Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojkt
I wrote a fatalistic comment yesterday that the only people who can save the economy of the US is the middle class. We’re the only substantial enough population to do it. In general, the uber wealthy have been fighting tooth and nail to protect their wealth. I believe it’s a little like cutting off their nose to spite their face but as someone who has never amassed great sums of wealth maybe I just don’t understand that need. I was born into the middle class and managed to hang onto that while putting five kids through college and living a well adjusted and happy life so I don’t think I’d want to trade places with them. Amassing huge sums of wealth was never a particular desire or fantasy for us.
I’m in favor of protecting the safety net but realize and accept that changes are coming which really means that myself and my friends will be spending more time in the trenches helping where we can to bridge the difference between minimal subsistence and something worse. Okay. I accept the fact that my grandchildren will have larger classes and more trouble finding colleges their parents can afford or that will accept them based on the need surpassing the availability. Luckily they’re smart kids and so are their parents, I’m pretty sure they’ll figure it out. There may not be as many manufacturing jobs for high school graduates but we still need plumbers and restaurant workers and eventually the construction industry will come back. And guess what the American consumer is already coming back, we’re spending our savings to do it, and Europe may bring us down yet, but for now demand is back. Good for us, we’re the heart of America. It’s not even a left right issue, it’s as American as apple pie.
Lots of good charts and cautionary tales at the link but I’m trying to look on the bright side.
Personal income growth is running at about 2% a year at best. Note as well that personal savings have begun to fall. Outside of cars and student loans, consumer credit has fallen in the last three months so I conclude that the current round of consumption is funded largely from a savings rundown, following the big spike post GFC. We’ve been here before, of course, and such cycles can run for longer than anyone expects so we can’t discount that possibility.
Filed under: Uncategorized | Tagged: middle class |
All Things in Moderation 
Thanx for the links, LMS.The trick is to expand the middle class, of course.
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For those without bionic vision, the blue line is retail sales and the red line is retail sales minus gasoline. What I would note is the constancy of the increase since the minima at the depth of the crash.It's interesting that the U.S. economy is now 0.6% larger than it was prior to the crash with roughly a decrease of 7 million (146 to 139; ~3%) employed individuals. Long term, the U.S. economy got leaner and millions will not be getting employment back. BB
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Anyone doubting the cuts to the safety net really just needs to read this piece. The next major budget plan that emerged was House Budget Committee Chairman Paul Ryan’s. It was a nonstarter with Democrats — perhaps even a political boon for them — but it dragged the conversation to the right. Then came President Obama’s budget plan, which looked quite a lot like Bowles-Simpson, but reduced the defense cuts by $600 billion and lowered the tax increase by $500 billion. In other words, the Democrats moved to the right of Bowles-Simpson.Then came the debt-ceiling debate. By the end of those negotiations, Obama had offered Boehner a deal that would cut the deficit by about $4 trillion, with only $800 billion to $1.2 trillion coming from revenue. That deal would also have raised the Medicare eligibility age to 67, cut Social Security and made the Bush tax cuts permanent. It was far to the right of both Obama’s previous offer and the Bowles-Simpson commission.Last week, some of the Democrats on the supercommittee offered the Republicans a plan that would include about $1 trillion in revenue. That put it near even with the president’s proposal to Boehner. The expectation this week is that they will offer the Republicans yet a bit more than that, putting them well to the right of the president’s offer to Boehner, which was in turn well to the right of the president’s previous proposal, which was in turn well to the right of Bowles-Simpson.
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I heard this morning that Congress is less popular than communism. I am sure it is really more popular than communism and that the polls are wrong. Somewhat wrong, anyway. Both communism and Congress do seem to be wildly unpopular.But being somewhat more popular than communism would be damnation by faint praise in itself.
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lmsinca: "Anyone doubting the cuts to the safety net really just needs to read this piece."I suspect that such cuts will not be enduring, unless the economy goes into a permanent tailspin, and which the money wouldn't likely be there, anyway. If the economy picks up, the government will renew spending with a vigor. I'm dubious that even the cuts being talked about will happen. In regards to the defense cuts, keep in mind what's going to get cut. Because defense has been a pot of money, a lot of stuff is put in there. I don't know all of it, but I do know my mother was working on a review for the DoD's prostate cancer research grant program. When the defense budget gets slashed, it's going to be all sorts of medical and science research and grants that go first. Then support jobs. That's not going to end up being any different from cuts anywhere else in the budget. Indeed, the things people most complain about, such as veterans programs being insufficient, post-military service job placement being insufficient, pay for enlisted personnel being insufficient, training, etc, are going to be the things negatively impacted by budget cuts in defense, before they start cutting the budget for bombs and bullets.
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FB: Long term, the U.S. economy got leaner and millions will not be getting employment back. Some of those–perhaps many of those–can get employment back. But it's almost certainly going to have to be doing something else, or involve the learning of a new skill. And the "job creators" are going to have to actually, you know, create some jobs. But the old jobs are probably gone for good.
