# Shocking Statistics: America's Income gap between the RICH & POOR



## Bowden (Mar 9, 2013)




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## IronAddict (Mar 9, 2013)

The great American obscene, In 1976 the richest Americans took only 9% of the wealth, the last 30 years their income has nearly tripled..The richest 1% own 1/2 the stocks, bonds & mutual funds...

Now all this disdain for Carter should be a little clearer.


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## Bowden (Mar 9, 2013)

This is a great example of the real class warfare that is taking place and who is winning the war.


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## irish_2003 (Mar 9, 2013)

the real reason people are more poor is because it's being taught to be the norm...we don't reward hard work and success and reward those who don't work instead...


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## LAM (Mar 9, 2013)

irish_2003 said:


> the real reason people are more poor is because it's being taught to be the norm...we don't reward hard work and success and reward those who don't work instead...



ah no, it's because of a fraudulent financial sector that has nothing except a negative effect on the real economy.


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## LAM (Mar 9, 2013)

Bowden said:


>



painfully obvious how this low wage neo-liberal consumption based economy has completely failed in the US.  but it has succeeded at concentrating the nations wealth and political power in the hands of the few.  and so many americans understand so very little about the subject, they just have no clue how bad the country's "future" is.


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## Zaphod (Mar 9, 2013)

irish_2003 said:


> the real reason people are more poor is because it's being taught to be the norm...we don't reward hard work and success and reward those who don't work instead...



You are correct.  Just not in the way that you mean.  Those that work hard are not being paid, think middle class, and those that do nothing or very little get rewarded, think extremely wealthy.


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## Swiper (Mar 9, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*



Zaphod said:


> You are correct.  Just not in the way that you mean.  Those that work hard are not being paid, think middle class, and those that do nothing or very little get rewarded, think extremely wealthy.



the wealthy pay for the "non working"


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## LAM (Mar 9, 2013)

Zaphod said:


> You are correct.  Just not in the way that you mean.  Those that work hard are not being paid, think middle class, and those that do nothing or very little get rewarded, think extremely wealthy.



it's only the people that know exactly nothing about finance that think the top percentile actually earn all of that wealth.  they have no clue about finance or economics at all, hence the opinions they hold.


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## Big Smoothy (Mar 9, 2013)

Bowden OP,

I saw this last week.  

This video has really gotten popular.  The info is needed.

Where are we headed as a society in the US? 

Down.  Well, down for the 95% of us.


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## Zaphod (Mar 10, 2013)

Swiper said:


> the wealthy pay for the "non working"



Most of the wealthy ARE non-working.  Talk about your welfare cases.


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## irish_2003 (Mar 10, 2013)

Zaphod said:


> Most of the wealthy ARE non-working.  Talk about your welfare cases.



it's their money whether people like it or not...it's time to back off condemning them...they earned it in one way or another...we need to stop the nanny state and handouts...handouts don't make someone middle class although the left will have you all believing it anyway...the low or no income class is the growing problem...until it's frowned upon enough in that culture to accept and abuse handouts, the problem will continue growing and never stop


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## Zaphod (Mar 10, 2013)

irish_2003 said:


> it's their money whether people like it or not...it's time to back off condemning them...they earned it in one way or another...we need to stop the nanny state and handouts...handouts don't make someone middle class although the left will have you all believing it anyway...the low or no income class is the growing problem...until it's frowned upon enough in that culture to accept and abuse handouts, the problem will continue growing and never stop



We have such unemployment because the so-called job creators aren't creating any jobs.  

The Waltons didn't earn shit, BTW.  They inherited.


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## irish_2003 (Mar 10, 2013)

Zaphod said:


> We have such unemployment because the so-called job creators aren't creating any jobs.
> 
> The Waltons didn't earn shit, BTW.  They inherited.



living in a family of rich snobs is alot of work...they earned it


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## Bowden (Mar 10, 2013)

irish_2003 said:


> it's their money whether people like it or not...it's time to back off condemning them...they earned it in one way or another...we need to stop the nanny state and handouts...handouts don't make someone middle class although the left will have you all believing it anyway...the low or no income class is the growing problem...until it's frowned upon enough in that culture to accept and abuse handouts, the problem will continue growing and never stop



If it's capital gains and dividend income they did not earn it by working for it.
It's passive income.
In example most of wealthy peoples income at the higher level is passive in nature.
They do not actually earn it by working for it..
The higher you go on the economic scale say at the 5% and up levels, usually less of your income is derived from actual work and more is derived from passive income flows.
A good example is Mitt Romney.
His current income is mostly passive income from capital gains and dividends.

Over the years the tax code has evolved through tax loopholes and intentional tax policy to devalue income derived from work,  in favor of higher tax rates on ordinary income than on tax rates on passive income.
In example, the way the tax code was structured a hedge funds manager making 900k an hour, would pay a lesser tax on his income aka. 'carried interest' than someone making 60k a year through a salary aka. ordinary income.

More here:
Carried interest - Wikipedia, the free encyclopedia

"Carried interest' income fell under 'passive income' capital gains favorable tax rates.

This is one of the reasons why there is such an income inequity ratio that is illustrated in that video.
The tax code has contributed to it.


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## Swiper (Mar 10, 2013)

Bowden said:


> If it's capital gains and dividend income they did not earn it by working for it.
> It's passive income.



So what's your point?


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## Swiper (Mar 10, 2013)

Zaphod said:


> We have such unemployment because the so-called job creators aren't creating any jobs.
> 
> The Waltons didn't earn shit, BTW.  They inherited.



so what?


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## irish_2003 (Mar 10, 2013)

so they allowed their money to make them more money...that's the american dream...why hate on it? u can be rich if you REALLY WANT TO...problem everyone wants to win the lottery instead or have it given to them...i don't hate the wealthy...i hate the poor...it's like having a donut tire on the car...


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## Standard Donkey (Mar 10, 2013)

Zaphod said:


> We have such unemployment because the so-called job creators aren't creating any jobs.
> 
> The Waltons didn't earn shit, BTW.  They inherited.




ok...their ancestors earned it 

lmao.. what difference does it make?


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## Bowden (Mar 10, 2013)

Swiper said:


> So what's your point?



The video illustrates the point.

The point as well is that people need to understand what is going on. 
As to the fact that there is an escalating income inequality in the U.S.
The distribution of wealth is 'trickling up' at increasing rates towards the upper economic class.
The wealth is not 'trickling down' from the top, creating jobs and 'raising all boats' in the lower economic classes.
It illustrates perfectly as to how supply side economics has failed.
The wealth is staying at the top and the middle class is in decline as a result of it.

It also raises questions as to the future of capitalism as capitalism requires stable societies to flourish.
Rising income inequality can create unstable social conditions that result in increased attraction by the lower economic classes towards big government socialist solutions.

People need to understand why this situation is occurring, the impacts and results of it on society as a whole.
As it impacts everyone's lives and it will impact the lives of their children.
The result of this rising income inequality aka. trickle up, not trickle down, will lead to a poorer society as a whole.


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## Zaphod (Mar 10, 2013)

irish_2003 said:


> living in a family of rich snobs is alot of work...they earned it



No, they didn't.  Quit making excuses for the people that hate you.


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## Zaphod (Mar 10, 2013)

Standard Donkey said:


> ok...their ancestors earned it
> 
> lmao.. what difference does it make?



You guys go on and on about how they "earned" their money.  They didn't.


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## Bowden (Mar 10, 2013)

The changing dynamics in the U.S. job market are also contributing factors in income inequality.
Capital is being reallocated globally outside of the U.S. to allow the highest return on capital investment to the 'wealth and job creators'.
As a result the jobs and wealth are not 'trickling down' in the U.S.

The majority of jobs being created now in the U.S. are low paying service jobs with low or no benefits that require onshore resources located in the U.S.
Companies like Wal-Mart in example.

Globalism is a factor in this changing job market dynamic resulting in income inequality as well.
U.S. manufacturing jobs paying middle class wages with benefits that used to be held by individuals with a high  school diploma, are now located offshore in countries like China

The internet is a contributing factor as it has allowed resource allocations to be shifted from the U.S. to low cost resource locations.
Well paying jobs with good benefits that used to be held by college graduates, especially in the information technology sector have been offshored to low cost resource locations.

