Well, a lot more than 1% are doing well. Probably closer to 70-80%. The poor are always struggling; most likely because they don't have any money! Joking aside, we are a product of our decisions. Have a baby at 14. Drop out of school. Join a gang. Don't go to college. Use drugs. Etc. These are the things that affect our ability to be rich or poor much more than who occupies the White House, Congress or Federal Reserve.
We already knew about housing. This is nothing new. Real estate is very cyclical. Inventories are up while risky loan schemes that were popular during at the end of the housing bubble are being more closely scrutinized. Supply-demand. But also notice that housing prices aren't tumbling that much, other than some of the froth coming out. Why? Because people are working and making their payments. Unless we see an increase in unemployment, people will continue to make their payments and live their lives. Yes, I know there are some out there struggling and who will be foreclosed on. But that's not a huge number.
What we're seeing with rising gas prices is that consumers are making a choice. Wages are up and unemployment is at 4.4%, but people tend to consume all of their earnings. People have decided that putting fuel in their gas tanks is more important than shopping at Target. Target earnings today.
Higher energy costs act like a tax on consumers. People have decided that conservation is for pussies, and that they must drive to work, they must take their kids to school and soccer practice, and that they love their cars. They have chosen to put gas in the tank and cut their spending elsewhere.
This is also why inflation is barely ticking on the radar. Yes, the Fed is jawboning about it for some unknown reason, because there certainly isn't much inflation out there. Curious to what their agenda is. Are. Is. Are. We'll have to wait and see.
Posted by muckdog at April 24, 2007 07:59 AMIn the spirit of his beloved preznit and pre-emptive war:
Screw you and your beloved economy Muckdog.
Posted by Simp at April 24, 2007 08:02 AMMuck, do you really believe that 70-80% are doing well? How far down the income scale do you think this wellness extends? Just curious as to your thinking there. Do you feel that those making between $50-75,000 a year are doing well? Those making below that?
Posted by Steve Soto at April 24, 2007 08:18 AMDog-pile!
Posted by Seven of Six at April 24, 2007 08:44 AMTwo houses in my own neighborhood have been listed for sale for the best part of a year and remain unsold. Three years ago six weeks was more typical.
As for gasoline prices, I saw a very interesting graph in the Economist within the last two years that plotted refining excess capacity within the US. It has declined monotonically since 1980 from about +20 percent to -3%. In other words, even when Katrina has not ravaged the Gulf Coast, refining capacity is marginally insufficient. This matters because slight shortages in goods such as gasoline produce excess profits ( it is a good with an inelastic demand curve.) Thus, shortages maximize profits. This, btw, could be a great explanation for propagating the violence in Iraq; to make Iraqi oil unavailable and drive up oil prices. So far, it has worked. Oil is about twice the price it was when Buscheney took office. This suggests the question, would Cheney kill 3000 US soldiers and half a million Iraqis just to prop up oil prices? What do you think?
Posted by steve at April 24, 2007 08:52 AMI am sick of the "blame the victim" attitude of people like Muck up there. If the great USofA was in proper working order (pun intended), there would be a safety net for those who weren't born with a silver spoon. "Bad choices"? More like "few to no opportunities." With all their jobs being outsourced that people who had the required degrees did for a number of years, how are those folks supposed to make ends meet now?
Posted by Sharon at April 24, 2007 09:09 AMMuck, do you really believe that 70-80% are doing well? How far down the income scale do you think this wellness extends? Just curious as to your thinking there. Do you feel that those making between $50-75,000 a year are doing well? Those making below that?
That depends on a few things, such as their lifestyle, and whether they get slapped with Clinton's AMT hike.
Posted by lordtyranus2 at April 24, 2007 09:13 AMThis suggests the question, would Cheney kill 3000 US soldiers and half a million Iraqis just to prop up oil prices? What do you think?
Is that why Carter was complicit in Khomeini's rise to power in Iran?
To boost the price of oil to its historical high?
Posted by lordtyranus2 at April 24, 2007 09:15 AMMuckdog, right on cue.
