Income Inequality, Does it Matter?

[Aberration]

Holy ****.

I've never been accused of having an entitlement mentality by anyone who knew me. I got my first job at 13 and been working ever since. I've never taken a dime from the government aside from public education.

I give up. I think some of you read Jonathon Swift's A Modest Proposal and took it literally.

May you receive the same compassion when you are in need that you now give.

You can not compel compassion.

 

[Ryanm]

This may help the discussion is defining what poverty and poor means today: "The Heritage foundation did a study in 2005 for poor U.S. households (those with cash incomes below the official poverty thresholds) While poor households were slightly less likely to have conveniences than the general population, most poor households had a wide range of amenities.

For decades, the U.S. Census Bureau has reported that over 30 million Americans were living in “poverty,” but the bureau’s definition of poverty differs widely from that held by most Americans. In fact, other government surveys show that most of the persons whom the government defines as “in poverty” are not poor in any ordinary sense of the term. The overwhelming majority of the poor have air conditioning, cable TV, and a host of other modern amenities. Exaggeration and misinformation about poverty obscure the nature, extent, and causes of real material deprivation, thereby hampering the development of well-targeted, effective programs to reduce the problem."

What is Poverty in the United States: Air Conditioning, Cable TV and an Xbox

What is the standard for "poor" here? Last I checked the definition of poverty is having so little money that you can't afford any of the following: Clothing, food, Shelter, transportation.

 

[ttwtt78640]

What is the standard for "poor" here? Last I checked the definition of poverty is having so little money that you can't afford any of the following: Clothing, food, Shelter, transportation.

That was then, this is now. As this thread does address income inequality, so does the great array of liberal entitlement programs. It now seems not only acceptable to use public funds (tax money taken from those that choose to earn their keep) to prevent starvation and exposure to the elements, but to provide a "lifestyle" suitable for the great loafing class to avoid sharing a TV, walking to a public phone or lacking sufficient electrical appliances to command a decent utility bill as well.

Why is that we working folks, not only must buy these things (if we can afford them) but also pay sufficient taxation to supply them for FREE to those that we must support in the great loafing class? We are told that public assistance is a brief and temporary hand up, not a hand out or "lifestyle", yet somehow it ALWAYS costs more, covers more people and lasts far beyond any three or five year limit; as Bill Clinton once told us was now the new, new deal, back when he ended "welfare as we knew it". Poor is now defined as having more bills due than income to pay them (no need to pawn any "luxuries" first), with a bonus thrown in for having more dependents than you can afford, as well; no penalty at all for lacking a highschool education or being a substance abuser, in fact, some now seek to make substance abuse (addiction?) into a new "disability". Yes they can!

 

[Harry Guerrilla]

They pay all their bills. And I can't believe it's gotten to the point you would attack them for helping others in need. You're not ingrossed with the idea that their financial struggle is entirely all there fault. It can't possibly be the fact that groceries and fuels costs are rising, that this is a bad economy, etc. No, they must be dip****s with their finances, that has to be the only explanation...

And helping others in more need than you, doesn't hat make them stupid with money. There is never a financial or economic benefit in helping other people, so you could very well argue that helping anybody is financially ignorant. I think that helping others makes them good people. They help people struggling worse than they are... one person they help frequently is the husband's grandmother. She's can't work, and she's was severely sick a few years ago. And the really messed up thing is that his brother is well off, and his brother's side of family does very little for their grandmother or anybody else at all. I have also let this family borrow money from me. I think good people deserve help when it's needed. The drug addict with the change donation jar doesn't get money from me. She's dying and she wants money so she can buried where she wants to be buried, but if she stopped using drugs like she was told, she wouldn't be dying. I can understand not wanting to give somebody like that money, if I were in financial distress. But my their grandmother, with little money and no ability to work, I would never attack them for helping out such a person.

I'm not attacking anyone.
I'm just saying, if you're really struggling, you shouldn't be handing money out to other people.

Sure helping grandma out is fine, but you didn't say any of that before hand.

 

[Harry Guerrilla]

Sorry, but this is simply not true. My friend used to live in Guatemala where there are unsafe factories full of children. It's true they don't have a lot of skilled laborers there, but to say those factory jobs are helping the people work out of poverty is far from the truth. It's the same way in parts of Mexico and China. People just working their asses off at the expense of their health and time, for a few cents an hour. In parts of Mexico where there are factories, it's people living in shacks without plumbing.

What's better, these Guatemalans without any job or with an unsafe job?

