The lower class is expanding and the middle class is shrinking. The middle class is dependent upon wages and wages have been stagnant for a decade.

The author concludes:

There seems little doubt that the economic pattern results from government intervention; it is nothing new in history. India’s static caste system and China’s 15th century halt of exploration and change both embedded poverty via economic stasis. In America, it has been overregulation and the increasing corruption accompanying crony capitalism.

The unique conditions of American wealth generation having passed, nothing suggests a return to that widely wealthy condition. Economist Tyler Cowen speaks of a “Great Reset;” a permanently lower economic level that lies yet ahead.

Rather than awaiting recovery, the people and even more, the government, need to learn again what is needed to survive in a world where others have risen up to compete. Until then, impoverishment seems likely to be the new normal for America and for similar reasons, for much of the rest of the world as well.
Read more: http://www.americanthinker.com/arti...shment_americas_new_normal.html#ixzz3bRP8Oz15



Read more: http://www.americanthinker.com/arti...shment_americas_new_normal.html#ixzz3bRNMCM55

 

[Crabtownboy]

The Trickle Down Economics instituted by David Stockman, Reagan's budget director, contributed greatly to this downward spiral. Turned out to be a trickle up result.

Even the more honest Republicans are now saying that Trickle Down was a scam at worst or a mistake at best.

It’s no secret that the only “plan” Republicans really have to address job creation is to push for deregulation and cut taxes – two things that have unequivocally proven time and time again that they have almost nothing to do with creating jobs. If tax cuts and deregulation actually led to strong economic success, Bush’s eight years in the White House would have yielded record growth.

Read more at: http://www.forwardprogressives.com/...republican-admit-trickle-down-economics-scam/

 

[matt wade]

One of the biggest challenges facing the middle class, in my opinion, is health care costs.

If you are poor, you don't need to worry about health care costs, because the government picks up the bill.

If you are rich, you have the money to pay for healthcare.

The middle class suffers from rising health care costs tremendously. I have personally seen my health care costs double over the past 7-8 years. I'm currently paying roughly 10% of my income to account for healthcare costs and it's killing me.

 

[OldRegular]

The Trickle Down Economics instituted by David Stockman, Reagan's budget director, contributed greatly to this downward spiral. Turned out to be a trickle up result.

Even the more honest Republicans are now saying that Trickle Down was a scam at worst or a mistake at best.

Trickle down is nonsense but as usual you are totally ignorant of the problem; blinded by your first love, Marxism. The problem is the Federal Government,

1. The excessive cost of maintaining an arrogant lazy bureaucracy.

2. The burden of excessive regulations which stifles small business,

3. The excessive tax load on the middle class,

4. The 18 million people added to food stamps by Obama.

5. The 8 million or so added to disability.

6. Obamacare.

7. The additional 9 trillion dollars in debt incurred by the Marxist in the White House.

8. The excessive burden imposed by the illegal immigrants flooding the country!

 

[Crabtownboy]

Trickle down is nonsense but as usual you are totally ignorant of the problem; blinded by your first love, Marxism. The problem is the Federal Government,

1. The excessive cost of maintaining an arrogant lazy bureaucracy.

What makes you think they are lazy?

2. The burden of excessive regulations which stifles small business,

Proven incorrect through the disaster of Trickle Down. You obvious do not know what Trickle Down was about and what it did. Read the article in the link. Read articles on the effect of Trickle Down.

3. The excessive tax load on the middle class.

I agree. The tax burden should be transferred to the super-rich. The middle-class should receive real tax breaks.

4. The 18 million people added to food stamps by Obama.

This is a result of the disastrous policies of Trickle Down as well as the disastrous policies under Bush.

5. The 8 million or so added to disability.

What should be down with the disabled?

6. Obamacare.

What what happens if the SC rules Obamacare unconstitutional. The GOP will really go down the tubes if that happens and they know it and are trying to figure out what to do to avoid a party disaster if it does happen.

7. The additional 9 trillion dollars in debt incurred by the Marxist in the White House.[/quote]

Largely a result of the Bush disaster. Also under Obama the percentage increase is less than under Bush. Remember Bush took a surplus and quickly turned it into growing deficit.

8. The excessive burden imposed by the illegal immigrants flooding the country!

And watch your food cost skyrocket if all the illegals were sent away.

 

[carpro]

One of the biggest challenges facing the middle class, in my opinion, is health care costs.

If you are poor, you don't need to worry about health care costs, because the government picks up the bill.

If you are rich, you have the money to pay for healthcare.

The middle class suffers from rising health care costs tremendously. I have personally seen my health care costs double over the past 7-8 years. I'm currently paying roughly 10% of my income to account for healthcare costs and it's killing me.