This is not all inclusive, however it illustrates again what is contributing to rising income inequality.


.


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## Swiper (Mar 10, 2013)

Bowden said:


> The video illustrates the point.
> 
> The point as well is that people need to understand what is going on.
> As to the fact that there is an escalating income inequality in the U.S.
> ...



i'm talking about how you said they didn't earn it.  why does that matter if they worked for it or inherited it? it's
still their money either way, so why does it matter how they got it?  

And as far as the capitalism debate, that's not debatable because we haven't had capitalism. so how can you/they say it's the problem?


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## Bowden (Mar 10, 2013)

irish_2003 said:


> so they allowed their money to make them more money...that's the american dream...why hate on it? u can be rich if you REALLY WANT TO...problem everyone wants to win the lottery instead or have it given to them...i don't hate the wealthy...i hate the poor...it's like having a donut tire on the car...



No one is hating on anyone.
As illustrated in that video the fact is that there is a rising income inequality in the U.S.

Income inequality means that capital is not 'trickling down' from the 'wealth and jobs creators', creating jobs and wealth in the middle class and 'raising all boats'.
It means that capital is 'trickling up' from the lower economic classes to the 'wealth and jobs creators' economic class and staying there.
The 'wealth and jobs creators' have been and are accumulating huge wealth under current regulations and the current tax code and the result of the current regulations and the current tax code is a sharp increase in income inequality in the U.S. 

So the next time that a politician running for office starts stating canned supply side economic slogans like 'a rising tide lifts all boats' and spewing out anti regulatory and lower the tax rates on the 'wealth and jobs creators' political sound bytes, you can compare what they are stating vs what is really happening related to who is getting rich and wealthy and benefiting from current regulatory and tax rates and make an informed decision if you want to vote for them or not.
.


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## Swiper (Mar 10, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*

^^^ if lowering tax rates don't create jobs,  do you think raising them will?


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## Zaphod (Mar 10, 2013)

Swiper said:


> ^^^ if lowering tax rates don't create jobs,  do you think raising them will?



What makes you think it won't?


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## LAM (Mar 10, 2013)

irish_2003 said:


> it's their money whether people like it or not...it's time to back off condemning them...they earned it in one way or another...we need to stop the nanny state and handouts...handouts don't make someone middle class although the left will have you all believing it anyway...the low or no income class is the growing problem...until it's frowned upon enough in that culture to accept and abuse handouts, the problem will continue growing and never stop



http://upload.wikimedia.org/wikiped...of_US_Economy_as_Percent_of_GDP_1947-2009.png

you know absolutely nothing about finance.  the US economy has gone from a nation that makes things to an economy  that finances the transactions, providing sickcare and ass raping students.

Those closest to the production of money benefit from the lowest costs of that money. Earn the largest profits and becoming an increasingly larger portion of the economy, ultimately becoming oversized and parasitic on the system. Then the system collapses.

financial markets in the US are mostly unproductive and self-serving.


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## Swiper (Mar 10, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*



Zaphod said:


> What makes you think it won't?



how could it?


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## Standard Donkey (Mar 10, 2013)

i have 4 room mates.. they are going to college for free because they are on the basketball team.

they don't work, they dont feel that they should have to work... they party every weekend and get trashed/do drugs etc.

they feel that they are entitled to a high wage job when they graduate if they don't go pro (which they wont). They get extra money from the school, and used that money and took out loans to buy cars that were WAY beyond their means.. now they owe lots and lots..

they are all sociology majors.

they will be the poor.. 

should i feel bad for them?

there was a student in my advanced accounting course.. he sweat blood over the class and his other academics..he never goes out..never parties.. is always working on campus or doing school-related work. he did all sorts of internships and now has a job at KPMG in their tax division waiting for him when he graduates.

he will be the top 1%.. or at least very close.. 

should he be penalized to make it "fair"?


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## LAM (Mar 10, 2013)

Swiper said:


> ^^^ if lowering tax rates don't create jobs,  do you think raising them will?



it's what all of the top economists around the globe recommend, and is backed by history and empirical data.

CBO report shows 1/3 of the current deficit is from the Bush Tax cuts
CBO | Changes in CBO's Baseline Projections Since January 2001


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## Swiper (Mar 10, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*



Standard Donkey said:


> i have 4 room mates.. they are going to college for free because they are on the basketball team.
> 
> they don't work, they dont feel that they should have to work... they party every weekend and get trashed/do drugs etc.
> 
> ...



yes. because he worked hard to get where he's going.  so now he should pay huge taxes to help those who don't have good work ethics.  it's only fair......   lol.


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## LAM (Mar 10, 2013)

Swiper said:


> yes. because he worked hard to get where he's going.  so now he should pay huge taxes to help those who don't have good work ethics.  it's only fair......   lol.



just face it you don't understand any of this stuff but act like you do....


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## Swiper (Mar 10, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*

according to our govt if you make an income of 400k or over you're a millionaire or billionaire and you have a corporate jet.  And while paying 50-63% in all taxes to govt, you're still not paying your "fair share".


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## LAM (Mar 10, 2013)

Swiper said:


> according to our govt if you make an income of 400k or over you're a millionaire or billionaire and you have a corporate jet.  And while paying 50-63% in all taxes to govt, you're still not paying your "fair share".



what were the tax rates during the 40 years post the Great Depression when the US economy was the most functional?


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## Swiper (Mar 10, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*



LAM said:


> what were the tax rates during the 40 years post the Great Depression when the US economy was the most functional?



you mean when govt cut spending by over 44% and then the economy boomed?


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## LAM (Mar 10, 2013)

Swiper said:


> you mean when govt cut spending by over 44% and then the economy boomed?



you mean back when the US actually had a manufacturing base and we made things and didn't have a low wage service sector based economy.  yes the gov cut spending when the war ending but now the US has markets that depend on constant warring to make a profit.  there was no MIC prior to WWII but there was after it.

you think cutting gov spending is a jobs program in 2013?  that shows just how little you understand economics.  20-25% of consumption in the US comes from gov spending which in reality is nothing more than the transfer of wealth from one group to another.  there are no magic beans to fixing the US economy.  your one stop shop answer holds no water in reality as you only see things in black & white when there is always a grey area.


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## Arnold (Mar 10, 2013)

Most Americans have no fucking clue what is going on, they just want to blame the liberals and Obama, which has absolutely nothing to do with anything.


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## LAM (Mar 10, 2013)

Prince said:


> Most Americans have no fucking clue what is going on, they just want to blame the liberals and Obama, which has absolutely nothing to do with anything.



the end result when you have such a large percentage of the US citizenry "educated" by the media and loud mouthed right wing politicians and pundits. the "solutions" they offer are mostly what caused many of the problems we have today.

economic reports have clearly shown that since the 80's supply-side tax cuts have done nothing more than concentrate wealth and political power, yet somehow more supply-side tax cuts will magically "fix" the economy.  even though all of the empirical data shows we have a demand side problem as the stagnant wages and record US household debt is proof-positive of this.


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## Zaphod (Mar 10, 2013)

Swiper said:


> how could it?



It has in the past.  Quit ignoring history.


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## Swiper (Mar 10, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp;amp; POOR*



Zaphod said:


> It has in the past.  Quit ignoring history.



stop being a retard. I asked how could it. educate me.


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## Zaphod (Mar 10, 2013)

Prince said:


> Most Americans have no fucking clue what is going on, they just want to blame the liberals and Obama, which has absolutely nothing to do with anything.



You are mostly correct.  Both "sides" want things to be the way they are.  By keeping people fighting each other and only voting democrat or republican it keeps the status quo.


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## Zaphod (Mar 10, 2013)

Swiper said:


> stop being a retard. I asked how could it. educate me.



You've been educated on it.  Many times.  You just ignore the lessons.


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## Swiper (Mar 10, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*



Zaphod said:


> You've been educated on it.  Many times.  You just ignore the lessons.



so you can't tell me, nice try.  you've failed again.


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## Zaphod (Mar 10, 2013)

Swiper said:


> so you can't tell me, nice try.  you've failed again.



There's a difference between failing and not doing so because the effort is wasted on an idiot.  Never confuse the two as you have done.


