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Town Square

Decline in the Middle Class in America

Original post made by Cindy Cross, Parkside, on Sep 6, 2011

Decline in the Middle Class in America by Cindy Cross
Is the middle class doomed? The huge disparity between the number of wealthy and those living above the poverty level is growing at an alarming rate.
Consider the following statistics; in 1988, the average income of the American taxpayer, adjusted for inflation was $33,400. The average taxpayer income in 2009 was $40,711; with the same adjustment in inflation, this amount would be equal to the $33,000 from 1988. In contrast, the average income of the top 1% in America is $380,000, with a growth of over 33% in the last 20 years.
Even more sobering is the poverty level. According to the government website ASPC.hhs.gov, a person making $22,350 is in the lowest working class echelon in our society, and is living in 'poverty.' Less than $20,000 separates those in the middle class and those living in poverty when more than $300,000 is the gap between middle and upper class Americans.
With a presidential candidate Mitt Romney saying, "Corporations are people too," it would not be unreasonable to imagine the average middle income lowering enough to meld with the poverty level, thereby eliminating the middle class all together Why help Americans when corporations are in need?
Corporations are sending jobs overseas leaving many American blue collar workers unemployed. The Bay Bridge is being built and constructed in China, with Chinese steel. The stone sculpture of Martin Luther King Jr., recently unveiled in Washington D.C. was done by a Chinese artist and constructed by Chinese workers. These artists, who may not have understood the nature of their subject, showed Martin Luther King Jr. in a more serious, patriotic stance rather than the emotion evoking, life changing essence that the spirit King will hold over generations of Americans he inspires. Had an American artist completed the sculpture, both the spirit and grace of King may have been better portrayed. But alas, even American art is made in China.
Unless we bring back jobs from China and other foreign countries, Americans will all either become very wealthy, or barely making it.
With this enormous gap in income, how can those in the government leadership scoff at the thought of increasing taxes for the wealthy?
Here are some statistics that show the decline in the middle class:
83% of all U.S. stocks are in the hands of 1% of the people.
61 % of Americans "always or usually" live paycheck to paycheck, which was up from 49 % in 2008 and 43 % in 2007.
66 % of the income growth between 2001 and 2007 went to the top 1% of all Americans.
36 % of Americans say that they don't contribute anything to retirement savings.
43 % of Americans have less than $10,000 saved up for retirement.
24 % of American workers say that they have postponed their planned retirement age in the past year.
Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 % increase over 2008.
Only the top 5 % of U.S. households have earned enough additional income to match the rise in housing costs since 1975.
For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
The bottom 50 % of income earners in the United States now collectively own less than 1 % of the nation's wealth.
The top 1 % of U.S. households owns nearly twice as much of America's corporate wealth as they did just 15 years ago.
More than 40 % of Americans who actually are employed are now working in service jobs, which are often very low paying.
Despite the financial crisis, the number of millionaires in the United States rose a 16 % to 7.8 million in 2009.
The top 10 % of Americans now earn around 50 % of our national income.
Warren Buffett, American business magnate and the world's third wealthiest man recently wrote an article for the New York Times. In his article, titled, 'Stop Coddling the Super Rich,' he says, "But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate. My friends and I have been coddled long enough by a billionaire-friendly Congress. It's time for our government to get serious about shared sacrifice. "
Many scoffed at Buffett's ideas and suggested that he write a check to the U.S. Treasury if he was so interested in the rich giving their 'fair share.'
The late real estate investor and billionaire Leona Helmsley, better known as the 'Queen of Mean,' was right when she said, "Only the little people pay taxes." So strong was her conviction against paying taxes, that in 1989 she was tried and convicted of federal tax evasion, and spent nineteen months in prison.

Comments

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Posted by Cholo
a resident of Livermore
on Sep 8, 2011 at 11:04 am

i would love to prove beyond a reasonable doubt that warren buffet and i are 1st cousins...


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Posted by Taxpayer
a resident of Another Pleasanton neighborhood
on Sep 8, 2011 at 12:26 pm

If the government were more effective at spending and investing, I would be more inclined to increase my taxes to help out. But they are not. The more we let government spend, the dimmer our future will be. Look at the $800M stimulus bill with all its shovel-ready projects. Are we more competitive now? No. Did we make any investments that will fundamentally improve our competitiveness? No. Unless you want to count Solyndra ;-)

The best thing we can do right now is starve the beast and then let market forces take over. Markets and companies create jobs. Governments don't.

Here is one area where I'd be more than happy to increase my taxes to support: binding productive improvement projects for government operations. I'd be happy to make that investments as I know there would be a down stream return.


