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LordofHats wrote:The sweet irony of the US rich v poor debate. 5% of the world's population controls 80% of its wealth and resources. Many Americans are in that 5%.

How is that ironic? Our poor people aren't as poor as other people's poor people?

I do not think that word means what you think it means.

Hawkward wrote:Rich people are human, Melissia. They react to incentives just like poor people. When people have access to more money, it doesn't matter whether or not they're already rich; they'll feel the urge to spend their money. Invest it into the economy.

And yet they haven't.

Hawkward wrote:

LordofHats wrote:The sweet irony of the US rich v poor debate. 5% of the world's population controls 80% of its wealth and resources. Many Americans are in that 5%.

How is that ironic? Our poor people aren't as poor as other people's poor people?

I do not think that word means what you think it means.

A situation where people talk about not being rich when they control the vast majority of the planets financial and material wealth, and by a world standard are among the wealthiest human beings? Seems ironic to me, admitting it is a gross simplification of the matter. But that seems to fit the definition of irony.

Melissia wrote:And yet they haven't.

Can you show me where, then, all the idle rich have hoarded their wealth Scrooge McDuck-style in a cave, where it can neither be saved in a bank nor spread through the consumption of material goods and services?

So far in this discussion, Melissa simply says things that fit with her conception of "rich people" as evil and deleterious to all other life; and then holds out her unsupported statements as proof. I too would like to see some supporting evidence.

Saying, "and yet they haven't" doesn't further your argument. Posting some sort of evidence other than "and yet they haven't" - might. Whatcha got?

Hawkward wrote:Can you show me where, then, all the idle rich have hoarded their wealth Scrooge McDuck-style in a cave, where it can neither be saved in a bank nor spread through the consumption of material goods and services?

Can you tell me where all of these tax cuts and benefits to the rich have produced these jobs and other benefits to the rest of society in the past decade?

Because THAT is what I can't find. I only see the rich getting richer, the poor getting poorer, the job pool drying up.

Quite consistently, every time benefits are passed out to the rich.

Actually, Melissia is both correct and incorrect. The top 20% in this country has about 85% (or more, depending on who you ask) of the wealth. The top 1% owns over 50% of all securities. The bottom 40% has no wealth whatsoever. (Keep in mind that wealth isn't just what you own -- it's what you own minus what you owe.) The money isn't sitting around in giant vaults, no. But it isn't changing hands downward. In other words, in terms of the further accumulation of wealth, the investment of this 85% continues to benefit only the same 20%.

Some charts for you all.

http://blog.pappastax.com/index.php/2010/07/11/case-rested-trickle-down-policies-work/

Read it and stop weeping.

Wow, how can anyone draw that point from that chart?

Because they're a tax lawyer, and therefor arguing that point benefits their clients?

It's simple. It shows, as the author notes, that as the rich get richer - so does everyone else. It's a direct refutation of the "But trickle-down economics has been PROVEN not to work!" cry from earlier in this discussion.

Think about it: when's the last time you got a job from a poor person? Right. Never. If I have money and I start a business, and hire people...is my wealth not trickling down to them? Yes, they are making me more money than I had (assuming business is good and I run mine properly) - but so what? Why ELSE would I invest my wealth in them?

Like the author, most of what I read here is indignation that some people are richer than others. Yeah, they are - and most of 'em worked hard to make it that way. It's called 'success'. Very few hurt someone else in the process of obtaining it.


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Melissia wrote:Because they're a tax lawyer, and therefor arguing that point benefits their clients?

Of course. That must be it. And you would obviously know more than a professional who's livelihood depends on a deep and accurate knowledge of the subject, right? All you've done is point out why he could be expected to have some expertise.

Just because someone is an expert doesn't mean they're an unbiased expert.

Melissia wrote:Just because someone is an expert doesn't mean they're an unbiased expert.

And just because someone is not an expert, doesn't mean they are an unbiased non-expert.

You seem to have a bias against the successful, as if they had caused someone else's poverty. I take the opposite stance, that wealthy people over all contribute more than they (as a group) take. This contribution comes in the form of jobs provided, currency moving in the economy, and all of the other positive attributions listed in the last 12 pages. You seem to feel that wealth can only be obtained at the expense of others - and that this is done with some sort of active malice.

I will not argue with you that SOME *few* stupendously immoral people have gotten obscenely rich at the expense of others...but that truly does not place anyone who manages to succeed in the same category. It would be great if we could all be rich, but that's a fantasy. Everyone being poor - is a horror. Who wants that?