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## LAM (Mar 10, 2013)

Zaphod said:


> There's a difference between failing and not doing so because the effort is wasted on an idiot.  Never confuse the two as you have done.



your wasting your time arguing or trying to educate a blind ideologue.  he has been "educated" far too much by tv and the radical right.  everything is the individual's fault, economic policy has no bearing or relevancy or economics, it makes a lot of sense.


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## Swiper (Mar 10, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp;amp;amp; POOR*



Zaphod said:


> There's a difference between failing and not doing so because the effort is wasted on an idiot.  Never confuse the two as you have done.



lmao!  you don't have a clue.  lol.  complete failure

try posting facts to your non sense next time and maybe people will take u seriously


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## Swiper (Mar 10, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp;amp; POOR*



LAM said:


> your wasting your time arguing or trying to educate a blind ideologue.  he has been "educated" far too much by tv and the radical right.  everything is the individual's fault, economic policy has no bearing or relevancy or economics, it makes a lot of sense.



lol you don't know what you're talking about, boy.  never had I said policy is not the problem.  you have comprehension issues.  get some help


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## LAM (Mar 10, 2013)

Swiper said:


> lol you don't know what you're talking about, boy.  never had I said policy is not the problem.  you have comprehension issues.  get some help



right...this coming from Mr "it's the governments fault" about everything...when government only does the bidding of it's corporate masters and the 1%'ers.


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## Zaphod (Mar 11, 2013)

Swiper said:


> lmao!  you don't have a clue.  lol.  complete failure
> 
> try posting facts to your non sense next time and maybe people will take u seriously



I'm not worried about you taking me seriously.  If you really think your opinion matters to anyone you need to reassess your life.


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## Swiper (Mar 11, 2013)

Zaphod said:


> I'm not worried about you taking me seriously.  If you really think your opinion matters to anyone you need to reassess your life.




All you do is keep spewing out your democrat talking points and not backing them up with facts.


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## Swiper (Mar 11, 2013)

LAM said:


> right...this coming from Mr "it's the governments fault" about everything...when government only does the bidding of it's corporate masters and the 1%'ers.



oh yeah, and all you do is advocate more govt intervention. you think more govt is the answer to all our problems.  LMAO!


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## Zaphod (Mar 11, 2013)

Swiper said:


> All you do is keep spewing out your democrat talking points and not backing them up with facts.



History is not fact?  That's a new one.


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## LAM (Mar 11, 2013)

Swiper said:


> oh yeah, and all you do is advocate more govt intervention. you think more govt is the answer to all our problems.  LMAO!



really cite a single post out of the thousands were I have done so.....your about a box or rocks because you don't know much about anything yet post like you do.  you don't understand a single thing about economics or finance yet post like you do and it's painful obvious that you understand not even the basics.  

your posts are nothing more than GOP talking points from right wing media and politicians from the radical right.  all of which are in direct conflict with economic analysis from know world economic history, empirical data and all of the award winning economists around the globe.


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## Swiper (Mar 11, 2013)

Zaphod said:


> History is not fact?  That's a new one.



lol  post some facts of how raising taxes on a business or people will make them hire or create a job.  you made the claim now back it up.


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## Swiper (Mar 11, 2013)

LAM said:


> really cite a single post out of the thousands were I have done so.....your about a box or rocks because you don't know much about anything yet post like you do.  you don't understand a single thing about economics or finance yet post like you do and it's painful obvious that you understand not even the basics.
> 
> your posts are nothing more than GOP talking points from right wing media and politicians from the radical right.  all of which are in direct conflict with economic analysis from know world economic history, empirical data and all of the award winning economists around the globe.



what policies of the gop have i supported?  this should  be interesting....

All you do is spewer propaganda from krugman who wants the US to mint a trillion dollar coin and deposit it into the treasury to solve our problems. LOL


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## irish_2003 (Mar 11, 2013)

Swiper said:


> you mean when govt cut spending by over 44% and then the economy boomed?



closing the borders completely and freezing all (illegal and legal) immigration will fix this overnight


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## Arnold (Mar 11, 2013)

Zaphod said:


> History is not fact?  That's a new one.



some things in history are facts, many others are not, it's someone's interpretation of what happened, you learn this concept in Sociology 101.


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## Arnold (Mar 11, 2013)

irish_2003 said:


> closing the borders completely and freezing all (illegal and legal) immigration will fix this overnight



lol, you say that like it's just a matter of flipping a switch.


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## LAM (Mar 11, 2013)

irish_2003 said:


> the real reason people are more poor is because it's being taught to be the norm...we don't reward hard work and success and reward those who don't work instead...



have you ever read a single economic report in our life?  let me guess, no. it's all ideology to you and no mathematics or empirical data.  must be nice to live in a world where you never have to use your brain.


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## Zaphod (Mar 11, 2013)

Swiper said:


> lol  post some facts of how raising taxes on a business or people will make them hire or create a job.  you made the claim now back it up.



From after WWII until the late seventies.


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## Swiper (Mar 11, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*



Zaphod said:


> From after WWII until the late seventies.



no. you don't understand. how does raising taxes make a business or person hire or create a job? or in other terms what inspires them to hire or create a job?  

FYI after ww2 govt cut spending over 44%.


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## Zaphod (Mar 11, 2013)

Swiper said:


> no. you don't understand. how does raising taxes make a business or person hire or create a job? or in other terms what inspires them to hire or create a job?
> 
> FYI after ww2 govt cut spending over 44%.



They cut spending, not taxes.  Explain how cutting taxes on the rich would help?  Clearly it hasn't.


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## Swiper (Mar 11, 2013)

Zaphod said:


> They cut spending, not taxes.  Explain how cutting taxes on the rich would help?  Clearly it hasn't.



Isn't that what i just said? duh!   damn dude lay off the pot for a while. you can't even think straight. 

you didn't answer my question but that's ok i know you have no clue.... 

Cutting taxes on all people will help. i don't discriminate like you do.  when the people have more money they usually spend it  which spurs the economy.    

What do you consider rich, 400k a year?


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## LAM (Mar 11, 2013)

Swiper said:


> Cutting taxes on all people will help. i don't discriminate like you do.  when the people have more money they usually spend it  which spurs the economy.
> 
> What do you consider rich, 400k a year?



consumption patterns in high income individuals play no part in employment in the majority of the population as luxury goods & markets do not employ a sizable part of the population. 

the top 5% already accounts for 35% of consumption in the US....

economic reports cite wages as being the primary problem with the US economy and not taxation.  wages have stagnated for the bottom 3 income quintiles for decades once adjusted for inflation.

* all you do is spout right wing talking points.  where is the science and math to back up your claims of across the board tax cuts boosting consumption for a "sustainable consumption based economy"?


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## Swiper (Mar 11, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp;amp; POOR*



LAM said:


> * all you do is spout right wing talking points.  where is the science and math to back up your claims of across the board tax cuts boosting consumption for a "sustainable consumption based economy"?



you clearly know nothing about history. every across the board tax cut increased revenue to the US treasury, and improved the economy.  geez, you're dumb.


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## The Prototype (Mar 11, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*

In 1920, the Kennedy administration, and Reagan administration there were tax cuts and the US tax base actually increased thus spurring the economy. 

Lower taxes for small business equates to more jobs and lower unemployment. Less people on unemployment mean more people paying into the tax base rather than sucking the gov't dry. More people with jobs means more money circulating in the economy, increasing GDP. Also, when the tax rates get too high, it is proven less people pay their taxes b/c they feel they are over paying. 

Lower taxes to the middle class means more cash for consumers to spend. Thus an uptick in consumer expenditures and more tax dollars for the gov't. When people have money, they buy things like houses, cars, tv's, clothes, etc. The more the money circulates, the better it is for the gov't b/c they get tax revenue from that money. That is a great alternative to giving all our money to the gov't and letting them spend it on gov't programs and big business bailouts. Just my two cents. Swiper is right though. Lower tax rates have historically proven the tax base increases and spurs the economy.


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## LAM (Mar 11, 2013)

*IMF: Inequality, Leverage and Crises - November 2010*

and what does the IMF have to say about Inequality?  they talk of income but not of taxes.   But what would the IMF know about finance?  they are only the loan-shark of the world.

