Friday, August 12, 2011

The Violence Inherent In The System

A guest blogger at Greenwald's has a post about the rising income disparity in the US. I suppose most people realize that the pace of the disparity is increasing. It's not something that is hidden from the public in a nefarious plot, but most people just don't have the time or inclination to pay attention to the details.

One bit I was rather shocked by;

A new survey found that 64% of the public doesn't have enough funds on hand to cope with a $1000 emergency. Wages are falling for 90% of the population.

More than half of all Americans do not have $1000 cash on hand.

John and I sometimes stress about money and such, but I think I'm pretty sure than I have more than 1k in my left-over coin collection. Our stress isn't about how to pay the mortgage(s), but rather how we get to where we want to be.

I can't imagine how it is possible for somebody to not have 1k, at the very least, unless you're really young. It's just so unbelievable to me that the wealthiest nation on the planet has half a population that is basically broke.. just completely broke.. and instead of things getting better, it's getting worse.

The Loon Brigade thinks there is some magical market where everything evens out and if people just work harder, the trends will reverse. They think the poverty is the result of laziness. They think that because somebody has a color TV and an internet connection, they're not, by definition, "poor" at all.

The strange thing is that rich people generally depend on everyone else spending money to keep the income going. The lack of spending is what is causing the economic problems we have now, and it's just going to get worse. It will be a problem for the wealthy when they become too greedy.

For the most part, very wealthy people are assholes. They're not altruistic, and they only care about themselves.

There has to be a mechanism in place to "redistribute wealth". It simply has to happen, and I'm not talking about "wealthy" people like me and John.. who float around the 95th percentile. I'm talking about the very wealthy. The relatively few of them control the majority of wealth in the US - and that's simply not going to work.

How do you redistribute the wealth? You tax the wealthy at a much higher rate, and take the money and increase Social Security benefits.. you lower the eligibility age.. you make the Medicare benefits better.. you subsidize education. Heck, eliminate all sales tax and shift the entire budget onto income taxes.

In fact, sales tax is where the poor and middle class are hit the hardest. Everyone pays the same rate on sales tax, so it's not progressive taxation at all. A rich person might by a $100k car, and a middle class person by a $25k car. The rich person pays more sales tax, but they pay at the exact same rate as the middle class person.

If you eliminate sales tax entirely, that encourages people to buy things, which is what moves the economy in a positive direction, plus it saves money on the administration of the tax.

but, of course, because the powerful are the wealthy, this paradigm isn't going to change until it reaches a breaking point. I'd imagine that we've got quite a ways to go before we eat the rich.

1 comment:

kris said...

if over half cannot point to £1K cash of their own that they can access right now, I'm guessing they are all insolvent - or hanging in by their fingertips on credit.

That is hard up. That is fucking scary.