According to the CBO...

[Rshermr]

One thing is for certain Obama doesn't have a clue. You see he has never had a job, paid expense or hired people. He has lived of the tax dollars of others his entire life. We need a businessman in office and yes I have read about Bain Capital..

Actually, running a country is nothing like running a business. But please, have it your way. Businessmen who became president always have done better. Or, have there actually been any?? Can you seem so certain, Signelect, you must know of a businessman who became president, right?? How did he do, if you can name one??

 

[Rshermr]

In real terms (inflation-adjusted 2010 dollars), average US household incomes (mean of middle quintile) have stagnated since 2000 -- at about $50K / year per household, the highest in history. Official "HI" excludes pension contributions, welfare transfers, and capital gains. Today, average US household welfare receipts are $10K / year per household. Even excluding welfare (and other forms of income), US households are keeping pace with the economy, earning (on average) solidly middle-class incomes, of $50K / year, in real terms. And that is despite 2001 and 2008, from which the US economy has yet to recover. What do people want? (to complain?) Average HI has stalled, at the highest levels ever, due to major recessions. Downturns always depress incomes, the same as always, like 1991, and 1980. Get the economy running again, and HI will grow again. HI was growing on trend, until 2008. 2008 is (still) the problem, not business profits, nor personal incomes.

doing the bidding of the wealthy who love the trend toward wider changes in income distribution, several right wing think tanks are trying to get you to believe that income disparity is no problem, and just as it always has been. All statistical studies say just the opposite. Here are some examples


In its report, the budget office found that from 1979 to 2007, average inflation-adjusted after-tax income grew by 275 percent for the 1 percent of the population with the highest income. For others in the top 20 percent of the population, average real after-tax household income grew by 65 percent.

By contrast, the budget office said, for the poorest fifth of the population, average real after-tax household income rose 18 percent.

And for the three-fifths of people in the middle of the income scale, the growth in such household income was just under 40 percent.

Striking it Richer: The Evolution of Top Incomes in the United States
Emmanuel Saez March 2, 2012
In 2010, average real income per family grew by 2.3% (Table 1) but the
gains were very uneven. Top 1% incomes grew by 11.6% while bottom 99%
incomes grew only by 0.2%. Hence, the top 1% captured 93% of the income
gains in the first year of recovery.

And it goes on and on. The middle class gets smaller, the poverty class gets larger, and the very wealthy have increased their incomes as a percentage by 7 times that of the middle class.

 

[Widdekind]

... income disparity is no problem...

According to Libertarianism, the "American dream" is "everybody works hard, and gets (at least a little) ahead". Utopianism is fantasy. Overall, on average, everybody in America is getting (at least a little) wealthier, in real (inflation-adjusted) terms. You're complaining? (What about orphaned children on the streets of American cities, or AIDS in Africa, where incomes are ten times lower than in the US?)

from 1979 to 2007, average inflation-adjusted after-tax income grew by 275 percent for the 1 percent of the population with the highest income. For others in the top 20 percent of the population, average real after-tax household income grew by 65 percent.

By contrast, the budget office said, for the poorest fifth of the population, average real after-tax household income rose 18 percent.

And for the three-fifths of people in the middle of the income scale, the growth in such household income was just under 40 percent.

So, in the US, everybody is getting (at least a little) wealthier... and they all complain about it, too? (i guess griping is good for GDP; maybe they should try that in Africa.)

There are real problems on earth; "my income only grew 20%" can be nothing but a (divisive) distraction

 

[Rshermr]

... income disparity is no problem...

According to Libertarianism, the "American dream" is "everybody works hard, and gets (at least a little) ahead". Utopianism is fantasy. Overall, on average, everybody in America is getting (at least a little) wealthier, in real (inflation-adjusted) terms. You're complaining? (What about orphaned children on the streets of American cities, or AIDS in Africa, where incomes are ten times lower than in the US?)

from 1979 to 2007, average inflation-adjusted after-tax income grew by 275 percent for the 1 percent of the population with the highest income. For others in the top 20 percent of the population, average real after-tax household income grew by 65 percent.

By contrast, the budget office said, for the poorest fifth of the population, average real after-tax household income rose 18 percent.

And for the three-fifths of people in the middle of the income scale, the growth in such household income was just under 40 percent.

So, in the US, everybody is getting (at least a little) wealthier... and they all complain about it, too? (i guess griping is good for GDP; maybe they should try that in Africa.)

There are real problems on earth; "my income only grew 20%" can be nothing but a (divisive) distraction

Libertarianism is a whole lot more than that. Are you trying to con me, or do you really believe libertarianism is what you just described?

So what is the problem with income disparity?

Here is a quote: The wealth gap may pose a real risk to the financial health of the country. Analysts at the International Monetary Fund have warned that the concentration of so much wealth in the hands of fewer and fewer people may be holding back a recovery of the national economy, which has been struggling to regain momentum since the financial crisis of 2008 touched off a global recession.

An international comparison from the CIA's World Factbook shows that America ranks roughly alongside a number of Second and Third World nations in terms of income distribution, including Iran, Uganda, Cambodia and China.