*Abstract*

The paper studies how high leverage and crises can arise as a result of changes in the income
distribution. Empirically, the periods 1920-1929 and 1983-2008 both exhibited a large
increase in the income share of the rich, a large increase in leverage for the remainder, and an
eventual financial and real crisis. The paper presents a theoretical model where these features
arise endogenously as a result of a shift in bargaining powers over incomes. A financial crisis
can reduce leverage if it is very large and not accompanied by a real contraction. But restoration of the lower income group's bargaining power is more effective. 


*V. CONCLUSIONS*

This paper has presented stylized facts and a theoretical framework that explore the nexus
between increases in the income advantage enjoyed by high income households, higher debt
leverage among poor and middle income households, and vulnerability to financial crises.
This nexus was prominent prior to both the Great Depression and the recent crisis. In our
model it arises as a result of increases in the bargaining power of high income households.
*The key mechanism, reflected in a rapid growth in the size of the financial sector, is the
recycling of part of the additional income gained by high income households back to the rest
of the population by way of loans, thereby allowing the latter to sustain consumption levels, at
least for a while. *But without the prospect of a recovery in the incomes of poor and middle
income households over a reasonable time horizon, the inevitable result is that loans keep
growing, and therefore so does leverage and the probability of a major crisis that, in the real
world, typically also has severe implications for the real economy. More importantly, unless
loan defaults in a crisis are extremely large by historical standards, and unless the
accompanying real contraction is very small, the effect on leverage and therefore on the
probability of a further crisis is quite limited. By contrast, restoration of poor and middle 
income households? bargaining power can be very effective, leading to the prospect of a
sustained reduction in leverage that should reduce the probability of a further crisis.

The framework we have presented uses a closed economy setting. In future work we aim to
extend this to an open economy. It is clear that the same mechanism presented in this paper,
namely the increase in lending by high income households in the country that is subject to a
bargaining power shock favoring high income households, would then extend not just to
domestic poor and middle income households, but also to foreign households. The counterpart
of this capital account surplus in the foreign country would of course be an increase in its
current account deficit. In other words, this provides a potential mechanism to explain global
current account imbalances triggered by increasing income inequality in surplus countries.


http://www.imf.org/external/pubs/ft/wp/2010/wp10268.pdf


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## LAM (Mar 11, 2013)

*Inequality Is Holding Back the Recovery By JOSEPH E. STIGLITZ*

And what does the nobel prize winning economist Joseph Stiglitz talk of?  why it's inequality and not taxation...but what would a nobel prize winning economist know about economics.

*************************

The re-election of President Obama was like a Rorschach test, subject to many interpretations. In this election, each side debated issues that deeply worry me: the long malaise into which the economy seems to be settling, and the growing divide between the 1 percent and the rest ? an inequality not only of outcomes but also of opportunity. To me, these problems are two sides of the same coin: with inequality at its highest level since before the Depression, a robust recovery will be difficult in the short term, and the American dream ? a good life in exchange for hard work ? is slowly dying.

Politicians typically talk about rising inequality and the sluggish recovery as separate phenomena, when they are in fact intertwined. Inequality stifles, restrains and holds back our growth. When even the free-market-oriented magazine The Economist argues ? as it did in a special feature in October ? that the magnitude and nature of the country?s inequality represent a serious threat to America, we should know that something has gone horribly wrong. And yet, after four decades of widening inequality and the greatest economic downturn since the Depression, we haven?t done anything about it.

There are four major reasons inequality is squelching our recovery. The most immediate is that our middle class is too weak to support the consumer spending that has historically driven our economic growth. While the top 1 percent of income earners took home 93 percent of the growth in incomes in 2010, the households in the middle ? who are most likely to spend their incomes rather than save them and who are, in a sense, the true job creators ? have lower household incomes, adjusted for inflation, than they did in 1996. The growth in the decade before the crisis was unsustainable ? it was reliant on the bottom 80 percent consuming about 110 percent of their income.

Second, the hollowing out of the middle class since the 1970s, a phenomenon interrupted only briefly in the 1990s, means that they are unable to invest in their future, by educating themselves and their children and by starting or improving businesses.

Third, the weakness of the middle class is holding back tax receipts, especially because those at the top are so adroit in avoiding taxes and in getting Washington to give them tax breaks. The recent modest agreement to restore Clinton-level marginal income-tax rates for individuals making more than $400,000 and households making more than $450,000 did nothing to change this. Returns from Wall Street speculation are taxed at a far lower rate than other forms of income. Low tax receipts mean that the government cannot make the vital investments in infrastructure, education, research and health that are crucial for restoring long-term economic strength.

Fourth, inequality is associated with more frequent and more severe boom-and-bust cycles that make our economy more volatile and vulnerable. Though inequality did not directly cause the crisis, it is no coincidence that the 1920s ? the last time inequality of income and wealth in the United States was so high ? ended with the Great Crash and the Depression. The International Monetary Fund has noted the systematic relationship between economic instability and economic inequality, but American leaders haven?t absorbed the lesson.

Our skyrocketing inequality ? so contrary to our meritocratic ideal of America as a place where anyone with hard work and talent can ?make it? ? means that those who are born to parents of limited means are likely never to live up to their potential. Children in other rich countries like Canada, France, Germany and Sweden have a better chance of doing better than their parents did than American kids have. More than a fifth of our children live in poverty ? the second worst of all the advanced economies, putting us behind countries like Bulgaria, Latvia and Greece.

Our society is squandering its most valuable resource: our young. The dream of a better life that attracted immigrants to our shores is being crushed by an ever-widening chasm of income and wealth. Tocqueville, who in the 1830s found the egalitarian impulse to be the essence of the American character, is rolling in his grave.
Protesters at California State University, Sacramento, railed against cuts to higher education in April 2011.

Even were we able to ignore the economic imperative of fixing our inequality problem, the damage it is doing to our social fabric and political life should prompt us to worry. Economic inequality leads to political inequality and a broken decision-making process.

Despite Mr. Obama?s stated commitment to helping all Americans, the recession and the lingering effects of the way it was handled have made matters much, much worse. While bailout money poured into the banks in 2009, unemployment soared to 10 percent that October. The rate today (7.8 percent) appears better partly because so many people have dropped out of the labor force, or never entered it, or accepted part-time jobs because there was no full-time job for them.

*High unemployment, of course, depresses wages. Adjusted for inflation, real wages have stagnated or fallen; a typical male worker?s income in 2011 ($32,986) was lower than it was in 1968 ($33,880). Lower tax receipts, in turn, have forced state and local cutbacks in services vital to those at the bottom and middle.*

Most Americans? most important asset is their home, and as home prices have plummeted, so has household wealth ? especially since so many had borrowed so much on their homes. Large numbers are left with negative net worth, and median household wealth fell nearly 40 percent, to $77,300 in 2010 from $126,400 in 2007, and has rebounded only slightly. Since the Great Recession, most of the increase in the nation?s wealth has gone to the very top.

Meanwhile, as incomes have stagnated or fallen, tuition has soared. In the United States now, the principal way to get education ? the only sure way to move up ? is to borrow. In 2010, student debt, now $1 trillion, exceeded credit-card debt for the first time.

Student debt can almost never be wiped out, even in bankruptcy. A parent who co-signs a loan can?t necessarily have the debt discharged even if his child dies. The debt can?t be discharged even if the school ? operated for profit and owned by exploitative financiers ? provided an inadequate education, enticed the student with misleading promises, and failed to get her a decent job.

Instead of pouring money into the banks, we could have tried rebuilding the economy from the bottom up. We could have enabled homeowners who were ?underwater? ? those who owe more money on their homes than the homes are worth ? to get a fresh start, by writing down principal, in exchange for giving banks a share of the gains if and when home prices recovered.

We could have recognized that when young people are jobless, their skills atrophy. We could have made sure that every young person was either in school, in a training program or on a job. Instead, we let youth unemployment rise to twice the national average. The children of the rich can stay in college or attend graduate school, without accumulating enormous debt, or take unpaid internships to beef up their r?sum?s. Not so for those in the middle and bottom. We are sowing the seeds of ever more inequality in the coming years.

