June 16, 2008
McCain's Tax Policy Favors the Wealthy
The Tax Policy Center has published an exhaustive comparison of the candidate's tax policies. They see a stark difference.
The two candidates' plans would have sharply different distributional effects. Senator McCain's tax cuts would primarily benefit those with very high incomes, almost all of whom would receive large tax cuts that would, on average, raise their after-tax incomes by more than twice the average for all households. Many fewer households at the bottom of the income distribution would get tax cuts and those whose taxes fall would, on average, see their after-tax income rise much less. In marked contrast, Senator Obama offers much larger tax breaks to low- and middle-income taxpayers and would increase taxes on high-income taxpayers. The largest tax cuts, as a share of income, would go to those at the bottom of the income distribution, while taxpayers with the highest income would see their taxes rise.
This is their chart.
Further analysis.
The Obama plan would still provide the largest tax breaks, measured as a percentage of after-tax income, to those in the bottom quintile. Each quintile would, on average, receive a tax cut but those at the very top of the income scale would receive tax increases. On average, the top 1 percent would receive a tax increase equal to about 3 percent of income; that figure would rise to about 5 percent of income for the richest 1 in 1,000 households.
As in 2009, the McCain tax plan provides very little benefit to households at the bottom of the income distribution in 2012. Households in the lowest quintile receive tax cuts averaging about 1 percent of income. Because McCain’s plan extends all of the regressive 2001–06 tax measures (other than complete repeal of the estate tax) and cuts corporate taxes, those in the top 1 percent receive average cuts representing 9.5 percent of income; that figure is 11.6 percent for the top 0.1 percent of households.The outcome is very clear. If you care about income equality in this country, if you are part of the working class and not one of the wealthy, Barack Obama is the candidate for you.
UPDATE: Krugman looks at the policies
Posted by jnfr at 09:22 AM | Comments (0)
May 05, 2008
Economic Inequality
It's not just in the U.S., and it's worse than you think. Read this Washington Post article on the superrich of the world. They're not like you and me.
Today, the world's more than 1,100 billionaires have a net worth that's roughly double that of the bottom 2.5 billion people on the planet. The richest 10 percent of adults worldwide own 85 percent of global wealth, while the poorest half only barely one percent. The world's almost 10 million millionaires have seen their wealth double to nearly $37 trillion over the past 10 years.
Posted by jnfr at 12:10 PM | Comments (0)
March 18, 2008
Bushtowns
The BBC reports on people in Los Angeles who have been made homeless by the mortgage crisis.
As long as the rich get their welfare, I guess it's all okay.
UDPATE: More on the homeless there from the L.A. Times.
Posted by jnfr at 12:50 PM | Comments (0)
February 26, 2008
Iraq is the Economy
The two issues are not separate.
Posted by jnfr at 10:13 AM | Comments (0)
September 21, 2007
A billion here, a billion there....
Pretty soon you're talking real money.
Billionaires no longer rich enough to make Forbes list.
For the first time, $1 billion isn’t enough to land someone on Forbes’ list of the 400 richest Americans. Forbes associated editor Matthew Miller said that there "are 82 American billionaires who do not make the Forbes 400 this year." Income inequality has grown dramatically in recent years, "with the top 1 percent of Americans — those with incomes that year of more than $348,000 — receiving their largest share of national income since 1928."
1928? Why does that sound familiar?
Posted by jnfr at 04:58 PM | Comments (0)
April 05, 2007
It's a Good Life!
Well it is, if all you look at are corporate profits.
Via Kevin Drum, I discovered this report from the Economic Policy Institute. It analyzes current economic growth (4th quarter 2006) compared to economic growth averaged across previous economic cycles. The snapshot shows several areas including GDP, employment growth, and business investment, and all areas are below normal growth, except for one — corporate profits. In fact, those profits are growing more than twice as fast as in the past.
The employment growth rate is especially disturbing, because it is so low. A country that privileges corporations over its own working people and middle class is a country that is not sustainable, in my opinion. Our economy is working for someone, but that someone is not us.
