Social Question

jerv's avatar

How do you feel about the economic inequality in modern America?

Asked by jerv (31027points) July 17th, 2010

I this ran across this article on the current status of financial inequality in America. I find chart 15 most telling.

I would like to here your thoughts.

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20 Answers

Nullo's avatar

I don’t mind not being rich, but I don’t think that I’d want to be poor.
It may be worth noting here that “rich,” “poor,” and “middle class” are all relative terms: our domestic poor would appear phenomenally wealthy to, say, Somalian poor.

ETpro's avatar

Great link and question. I am very concerned about it. Of course, the world has always had economic disparity and that’s not a bad thing. THe brightest, the most creative and the hardest working should be rewarded for their efforts because those efforts make the world a better place for all of us. We have learned from experience that if everyone is rewarded equally, many decide there is no need to work—they will just let their fellow man carry them on their backs. And soon the whole work ethic suffers.

But we have been seeing a 3 decade slide now where our vital middle class is slowly slipping away. Ronald Reagan launched it, cutting taxes for the wealthiest Americans from 70% to 28% just like secretaries and sales clerks paid.

The Republicans championed elimination of the inheritance tax, calling it the death tax and thereby convincing voters who have no chance of ever needing to pay it that it was an evil thing and needed to be eliminated. Perhaps it should have only applied to estates in excess of $5 million, or been indexed to inflation. But the inheritance tax served a valuable purpose of preventing dynastic wealth.

Republicans keep seeking more tax cuts for the wealthy under the banner of stopping the transfer of wealth. Transfer of wealth is unfair. They want a fair tax, which would be an equal percentage applied to all. Oliver Wendel Holmes noted that, ”‘Taxes are the price we pay for a civilized society.” And all taxes involve a transfer of wealth. THe question is who is it being transferred to.

Our wealthiest taxpayers today can take advantage of hundreds of tax loopholes leaving them actually paying a lower percentage of their annual income than the typical American worker. Wealth has been transferrring, all right, but it is collecting at the top. The top 1/10th of 1% have greatly increased their hold on all the nation’s wealth. And despite Republican propaganda about trickle down and the wealthy providing the jobs, many of them invest their wealth offshore, and in investments that create no jobs in America and often none anywhere else either. They are in hedge funds and in derivitaves and credit default swaps.

Beginning with Ronald Reagan, the Republican party’s senior leadership took on the goal of slowly converting the USA from a nation built around its middle class to an oligarchy. It will take time, but if left unchecked, we will find ourselves living in something akin to today;s Latin American banaba republics, where a handful of families hold all the wealth and use the government, which they own, as a tool to inforce their prepetual dominance.

jrpowell's avatar

This also helps paint the picture.

ETpro's avatar

@johnpowell Excellent image. It’s also important to note what the Republican tax cuts for the rich have done to the National Debt.

It’s rather amusing that after all their hand wringing about the huge impact to the national debt that extending unemployment would add $34 billion to the deficit, Senator Kyl insisted that any such move had to be offset by other spending cuts—something you don’t want to do while trying to pull out of a recession. But Kyl went on to say that we had to extend Bush’s tax cuts for the rich, which will cost $750 billion a year, and that that doesn’t need to be paid for.

Simone_De_Beauvoir's avatar

Economic disparity is nothing new to America, especially to modern America – I don’t feel good about it, that’s for sure, because it affects people’s education opportunities, nutrition accessibility…it affects their health, their disease progression and likelihood of death.

gorillapaws's avatar

@ETpro I wish I could give you extra Lurve. Your answer very articulately summarizes my personal sentiments on the subject better than I ever could.

I would add that there is data coming out that seems to indicate that insanely large bonuses/paychecks can actually hurt performance, despite what many CEO’s, Republicans, and Tea Party people would have you believe. CEO’s absolutely deserve better pay than the guy that mops the floors, but the disparity has become so absurd that it’s been destroying this country’s middle-class.

Berserker's avatar

And yet the number of starving and homeless people stalking the streets baffles the mind.

Oh wait, they’re all just lazy. Simply couldn’t hold a simple job over at fucking MacDick’s.

Hypocrisy_Central's avatar

Many love to vilify the rich and make them the scapegoats. To say the rich are all slimy people because of a few Boorish, self-absorbed, greedy would be as logical as to say all the poor are shiftless criminals because some of the poor choose to rob and burglarize homes rather than work.