Posted by Judith at April 24, 2007 09:36 AMI have a question for Mucktroll: where does the government get all the billions that is being poured into Iraq? What money pile does it come from and where is the income to balance it? If there is no balance, either in cuts elsewhere or income, then how does that work? Do we just print more money and call it OK?
Posted by T2 at April 24, 2007 09:41 AM"would Cheney kill 3000 US soldiers and half a million Iraqis just to prop up oil prices? What do you think?
Is Bush a liar?
Posted by Judith at April 24, 2007 09:43 AMDo we just print more money and call it OK?
Please don't call it OK. You may offend someone from Oklahoma. Take the time to type okay. Okay?
Posted by snark at April 24, 2007 09:44 AMIf you believe the unemployment figure, then your an idiot.
Posted by Judith at April 24, 2007 09:45 AMI just think Muck has his numbers backwards. It's more likely that 20-30% are doing well while 70-80% are living paycheck-to-paycheck, or worse. Depending on where you live a household income of between $50-75k, if managed properly, is a livable income that allows for some luxuries.
Of course, this doesn't touch on the disparities in wealth accumulation that has accelerated under Bush. In my opinion, that's the real problem. When the top 1% controls close to half the money in an economy you're getting dangerously close to third world conditions and the not so vibrant economic situation that generates.
Posted by Cosrai at April 24, 2007 09:45 AMGood one Snark.
Posted by Judith at April 24, 2007 09:48 AMI have a question for Mucktroll: where does the government get all the billions that is being poured into Iraq? What money pile does it come from and where is the income to balance it? If there is no balance, either in cuts elsewhere or income, then how does that work? Do we just print more money and call it OK?
It gets the money from the top 1%, which pays 37% of total income taxes.
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[Editor: ignore=off]It gets the money from the top 1%, which pays 37% of total income taxes.
Well, it's been recommended that the government try to squeeze more from those with next to nothing. The idea is apparently in the 'pipeline' (no pun intended) right behind proposals to turn water into wine and squeeze blood from stones.
Posted by snark at April 24, 2007 10:09 AMok, snark, you got me. I was unsure of the spelling of okay,so I just used the abbreviation OK. I thought that would be ok, but never intended to offend people of OK., as I thought they were people of OKLA. I hope you're okay with that. In the future, I might go with Okeedokee, unless you think that might offend gators living in the Ofeekenokee swamp.
Posted by T2 at April 24, 2007 10:14 AMunless you think that might offend gators living in the Ofeekenokee swamp.
Not as much as slaughtering the spelling of their homeland!
Posted by snark at April 24, 2007 10:17 AMlordanus
If you check you will find that your 1% is wrong. A large part of the government income is from social security and medicare taxes which are counted as income. This practice was started when Lyndon was financing his little war.
t2, snrky ws smply pckng p frm nthr thrd whn n rhd frm Vrmnt whnd bt th VT bbrv. whn tkng bt th cllg.
[Editor: ignore=off]I take it Muck thinks that W deserves a third term. Interesting to see that we've got quite a few thirty percenters hanging out here.
Posted by Ga6thDem at April 24, 2007 11:00 AMGa6th - goddam, you're right, get the Raid, this thread is troll-infested! mucky always shows up on econ threads, and scout's been banned so many times, but he's a Falwell clone, you know how they never go away - best to ignore the cultist! (Worse than a Phelps family member-or pretends to be, for attention). Lord Anus is the new guy who's prolly ol' teabagger. Yawn. Econ threads are soooo boring. Exactly the same thing every time.
Posted by iamcoyote at April 24, 2007 11:17 AMIf you check you will find that your 1% is wrong. A large part of the government income is from social security and medicare taxes which are counted as income. This practice was started when Lyndon was financing his little war.
Those are not income taxes, they are payroll taxes, set up separately to fund special programs.
Bill Gates gets the same Medicare as your average Joe, and so he pays the same tax rate. Sounds fair.
Posted by lordtyranus2 at April 24, 2007 11:28 AMWell, it's been recommended that the government try to squeeze more from those with next to nothing. The idea is apparently in the 'pipeline' (no pun intended) right behind proposals to turn water into wine and squeeze blood from stones.