VoidAngel wrote:

Melissia wrote:Just because someone is an expert doesn't mean they're an unbiased expert.

And just because someone is not an expert, doesn't mean they are an unbiased non-expert.

I would have gone with "Just because someone is unbiased doesn't mean they're an expert."

Works better.

It's a separate and entirely different thing (though also true).

And yet, for all your attempts to flame and troll, we've still seen an increase in the concentration of wealth and a decrease in the overall financial well being of the country.

And this despite the fact that the rich have gotten so many tax cuts, so many other benefits and other things, other loopholes that often make them be taxed LESS than people who make less.

The real facts of history dispute that man's argument. Giving the rich more wealth does not cause a trickle down effect. The trickle down effect is a lie, and has always been.

I think the trickle down effect works in some respects, the job creation example is great one and is perfectly legit but honestly I think it is just justification for the those with majority of the wealth in power to keep making policies to keep them the majority with wealth and power. The problem is history shows that most of the time these policies have much more negative impact on the bottom 85% than to justify the little gains from the trickle down effect. One example is war, when a country goes to war (and yes the wealthiest in a country decides the wars), it is the poor that go and fight those wars. It is their families that suffer, they are the ones living paycheck to paycheck and whos paychecks buy less and less.

And the thing is, the gap bewteen the rich and poor is continually deepening which if one is proned to forward thought can be alarming.

While its not the best anology because it is not always accurate, I always imagined the trickle down effect akin to the glutton stuffing themselves on a feast of plenty while the mouse scurries to pick up the crumbs.

@Melissa - please point out how I'm flaming or trolling. I've disagreed with you. That does not constitute either. Surely you are not so fragile that you can't countenance an opposing viewpoint?

We've been over the tax thing before. Wise people than we have been unable to come with a better system than the one we have. All have their flaws, our is among the most benign. A flat tax won't work. A flat rate CERTAINLY won't work...what do you want? NO tax on the poor? Shall we go even further toward creating a complete welfare state? Has that worked in Europe? Do a little research.

@thedude - I can't say I can remotely agree with the old "the rich start wars, and the poor fight them" trope. Most of the military families I know are extremely well off. Their children go into harms way for ideological reasons, not economic ones. Certainly this is not true of every family with someone serving, but the fact of it lets some air out of your assertion. You do a disservice to our soldiers by perpetuating what is no more than a gross generalization. There are many reasons to serve. "Because I can't do anything else" is the very least of them.

Melissia wrote:And yet, for all your attempts to flame and troll, we've still seen an increase in the concentration of wealth and a decrease in the overall financial well being of the country.

And this despite the fact that the rich have gotten so many tax cuts, so many other benefits and other things, other loopholes that often make them be taxed LESS than people who make less.

The real facts of history dispute that man's argument. Giving the rich more wealth does not cause a trickle down effect. The trickle down effect is a lie, and has always been.

We're not flaming, and we're not trolling. As VoidAngel stated, we just disagree with you. A dissenting viewpoint is often a good thing - it lets you practice debate and self-reflection.

There's certainly been an economic downturn recently. That does not mean that America's financial well-being has been negatively affected forever. A good tool to measure overall financial wellbeing and the "concentration of wealth" is the Human Development Index, a figure that expresses the country's average wealth, education, health and standard of living.

Check it.

As you can see, the overall health, wealth, education and standard of living has been steadily increasing since 1980, with the US well above the rest of the world.

VoidAngel wrote:
@thedude - I can't say I can remotely agree with the old "the rich start wars, and the poor fight them" trope. Most of the military families I know are extremely well off. Their children go into harms way for ideological reasons, not economic ones. Certainly this is not true of every family with someone serving, but the fact of it lets some air out of your assertion. You do a disservice to our soldiers by perpetuating what is no more than a gross generalization. There are many reasons to serve. "Because I can't do anything else" is the very least of them.

I think we have a vast difference in opinion on wealth. Assuming the people you know are high ranking officers with more than 14 years of service then they may be making closer to $150k annually. If the people you know are enlisted, it is closer to 30-50k annually. The head one of the major banks is closer to 2 million annually. That does not include other privlgies t o quality of life that comes with such a posistion.

I work in finance and have seen many servicemens income and assets over the last 10 years. Majority of what I see ranges between 30k-60k. With an average household assets around $150-500k including real estate and savings(401k included). With a household average debt somewhere between $150-500k. You must subtract debt from assets for a true idea of wealth.

The CEO of a specific major US bank is about 3.6 million NET worth.