 

[Widdekind]

the concentration of so much wealth in the hands of fewer and fewer people may be holding back a recovery of the national economy

the US economy has been growing several percent every year. US workers' wages have been growing even faster. Total "sales volume" in the US (final goods & services, intermediate goods & labor) has grown to nearly $40T / year, higher than ever. Median household incomes, excluding pensions & welfare, have grown to nearly $50K / year, higher than ever.

how can you transmute that into "wealth restricted to fewer & fewer" ? Inexpertly, what the IMF analysts are arguing, is that wealthy people are hoarding their money; and not reinvesting the same. That would be deflationary. More-than-less, GDP "investment" (I) this year, is funded by borrowing from the savings (S) of last year. The private sector saves net earnings this year; then finds a profitable venture to lend them to for next year. That keeps the economy going. Money that would be "squirreled away" is piped back into the economy, borrowed by businesses to buy equipment, build factories, and hire workers to make widgets. Money which wasn't being spent, is (borrowed and) spent.

If wealthy people save allot (S); but do not lend that money back out; then all that money is de-circulated, "doing nothing in bank accounts". Next year, there could be no investment (I), and the economy (GDP = C+I+G+NX) would contract by 10% (investment is roughly a tenth of GDP spending).

But what do you want -- wealthy people to throw that money away, investing in risky start-ups that go bust? Savings this year (S) becomes investment next year (I) if there are worthwhile investments to be made. If not, then the economy is unhealthy; and there's no possibility for growth at present anyway. Demanding saved money be wasted on unprofitable ventures would only throw good money away. That would be like a "private sector stimulus program", where wealthy people "poured money on the economy" -- and it would all flow overseas, through the US trade deficit, for cheap foreign products, even as critics claim that Pres. Obama's stimulus program has already done.

Are you claiming, that wealthy people, are intentionally sabotaging the US economy, wittingly foregoing profitable investments, specifically out of "spite"? Not that wealthy people have looked, and found no profit potential at present; but that they have looked, and are basically "burning dollars" (by sequestering them in banks, out of circulation) ? If wealthy people are basically accumulating dollars; and then basically burning them by the wheelbarrow; then they are sabotaging the US economy. If, however, the US economy is offering wealthy would-be-investors no potentially-profitable possibilities; then that is the economy's fault, not theirs. Wealthy people, having accumulated money, and not squandering the same, wasting money on unprofitable ventures, at least "treads water", without losing more money, and is less loss-ful than many other Americans, with their net negative savings rates.

Are wealthy would-be investors, in the US, wittingly sabotaging the US economy, intentionally refusing to finance otherwise-profitable business ventures, specifically to undermine the US economy? 'Cause otherwise, it's their money; and if you (or i, or anybody else) wants to borrow it, then we have to make it worth their while. If they are not sabotaging the US economy, then they would jump at the chance to invest for (future) profit, to the benefit, of the entire US economy, and Society. If you and/or i were entrepreneurs, then we could think up something smart; put together a proposal; and they would finance it; and everybody would benefit.



web references
A Hole in the Bucket Drains Recovery | Fox Business
Net Netional Product
http://www.themicroeconomics.com/images/f4-2.jpg

 

[expat_panama]

...Official "HI" excludes pension contributions, welfare transfers, and capital gains...

--not to mention the rest of the $4trillion in personal income that the Census Bur. leaves out:

For purposes of understanding economic activity the BEA's totals are the only way to stay consistent with GDP figures. The Census Br.'s unusual slant would be more useful with Hillary becoming the next VP candidate; that would address the need to make the Clintons look better.

 

[uscitizen]

inexpertly, the OP discusses only half the story, taxes paid. High-income earners pay more taxes. But, meanwhile, low-income earners receive more tax-transfers, i.e. welfare. The US tax code is a "Robin Hood" system, that takes taxes from high-income earners; and gives welfare to low-income earners. Overlooking the 2008 recession, total net taxes, for the entire US public, have hovered around zero since the 1970s. Oversimplifying, all the taxes paid by people, are re-routed, and given back to other people. So, if high-income earners are paying more; then low-income earners are receiving more (so that, summed over everybody, the net losses cancel out the net gains)

Well duhhh! the govt is supposed to spend the taxes collected.

And not just people get it trillions have been spent on the military, roads, bridges, buildings, etc.
.

 

[Widdekind]

not to mention the rest of the $4trillion in personal income that the Census Bur. leaves out

HI excludes non-taxable incomes (interest payments, welfare transfers), and non-received income (pension plans), and non-regular income (capital gains):

HI = PI - welfare - interest - pensions - capital gains​

removing those incomes from PI reconciles the "business accounting perspective" (PI) to the "government accounting perspective" (HI). There is no "missing $4T (per year)" between the two statistics:

Except for 2008, real incomes, by any measure, have been growing faster than inflation. (Rising income is not a legitimate issue to complain about, and can only be a divisive distraction; people should not be bogus about money; if they are, everybody else should take note; if nobody does, then 'tis yet more bogus.)

 

[chikenwing]

Maybe it's because the earning power of the middle and lower groups has declined or disappeared due to the recession.

And how would that change the tax code?? They pay more because its required,not because they earn more.