Actually, I'm fairly satisfied with the proportionality of the current tax system. Nobody needs to be further squeezed.
Posted by lordtyranus2 at April 24, 2007 11:34 AMIt gets the money from the top 1%, which pays 37% of total income taxes.
Which owns what percentage of total wealth in the country?
Let's see the tax returns. Show me one that actually pays that much and I'll show them to a better financial advisor.
Additionally, they should be paying more than that. You and MuckPrick don't believe it, but the wealthy carry a much greater responsibility to support the economic and societal structures that provide them the opportunity to rape the rest of us. Contrary to the binary-ization of arguments that the right loves to do, progressive taxation is not penalizing someone for making money.
BTW, I may be changing my moniker. Apparently "Simp" has been lost on some. I'm thinking of going with the blatant "Captain Obvious"
Posted by Simp at April 24, 2007 11:43 AMBill Gates gets the same Medicare as your average Joe, and so he pays the same tax rate. Sounds fair.
Not exactly. 100% of my income is subject to social security/medicare taxes but Bill's income (if he even still draws a paycheck) is only taxed for social security up to...what is it now 90K? And his effective tax rate (and that's the number that really matters) is probably much, much smaller than most.
Posted by ann at April 24, 2007 11:46 AMlordtyranus2, yes the SS program is funded by a payroll tax, but Bush has been raiding the trust fund to pay for regular government operations, so the distinction has been lost over time.
Also, it isn't Clinton's AMT hike. The AMT was implemented long before Clinton, and most of the need for an AMT fix was a result of Bush's tax policies.
Posted by Steve Soto at April 24, 2007 11:53 AMI have no idea why you bring wealth up, since taxing wealth on a national scale is difficult at best. Few nations do it; Sweden in fact just scrapped their wealth tax.
But if you want an answer, the top 1% own about 39% of the wealth owned in this country, although some of that is overseas.
And here's a rich guy who paid a 29% tax rate on income:
President and Mrs. George W. Bush reported taxable income of $642,905 for the tax year 2006. This resulted in a total of $186,378 in federal income taxes paid by President and Mrs. Bush.
The President's 2006 income included salary earned as President and investment income from the trusts in which their assets are held.
President and Mrs. Bush contributed $78,100 to churches and charitable organizations, including the Crawford Volunteer Fire Department, the Federal Government's Combined Federal Campaign, Operation Smile, Martha's Table, the Salvation Army, Susan G. Komen Foundation, and the Yellow Ribbon Support Center.
Posted by lordtyranus2 at April 24, 2007 12:00 PMNot exactly. 100% of my income is subject to social security/medicare taxes but Bill's income (if he even still draws a paycheck) is only taxed for social security up to...what is it now 90K? And his effective tax rate (and that's the number that really matters) is probably much, much smaller than most.
And when he collects Social Security, he gets the same level as a guy who actually makes $90k.
lordtyranus2, yes the SS program is funded by a payroll tax, but Bush has been raiding the trust fund to pay for regular government operations, so the distinction has been lost over time.
Also, it isn't Clinton's AMT hike. The AMT was implemented long before Clinton, and most of the need for an AMT fix was a result of Bush's tax policies.
Each of the past 4 presidents (and Congresses) of both political parties have "raided" the SS surplus. That said, the annual surplus of $170 billion or so is a lot smaller than the $600 billion the SS admininistration collected in revenues.
As for the AMT, you're absolutely right. The AMT is a blue state tax; there is was no incentive for the Republican congress to fix it.
Doesn't change the fact that the reason that the upper middle class in CA, NJ, CT, and NY are all getting soaked now is the 28% AMT hike implemented in 1993 by Clinton.
Posted by lordtyranus2 at April 24, 2007 12:17 PMThere was no 28% AMT hike by Clinton in 1993. According to the CBO, the major reason why the AMT is now a problem stems from Bush's 2001 tax cut.