Posted by jnfr at 08:23 AM | Comments (0)
April 16, 2006
Think Bush's tax cuts helped you?
Then you must be very well off.
UPDATE: A friend points out to me that half of U.S. families fall into that $50k and under segment.
UPDATE:
In 2002:
• The upper 5% topped out at $164,323/yr (so 95% of U.S. families made less than $165k/year in 2002).
• The upper 20% made less than $94,469
• The next quintile made less than $63,000
• The next quintile made less than $41,440
• The bottom quintile made less than $24,000
Graphic from Citizens for Tax Justice.
Hat tip to georgia10 at DailyKos.
Statistics are from the U.S. Census Bureau.
Posted by jnfr at 11:07 AM | Comments (9)
February 19, 2006
It takes the British media
...to honestly discuss poverty in the United States.
From the article:
37 million poor hidden in the land of plentyThere's much more. Please read it all.
Americans have always believed that hard work will bring rewards, but vast numbers now cannot meet their bills even with two or three jobs. More than one in 10 citizens live below the poverty line, and the gap between the haves and have-nots is widening...
An America divided
· There are 37 million Americans living below the poverty line. That figure has increased by five million since President George W. Bush came to power.
· The United States has 269 billionaires, the highest number in the world.
· Almost a quarter of all black Americans live below the poverty line; 22 per cent of Hispanics fall below it. But for whites the figure is just 8.6 per cent.
· There are 46 million Americans without health insurance.
· There are 82,000 homeless people in Los Angeles alone.
· In 2004 the poorest community in America was Pine Ridge Indian reservation. Unemployment is over 80 per cent, 69 per cent of people live in poverty and male life expectancy is 57 years. In the Western hemisphere only Haiti has a lower number.
· The richest town in America is Rancho Santa Fe in California. Average incomes are more than $100,000 a year; the average house price is $1.7m.Posted by jnfr at 03:47 PM | Comments (0)
March 01, 2005
The next few weeks are crucial
In the fight to save Social Security, the next six weeks are crucial. In the Washington Post today, Mike Allen writes:
White House officials are telling Republican lawmakers and allies on K Street that they must begin to overcome opposition to President Bush's proposal for changing Social Security within six weeks, GOP strategists said yesterday.The GOP strategists stressed that the six-week goal is not a hard deadline for a political breakthrough, but they said the public's tepid view of Social Security change cannot be allowed to continue indefinitely. The directive raises the possibility that Republicans will have to reconsider whether legislation can be passed this year, as Bush wants. ...I especially like that line about how our dislike of Bush's proposals "cannot be allowed to continue". I do hope they're about to find out that there are some things in this country they don't yet control.
Posted by jnfr at 12:05 PM | Comments (0)
February 22, 2005
Dollar falls another bit
The dollar continued to fall when matched against the Euro this week, as Korea reported plans to diversify its currency holdings. The U.S. is dependent on foreign faith in the dollar to prop up the massive deficit spending which now underlays our economy.
"Support for the dollar is quickly disappearing," said Kenichiro Ikezawa, who manages $1 billion in overseas debt at Daiwa SB Investments in Tokyo. "This Korean story is having quite an impact because it feeds into suspicion that others are also seeking to cut their exposure to the dollar."Posted by jnfr at 08:57 AM | Comments (0)
January 30, 2005
Central banks begin to abandon the dollar
It's been coming for a while, what with our insane deficits and all, but now they are shifting their reserves away from the dollar, and things may go downhill fast for the U.S. economy.
Posted by jnfr at 10:12 PM | Comments (0)
January 07, 2005
This is exactly right
Josh Marshall quotes a reader on Social Security.
There are $1.8 trilliion in U.S. Treasury securities in the U.S. Social Security Trust Fund. It is imperative that the Democrats ask Bush whether he intends to honor that obligations and force him to make a public proclamation of his steadfast commitment to do so. The Democrats must take the lead in committing themselves to honor those obligations.Democrats should seize this opportunity at once, and every one of them stand forth and guarantee they will honor those financial commitments, and will not vote for any bill that puts those commitments at risk. That's the least they owe those of us who paid for the damn things, and it would be a smart political move to boot.