This says nothing of the real wealth elite, such as the Rothchilds family

I do not disagree that there are many servicemen who serve for idealogical purposes alone, but I would contend that majority of the service men and women are also motivated by the financial security guaranteed by such an obligation and even a small percentage who as you put it join just 'because they cant do anything else' (I never stated nor implied this). I served 4 years in the military and do not feel in any way that my statement does a disservice to our troops. I consider the fact that our government is leading our troops into harms way unneccesarily on a regular basis is the great tragedy and disservice. If you believe that governments wage war soley for idealogical purposes alone and that money is power is not a primary motive then we will not agree on anything from this point forward I would suspect.

Edit: just wanted to add... I have nothing against making money and hard working people growing their wealth nor am I a class warrior but wrong is wrong and rigth is right, regardless of the banner it flies under.

VoidAngel wrote:It's simple. It shows, as the author notes, that as the rich get richer - so does everyone else. It's a direct refutation of the "But trickle-down economics has been PROVEN not to work!" cry from earlier in this discussion.

That's actually not what that chart shows. If anything, that chart shows that the poorer people don't keep up with or only barely keep up with inflation while the richer people increase in wealth astronomically above inflation rates. In other words, the chart shows that the gap between rich and poor was yawning in 1979 and has widened since 1979. The value of currency going down over decades is not proof of the "trickle-down" soundbyte. As for job creation and trickle down, consider that unemployment is as high as or higher than its been in the lifetime of almost every living US citizen even though the financial sector is even more profitable now than it was before 2008. "Trickle down" is wishful thinking. It's a point that makes intuitive sense so you believe it must be true. It's something like thinking that customer satisfaction equals profitability (airlines anyone?). Political slogans like "trickle down" and "rising tides lift all boats" do not express much if anything about economics. These are catchphrases designed to allow otherwise sensible people of average intelligence to reject reality.

If you think I base my worldview on catchphrases... well, I'll give you props for being masterful with the veiled insult.

I'll agree that part of the problem is a failure to define terms in this discussion. If "rich" to you means "millions and millions in the bank" - we could be talking past each other. If you mean 'rich' relative to residents of other nations...that's something else entirely. I think many of us have been freely swinging back and forth between these definitions without informing each other.

The rich have gotten richer to a greater degree than the poor. The reasons for this are many. The poor have gotten richer for a few more easily enumerated reasons. Are they still poor? Sure. Is that the fault of the people with "millions and millions"? Mostly, "no". A FEW of the very rich have been predatory and created some of the newly poor - but they're vastly in the minority. Most of the very rich have directly or indirectly helped a great many people become prosperous. Mostly through job creation. That's certainly something, and it certainly could be described as a "trickle-down" effect.

No insult was implied, unless you think that "you are wrong and your views are not based in fact" is an insult.

The blog post that you linked to contained a chart that does not indicate that the poor have gotten richer. It does indicate that the value of the currency has gone down over time. It also indicates that the absolute value of the income of poorer people is less likely than that of richer people to have risen at the pace of inflation while the absolute value of income of richer people is more likely that that of poorer people to have outstripped inflation.

In terms of 1979 money, the poorest people represented in that chart are poorer today than they were in 1979 while the richest are far, far more rich than they were in 1979.

By the way, there is not very much difference between the quality of life of the destitute in this country and the quality of life of the destitute in third-world dictaorships. Similarly, there is little difference in terms of the wealth of the richest people in this country and the richest people in third-world dictatorships.

The real difference is in the middle and it is not a difference in absolute wealth. Again, wealth is not just what you own but rather what you own minus what you owe. Our consumer credit culture allows us to own a lot but it is, in the case of the middle middle class, not in excess or (especially since the mortgage crisis) far less than what we owe. You can find some examples of this in thedude's post above. You can also read about this in almost any newspaper article about underwater mortgages or credit card reform.

Here is just a few basic numbers...

The general rule of thumb when saving for retirement is you need to save about 1.25 million, with inflation estimates, this will put you at about $50k annually salary..depending on of course how long you live after that and what we actually see with regards to inflation and how old you are now, ect.

Latest reports from various news sources put the average net savings of those at retirement age now is closer to 350k. The official US 'poverty line 's $22,500 annually for a family of 4. So needless to say, these numbers point out that the average America will be poor when they retire (even accounting that you will not be support 4).
Remember as well that technology has provided amazing results for improving a distracting quality of life at relatively low costs but these things do not constitute wealth. We are a very wealthy country (although some would argue we are living on credit alone) Wealth is your income minus your debts and when you retire where will you be?

