The Destruction of the 'American Dream' 18 comments
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The latest report from the Census Bureau on income, poverty and health insurance coverage portrays a darkening economic picture for millions of Americans. Incomes and living standards fell without regard to geography, race or work profession. For many, the Census report only confirms the destruction of the “American Dream” of economic advancement.
- For 2008 real median household income declined 3.6% to $50,303.
- The official poverty rate in 2008 increased to 13.2% from 12.5% the previous year and is the highest since 1997. There are now 39.8 million people in poverty. The government definition of poverty for a family of four is an income below $22,025.
- The number of people without health insurance increased from 45.7 million to 46.3 million. The number of people with private health insurance decreased slightly to 201 million.
- Incomes declined across all racial groups.
- Incomes declined in every geographic region except the Northeast where incomes remained unchanged.
- Income inequality was unchanged in 2008 from the prior year, indicating that no income class was spared from a decline in income.
While the government is rolling out the press releases congratulating itself on an economic recovery, many Americans remain in an economic nightmare of unemployment, poverty and hopelessness. The latest stats from the Census Bureau provide little reason for optimism since without income growth there will be no economic recovery. The latest report on the number of homeowners in foreclosure signals no recovery to date in incomes or jobs.
U.S. Foreclosure Filings Top 300,000 for Sixth Straight Month
Sept. 10 (Bloomberg) — Foreclosure filings in the U.S. exceeded 300,000 for the sixth straight month as job losses that boosted the unemployment rate to a 26-year high left many homeowners unable to keep up with their mortgage payments.
A total of 358,471 properties received a default or auction notice or were seized last month, according to data provider RealtyTrac Inc. That’s up 18 percent from a year earlier…. One in 357 households received a filing.
Foreclosures rose from a year earlier as companies cut payrolls by 216,000 workers last month…
“The foreclosure numbers are largely unemployment related,” Davis, a former Federal Reserve Board economist, said in an interview. “As long as 15 million Americans are unemployed, record foreclosures will continue.”
With the real world unemployment rate approaching 20%, the government’s loan modification schemes merely delay inevitable foreclosure for many homeowners - without income any monthly payment is too high. Nor is unemployment the only cause of foreclosures. For those who still have jobs but are barely getting by, a decrease in income can easily lead to mortgage default.
We Need Income - Not More Debt
While the divorced-from-reality politicians in Washington decide on what new deficit financed spending program they should enact next, they are missing the big picture. Our future long term national prosperity will be based on promoting free enterprise job creation - something that does not appear to be on the agenda in Washington.
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After the depression and from 1942 through 1982 the earnings of the top 10% had been reduced to 32% of all income. This was the age of the middle class.
In 1982, about the same time the great leveraging of America got underway, the fraction earned by the top 10% started rising and today its around 45%, the same as it was in the guilded age.
There are certain desirable home improvements that wouldn’t require skilled labor, such as adding fencing, and improving home security, insulation, and earthquake protection. Millions could be hired to do these tasks after a bit of videotaped training.
This would stimulate lots of economic activity, would upgrade the country's housing stock, would make life pleasanter for home-owners and their neighbors (who'd live in an upgraded neighborhood), would reduce crime, and would be a good investment for the gov't. in the long run. It would also be politically popular (assuming it would work).
This technique could also be used to fund purchase and installation of attic fans, south-side awnings, white-painted roofs, and heat pump installation. The US needs to cut its energy consumption, and a little governmental nudging--or even frog-marching--is OK to get us there.
On Sep 11 05:58 AM CautiousInvestor wrote:
> We have returned to what I will call the gilded age where incomes,
> prosperity and wealth is ever more concentrated.
>
> After the depression and from 1942 through 1982 the earnings of the
> top 10% had been reduced to 32% of all income. This was the age of
> the middle class.
>
> In 1982, about the same time the great leveraging of America got
> underway, the fraction earned by the top 10% started rising and today
> its around 45%, the same as it was in the guilded age.
1. The freedom and opportunity to achieve all that talent, work , perseverance and faith could attain; it meant the freedom to fail and the generosity to be given a second chance
2. Upward mobility in terms of material consumption, economic security and social standing: the possibility of starting at the bottom and reaching the top in one generation and the expectation and trust that the lives of children would be better, healthier, physically easier than the lives of parents
3. The mission of being a shining city on a hill for all people everywhere on earth. This was the source and purpose of American exceptionalism-----to be so much better than others in the pursuit of life, liberty and happiness that by precept and action all fellow humans could eventually participate in the American blessing. Exceptionalism was never meant to be exclusionary. It was a means to ultimately include all fellow human beings, so that America would become the universal nation.
Government was instituted to advance, preserve and protect the American dream. Government was constituted to be the servant of the people. Those who had the gifts of talent, leadership, wealth and power were especially obligated to give back and to adhere to higher standards of conduct and honorable achievement than ordinary people.
Through a series of willed choices the governing elite has now , with accelerating criminality, perverted all 3 components of the American dream. To elites the Government is now the master not the servant and the purpose of government is to rule, exploit and subdue the many for the few
---By their insatiable greed for material things , power and fame, the entrenched governing elites supress and steal freedom and opportunity from the vast majority of Americans.
-----By their willfully exclusionary behavior and policies the elites are compelling downward mobility for tens of millions of Americans and systematically extinguishing opportunities for upward mobility. To feed its own dreams and fantasies the permanent Upper Class seeks to starve the dreams and aspirations of all others.