Posted by jnfr at 08:57 AM | Comments (0)
November 29, 2004
Social security, and the proposed changes
I understand some of the pros and cons on privatization of social security. The way we organize it now, it is a very safe way of providing that our older folks not end up impoverished, but it's very inefficient in rate of return. That's pretty much how investments go: low risk investments offer less return on your capital but are safer, while higher risk investment offer more potential return but also a great chance of loss. Another advantage of the current system is that it has very low overhead costs, which a privatized system won't be able to match, but the higher costs are presumed to be offset by higher returns.
I personally don't think the current system needs much more than a few tweaks (extending the income levels that pay into the system could immediately solve any potential insolvency problems, for example). That's because my primary concern is seeing that the most vulnerable members of our country don't suffer in poverty through their sunset years.
But my more libertarian friends believe that people should have a chance to do better than the system allows, by taking on more risk. That's part of what drives the Republicans, I guess, or at least some of them. The other part is that their friends in the financial industry stand to make out big on those investment fees and overhead costs which will be generated by the new privatized accounts. That's my impression, anyway.
Whichever side of the libertarian argument you fall on, it's hard to credit this administration with the competence or integrity to implement a privatized system in any sort of useful way. They're already planning to count the cost of the changeover off the books so that the deficit will not show another big jump. That's their lack of integrity showing. They know it's not politically feasible to borrow yet more money, so they're going to wave their hands and pretend they haven't. An honest response, if they really believe this change will earn more money in the long run, would be to explain to the country why they believe that, and convince us they are right. But that would require a respect for the citizens of this nation which this administration doesn't have.
Lack of competence shows in pretty much everything they've done, from their tax cuts and the accompanying iceberg of deficits, to the unfunded federal mandate of "No Child Left Behind" which is their entire education policy, to the invasion and continuing occupation of Iraq. Frankly, Bush has never run a successful business in his life, and I believe his administration is going to leave this country in terrible shape by the time he's done. In particular I suspect if his changes to Social Security are implemented, we're not only going to face further deficits and a weaker country, but that our elderly will end up in more perilous circumstances because of it.
To learn more about the Social Security issue and the proposed changes, read this page from the Center for Economic and Policy Research.
Posted by jnfr at 03:51 PM | Comments (2)
November 23, 2004
Why I worry
Just in time to fuel my concerns about the falling dollar and the deficit, Atrios links to an article in the Boston Herald in which Steven Roach, chief economist at Morgan Stanley, is quoted as saying that at this moment in time, the U.S. has a 90% chance of facing "economic armageddon". He thinks there is a 30% chance of a slump soon, though we may muddle through a bit longer before the inevitable downturn.
He predicts Greenspan will be forced to raise interest rates even faster, and that U.S. consumers, who are loaded with debt at the moment, will get pounded. Thank heavens for my nice, fixed-rate mortgage. People with adjustable rates on their homes may well face losing everything, if interest rates really begin to rise.
And here I was hoping that the experts were going to allay my fears, not compound them. But it's pretty clear that we can't continue to borrow 80% of the world's net savings, day after day after day. That well has a definite bottom to it, and we'll hit it sooner or later.
Posted by jnfr at 07:44 AM | Comments (0)
November 21, 2004
The importance of pre-school education
In light of the fact that our Republican-led Congress just voted to cut Head Start funding again, you might be interested in this article in today's New York Times which explains that pre-school education not only helps when children are young, but has benefits even 40 years later. The information is from an extraordinary longitudinal study started in the 1960s. The same group of high-risk inner city children have been followed the entire time.