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Posted by Investment Tipster
a resident of Ironwood
on Sep 8, 2011 at 12:31 pm

@"Here is one area where I'd be more than happy to increase my taxes to support: binding productive improvement projects for government operations. I'd be happy to make that investments as I know there would be a down stream return."


As another patriotic Republican, I have to tell you you should invest in the kinds of govt activity being advanced by the GOP. Higher and higher border fences will add so much to our nation, as will more Border Patrol agents and workplace regulators. Prisons are productive too. More prison guards will give us a real bang for the buck.


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Posted by Taxpayer
a resident of Another Pleasanton neighborhood
on Sep 8, 2011 at 12:42 pm

You know I'm not a Republican, but continued idiotic statement like yours and others are causing me to look far and wide for new ideas and true leadership.

It is pretty sad that all you can do to protect status quo is to say the others guys would be worse.


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Posted by Depth
a resident of Another Pleasanton neighborhood
on Sep 8, 2011 at 10:22 pm

Oh Cindy, you lack such depth ! What do you mean 83% of stocks are in hands of 1% of our people? So not really true. Almost every 'working' family or union member has a varying amount of mutual 'funds', thru companies such as Fidelity Funds and Vanguard.....each smaller 'fund' made up with 20-40 'stocks'....in their deductible IRA accounts. The massive 'union accounts' and municipality investment accounts are made up of these stock index funds...for retirees (people). Most seniors have investment funds ....made up of a variety of 'stocks'. The stock market is made of more average people, who can't buy BIG things. The really rich, invest in multiple world mansions, and own smaller 'private' companies that are not even ON the stock market ! The 'market' is actually for the little people who don't have big $$$ to invest....and buy 'little pieces' in mutual funds.
IRA accounts, or senior funds, (comprised of mutual stock funds) are in the names our families, friends, and relatives.
Do you think every employee just has 'cash' sitting in CDs and savings accounts to fund their IRAs.
Your eagerness to trash Romney with petty digs tips your hand.
Since you don't understand 'how' people invest in 'corporations' that are owned in millions of 'pieces' by little people, I would guess you must be a union talking head....fearing Romney would beat Obama, which he would....the others would not.


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Posted by Middle Class
a resident of Kottinger Ranch
on Sep 15, 2011 at 7:13 pm

Cindy has some good points but not enough of the full picture.

My 8 rules for a better society:

It's simple -
1) shame CEOs, other executives, hedge fund managers, etc into slashing their compensation. How many millions are enough for you guys?
2) give this money back to the middle and lowest paid employees (or at least prevent layoffs - BofA executives, are you listening?)
3) demand that Government function more efficiently
4) bring back jobs from overseas
5) stop blaming illegal immigrants for our troubles (seriously, are you really going to wash cars, clean houses, do yard maintenance, and pick crops?)
6) stop blaming Muslims for our troubles and stop going to war (hello?! war is expensive!)
7) get rid of all Reality TV
8) slow down the massive consumerism which drives this country (it's unsustainable you idiots!)


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Posted by Barbara
a resident of Amador Valley High School
on Sep 26, 2011 at 8:53 am

Taxpayer, just because something is repeated ad infinitum doesn't mean it's true. "Markets and companies create jobs. Governments don't." What utter nonsense. A few facts: corporations are required by law to make as much return on investment as possible, i.e., it is woven into the fabric of our society that the most powerful concentrations of wealth the world has ever seen are legally required to place profits above citizenship; the people who run them are legally protected from personal responsibility for any damage the corporation does to regular people. CEOs think nothing of taking millions of dollars in salary while laying off hundreds, thousands of people from those jobs you think they create; they think nothing of shipping our manufacturing jobs overseas to make more profits for the corporation while destroying our manufacturing base, turning us into a nation of "consumers." Those corporations and markets you think are the solution to every problem are sitting on trillions in cold hard CASH right NOW, enough to pay off the entire federal deficit and put a whole lot of people to work right NOW. Market forces aren't solving this problem, are they? As a nation, we've transferred our entire wealth to the private sector and we're too stupid to see what's going on. And you keep barking out the party line, no new taxes, etc. Who do you think was responsible for getting us out of the great depression, Ford? AT&T? No, unfortunately, it was a war, and a huge public works project financed by what? the government. It's all just people making decisions; the difference between government and corporations is just who has the power: government is open, corporations are not. By the way, corporations now control all of our media; we were too stupid to notice that the laws about concentrated media ownership were changed a couple of decades back.
Wake up and smell the coffee.