---By their maniacal embrace of debts, dishonor and the fiat dollar, the governing elites are assuring that America becomes an object of contempt and derision ; the shining city on a hill is being buried under the rubble of vanity , collectivism and depravity.
No implacable alien enemy is attacking and destroying the American dream. It is being defiled and destroyed by the very institutions and people charged with revering and protecting it.
Well put Mr. Zielinski. It's not on the agenda.
"For those who would spread the wealth around, there must first be some wealth to spread around." Yogi Berra.
"A rising tide lifts all boats." John F. Kennedy.
"An ebb tide lowers all boats." Anonymous Citizen of the World.
The solution to this current economic crisis AND to this general problem of disparity and increasing poverty is drastic DOWNSIZING of government and a dramatic DECREASING of regulation and government interference in personal lives and business. That and that alone will yield results. Lower complexity equals lower barriers to entry --> the opportunities are open to more people, given the lower overhead!
What you propose is more government, more dependence, and less self-reliance. Completely the opposite direction of what works and what is needed! GET OFF THE GOVERNMENT TEAT!!!
On Sep 11 06:43 AM Roger Knights wrote:
> Namely, the gov't should offer to pay
> for home-improvement projects for home-owners in exchange for a share
> of future profits on the sale of the house.
www.amazon.com/Liberty...
" Since the gov't. is already throwing money at make-work projects and infrastructure improvements, here's a project that could get under way much faster, with less likelihood of fraud or ineffectiveness than the current stimulus. Namely, the gov't should offer ..."
More government and more spending of money our government doesn't have? WOW!
There is a lot of demagoguery about rights of everybody to the best possible and most expensive medical care. This is a total nonsense!
Somebody might say: it is a necessity and American people are entitled to it. Food is also a necessity but does everybody entitled to it including the most expensive one? A shelter is also a necessity but does everyone is entitled to a mansion?
The answer to the both questions above is NO!
As a civilized and compassionate nation, we should provide opportunities to our people to have decent shelters, prevent people from starving, and provide a BASIC medical care. However, this system should not be abused and open for theft.
We should not provide something for nothing and our assistance must be confined to only our citizens (we cannot feed and provide care for the entire world).
Finally, in our corrupt society to have a decent medical care the country can afford is just practically IMPOSSIBLE!
But that has not always been true. As CautiousInvestor notes above, the Gilded Age was one exception when the pie got larger, but fewer gained from it. And, of course, we have had the intermittent recessions and depressions in which the pie got smaller, usually at the greater expense of the less fortunate--but the more fortunate also suffered some.
Today is different. Over the last decade--as reported in the Census report Mr. Zielenski notes above--through two recessions and a historic "boom" period, the highest 10% income households retained its its real income levels unchanged, while the median national household income has declined by 4.3% and the bottom 10% of households saw their family incomes shrink by 9%.
With the growing divergence in income (flows), one can only expect the growing concentration of wealth (stock) in the top group to continue. If the US government doesn't do something to reverse that income and wealth centralization, our economy will lose any remnants of vigor and growth it may have and, ultimately, create the conditions for total distrust of government and civil unrest.
It is not a trend that want might children and grandchildren to experience. I thought Mr. Obama might be part of the answer to that problem, but he sold out so fast to the interests of the wealthy in propping up Wall Street and the wealthy, I am not at all optimistic for our country's economic and political future.
-The Geoffster
In terms of major policy prescriptions - not rhetorical devices or various religious/moral assertions - every president since 1980 (with the possible exception of G.H.W. Bush, a one-termer) has offered essentially the same message of "there IS gain without pain." Whether it's deficit spending generally, trade policy, deregulation, taxation, or wars that pay for themselves, Americans lapped it up.
At some point, blaming the con-man no longer works, especially when we continue to return them to office, over and over again. I don't know why it became so easy to convince generations of Americans that freedom is free, irresponsibility is virtue, and our prosperity depends on embracing our base urge to steal from future generations because "we deserve it." Whatever happened to "if it's to good to be true, it probably is." It has been said in various forms that we are sheep. IMO this is an insult to sheep everywhere. You won't see sheep habitually rationalizing new and inventive ways to pillage the future - and always we say "oh, just a little more, this is the last time, I promise."
It says less about our politicians than it does about the electorate that keep the various carnival barkers busy. Loudly they proclaim our collective greatness, and say: "Yes YOU CAN have your cake and eat it too!" Given that both political parties parrot the same basic routine, and that the terms "liberal" and "conservative" are now devoid of meaning, we can come a little closer to the only real ideology alive in America. . .
It goes something like this:
"We are Great Americans, so great that we deserve the rewards of sacrifice without the act of sacrifice. Please leave that last bit to my kids."
I think we all agree on this. It's like saying "I like children and old people." The question is how to do it. I'd be interested in the latest "win-win" plan for making it happen.
A little more of the same will hurt no one. It's a competitive world now so a postponement of that new car, latest derivative or flat screen can only benefit the national character. With its immense pool of resources why should anyone, today, be so fearful of the future?
Sure, there is huge debt and bank fraud to work through but the world has little choice but to eat that by inflation. What follows will prove, or disprove, the American dream - not only for America but for the rest of the world.
Instead of giving trillions of dollars directly to the elites on Wall Street, if Washington was going to spend that money, they could have directly paid off some of the debts of the middle and lower class families.
This would have not only alleviated the debt burden from these people and would have stimulated the economy, but it would have taken a lot of bad loans off the books of financial institutions.
Instead the money went directly to the greedy bankers of Wall Street and has only helped the economy of the Hamptons, which did not need the stimulus.