 

[Harry Guerrilla]

I don't think there is such a thing as economic adaptation... You can't simply adapt in a shrinking economy and go from the bottom percent to the top 1%. It's not all up to the individual, because there are many things outside of an individual's control... rising costs, burdened with debt after going to college to be competitive, gloomy economy, etc..

Why must someone go from bottom to top, why not bottom to middle?
What are you doing to meet these rising costs?
What changes are you making?

 

[Harry Guerrilla]

Do you have children? Or children you support?

I have a wife and 2 kids.
That live with me.

 

[Harry Guerrilla]

Like your job? I usually like your posts, but come on: you're a factory worker making less than $14 an hour. Are you going to be so "Libertarian" when your job is lost to shrinkage or outsourcing?

It may eventually happen.
I've already prepared, for such a thing to occur.

My bills are such that I can cover my expenses, on unemployment, if necessary.

Yes and no. You're right that Americans buy too many unnecessary consumer items. No argument there. But many people in this thread have demonstrated that there are those who have cut back, and they still struggle to make it. Tough **** for them, I guess. They're just not trying hard enough. That's bs.

Sometimes yes and sometimes no.
All I can say, is that personal experience has taught me, that most are poor money managers.

I would like to see your living expenses. I don't expect to get such personal info from you, but it seems unlikely that you could be saving that much. Even with a 401k. You probably have a high speed internet connection or at least DSL. I'm paying $50 a month for cable internet. Even living like a Spartan costs at least $2000 a month. :shrug:

Internet- $44.99
Power- (last month) $99.50
Water- $28.71
Sewer and Garbage- $33.45
Mortgage- $430 (but I pay $500)
Natural Gas- $38.18
Vehicle Gas- Usually $30 a week
Groceries- $692.60 (for the month of May, includes side trips)
Total cost = $1517.43
Edit: My math is off, It's actually almost $1600.

I bought some movies off Amazon streaming and I do have a Netflix and Hulu sub.
Still though under $2000 total.
When I'm working overtime, like I am now, I can usually save 1/3 or more of my check.

 

[SheWolf]

What's better, these Guatemalans without any job or with an unsafe job?

Those jobs don't make a difference nor raise their standard of living. Farming and agriculture raises their standard of living and access to food better than slave labor will. People in countries like that work all the time. They work to feed and clothe themselves.

 

[ttwtt78640]

Those jobs don't make a difference nor raise their standard of living. Farming and agriculture raises their standard of living and access to food better than slave labor will. People in countries like that work all the time. They work to feed and clothe themselves.

WRONG. Any outside income to a country/region is a plus, even if the actual workers get "ripped off", the slave driver and foreign gov't still get paid well and will likely spend MOST of it in their home country. "Trickle down" is not a fast or direct way to help "the masses" but it sure beats nothing, the likely alternative.

 

[Alyssa]

It may eventually happen.
I've already prepared, for such a thing to occur.

My bills are such that I can cover my expenses, on unemployment, if necessary.




Sometimes yes and sometimes no.
All I can say, is that personal experience has taught me, that most are poor money managers.





Internet- $44.99
Power- (last month) $99.50
Water- $28.71
Sewer and Garbage- $33.45
Mortgage- $430 (but I pay $500)
Natural Gas- $38.18
Vehicle Gas- Usually $30 a week
Groceries- $692.60 (for the month of May, includes side trips)
Total cost = $1517.43
Edit: My math is off, It's actually almost $1600.

I bought some movies off Amazon streaming and I do have a Netflix and Hulu sub.
Still though under $2000 total.
When I'm working overtime, like I am now, I can usually save 1/3 or more of my check.

Fair enough.

But if Americans were taught how to be better money managers, the economy would collapse because it is consumer driven. :mrgreen:

 

[Aberration]

Fair enough.

But if Americans were taught how to be better money managers, the economy would collapse because it is consumer driven. :mrgreen:

That is exactly what happened.

 

[Alyssa]

That is exactly what happened.

Americans suck at managing money. It's like Harry said. And I've made plenty of mistakes with money in my life. But I've also cut lots of consumer junk out of the budget including cable and cellphone service. I now have Magic jack and prepaid service. My mom added me to her service plan because she hates trying to reach us on magic jack. But I refuse to pay for all of these services. Personally, I am sick of consumerism. The idea of self sufficiency is very appealing to me. I am light years from achieving it, however.

 

[Ikari]

There is a lot of discussion about the growing income inequality in this country. My question is why are we so fixated on this? If Warren Buffett or Bill Gates were not worth $40 billion each, let's say we confiscated all but $50 million each how would that help the lower income folks in the country? Our deficit would go down by $80 billion so our debt would go down to ONLY $ 15.9 billion, big deal.