Good post. :thumbs:

 

[InTheLight]

If tax cuts and deregulation actually led to strong economic success,

Here's what a poll of leading economists revealed in the summer of 2012

http://www.igmchicago.org/igm-economic-experts-panel/poll-results?SurveyID=SV_2irlrss5UC27YXi

Bush’s eight years in the White House would have yielded record growth.

 

[carpro]

Those guys don't know nuthin'.

Everybody knows the higher the tax rate, the more prosperous the country. That's why Obama's been trying to raise taxes ever since he's been in office and wants to do more.

 

[Scott J]

An article in the American Thinker by someone named Jack Curtis notes that the decline in the middle class began about 1970. That is when women were once and for all forced into working because of ever-increasing federal taxes. The author thinks that the unique conditions that made the USA so wealthy are now gone with the wind.

The rich are where the growth is occurring. The lower class is expanding and the middle class is shrinking. The middle class is dependent upon wages and wages have been stagnant for a decade.

I think the decline has more to do with the rise of the welfare state. Anything you subsidize, you get more of. Today in various forms the US gov't subsidizes sloth, dishonest disability claims, illegitimacy, dishonesty in banking and investment, etc.

One of the WORST examples is "guaranteed" investments like those that went to ethanol start ups. People with at least $25K had the Feds guarantee their principle. They couldn't lose, only profit. The political class protecting themselves and their benefactors.... at our expense.

Progressives in both parties are the problem and enemy. They use various wedge issues to divide and conquer but it is no real surprise that guys like Boehnner and McConnell are warmer to Obama than the voters that actually put them in power. They ALL love big gov't and to exercise control over the masses and wealth.... they just differ on how to divide the spoils.

 

[Revmitchell]

When you cut taxes you also cut spending. Smaller government is the goal and is always best.

 

[Scott J]

Here's what a poll of leading economists revealed in the summer of 2012

So... liberal economists at liberal universities trained for 7 years by other liberal economists who themselves were trained by liberal economists... deny history and you find it impressive?

History speaks for itself. On three occasions Presidents have been able to employ "supply side" policies... and a 4th one that Dems and liberals will NEVER acknowledge.

Kennedy was the first. He lowered taxes and very unsurprisingly the economy took off and tax receipts increased. Reagan did similar and threw in deregulation and saw more of the same. Bush did the tax cuts and saw increased revenues and economic growth. These are simply facts of history easily verifiable.

The one that Dems want to ignore are the cuts the GOP and Newt forced on Clinton in 98. Remember what happened for the next couple of years? The economy became even stronger AND we had surpluses due to increased tax receipts.

PS- the unemployment number has become completely meaningless. It has been changed again under Obama to make the numbers look better than they are. The ONLY merit it has is if it is taken in the context of wage growth, business start-ups and failures, and labor force participation. Within the last couple of years, business failures for the first time exceeded business start ups in the US. Labor force participation is at a 40 or 50 year low. But the thing that MOST exposes the "lie" of the unemployment stat is median family income. A healthy job market very, very naturally drives up wages and family income. As a sidenote, it also causes companies to sweeten their benefits packages (because they can). Here's what that looks like during the Obama "recovery"-

http://www.advisorperspectives.com/...household-income-for-inflation-1967-chain.gif

This is a DIRECT result of the policies pursued by Bush and the Dem Congress after 06 and then continued by Obama. Median income didn't start to stabilize until after the Dems lost Congress.

 

[InTheLight]

So... liberal economists at liberal universities trained for 7 years by other liberal economists who themselves were trained by liberal economists... deny history and you find it impressive?

No, take another look at the chart. I find it impressive that 43% of liberal economists at liberal universities agreed that cutting taxes will lead to gains in GDP whereas only 9% disagreed.

History speaks for itself.

Rest of post snipped since we mostly agree with each other.

The year of the Gingrich tax cuts, I think they came in 1995 after the Contract with America passed, and was a $500 child tax credit (later increased.)

The unemployment numbers--what metric was changed under Obama? I thought the last time they changed the methodology was in the early Clinton years.

As far as labor participation rate--that is depressed primarily because of the large numbers of baby-boomer workers retiring.

 

[targus]

As far as labor participation rate--that is depressed primarily because of the large numbers of baby-boomer workers retiring.

The opposite is happening... the participation rate among those 65 and older has been increasing - and the rate for those younger than 24 has been decreasing.

http://www.forbes.com/sites/realspi...nt-retirees-are-not-the-labor-exodus-problem/

 

[Revmitchell]

The opposite is happening... the participation rate among those 65 and older has been increasing - and the rate for those younger than 24 has been decreasing.

http://www.forbes.com/sites/realspi...nt-retirees-are-not-the-labor-exodus-problem/

"If, however, younger Americans are not entering the labor force and/or middle-aged people are dropping out, quite the opposite. The reported unemployment rate then understates the reality of current labor market conditions. Then, individuals are not looking for work conceivably because there is little work to be found and so they are giving up — in short, an economic calamity.