Based on past experience, it was a near certainty that most of these kids would fail in school. During the previous decade, not a single class in the Perry elementary school had ever scored above the 10th percentile on national achievement tests, while across town, in the school that served the children of well-off professionals, no class had ever scored below the 90th percentile....As they progressed through school, the Perry children were less likely to be assigned to a special education class for the mentally retarded. Their attitude toward school was also better, and their parents were more enthusiastic about their youngsters' schooling. Their high-school grade point average was higher. By age 19, two-thirds had graduated from high school, compared with 45 percent of those who didn't attend preschool.Most remarkably, the impact of those preschool years still persists. By almost any measure we might care about -- education, income, crime, family stability -- the contrast with those who didn't attend Perry is striking. When they were 27, the preschool group scored higher on tests of literacy. Now they are in their 40's, many with children and even grandchildren of their own. Nearly twice as many have earned college degrees (one has a Ph.D.). More of them have jobs: 76 percent versus 62 percent. They are more likely to own their home, own a car and have a savings account. They are less likely to have been on welfare. They earn considerably more -- $20,800 versus $15,300 -- and that difference pushes them well above the poverty line.We fail the impoverished children of this country when we won't provide them with even minimal help. We do this because a large portion of this country hates them and hates their parents, blaming them for their own circumstances. While it's true that people need to take responsibility for their own lives and their progress, children who are neglected and malnourished can't possibly perform up to potential. The rest of us then pay for it throughout their lives, in higher crime rates and lost human potential. This is why childhood education and feeding children are liberal values — it is both kind and prudent.
Posted by jnfr at 04:38 PM | Comments (0)
Ah! This explains it
We see now why it was necessary to cut Pell Grants and health care for veterans. Because Bush needs the Nixon yacht back!
Atrios is right — if the Dems can't spin this one there's no hope for them.
Posted by jnfr at 08:34 AM | Comments (0)
November 20, 2004
Further appropriations
Well, I watched CSPAN2 for a while, and apparently they figured out how to take the anti-tax-privacy clause out of the bill while still reconciling it with the House (which is in recess, so that's a nice trick). I don't really understand how they did it, but everyone seemed satisfied.
I wasn't surprised to find that funding was cut for Head Start, public housing, and the National Science Foundation, but I was horrified that they cut funding for extra police (first responders you know), and that they took $235 million from Veteran's Health Care. Now that's supporting our troops.
Posted by jnfr at 09:47 PM | Comments (0)
More in the omnibus appropriations bill
It's the gift that keeps on giving!
A friend pointed me to CSPAN2 where the Dems, reading the appropriations bill, found the Republicans had slipped in language allowing certain Senate Chairs to have full access to anyone's tax information. dailyKos, as usual, has the scoop. The Senate is still in session on CSPAN2, where they are trying to figure out how to handle this.
Posted by jnfr at 06:14 PM | Comments (0)
Cuts in student aid
More damage from the omnibus spending bill: a $300 billion cut in student aid, changing eligibility rules for Pell grants in such a way that nearly 100,000 students will lose all or part of their grants. Republicans attempted to pass this rule change last year, but Democrats fought them back. Now they've brought it back as part of the budget package.
Tuition has been rising since Bush came into office, as state budgets tighten and more costs are passed on to students. I know this country used to want an educated population. I fear the people in power now prefer to keep everyone poor and ignorant.
Posted by jnfr at 10:28 AM | Comments (0)
November 19, 2004
The price of war
Well, even though it wasn't planned for in the budget, the war in Iraq currently costs us $5.8 billion a month, according to our generals. I guess that's part of the reason why we've had to cut our contribution to the AIDS fund.
And even while we're pumping all that money into the military, the generals say that our military is under a terrible strain, both financially and in terms of personnel.
Posted by jnfr at 01:09 PM | Comments (0)
November 18, 2004
The Bush tax plan
Well it seems that Bush isn't going to go for a flat tax or a sales tax after all. Instead, he's going to cut capital gains taxes again, eliminate the alternative minimum tax, and otherwise shield income for wealthy people. How can he pay for all this without driving the deficit even higher? He plans to increase taxes on the middle class and working poor, by eliminating your tax deduction for state and local taxes, and eliminating the tax deductions businesses can take for providing health care.