Do people think that if their income or wealth goes down that there is some automatic lever that increases the income of others.

Seems to me that this is a false argument to take our minds off the real problem of generating real jobs that pay a decent wage.

It would seem we should spend more time figuring out how to have folks move up the ladder of success rather than spending all this time trying to drag others down.

There are better arguments for fixing the tax code than the simplistic chant of decrying the most successful among us.

It really depends on how the system is set up. I think there will always be some amount of economic inequality in any functional and healthy society. You will have rich and you will have poor and you will have a middle class. The real problem isn't innately these designations, but comes in rather through economic mobility. If the income differential grows, or is historically unfavorable to labor. Meaning that as a society grows and can take in more money, the real term wealth of the middle and lower class stays even or declines while the rich's take of the pot increases. That's a problem for sure. Also if one cannot reasonably raise themselves out of poverty, that is a problem too. While you can always say "you should just work harder and you'll do better", it's not always a correct statement. In fact normally there is always some amount of luck or serendipity involved; but when it aggregates up to such levels as it becomes rare for someone to raise their lot in life; you have a problem.

In the end, what we have in the US is classic corporate capitalism. The mixing of State and corporate entities such that free market dynamics are snuffed out. Under corporate capitalism, there is very little economic mobility as that is considered bad from the perspective of the upper class. Economic mobility doesn't just mean poor people can become rich or middle class; but also the reverse, rich people can become poor. If you move to remove that dynamic, you also then start restricting the economic mobility of the lower classes.

Simply taxing the rich more will not solve this problem. You need to rework the economy and move to install once again free market capitalism.

 

[Mach]

Most applications are online. Internet and computers are necessary to obtain and maintain employment. And refrigerators and stoves? -Please. :roll: I can't believe people are arguing that these basic necessities constitute wealth.

Why? Relative to many regions and hundreds of millions of people, they are considered wealth. Is it a global economy? Yes. So why do you reject it?

Personal responsibility is the catch-all conservative argument for every conceivable problem anyone can face. There are plenty of highly educated people struggling to make it. Not everyone is a welfare bum as you and others in this thread like to insinuate.

How do you explain the massive influx of Asian immigrants into the U.S. These people are coming from living conditions where the have far less than your idea of "basic necessities" (How is that even possible??!?!).
They are coming from worse living conditions, areas of worse corruption, areas that are less stable, with less early education. If they even know English, it's as a second language. They don't know our culture well.

Yet they move here. Why? It's better. And they thrive here...how? Are they simply genetically superior to our white trash? Or is their lack of american culture actually an ADVANTAGE because our entitlement culture is so poisonous?

How do they move here and thrive, yet 5th generation american poor can't? Won't? Don't want to?

 

[Harry Guerrilla]

Fair enough.

But if Americans were taught how to be better money managers, the economy would collapse because it is consumer driven. :mrgreen:

True enough.
It's quite the conundrum.

 

[Goshin]

It really depends on how the system is set up. I think there will always be some amount of economic inequality in any functional and healthy society. You will have rich and you will have poor and you will have a middle class. The real problem isn't innately these designations, but comes in rather through economic mobility. If the income differential grows, or is historically unfavorable to labor. Meaning that as a society grows and can take in more money, the real term wealth of the middle and lower class stays even or declines while the rich's take of the pot increases. That's a problem for sure. Also if one cannot reasonably raise themselves out of poverty, that is a problem too. While you can always say "you should just work harder and you'll do better", it's not always a correct statement. In fact normally there is always some amount of luck or serendipity involved; but when it aggregates up to such levels as it becomes rare for someone to raise their lot in life; you have a problem.

In the end, what we have in the US is classic corporate capitalism. The mixing of State and corporate entities such that free market dynamics are snuffed out. Under corporate capitalism, there is very little economic mobility as that is considered bad from the perspective of the upper class. Economic mobility doesn't just mean poor people can become rich or middle class; but also the reverse, rich people can become poor. If you move to remove that dynamic, you also then start restricting the economic mobility of the lower classes.

Simply taxing the rich more will not solve this problem. You need to rework the economy and move to install once again free market capitalism.

Thank you for saying what I was trying to say for several posts. I must have been having an off day since I botched it, but you nailed it and made the point I was trying to make. Thx.

 

[Alyssa]

Why? Relative to many regions and hundreds of millions of people, they are considered wealth. Is it a global economy? Yes. So why do you reject it?