Life is not fair, the children of the rich get a cushy start, they are born with a silver spoon and are ahead of most of us out the womb. The rest of us do have the ability to be wealthy it just might take longer or implore some luck. But many I know do not want to give up those lattes, ball park trips, island vacations, big screens and the likes today for a mansion and yacht later. They want to live higher now as oppose to later, they can’t afford to do it without going into credit card debt. It is hard to get a head when you are always playing catch up. Many are too busy having fun going to the club, the show, skiing and such to think or strategize about how to become wealthy. Many I know also will not take risk, and you can hardly become wealthy if you are not starting out with out risk, taking a gamble and investing in yourself. I know people who would rather work a job and get a bi monthly check than try to go at a business they own, many believe running a business takes too much time, they could lose their home of the business tanks, there is too much responsibility; all of which they avoid by simply doing a job (*J*ust *O*ver *B*roke) and leaving the worry and risk to someone else.

I think part of the gap widening is that in the digital age there is far more avenues to become rich to know who truly seek the path to it. You can compete and have a store to compete with the big boys that before you could not start a business with out buckets of cash.

Hypocrisy_Central's avatar

The gap is widening as the charts show but I don’t think it is because the rich are huddle in some dark room making sinister plans that closes every avenue to wealth from those who are not. I believe most make it an active activity to make money and money with tons of leverage the moment their feet hit the floor in the morning not how they would love to go out bass fishing today and how to budget that in the paycheck.

mattbrowne's avatar

Solidarity is required for the long-term stability of societies. Extreme inequality will eventually turn into a threat.

tinyfaery's avatar

I think it’s disgusting that a country that proclaims to be religious (Christian) allows people to suffer so greatly. I think it’s disgusting that people have 100K cars and children starve. I’ll stop now.

gorillapaws's avatar

@Hypocrisy_Central So you don’t think the gap has been increasing at all due to the fact that CEO compensation has increased from 24 times that of the average worker in 1965 to 262 times that of the average worker in 2005 (source)? Are CEO’s working 10 times as hard? Are they 10 times as clever? Isn’t it infinitely more likely that they are offshoring lots of the decent middle-class jobs that they used to have and writing checks to themselves with the difference?

I can promise you that the vast majority of wall street CEO’s aren’t where they are because they chose to strategizing instead of “going to the club, the show, skilling…” etc. The fact that they are given huge golden parachutes even when they fail indicates that risk taking isn’t even difficult since they are rewarded even if they fail. It’s easy to take risks with other people’s money. Many of the wealthiest people I know are excellent at loosing other people’s money, but managing to come out ok themselves.

The VAST majority of these guys are where they are because they’ve had opportunities that the rest of us don’t have (@ETpro makes an excellent point about how abolishing death taxes leads to dynastic wealth). They have strings pulled for them when they were kids, they get into the be best schools because their father donated millions to build a new library, they get to start their first business with angel venture capital, and if it fails, many get the opportunity to try again doing something else until they succeed.

Many execs are where they are because they’re more willing to be weasels than the rest of us. In the book “Freakonomics”, it is discussed how the executive floor was more likely to steal than the people on the sales/service floor (article where it’s discussed).

ETpro's avatar

@Hypocrisy_Central How on earth can slashing the top tax rate from 70% to 28% and eliminating estate taxes have nothing whatsoever with the concentration of wealth at the top? Why have the bottom 60% of Americans by income lost ground in terms of real earnings over the last 30 years, while the top 1/10th of 1% have become fabulously more wealthy than they were 30 years ago.? Just luck? Nothing to do with tax policies of CEO pay?

Smashley's avatar

Shameful. Enough said.

Hypocrisy_Central's avatar

gorillapaws *_” So you don’t think the gap has been increasing at all due to the fact that CEO compensation has increased from 24 times that of the average worker in 1965 to 262 times that of the average worker in 2005 (source)? I would not say the gap between the rich and the poor is solely due to CEOs because they don’t make up the whole body of rich people. Some made it through inventions, real estate, industry, entertainment, etc.

” Are CEO’s working 10 times as hard? Are they 10 times as clever?” I would have to guess they were more clever but maybe not that much. Certainly the rich are better at leveraging income, getting paid over the effort of a collective body or having the ability to earn apart from swapping sweat for dollars.

” Isn’t it infinitely more likely that they are offshoring lots of the decent middle-class jobs that they used to have and writing checks to themselves with the difference?” Companies and business have to ship jobs over seas because American are cheap and to a point greedy workers. We want whatever new widget there is but unless it has some status to buying it, a Rolex watch, a Lamborghini, iPone, etc no one wants to pay a price for it that will keep jobs here. And workers won’t work for that little. Many who are unionized cause more waste and ineffective use of time and money, they have to have this expensive benefit or perk and if they can’t get it they won’t work. Or the job could be done quicker and easier but the union has rules on who can do it and how so a worker who could do the job can’t because the union will not let him.

The rich may have had a leg up from the time they squirted out of their mama’s choochie but with hard work and some luck the average schmuck can be successful. It may take more personal sacrifice than the rich person but it can be done. We American want to have it all and have it now, so we charge the cards to the hilt as oppose to saving for it and having it free and clear later.