Not only does this stick it to working people in favor of the wealthy, one of Bush's favorite things to do, but it disproportionately hits blue states — the ones who voted Democratic — because that's where most local and state taxes are paid. It's a two-fer, nicely done.
He'll also manage to cost a bunch of people their health insurance, since many businesses can't afford health insurance premiums if they can't deduct them. But that will only apply to people who can't afford to pay for their own insurance through tax-free health savings accounts. And those people aren't his base anyway. They are well on their way to dismantling every social protection this country has.
Posted by jnfr at 01:27 PM | Comments (0)
Debt ceiling raised
For the third time in as many years, Congress voted to raise the debt ceiling, allowing the government to keep functioning by running up the deficit even further. There was a time when Republicans were seen as the party of limited government and balanced budgets. But no more! They have become the party of no-taxes-but-spend anyway. I call them "red ink Republicans".
The measure was passed by a nearly straight party-line vote. The new debt ceiling is $8.2 trillion, up from a ceiling of $5.9 trillion when Bush took office.
Posted by jnfr at 07:56 AM | Comments (0)
November 17, 2004
The dollar, the euro, and the deficit
Brad deLong, who has forgotten more about economics than I ever knew, has a post about the effects of the deficit on the general decline in strength of the dollar. If I'm reading him correctly (numbers give me a headache), he's predicting a slow decline of the dollar's buying power as we rely on other countries to hold our national debt. People in the administration are claiming that the deficit is actually a sign of economic strength, but I don't buy that, and I don't think deLong does either.
Of course, just this morning I see that the dollar has fallen to a record low against the Euro. According to that BBC account, Treasury Secretary John Snow is again citing the deficit as a sign of economic strength, while pledging to cut it back (if it's a sign of strength, why bother?). He also says other nations have a "shared responsibility" to help resolve our deficit problems, though I'm not sure why he thinks that. I suppose they could solve the problem by not buying any more of our bonds, thereby halting growth of the deficit entirely. But it's hard to imagine that Snow would want that. The reporter seems to think that Snow is lying, and the administration is actually happy with a slightly weaker dollar. I have no idea if that's true, but lying is certainly a hallmark of this administration.
UPDATE: And over at the WashPost, Samuelson chimes in with some worries of his own over where the dollar is headed.
George Bush hasn't much discussed what could be his biggest economic problem. It's not budget deficits or jobs. It's the possible crash of the dollar on foreign exchange markets. Even if Bush understood it, he would be hard-pressed to explain it to the public. Worse, there are no obvious ways to prevent it. Nor is it certain how big the threat is. Little wonder Bush hasn't said much. If John Kerry had won, the situation would have been the same. But a dollar crash, if it occurred, could trigger a terrifying global slump.Posted by jnfr at 08:06 AM | Comments (0)
November 16, 2004
Euro over dollar as next world currency?
While the U.S. dollar weakens due to increasing debt and trade deficits, the Euro is growing stronger. Some think the Euro will replace the dollar as the cornerstone of world currency. If it does, that will be one more sign of failing U.S. influence in the world at large.
Oh, and inflation took a surprising jump last month as well.
Posted by jnfr at 09:31 AM | Comments (0)
November 08, 2004
Dollar falling, in spite of good employment news
When you run a large federal deficit, that means some one else is financing your spending. Just as when your household budget gets out of balance and you end up at the mercy of the credit card companies, when the nation carries debt we are the mercy of those who buy our bonds. China and other nations currently hold a huge amount of American debt, and when they stop buying, our economy is going to feel it.
Posted by jnfr at 01:19 PM | Comments (0)
Red states = welfare states?
Over at Angry Bear, the Angry Bear himself lays out the statistics which show that red states can't support themselves very well. In fact, the blue states are the generous givers of money while the red states, mostly, suck it up. Isn't it time we put an end to this welfare relationship?
Posted by jnfr at 01:02 PM | Comments (0)