If you want to compare the US to a third world country, sure. Personally, I'd rather move up--not down. Should the poor in this country accept unrefrigerated food and dirt floors an exchange for an elite class lording over the rest of us? I would prefer a real free market system as opposed to the fake, neo conservatism version of capitalism that is currently in place.

How do you explain the massive influx of Asian immigrants into the U.S. These people are coming from living conditions where the have far less than your idea of "basic necessities" (How is that even possible??!?!).
They are coming from worse living conditions, areas of worse corruption, areas that are less stable, with less early education. If they even know English, it's as a second language. They don't know our culture well.

Yet they move here. Why? It's better. And they thrive here...how? Are they simply genetically superior to our white trash? Or is their lack of american culture actually an ADVANTAGE because our entitlement culture is so poisonous?

Many thrive here because they get government grants that aren't available to Americans to start businesses, and pay little or no taxes for several years. Others are used to living in such horrible conditions that the impoverished life styles of Americans far surpass what they dealt with in their third world ****hole. And still others work hard and save just like many Americans, and they make it. :shrug:

How do they move here and thrive, yet 5th generation american poor can't? Won't? Don't want to?

Some of it is "poisonous" American culture. People are lazy, entitled assholes. But that doesn't change the fact that the current system in place needs reform. VAST reform.

 

[Diving Mullah]

There is a lot of discussion about the growing income inequality in this country. My question is why are we so fixated on this? If Warren Buffett or Bill Gates were not worth $40 billion each, let's say we confiscated all but $50 million each how would that help the lower income folks in the country? Our deficit would go down by $80 billion so our debt would go down to ONLY $ 15.9 billion, big deal.

Do people think that if their income or wealth goes down that there is some automatic lever that increases the income of others.

Seems to me that this is a false argument to take our minds off the real problem of generating real jobs that pay a decent wage.

It would seem we should spend more time figuring out how to have folks move up the ladder of success rather than spending all this time trying to drag others down.

There are better arguments for fixing the tax code than the simplistic chant of decrying the most successful among us.

Regardless of rhetoric. IF you want the truth, just look at the history. In almost every situation a healthy Middle Class system 100% contributes to healthy country and economy and more importantly a prosperous Democracy. This has been true from the time of Greek and then Romans (yes they had a Middle Class too), all the way to us in here and now or at least from 1950 all the way through 1980 (the golden age of middle class in America). Because the middle class is the true engine behind the economy and nothing else. That means Government Job, infrastructure jobs, Responsible Social Engineering. You tip the balance and the economy suffers.

And again history is the witness that any these great civilization have fallen simply because of one reason and reason alone. The accumulation of wealth by mainly one group and hording it. Demise of infrastructure and reduction of Social engineering and safety nets.

Regardless what BS fills the bullhorns. The burden always from follows in one direction. The weakest always suffer more and have the least voice.

In case of U.S for example the shift started in the early 80s. Where we started to put more burden on the Middle Class, and equally there began the gap in classes. Actually what is so funny is that With Reagan cutting taxes on the rich and increasing it on Middle Class, he also expanded the government 5X which in essence offset the demise somewhat until Bush I, but in Return increased the deficit from 30% of GDP to over 60%.

"An April 2004 CBO study showed that between 1979 and 2001 (the last year CBO examined), the average after-tax income of the top one percent of households rose by 139 percent ($409,000) after adjusting for inflation, compared to a 17-percent ($6,300) increase for the middle fifth of households and an 8-percent ($1,100) increase for the bottom fifth.
The magnitude of the income tax cuts and the change in tax rates under the Reagan-Bush-Bush regimes is important but there is more to the story. It's also important to look at what taxes have already been cut: capital gains tax rates; taxes on dividend income; repeal of the estate tax in 2010; increased business depreciation schedules etc. Each of these changes favors those with investment income over those with labor income, thus magnifying the effect of the reduction of income tax rates.

Pure and simple you reduce people's disposable income, people have less money to buy crap. If people don't buy, manufactures won't build and therefore they won't hire, which means good jobs are scares, it drives the wages down, people getting paid less they buy less stuff....See the pattern??

With Rich getting Richer they also control more of the government, which in turn helps them accumulate more wealth.

Here is a good example. before 1970s 42 Banks controlled less than 17% of entire wealth in US. In 2012 5 Banks control own over 61% of wealth in US. An average a White collar worker makes $1500 dollar less now adjusted for inflation than the same worker doing the same job in 1975. Why? But the same time the rich income increase by few hundred %.