"Until 2000, less than 1 percent of taxpayers paid the AMT in any year. Under current law, however, the number of taxpayers affected by the AMT will grow from just over 1 million in 2001 to nearly 30 million in 2010 before falling back to about 23 million in 2014 after the expiration of the 2001 and 2003 tax cuts."
If you are going to keep spreading "Blame Clinton" disinformation, take it somewhere else and use up someone else's bandwidth. If I wanted right wing lies, I could watch Faux News.
Posted by Steve Soto at April 24, 2007 01:25 PMafter the expiration of the 2001 and 2003 tax cuts
Hmmm, something about the aerodynamics of pigs comes to mind
Posted by Simp at April 24, 2007 01:53 PMThe Republitrolls might do well to remember that during the glorious 1950s, when America was great, the economy was booming, the Republicans had the White House and even Congress for a couple years, "Under God" was added to the pledge, Hollywood still had values (i.e. extensive self-censorship), and white men everywhere were dominant, that the top marginal tax rate was 90%.
Yes.
90%.
And the American economy did not crap out (in fact it was rather robust, the physical infrastructure actually was in much better shape than it is today, American students led the world in test scores (and didn't need to join the military to get funds for college), and liberals did not hand the country over to dark-skinned Arabs.
CEO salaries were typically 10x their lowest paid workers, not 10,000x like today. No point in getting monster salaries if they are just taxed away. Instead they got a few perks (company Cadillac) that weren't all that expensive.
Posted by anony at April 24, 2007 02:32 PMalternet had a good article a while back about the mortgage entrapment of millions of average americans
http://www.alternet.org/stories/50120/
".....The boom in this industry has been extraordinary. “From 1994 to 2005, the subprime loan market grew from $35 billion to $665 billion,” the Center for Responsible Lending notes in a report entitled “Losing Ground: Foreclosures in the Subprime Market and Their Cost to Homeowners.”
But so has the bust. “We estimate that one-third of families who received a subprime loan in 2005 and 2006 will ultimately lose their homes,” the report predicts...
“Foreclosure rates will increase significantly in many markets as housing appreciation slows or reverses,” the Center for Responsible Lending says. “As a result, we project that 2.2 million borrowers will lose their homes and up to $164 billion of wealth in the process.”
....But the beatified former Fed chief Alan Greenspan was not all that concerned about the interest of the borrower. His interest lay with the financiers, so he hailed subprime lending as the “democratization of credit...."
the top 1% don't need to worry about this, they profit from it. hundreds of billions in their pockets.
Here is a fact that the media doesn't report (more because they are stupid, rathter than biased)
Housing prices haven't declined nationally. There are a couple of reports (house price index, HPI, and S&Ps Case-Shiller index --which takes into account jumbo mortgages) which actually compares the actual sales price of every house sold vs previous price and then annualized the change. Guess what, prices are still going up nationally albeit very slowly. (and some regions going down while other up)
So why do media reports imply the contray:
1. Comparing houses sold is a very bad measure of price change; it only compares the % of market that is sold in specific time period (vs. the 95-99% that aren't sold); comparing sold houses in different time periods requires that houses be of the same type/location/sq ft etc, for this to be valid. Clearly not the case
2. They are lazy bums with the critical reasoning capability of cockroaches. Really no excuse not to use the better surveys. Have only seen it referenced in some business publications.
3. The facts shoot down the notion that some huge housing crisis taking place, which doesn't help sell papers
Those are not income taxes, they are payroll taxes, set up separately to fund special programs...It gets the money from the top 1%, which pays 37% of total income taxes..
Holy crap. I have never seen less understanding of how the Feds finance their activities from any person who has ever posted on TLC, and that's saying something. Honestly. I have never seen this level of ignorance on this blog.
Lardanus must be sitting in his mom's basement with one of those Star Wars pilot helmets on, about 6 days of beard stubble, screaming at Ma to bring him another box of Twinkies and a Mountain Dew. I'm sure he is quite positive that he will be wealthy when his Star Wars stuff becomes valuable.
Posted by phidipides at April 24, 2007 04:59 PM"If you are going to keep spreading "Blame Clinton" disinformation, take it somewhere else and use up someone else's bandwidth. If I wanted right wing lies, I could watch Faux News."