ETpro ” Why have the bottom 60% of Americans by income lost ground in terms of real earnings over the last 30 years, while the top 1/10th of 1% have become fabulously more wealthy than they were 30 years ago.?” I would think it is because the lower 60% choose to live in a debt society. If you want the big screen, new clubs, custom wheels on the ride, those riding lesson, etc they all chew up money, they don’t make it. Rather than going without those things for a period of 5, 7 years etc and making the money that would have been spent on it into something that would have had leverage we Americans want to live larger now even if you have to use credit to get it, that doesn’t earn it just spends

jerv's avatar

@Hypocrisy_Central How is it that whenever I am clever like that, I get called for cheating then, even when I haven’t broken any rules? Or is it actually acceptable to exploit loopholes like some do? Seems to me that hard work alone won’t do it though; you need to be a grade-A bullshit artist to pull anything off. That kind of sucks for the honest hard-workers that don’t have any luck aside from what they make for themselves.

As for upward mobility, I have seen too many studies that prove otherwise, if for no reason other than the fact that more of the wealth is concentrated at the top without much of a trickle-down effect. Starting a small business that will actually last isn’t as easy as some people seem to think either; you might make a living, but you won’t build an empire like you could, say, thirty years ago before the groundwork for our current situation was laid.

I won;t deny that a lot of people live above their means, but that was pretty much the mantra during W’s reign; consumer spending stimulates our economy and creates jobs, so help your country out by spending like a mad bastard! (I’m not blaming W really; it’s just a timing thing) Of course, that also proves that leverage is only for the elite.

Also, I think you may have overstated our debt society a bit. Sure, there are some stupid people out there, but there are also quite a few that only went into debt to their landlords or utility companies. Between my wife and I, we have abut $1,500 in debt, mostly from an old student loan and utility bills that aren’t due for another couple of weeks. I know many people who do follow that “don’t buy on credit ‘cuz it’ll cost ya” mentality and they are still fucked without lubricant.

You make some valid points, but you overstate your case a bit as well.

ETpro's avatar

@Hypocrisy_Central The bottom 90% have lost significant ground in control of wealth in the last 30 years. Are you suggesting that has nothing to do with moving from a heavily progressive tax structure before Reagan to one that taxes the very top earners at the same rate as factory workers, but gives the top tons of loopholes factory workers and secretaries can’t afford? Are you asking me to believe it’s because 9 out of 10 Americans suddenly decided, 30 years ago, to be really dumb?

Reagan slashed top tax rates from 70% to 28%. When Reagan launched trickle-down economics, the top 10% held about 50% of the nation’s wealth and the rest of us had the other half. The top 10% now hold 71.5% of all the wealth in the nation. The other 90% of us are left to divvy up the remaining 28.5% that’s not theirs yet.

As Wikipedia states “Those who acquire a great deal of financial wealth do so primarily through the appreciation of fiscal portfolios. For this reason, financial wealth involves only stocks and mutual funds, and other investments and is subject to much greater inequality than net worth alone.” And much of that financial gain, particularly that of the wealthiest 1% who own 33.8% of all financial wealth in the USA, is invested offshore for greater returns and to duck taxes.

Tax cuts for the rich are killing the middle class, and the middle class was the economic engine that kept this economy running from the end of the Great Depression till the Greedy Oligarchy Party got Reagan elected and started deliberately, slowly turning America into a Banana Republic by transferring wealth to the wealthy.

Tax cuts for the rich create jobs? Where are the jobs? I’ll tell you where they are. Off-shore where so many of the rich invest all the wealth that the GOP has been transferring from the 90% to them.

dabbler's avatar

Tax cuts for the ‘job creators’ is the biggest lie perpetrated on us in decades.
Big tax breaks encourage the parasite class to take money out of their companies and stash it in hedge funds where that capital further works to extract wealth from the economy at large.

When tax rates on the wealthiest are high they keep their money in their companies—which creates jobs !!

jerv's avatar

@dabbler Tell that to @Jaxk :D

dabbler's avatar

@jerv Heh heh heh… yep.
I was going to write that my current theory (checking category) is that @Jaxk is an AI program with a sophisticated nuisance algorithm that assembles peripherally related, half accurate info to posit vague but emphatic grazing contradictions.
And there is the charming sidecar algorithm, in the cases where you have listed factual information of substantial weight on the topic beyond a few sentences, it will handily dismiss it all right at the start of the next response with : “nice rant.” Not all the time, though, just to make it seem life-like.

But what I really meant was that @Jaxk can be a piece of work, but @Jaxk always makes me laugh out loud somewhere in there.

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