Wealth Distribution is good measurement of County's Economic and system of Government.

You look at the poor countries with tyrannical government, they all have a huge wealth distribution and the more prosperous the country and its democracy the narrower is the wealth distribution.

It is really that simple.

Diving Mullah

 

[KevinKohler]

I prefer to use the term income mobility.

Income inequality, or disparity, doesn't really point to the problem. The the US has poor people...and really really really really really really really really really really really really really rich people, is not the issue. The issue is, the average amount of economic mobility we are afforded.

And I would say that, these days, that mobility is stagnant in this country. It's pretty hard for truly wealthy people to end up poor, because of all the non wealth related, personal connections they have AS wealthy people, or even as FORMERLY wealthy people. If Bill Gates gambled ALL of his money and lost, do you think he would stay poor for long? No, he's gonna get a hand up from friends, and since his friends are likely all rich, his hand up will be more like a giant fling back into the pie in the sky. Wealth, in a way, is self sustaining. And it's darn near impossible anymore to start out poor, and end up rich. Yeah, sure, you got your Mark Zuccerbergs out there, or however you spell his last name...but they are, by FAR, the exception...and honestly, that the poor could become rich is not the goal. Not everyone can be rich, or NO ONE would be. However, to go from poor to middle class should not be impossible. And it's NOT impossible. But it's a HELL of a lot harder than it used to be. Used to be, all you needed was a properly functioning brain, a little work ethic, and thumbs. Now? Now you gotta be like me, and work 70+ hours per week. There is something wrong with that picture.

 

[Alyssa]

The median family's net worth dropped 38.8 percent during the three-year period, the Fed said in its latest report on changes in U.S. Family Finances, derived from a survey of consumer finances. Fed economists told reporters that this was the biggest drop in net worth since the survey started in 1989.

Meanwhile:

At a time most employees can barely remember their last substantial raise, median CEO pay jumped 27% in 2010

 

[Harry Guerrilla]

The median family's net worth dropped 38.8 percent during the three-year period, the Fed said in its latest report on changes in U.S. Family Finances, derived from a survey of consumer finances. Fed economists told reporters that this was the biggest drop in net worth since the survey started in 1989.

The problem with this, is people consider a house an asset, when it's really a liability.
Essentially, many folks put too many eggs in one basket.

They overleveraged their position.

Meanwhile:

At a time most employees can barely remember their last substantial raise, median CEO pay jumped 27% in 2010

You have to remember too, that we were very near a time of deflation.
Wages tend to stop growing when that happens, even the feds pumping tons of money into the economy, barely staved that off.

 

[Medusa]

income inequity would be a better title.not everybody has same specialities and can earn same money because of this.

 

[cpwill]

Talking about income inequality is not the same as attacking wealth. Yes, we do need to talk about income inequality and the reasons behind it. I think that it's sad to see so many people graduating from college without a job, and these are not just degrees in Social Science. I studied accounting, and I know a lot of people are trying to find jobs in that field and it's a growing field. On top of that, there is the issue of mounting college debt.

It's not all about jobs, it also about debt accumulation. Many times the middle class and poor have to accumulate debt to get ahead. Investing in real estate or college involves taking out a loan. Meanwhile, the wealthiest in the country can invest with cash. If college continues to go up, income inequality will rise.

not necessarily true at all. In fact, quite the opposite - avoiding debt will help you get ahead.

 

[cpwill]

And I would say that, these days, that mobility is stagnant in this country. It's pretty hard for truly wealthy people to end up poor, because of all the non wealth related, personal connections they have AS wealthy people, or even as FORMERLY wealthy people. If Bill Gates gambled ALL of his money and lost, do you think he would stay poor for long? No, he's gonna get a hand up from friends, and since his friends are likely all rich, his hand up will be more like a giant fling back into the pie in the sky. Wealth, in a way, is self sustaining. And it's darn near impossible anymore to start out poor, and end up rich. Yeah, sure, you got your Mark Zuccerbergs out there, or however you spell his last name...but they are, by FAR, the exception...and honestly, that the poor could become rich is not the goal. Not everyone can be rich, or NO ONE would be. However, to go from poor to middle class should not be impossible. And it's NOT impossible. But it's a HELL of a lot harder than it used to be. Used to be, all you needed was a properly functioning brain, a little work ethic, and thumbs. Now? Now you gotta be like me, and work 70+ hours per week. There is something wrong with that picture.

You will be happy to know that the vast majority of millionaires in this country are first-generation and self-made.