Applaud applaud.
Posted by Judith at April 24, 2007 05:51 PMSoto:
I think some hearings on Big Oil's refining and supply practices are in order over the summer, don't you?
Yes. I hope you will be a resource to me when the hearings start up.
Posted by Toby Petzold at April 24, 2007 05:53 PMFirst... Mmmm, Twinkies and Mountain Dew. To be honest, I was more of a Cupcakes and Dr. Pepper kid myself.
Steve: Muck, do you really believe that 70-80% are doing well? How far down the income scale do you think this wellness extends? Just curious as to your thinking there. Do you feel that those making between $50-75,000 a year are doing well? Those making below that?
It's a lifestyle question, isn't it? Some folks are doing well at $30K and some folks are living paycheck to paycheck at $200K. It reminds me of NBA guard Latrell Sprewell negotiating a contract for millions a few years back, saying that he needed it because he had huge bills.
When I say "doing well" it means that they're making it month to month. They have enough to meet their needs (shelter, food, monthly bills). They're not going hungry or sleeping out in the streets. They're living their lives, watching TV, going to and renting movies, taking their kids to soccer practice, shopping at Costco every saturday, and having weekly sunday dinners with the in-laws. They have some money saved for retirement and maybe a little for the college fund and next summer's vacation (some to Hawaii, some camping to the coast). That kind of thing. Most folks are making it.
Second Steve brings up refining capacity and speculates that there is some collusion going on to squeeze capacity and drive up prices. This is ridiculous. The reality is that clean air regulations and environmental groups have made it next to impossible to build refineries. Next, there is no single standard for refined fuels, so there are certain refineries geared to creating differing standards. If we could come up with a single fuel standard, this would help.
Sharon must be blogging from Havana. there would be a safety net for those who weren't born with a silver spoon. "Bad choices"? More like "few to no opportunities." With all their jobs being outsourced that people who had the required degrees did for a number of years, how are those folks supposed to make ends meet now?
Tell that to the kids at Chico State, USC, VA Tech, Missou, and many other fine colleges around the country. These kids are in college because there is opportunity and they're going for it. They made a choice to go to college. Born with a silver spoon? Hardly. Hard work and lots of hours studying.
Lord TRex writes about the AMT, and the reality is that this was meant to make sure "the rich" pay taxes. Unfortunately, it was never indexed to inflation and will eventually be a "flat tax for all" if not corrected.
T2 asks about where the govt gets their money? They print it. They borrow it. And they collect it from us. A check from the US government will never bounce, because they own the printing press.
Coyote says that econ threads are boring. I used to think so, too. But then you see so many folks who haven't planned and haven't saved who are working until late in life and think to yourself that there must be a better way. And there is. Educate yourself. It's not boring if you understand it and can use the information to achieve your goals. (College savings, retirement savings, vacation plans, nice home, etc).
Ga6 wishes Bush had a 3rd term so he could kick him around for another 4 years. No, I think the country is ready for Rudy.
I saw a few comments on Social Security. First, there is no "trust fund." Al Gore was really joking about the lock box. There is no such thing because via a slick accounting gimmick, the money goes straight into the general fund and is spent on whatever Congress wants to spend it on, including Social Security obligations. Which is why starting in 2009, this surplus money will begin to shrink and Congress will have to get creative about how to make up for lost dollars. I have a hunch they'll be coming for your wallets.
The reality is that clean air regulations and environmental groups have made it next to impossible to build refineries.
muck, I think building refineries cost money. That's overhead, no profit in that.
Posted by Seven of Six at April 24, 2007 10:45 PMIt's a Muckdog eat Muckdog world, according to Muckdog, which sounds exactly like what Jesus Christ was teaching. NOT!!
Posted by The Oracle at April 25, 2007 01:27 AMMuck,
Voting for Rudy is the same as giving Bush a third term. After all, Rudy is promising the fundies that he will continue the Bush agenda.
Glad to know that you finally admitted it.
Posted by Ga6thDem at April 25, 2007 03:09 AM