Edit: sorry just a few more things after reading the posts above...I think it is also important to make the distinction that most of the so called wealthy elite and ruling powers do not act with malicious intent to hurt others most of the time, when it is done is more so done in my opinion due to a reckless abandon that comes with being so far above the average man's 'reality'. They are simply acting in their interest from a more managorial stand point. But that does not mean that the people do not need to stay vigilent and educate themselves and refuse to settle for conditions simply due to complanency.

thedude wrote:Wealth is your income minus your debts and when you retire where will you be?

You will be where you are now except without the ability to earn or access credit. In other words, you will still be poor but you won't be able to pretend otherwise by appealing to slogans like "trickle down" or "rising tides lift all boats."


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thedude wrote:I think it is also important to make the distinction that most of the so called wealthy elite and ruling powers do not act with malicious intent to hurt others most of the time, when it is done is more so done in my opinion due to a reckless abandon that comes with being so far above the average man's 'reality'.

The problem is not that the wealthy view the impoverished with malice. The problem is that the wealthy view the impoverished with contempt.

It's hard to argue that everybody is better off now than before (with before being pretty much any time), as long as you speak in relatively absolute terms. In terms of size/quality of housing, healthcare, education, and material goods, it's a great time to be non-wealthy.

It's also hard to argue that the wealthy have gotten wealthier faster. Meaning, while a middle class american now, compared to 30 years ago, might have more/better/safer cars, better health care, and far more electronics, a wealthy american now has far, far exceeded those gains.

In other areas, the middle class is getting screwed though, in terms of job security, dignity of work, availability of work, and say in the government.

Basically, you can look at the rise in poor/working/middle class standards of living and comment on how we're all enjoying the benefits of progress; you can also look at the burgeoning wealth of the upper 20% and realize we're getting bought off with bread and circuses.

Manchu wrote:In terms of 1979 money, the poorest people represented in that chart are poorer today than they were in 1979 while the richest are far, far more rich than they were in 1979.

Did you happen to miss the "(in 2007 dollars)" part of the chart? The lowest quintile in 1979 earned $15,300 (in 2007 dollars). In 2007, they earned $17,700.

That looks like an increase to me.

VoidAngel wrote:http://blog.pappastax.com/index.php/2010/07/11/case-rested-trickle-down-policies-work/

Read it and stop weeping.

Your charts are very interesting. But they no way take into account the cultural changes from 1979 till 2007.

Here is a better article http://www.census.gov/prod/3/98pubs/p23-196.pdf

It's a little long, but it shows that the reality is that people are making less money.

Lots of government facts and charts for all you people that like that kind of thing.

While you account for inflation, there is no cost of living adjustment which has gone through the roof.

The days of the single family income are gone, now even with dual income families times are tight, disposable income is way down!

@biccat: I did miss that, thanks for pointing it out!

VoidAngel wrote:
Like the author, most of what I read here is indignation that some people are richer than others. Yeah, they are - and most of 'em worked hard to make it that way. It's called 'success'. Very few hurt someone else in the process of obtaining it.

Given the nature of scarcity, that's simply not true. Arguments from a rising tide lifting all boats aside, the relative distribution of material wealth is, at any given time, finite. As such, any unusual amalgamation of wealth will necessarily do financial injury to others by the very fact that it collects a large sum of valuable goods and purchasing power in a single place; thereby denying it to all others. Which is, ultimately, why simply looking at percent change, even in normalized dollars, is not sufficient to make the argument that everyone is better off at time t than time t2. You also have to account for the relative prices of goods and services, hence the use of CPI, among other things.

Then you have wonder if that trend really is the result of trickle down policies, or simply lower tax rates across the board, which is something that you would need more than a two point analysis to determine. Meaning that titling that article "Case closed" is the same sort of indignant nonsense you're railing against. Basically the equivalent of a college Freshman taking a class on Marxism and deciding that Capitalism is crap because his eyes have been "opened".

Hawkward wrote:
As you can see, the overall health, wealth, education and standard of living has been steadily increasing since 1980, with the US well above the rest of the world.

The US usually floats between 4th and 5th, but is basically tied with the rest of the Western world at roughly .9 HDI. The only nations significantly higher than it are Australia (.937) and Norway (.938). It certainly isn't well above other developed countries though.




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Andrew1975 wrote:
Your charts are very interesting. But they no way take into account the cultural changes from 1979 till 2007.

You also have to look at the the level of debt relative to annual income. It may be that while Americans are earning more on average the credit requirements of reaching those earning thresholds is much higher than previous. I imagine that, if true, this would mostly apply to urban areas where income is closely associated with education.