The Obama administration does not, of course, bear the sole blame. President George W. Bush?s steep tax cuts in 2001 and 2003 and his multitrillion-dollar wars in Iraq and Afghanistan emptied the piggy bank while exacerbating the great divide. His party?s newfound commitment to fiscal discipline ? in the form of insisting on low taxes for the rich while slashing services for the poor ? is the height of hypocrisy.

There are all kinds of excuses for inequality. Some say it?s beyond our control, pointing to market forces like globalization, trade liberalization, the technological revolution, the ?rise of the rest.? Others assert that doing anything about it would make us all worse off, by stifling our already sputtering economic engine. These are self-serving, ignorant falsehoods.

Market forces don?t exist in a vacuum ? we shape them. Other countries, like fast-growing Brazil, have shaped them in ways that have lowered inequality while creating more opportunity and higher growth. Countries far poorer than ours have decided that all young people should have access to food, education and health care so they can fulfill their aspirations.

Our legal framework and the way we enforce it has provided more scope here for abuses by the financial sector; for perverse compensation for chief executives; for monopolies? ability to take unjust advantage of their concentrated power.

Yes, the market values some skills more highly than others, and those who have those skills will do well. Yes, globalization and technological advances have led to the loss of good manufacturing jobs, which are not likely ever to come back. Global manufacturing employment is shrinking, simply because of enormous increases in productivity, and America is likely to get a shrinking share of the shrinking number of new jobs. If we do succeed in ?saving? these jobs, it may be only by converting higher-paid jobs to lower-paid ones ? hardly a long-term strategy.

Globalization, and the unbalanced way it has been pursued, has shifted bargaining power away from workers: firms can threaten to move elsewhere, especially when tax laws treat such overseas investments so favorably. This in turn has weakened unions, and though unions have sometimes been a source of rigidity, the countries that responded most effectively to the global financial crisis, like Germany and Sweden, have strong unions and strong systems of social protection.

As Mr. Obama?s second term begins, we must all face the fact that our country cannot quickly, meaningfully recover without policies that directly address inequality. What?s needed is a comprehensive response that should include, at least, significant investments in education, a more progressive tax system and a tax on financial speculation.

The good news is that our thinking has been reframed: it used to be that we asked how much growth we would be willing to sacrifice for a little more equality and opportunity. Now we realize that we are paying a high price for our inequality and that alleviating it and promoting growth are intertwined, complementary goals. It will be up to all of us ? our leaders included ? to muster the courage and foresight to finally treat this beleaguering malady.

Joseph E. Stiglitz, a Nobel laureate in economics, a professor at Columbia and a former chairman of the Council of Economic Advisers and chief economist for the World Bank, is the author of ?The Price of Inequality.? 

Inequality Is Holding Back the Recovery - NYTimes.com


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## Swiper (Mar 11, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*

Joseph stiglitz is nothing but a far left wing  political hack whose ideology steers his phony reports.


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## LAM (Mar 12, 2013)

Swiper said:


> Joseph stiglitz is nothing but a far left wing  political hack whose ideology steers his phony reports.



but of course he is, as is everyone who's works counters the rhetoric of the radical right in the US and their decades long talking point of "high taxes" in the US. and what's your lame excuse for the IMF?  another "left wing" group of hacks?

seems to be the only people that point to taxes is being the problem are those that know nothing about economics.  

please do tell how the math works out when you have the constant increase of many goods and services with a decreasing tax structure when combined with monetary inflation?


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## The Prototype (Mar 12, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*

The IMF report doesn't even mention taxes. It talks about income inequality. The average person isn't going to work 45 hours as opposed to 40 hours to make the same money if you increase taxes on him. Why would someone work harder to make the same money? I'm talking about the middle and lower class, not upper class. I tend to see the upper class as go getters that will work hard regardless mainly as a result of pride and prestige but maybe that's just my bias. But the general population isn't going to work more. The fry cook at McDonald's isn't going to work the same hours to make the same money. They will either find supplemental income that isn't taxed or will find other means to save money. 

LAM, I'm sure you're a smart guy and I don't doubt that. But please do not insult others by saying we don't know economics. I have a BA in Finance with over 400 hours of advanced post graduate studies. I will be writing my demo report in the next year. I have given three times in history that have proven when tax rates decrease, the economy, tax base and GDP increase.


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## Zaphod (Mar 12, 2013)

Swiper said:


> Isn't that what i just said? duh!   damn dude lay off the pot for a while. you can't even think straight.
> 
> you didn't answer my question but that's ok i know you have no clue....
> 
> ...



We're not talking about government spending.  We're talking about taxes.  That's why you're all fucked up on the subject.  You get more than one thought in your head and it all comes down like a house of cards.


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## Swiper (Mar 12, 2013)

Zaphod said:


> We're not talking about government spending.  We're talking about taxes.  That's why you're all fucked up on the subject.  You get more than one thought in your head and it all comes down like a house of cards.



my post was about cutting taxes on all people. learn to read....

still answer on what you consider rich, uh?


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## LAM (Mar 12, 2013)

rippedgolfer said:


> The IMF report doesn't even mention taxes. It talks about income inequality.



exactly my point...no leading economists or group of economists points to taxes as being the problem with the failing US economy.  they all talk of income and not a word of taxation because taxes aren't and have never been the problem.


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## The Prototype (Mar 12, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*



LAM said:


> exactly my point...no leading economists or group of economists points to taxes as being the problem with the failing US economy.  they all talk of income and not a word of taxation because taxes aren't and have never been the problem.



I think we're discussing two different points. I was just giving examples of times when the tax rate decreases, the economy expands. I'm sure your point is valid but I think we're comparing apples and oranges rather than apples to apples.


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## LAM (Mar 12, 2013)

rippedgolfer said:


> I think we're discussing two different points. I was just giving examples of times when the tax rate decreases, the economy expands. I'm sure your point is valid but I think we're comparing apples and oranges rather than apples to apples.



tax cuts for those in the lower income quintiles offer nothing more than very short term increases in consumption before inflation catches up.  tax cuts for high income individuals don't increase consumption but they do increase the growth of unproductive asset bubbles which then lead to recessions and permanent wealth transfers.  as this is what all of the empirical data shows.  only with growth across all income quintiles does sustained economic growth occur.


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## bigdaddy350 (Mar 12, 2013)

irish_2003 said:


> so they allowed their money to make them more money...that's the american dream...why hate on it? u can be rich if you REALLY WANT TO...problem everyone wants to win the lottery instead or have it given to them...i don't hate the wealthy...i hate the poor...it's like having a donut tire on the car...



The point is that passive income is not being taxed the way it should and people who have access to change the way they are being paid are getting away with not paying their fair share. i don't hate the rich either, and i do believe in the american dream, but its unfortunate that most of the people in these scenarios did wIn the lottery/get if for free... THEY INHERITED IT!!!


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## bigdaddy350 (Mar 12, 2013)

LAM said:


> tax cuts for those in the lower income quintiles offer nothing more than very short term increases in consumption before inflation catches up.  tax cuts for high income individuals don't increase consumption but they do increase the growth of unproductive asset bubbles which then lead to recessions and permanent wealth transfers.  as this is what all of the empirical data shows.  only with growth across all income quintiles does sustained economic growth occur.



This is exactly right!


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## The Prototype (Mar 12, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*



LAM said:


> tax cuts for those in the lower income quintiles offer nothing more than very short term increases in consumption before inflation catches up.  tax cuts for high income individuals don't increase consumption but they do increase the growth of unproductive asset bubbles which then lead to recessions and permanent wealth transfers.  as this is what all of the empirical data shows.  only with growth across all income quintiles does sustained economic growth occur.



Yes and the three examples I gave there were tax rate cuts across all income levels. IMO the most meaningful tax cuts are for the middle class and small business.


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## Bowden (Mar 12, 2013)

rippedgolfer said:


> Why would someone work harder to make the same money?  I have a BA in Finance with over 400 hours of advanced post graduate studies.



Hey Mr. BA in finance with over 400 hours of advanced post graduate studies.
Try getting out of your academia ivory tower and going to work in the real world.
People working in corporate America constantly find themselves working harder for the same money after a reorg and layoffs when the executives reduce headcount.
The workload increases due to reduced headcount but the salary does not increase.