On one side are those who take the view that what is being observed are actually Baby Boomers leaving the workforce and retiring, such as minnpost.com’s Erik Hare, writing in a piece, “Decline in labor force driven by retirement, not discouragement.”

Hare calls it a “lie” that “this is the result of people giving up looking for work, a sign that the ‘recovery’ is weak.” Instead, Hare points to a Philadelphia Federal Reserve study on the topic that takes a narrow look at Bureau nonparticipation data, concluding that retirements beginning in 2010 began to play a role in driving down the participation rate.

The trouble with the study is that labor participation has been declining a lot longer than since 2010. In fact, it peaked in 1997 at 67.1 percent, and has dropped annually ever since. As the study notes, “retirement had not played much of a role until around 2010.” By then, the rate had already dropped 2.4 percent.

Meaning, retirement cannot be thought to have played much of a role in the participation rates up until that point, and may only be tangentially affecting it now."

 

[Revmitchell]

Blaming the participation rate on retirees and refusing to admit people have stopped looking for work is akin to Obama refusing to admit there are radical Islamists. If you will not admit the problem you cant fix it.

 

[InTheLight]

"If, however, younger Americans are not entering the labor force and/or middle-aged people are dropping out, quite the opposite. The reported unemployment rate then understates the reality of current labor market conditions. Then, individuals are not looking for work conceivably because there is little work to be found and so they are giving up — in short, an economic calamity.

On one side are those who take the view that what is being observed are actually Baby Boomers leaving the workforce and retiring, such as minnpost.com’s Erik Hare, writing in a piece, “Decline in labor force driven by retirement, not discouragement.”

Hare calls it a “lie” that “this is the result of people giving up looking for work, a sign that the ‘recovery’ is weak.” Instead, Hare points to a Philadelphia Federal Reserve study on the topic that takes a narrow look at Bureau nonparticipation data, concluding that retirements beginning in 2010 began to play a role in driving down the participation rate.

The trouble with the study is that labor participation has been declining a lot longer than since 2010. In fact, it peaked in 1997 at 67.1 percent, and has dropped annually ever since. As the study notes, “retirement had not played much of a role until around 2010.” By then, the rate had already dropped 2.4 percent.

Meaning, retirement cannot be thought to have played much of a role in the participation rates up until that point, and may only be tangentially affecting it now."

Let's take a look at the actual study and not listen to someone's narrow spin of it, shall we? The author admits that the labor participation rate started declining around 2000.

First, note that the decline in the participation rate started around 2000. However, it is important to notice that the declining trend had flattened in the boom years between 2004 and 2007 and then accelerated during and after the Great Recession.


Between the first quarter of 2000 and the final quarter of 2013, the participation rate declined more than 4 percentage points.
Roughly 65 percent of the decline is accounted for by retirement and disability. The increase in non participation due to retirement has occurred only after around 2010, while non participation due to disability has been steadily increasing over the past 13 years.


Retirement had not played much of a role until around 2010, at which point it started to make a large impact on the overall participation rate. In particular, the decline in the participation rate in the past one-and-a-half years [..] is mostly due to retirement.


http://philadelphiafed.org/research...nes-in-the-labor-force-participation-rate.pdf

 

[InTheLight]

Blaming the participation rate on retirees and refusing to admit people have stopped looking for work is akin to Obama refusing to admit there are radical Islamists. If you will not admit the problem you cant fix it.

Blaming the participation rate on people who have stopped looking for work and refusing to admit people have retired is akin to Obama refusing to admit there are radical Islamists.

 

[targus]

In my opinion, what is happening is employers don't want to let their experienced (older employees) go because they are too valuable.

And companies don't want to hire inexperienced (younger) people because it costs so much to train them.

I am in my mid sixties and see no reason to retire anytime in the foreseeable future.

 

[church mouse guy]

Although older workers are more dependable, if they do not work dirt cheap and have good skills, they are often let go for cheaper illegals, in my opinion. Nevertheless, it is true that many people have been forced to work even though they are elderly due to economic stagnation and the decline in the purchasing power of the fiat currency being printed by the Federal Reserve while holding interest rates below Great Depression levels. The next twenty months might see things getting even worse economically.

 

[InTheLight]

Although older workers are more dependable, if they do not work dirt cheap and have good skills, they are often let go for cheaper illegals, in my opinion. Nevertheless, it is true that many people have been forced to work even though they are elderly due to economic stagnation and the decline in the purchasing power of the fiat currency being printed by the Federal Reserve while holding interest rates below Great Depression levels. The next twenty months might see things getting even worse economically.

I took you off Ignore for this post and I see at least three errors.

Also, I was disappointed that "Clinton" didn't make it into your post somewhere. You are slipping.