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kevinI doubt the "super committee" will be able to come up with a compromise, it's seems a little crazy to me that Republicans aren't taking one of those deals. But once we do get cuts do you really think they'll only be temporary? Doubtful, IMO. Let's say they raise the eligibility age for Medicare to 67, do you think they'll lower it again when the economy comes back to life and revenue increases? I don't. If they change the COLA for SS do you think they'll suddenly reverse that just because the government has a little more money than previously?
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These posts from Ezra are quite useful in following the SupercommitteAll the supercommittee proposals (and counterproposals) in one post andWonkbook: What counts as a tax increase? This is key:"The end result is that all these budget conversations are bedeviled by tax math that's anything but simple. First there's the question of what Republicans consider a tax increase, which is anything above the rates Americans are paying right now. That's how they can say their supercommittee proposal would raise taxes. Then there's what Democrats consider a tax increase, which is anything equal to or above letting the Bush tax cuts for income over $250,000 expire. That's how the White House can say their recent deficit-reduction plans increase taxes. Then there's what the Congressional Budget Office will score as increasing taxes and reducing the budget deficit, which is only a plan that increases taxes by more than the $3.7 trillion they're currently scheduled to increase when the Bush tax cuts theoretically expire in 2012. Just one more legacy of the Bush tax cuts, and the confused way Washington has dealt with them."I fundamentally agree with the Republican definition that anything more than Americans are paying right now counts as a tax increase, and yes, I'm perfectly willing to stipulate that the Bush Administration gamed the CBO process back in 2001 with the 10 year expiration window to make the deficit numbers work.Also, would it be possible to put the quote for the URL paste (<"a” href="URL">words or title<"/a">) somewhere on the main page, say under the text for ""We're all administrators now." It would make posting links a lot faster.
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it's seems a little crazy to me that Republicans aren't taking one of those dealsHonestly, I don't think they want to have to answer to their base, and they don't want to be primaried in the next election. But once we do get cuts do you really think they'll only be temporary? Doubtful, IMO.Or a specific cut will eventually get supplemented by another program (let's call it Medicare Part X) that is more complicated, more Byzantine, less helpful and ultimately more expensive to the tax payers. Let's say they raise the eligibility age for Medicare to 67, do you think they'll lower it again when the economy comes back to life and revenue increases?I expect they might do something. I doubt they'll change the COLAs for SS, but they can also choose to not do a COLA in a given year, and they might implement the maximum COLA every year, effectively maintaining the old rate. Or, the old rate might come back–it wouldn't be the first time. In the case of Medicare, I expect some addendum to the ACA would fill in for folks up to 67. I also think it's possible that ACA gets limited and Medicare eligibility goes down. Cuts that negatively impact a large constituency will probably not endure indefinitely, however. That's just a part of representative government. Of course, some of the spending will be moved to other, more fancy new programs, but government spending will continue to rise. It's going to take national bankruptcy or a zombie apocalypse to prevent that.
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jncp4; Also, would it be possible to put the quote for the URL paste (<"a” href="URL">words or title<"/a">) somewhere on the main page, say under the text for ""We're all administrators now." It would make posting links a lot faster.Done. I include "target="_new" in the A tag so that when you click on a link, it opens it up in a new document, rather than in the main window.
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Kevin:but government spending will continue to rise. It's going to take national bankruptcy or a zombie apocalypse to prevent that.Regrettably, I think you are absolutely correct.
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I for one welcome our new Zombie Overlords.
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This is truly hilarious.. I guess former Speaker Visa, er, Pelosi was right, we do have to read the bill to find out what's in the bill.
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picking up on Troll's theme, South Carolina has decided not to pursue an exchange. as written, the feds will do it, but the states can assume control later.
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Doing something new often means starting at the ground floor–a permanent cut in wages.I was thinking of older people. I suspect that anyone 55+ who has been unemployed for 26+weeks will not be returning to the labor force. BB
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FB: Yeah, seems unlikely, at least in any serious way. Although if I were 55+ and unemployed, I'd have to be finding some way to make some money. No choice in the matter.
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Generally, it's pretty tough I think to find a job after 50+. My dad was forced out at 58 and took a lump sum and went back to school to become an enrolled agent and started a tax business which he worked until about 3 months before he died at 81. They needed the money. Several of his friends were out even younger and some never went back to work. It's not necessarily a new phenomena, I don't think, but it's worse right now because of sheer numbers.
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My dad got knocked out of the labor force. He helped a fellow set up a company that did label printing in KC that was to be something for the guy's son. Once everything was up and running, my dad was out of his job. He was about 60 years old at the time and was owner of a small business. So, he dedicated himself to that. His original idea was for the small business to be a retirement income (http://www.candymancorp.com/.So), he dedicated himself to the business and eventually sold it on. Kinda disappointing that they don't bother putting him in their history.BB
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What a great business though FB. It's funny, our youngest who's the scientist really has dreams of opening a bakery some day. She figures if she saves enough money working in the oil industry, someday she'll have enough to buy someone's bakery out. You should see some of the cookies she makes, and drags me along kicking and screaming I might add when we're doing them together.One of the reasons my husband and I jumped at buying the business he was in for almost 30 years was because at 53 he didn't know if he'd be able to find another good job if they sold to someone else. We really went out on a limb but it's paid off and now we have something to do in retirement as we downsize.
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