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## Swiper (Mar 12, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*



Bowden said:


> Hey Mr. BA in finance with over 400 hours of advanced post graduate studies.
> Try getting out of your academia ivory tower and going to work in the real world.
> People working in corporate America constantly find themselves working harder for the same money after a reorg and layoffs when the executives reduce headcount.
> The workload increases due to reduced headcount but the salary does not increase.



what's your solution?


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## The Prototype (Mar 12, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*



Bowden said:


> Hey Mr. BA in finance with over 400 hours of advanced post graduate studies.
> Try getting out of your academia ivory tower and going to work in the real world.
> People working in corporate America constantly find themselves working harder for the same money after a reorg and layoffs when the executives reduce headcount.
> The workload increases due to reduced headcount but the salary does not increase.



I've been in the work field for eight years after I graduated in 2005. I am an expert witness in my field in three counties. I've continued my studies on top of working full time.


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## Arnold (Mar 12, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*



rippedgolfer said:


> I've been in the work field for eight years after I graduated in 2005. I am an expert witness in my field in three counties. I've continued my studies on top of working full time.



U should become a politician, they operate with blinders on as well.


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## maniclion (Mar 12, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*

I was reading an article about a company that is drowning in debt then I look down at the related links and one mentions the same company laid off some people, another is about the companies mounting debt and between those 2 links it mentions that the CEO of said company buys a castle!  

Just blows my mind....

This whole debacle has me depressed to no end....


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## Swiper (Mar 12, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*

so having a stellar education and a full time job is now looked down upon?  no wonder this county is headed down hill.  

I bet you guys are just jealous because he is or will be a 1%er and you never will be.


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## Dale Mabry (Mar 12, 2013)

maniclion said:


> I was reading an article about a company that is drowning in debt then I look down at the related links and one mentions the same company laid off some people, another is about the companies mounting debt and between those 2 links it mentions that the CEO of said company buys a castle!
> 
> Just blows my mind....
> 
> This whole debacle has me depressed to no end....



Better smoke some cheeba, it'll make you feel better.


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## Bowden (Mar 12, 2013)

Swiper said:


> what's your solution?



What solution?
It is a fact of life in most large corporations.
Most people that work in large corporations have experienced it.
Reorg, cut headcount and the workload but not the salary increases for the remaining employees.
People are working harder but not getting any more money for doing so.


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## LAM (Mar 12, 2013)

rippedgolfer said:


> LAM, I'm sure you're a smart guy and I don't doubt that. But please do not insult others by saying we don't know economics. I have a BA in Finance with over 400 hours of advanced post graduate studies. I will be writing my demo report in the next year. I have given three times in history that have proven when tax rates decrease, the economy, tax base and GDP increase.



and I've performed about 6-7,000 hours of study on US and global economics and world history over the past 10-15 years going all the back to Hammurabi's Code.

and an increase in GDP is meaningless if productivity gains are not enjoyed by all of the income quintiles.  the majority of GDP growth in the US since the 80's has been due to finacialization in the self-serving and unproductive US financial sector.


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## The Prototype (Mar 12, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*



Prince said:


> U should become a politician, they operate with blinders on as well.



I would never be a politician. Not my thing. 

Swiper, thanks for the kind words but I doubt I'll ever be a 1%er.


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## Bowden (Mar 12, 2013)

rippedgolfer said:


> I've been in the work field for eight years after I graduated in 2005. I am an expert witness in my field in three counties. I've continued my studies on top of working full time.



Your statement as to "Why would someone work harder to make the same money" is ridiculous.
I have worked for major corporations in which major reorgs and head count reductions have occurred.
When the headcount is reduced, the work that the former employees did is transferred to the remaining employees.
At the same time the remaining employees salaries do not go up.

People are working harder for the same money.
Hope that helps.


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## LAM (Mar 12, 2013)

Bowden said:


> Your statement as to "Why would someone work harder to make the same money" is ridiculous.
> I have worked for major corporations in which major reorgs and head count reductions have occurred.
> When the headcount is reduced, the work that the former employees did is transferred to the remaining employees.
> At the same time the remaining employees salaries do not go up.
> ...



it's called the current US economy where wage growth is about 50% the rate of the CPI.


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## Arnold (Mar 12, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*



Swiper said:


> so having a stellar education and a full time job is now looked down upon?  no wonder this county is headed down hill.
> 
> I bet you guys are just jealous because he is or will be a 1%er and you never will be.



Not at all, a college education is a great thing to have.

I am not jealous, I am sure I make more $ than 90% of the US population.


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## Bowden (Mar 12, 2013)

LAM said:


> it's called the current US economy where wage growth is about 50% the rate of the CPI.



Companies slash workforces, do not hire and the result is termed 'increased productivity', 'improved cost margins' and 'higher corporate profits' and 'increased quarterly EPS'.
That means that one employee now is doing the jobs of at least two employees maybe three, not receiving a raise for working harder aka. employees are working harder for no more money.

It's a fact of life in many corporations that cut headcount due to the last recession.

Why are people willing to work harder for no more money?
Dumb assed question.
They do it because they want to keep their jobs.


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## The Prototype (Mar 12, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*



Bowden said:


> Your statement as to "Why would someone work harder to make the same money" is ridiculous.
> I have worked for major corporations in which major reorgs and head count reductions have occurred.
> When the headcount is reduced, the work that the former employees did is transferred to the remaining employees.
> At the same time the remaining employees salaries do not go up.
> ...



Good for you. You continue to work harder for the same wage. I get paid on production so my salary is a direct correlation to my production. Btw, i do not work for corporate America. Hope that helps. 

I will respectfully bow out of this conversation. I gave you guys three examples in history where the tax rate decreased, the tax base and economy expanded. I don't understand why you all want to drag me into some debate over something I never argued with you about.


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## Swiper (Mar 12, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*



Bowden said:


> What solution?
> It is a fact of life in most large corporations.
> Most people that work in large corporations have experienced it.
> Reorg, cut headcount and the workload but not the salary increases for the remaining employees.
> People are working harder but not getting any more money for doing so.



well you and lam say thats the problem of this horrible economy. there's always a solution to a problem.  I want to know if you know a solution.  for example: capitalism is the problem, we need to more towards socialism and have govt set wages.


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## The Prototype (Mar 12, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*

One last thing, someone taking money out of your pocket without your consent (taxation) is a lot different than someone saying you need to do X and Y to keep your job. Taxation does not have anything to do with whether you keep you job or not.


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## Bowden (Mar 12, 2013)

Swiper said:


> well you and lam say thats the problem of this horrible economy. there's always a solution to a problem.  I want to know if you know a solution.  for example: capitalism is the problem, we need to more towards socialism and have govt set wages.



I am not stating anything about "thats the problem of this horrible economy."
I am making an objective statement that is a fact of life at many corporations.

During the last recession many companies slashed workforces.
The employees that were left after the layoffs had the work transferred to them that was done by the former employees.

Corporations have discovered that they can produce the same level of work output but achieve it with reduced workforces.
Employee salaries are the major cost factor at most corporations.
Reduced workforces = reduced salary and benefit compensation requirements, leading to improved cost margins, increased productivity, increased corporate profits, increased EPS and increased ROI to shareholders.


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## irish_2003 (Mar 12, 2013)

Swiper said:


> well you and lam say thats the problem of this horrible economy. there's always a solution to a problem.  I want to know if you know a solution.  for example: capitalism is the problem, we need to more towards socialism and have govt set wages.



it's difficult to say we've had true capitalism when the gov't has always picked winners and losers


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## Bowden (Mar 12, 2013)

rippedgolfer said:


> One last thing, someone taking money out of your pocket without your consent (taxation) is a lot different than someone saying you need to do X and Y to keep your job. Taxation does not have anything to do with whether you keep you job or not.



Sure it does.
Higher level of taxation leads to less corporate hiring and to reallocation of corporate resources and means of production to lower resource cost locations that have lower corporate tax rates.
It increases profit margins due to lower corporate tax rates.
Companies do it all of the time when they offshore jobs to lower cost locations in which corporate taxes are lower and as a result fire current resources and hire resources in the lower cost locations.

LOL.
What planet are some of you living on that you do not know that corporate taxation rates are a factor in corporate resource hiring and layoff decisions?


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## Swiper (Mar 12, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*



irish_2003 said:


> it's difficult to say we've had true capitalism when the gov't has always picked winners and losers



agree. we don't know how capitalism would work because we've never technically had it.


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## Swiper (Mar 12, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*



Bowden said:


> Sure it does.
> Higher level of taxation leads to less corporate hiring and to reallocation of corporate resources to lower resource cost locations.
> Companies do it all of the time when they offshore jobs to lower cost locations in which corporate taxes are lower and as a result fire current resources and hire resources in the lower cost locations.
> 
> ...



LAM would say otherwise. he says corporations don't pay a high tax rate and most don't even pay taxes.   why would he such a thing?


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## The Prototype (Mar 12, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*



Bowden said:


> Sure it does.
> Higher level of taxation leads to less corporate hiring and to reallocation of corporate resources and means of production to lower resource cost locations that have lower corporate tax rates.
> It increases profit margins due to lower corporate tax rates.
> Companies do it all of the time when they offshore jobs to lower cost locations in which corporate taxes are lower and as a result fire current resources and hire resources in the lower cost locations.
> ...



Bro, you are viewing it from a corporate standpoint. More of a CFO type view. I am viewing it from an employee standpoint. An employee doesn't care if a company saves a few bucks on taxes, labor or resources. They do care if they get taxed more and their paychecks are smaller. You must work in management huh? I don't disagree with most of what you say. You are right regarding the corporation and how they handle their business. I'm not arguing that fact.


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## irish_2003 (Mar 12, 2013)

"think and be rich"...most people don't think and only react...


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## LAM (Mar 12, 2013)

rippedgolfer said:


> I gave you guys three examples in history where the tax rate decreased, the tax base and economy expanded. I don't understand why you all want to drag me into some debate over something I never argued with you about.



economic expansion is good if ever increasing numbers as in GDP is excepted to be called "growth".  but what's far more important is sustainable economic expansion/growth and history and empirical data clearly shows that only occurs when their is real income growth across all the income quintiles with the bottom growing at a high rate than the top.

shrinking tax collections with constant increasing costs of goods and services only leads to account deficits and that is also what all of the empirical data shows. tax cuts make for fine political campaign speeches and short term economic stimulus but solve no problems when it comes to sustainable growth only increases in wages/income does that.


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## The Prototype (Mar 12, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*



LAM said:


> economic expansion is good if ever increasing numbers as in GDP is excepted to be called "growth".  but what's far more important is sustainable economic expansion/growth and history and empirical data clearly shows that only occurs when their is real income growth across all the income quintiles with the bottom growing at a high rate than the top.
> 
> shrinking tax collections with constant increasing costs of goods and services only leads to account deficits and that is also what all of the empirical data shows. tax cuts make for fine political campaign speeches and short term economic stimulus but solve no problems when it comes to sustainable growth only increases in wages/income does that.



So a 5% reduction to the tax rate for the middle class is not an increase in disposable income? For the average family making $50k a year, that's a $2,500 annual increase, or about $50/week or $200/month. You go ask you boss tomorrow for a 5% increase in your salary and see what he says. Reducing the tax rate is not a simple solution. To spur the economy, spending needs to be cut which was implemented in the three examples I provided. I agree, increased income is what the underlying fundamentals of the market will necessitate for sustained economic growth across all income levels. I am merely saying a tax rate reduction provides more disposable income to the lower and middle class and to small businesses. I'm not concerned with the upper class.


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## LAM (Mar 12, 2013)

rippedgolfer said:


> So a 5% reduction to the tax rate for the middle class is not an increase in disposable income? For the average family making $50k a year, that's a $2,500 annual increase, or about $50/week or $200/month. You go ask you boss tomorrow for a 5% increase in your salary and see what he says. Reducing the tax rate is not a simple solution. To spur the economy, spending needs to be cut which was implemented in the three examples I provided. I agree, increased income is what the underlying fundamentals of the market will necessitate for sustained economic growth across all income levels. I am merely saying a tax rate reduction provides more disposable income to the lower and middle class and to small businesses. I'm not concerned with the upper class.



and how long until inflation and the costs of goods and services like healthcare chews up that measly $2,500?  

constantly cutting taxes is why just about all 50 states have been running deficits since the late 70's and have turned to the use of borrowing via bonds for the majority of spending.


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## The Prototype (Mar 13, 2013)

*Shocking Statistics: America's Income gap between the RICH &amp; POOR*



LAM said:


> and how long until inflation and the costs of goods and services like healthcare chews up that measly $2,500?
> 
> constantly cutting taxes is why just about all 50 states have been running deficits since the late 70's and have turned to the use of borrowing via bonds for the majority of spending.



Inflation is a fact of life. It will be there regardless of what the tax rate is or whether salaries increase or not. I think an extra $200/month would go a long ways for the average family making $50k a year. That's a car payment for some. Or a couple weeks of groceries. An electric bill, or even a cycle lol. 

Healthcare is a completely different subject my friend. Inflation is a bitch. My grocery bill has almost doubled in the last 2-3 years and I don't eat double the food.


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## LAM (Mar 13, 2013)

rippedgolfer said:


> Inflation is a fact of life. It will be there regardless of what the tax rate is or whether salaries increase or not. I think an extra $200/month would go a long ways for the average family making $50k a year. That's a car payment for some. Or a couple weeks of groceries. An electric bill, or even a cycle lol.
> 
> Healthcare is a completely different subject my friend. Inflation is a bitch. My grocery bill has almost doubled in the last 2-3 years and I don't eat double the food.



exactly my point about taxation.  using 1960's tax rates doesn't pay for goods and services in the 2000's.  just like paying people 1970's wages doesn't work for a sustainable consumption based economy either.


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## Gregzs (Oct 16, 2013)

The Depressing Geography of Debt Collection - Emily Badger - The Atlantic Cities

The Depressing Geography of Debt Collection

One of the cruelties about falling deep into debt is that you need a few things to get out of it: maybe a car to commute to the job that will help you pay back your bills, or a subsistence wage that will feed and house your family while you work on that, or a minimum quantity of cash in the bank to cover things like gas to run that car, or medicine to keep you moving.

If debt collectors seize any of those things, repaying debt becomes that much harder. Because of this, states have protections called "exemption" laws that limit what creditors can seize from a family teetering on destitution. These laws have become particularly relevant since the onset of the recession (or the rise of what the National Consumer Law Center calls the "lucrative and fast-growing debt buyer industry").

Not surprisingly, exemption laws vary dramatically depending on where you live, and the NCLC considers many of them to be outdated. In a survey of what these protections currently look like across the country, the NCLC argues that not one state offers all the minimum standards you might need to really survive debt. Some states (Massachusetts and Iowa) are much better than others (Alabama, Kentucky and Michigan).

This is the geography of where your car, your home, and even your household goods, are up for grabs. Yes, that includes cooking utensils, bedding, furniture and appliances:

A) States that ban wage garnishment for most debts. B) States that preserve 90% of debtors wages. C) States that preserve enough wages so that paycheck does not drop below the poverty level. D) States that preserve more than the minimum required by federal law. F) States that protect only the federal minimum.


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## jay_steel (Oct 17, 2013)

The problem with society has nothing to do with Republicans nor Democrats.. You see to many people that live out of their means. Big Screen TV's 22 inch wheels, iphones, high dollar jeans, getting your nails done, and ect are not things that you need. People need to cut out the wants in life and only focus on the needs if you are hurting for money. I dont know how many times i walked into a low income family as a recruiter and seeing a PS3 and a 60 inch TV. They have about 2k in entertainment stuff but cant even afford to feed their kids proper food. 

People live in a world were they want to look like a millionaire on a poor mans budget. Why does a girl that makes 20k a year have a 1g purse? Shit doesnt make sense to me. My wife and I make over 100k a year... I FINALLY bought her an expensive purse but it was a coach purse on sale at the outlet for 180$ and I thought that was to much but she earned it getting her masters. 

My wife went to school for 7 years and out of those seven years 4 of them she worked as an athletic trainer with no salary. She would have had 60k in loans but i been paying allot on them since we were first dating and got them paid off before she finished school. So if it wasnt for me should would be brand new in the work force with 60k in loans and probably a HIGH credit card because she worked 100 hours every two weeks plus was a full time student with no pay. She said the average person in her program walked out over 100k in debt. So now starting out 100k in debt with a high interest credit card and loan, but they should be paying more taxes? 

I have no problem paying taxes and i take pride in paying my taxes. but it pisses me off that people want to point fingers and get a free way because they dont want to work as hard as the other guy. I killed my self to get where I am and I am still killing my self because I goaled my self with a 200k income by the time I am 35. 

As for the having more work to do but the pay stays the same. Thats your choice though. There is nothing that forces you to work their. If you are unhappy look for another place to work. I get unlimited overtime and free ranged to work independently as an IT. If the work load gets high my pay check gets higher. I also farm so i basically work as hard as I can to ensure i high yield. 

People need to realize that success is not given it is earned.


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## LAM (Oct 17, 2013)

jay_steel said:


> As for the having more work to do but the pay stays the same. Thats your choice though. There is nothing that forces you to work their. If you are unhappy look for another place to work. I get unlimited overtime and free ranged to work independently as an IT. If the work load gets high my pay check gets higher. I also farm so i basically work as hard as I can to ensure i high yield.
> 
> People need to realize that success is not given it is earned.



the economy changes with time and from geographic area.  

before I joined the Navy back in the late 80's we all had two jobs to cover the costs of living expenses and party supplies, that all started going away decades ago, now you are lucky to have one job and this is in a high income township and county in PA where everyone has degrees, masters, etc.   I have well educated friends all over the country that are reporting the same problems, and especially once you are in the late 40's and higher.

sure you have to have a goal, make a plan, be very disciplined, etc. but timing, luck and the health of the economy all play an equal role today.  there's just way too much empirical data about the changes in the economy and opportunities for workers to discount it.


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## Jeeper (Oct 17, 2013)

Taxes always irked me a little, but when I started working for myself is when they became really irritating.  I think if more people actually wrote their own tax checks, like I now do, they would be more concerned about what the government does with the money.  It is really hard when I get in a big payment from a client, say 40-50K, and knowing that I then have to turn around and write a check for 15-20K to the government.


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## jay_steel (Oct 18, 2013)

LAM said:


> the economy changes with time and from geographic area.
> 
> before I joined the Navy back in the late 80's we all had two jobs to cover the costs of living expenses and party supplies, that all started going away decades ago, now you are lucky to have one job and this is in a high income township and county in PA where everyone has degrees, masters, etc.   I have well educated friends all over the country that are reporting the same problems, and especially once you are in the late 40's and higher.
> 
> sure you have to have a goal, make a plan, be very disciplined, etc. but timing, luck and the health of the economy all play an equal role today.  there's just way too much empirical data about the changes in the economy and opportunities for workers to discount it.



i do agree that that value of a degree has diminished because they are pretty cookie cutter now and getting an education is easy. Jobs that use to not require a BS now require a degree. Where in the past you can become an electrician and journeyman program to earn a great wage. Now you need a BS just to get your foot in the door. I think we allow to many people to seek a high education or we should hold it to a hirer standard. In a masters program and thing other then a B is failing. I believe that should be the same thing with your concentration classes. If you get a C that means you only know 70% of what was taught. Do we really consider someone that does not know 30% of something as intelligent or qualified to do the job. My math teacher believed that anything other then a 90% is failure. He gave 10% for miscalculations and errors, but he felt that if you did not know the material then you do not deserve the pass the class. 

Having higher degree standards would make people with degrees more marketable and also bring back the jobs that really should not require a degree. 

As for not working multiple jobs in todays society I consider my self as working 4 jobs. 

IT at one of the largest orthopaedic centres (23 providers and 60 pa's) I am the only IT
Almond Farmer
Full time student (night classes) 
LPO of a Reserve Unit with 83 members, my work goes past just the weekend.

Plus i am a competitive bodybuilder, take great care of my dogs (i have no kids) and also looking to start my own company (small hobby, breading Panther Chameleons) 

But my point is people need to realize that if you want to live this lavish life style and splurge you have to make sacrifices and work more and take on more jobs. My step father is a Professor, Lead Juvenile Correction Officer, and volunteers hours at juvenile hall. He does that to buy his guns. If he wants a toy he finds overtime and earns additional wages.

I also worked two jobs as an E3 I was a personal Trainer and in the Navy. When it comes down to it life is not easy and people think it should be. People are successful because they work 18 hours a day, not because they put in an 8 hour day and go home to relax. Luckily with my job i spend 8 hours monitoring networks so im on a computer all day, and I can fix 90% of issues remotely.


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## jay_steel (Oct 18, 2013)

Jeeper said:


> Taxes always irked me a little, but when I started working for myself is when they became really irritating.  I think if more people actually wrote their own tax checks, like I now do, they would be more concerned about what the government does with the money.  It is really hard when I get in a big payment from a client, say 40-50K, and knowing that I then have to turn around and write a check for 15-20K to the government.



see i wouldnt mind paying taxes if i know my money was going to places that actually need the money. I cant stand that peta gets aide then gives money to ALF who is basically a terrorist organization. Or the boy scouts get coverage from the FG and then say gays can not be in the boy scouts. I honestly don?t know one gay person, personally but i believe in civil rights and equality especially if your receiving money from the gov't. Then the whole health care thing, I honestly would have no issue with it if they did not make it mandatory and put limits on it. No one should live of the gov't forever. Children should get free medical period, there is no reason a child should suffer because their parents are pieces of shit, but once you make it to the work for and out of school your back to normal health care and then have it for the elderly. Then if some one becomes unemployeed they become eligible.


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## Gregzs (Oct 24, 2013)

Here's How Much The 'Average' Wall Streeter Makes Compared To The 'Average' New Yorker - The Wall Street Job Report | The Wall Street Job Report

Every year the Office of the New York State Comptroller does a deep dive into Wall Street employment and compensation. This morning, the office released its report for 2012, and as usual Wall Street salaries trounced the average New Yorker?s.

The average Wall Street salary came in 5.2 times higher than the average New Yorker?s at $360,700 for 2012.

The NYC average came in at $69,200.

For a bigger picture of how Wall Street?s doing, you?ll want to see how that fits in with the rest of the report. From these stats, you?ll get an understanding a few really important things ? how healthy the industry is, and how it?s contributing to the whole of New York City and New York state?s finances.


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## Gregzs (Oct 24, 2013)

25,000 jobs vanish from Wall Street, and they

25,000 jobs vanish from Wall Street, and they?re not coming back

Despite a sluggish third quarter, Wall Street has all but cemented its comeback from the economic crisis. Profits are up, stock prices are soaring and big banks are better capitalized than they?ve ever been. There?s really only one thing missing: the jobs.

Private sector employment in New York City has been robust during the recovery; roughly 335,000 jobs have been added, more than twice the number of jobs that were lost during the recession, according to a new report from the Office of the New York State Comptroller. Unfortunately, Wall Street has failed to get in on all the fun. The OSC estimates that the securities industry in New York City boasts 25,600 fewer jobs than it did pre-crisis, a massive 14% dip.

Looking deeper into the numbers, the news is worse than it sounds. Job growth was actually rather strong during the first two years of the recovery, with the industry adding nearly 10,000 jobs between January 2010 and August 2011. Since then, banks have been doing nothing but cutting jobs as they have begun to streamline their organizations.

During previous recoveries, the securities industry accounted for 11% of job gains. This time around, less than 1% of new private sector jobs can be attributed to Wall Street. The only real bumps in employment have been in non-revenue generating roles like risk management and compliance. Take those government-mandated jobs away, and the situation is even uglier.

When compared to the balance sheets of big banks, the numbers paint a rather stark picture. Sadly, Wall Street is doing better without you. It seems the current hiring landscape has little to do with the economy. Banks ? with a little help from Washington ? have made a choice to be smaller, and it?s paying off. The Comptroller?s office expects New York?s securities industry to continue to contract as it streamlines itself further.

It?s not all bleak, though. Those who remain employed are still taking home a hefty paycheck. The average Wall Street salary in 2012 was $360,700 in 2012, or 5.2 times that of the average New Yorker. Not half bad.


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## Gregzs (Oct 24, 2013)

America's jobs report: Still sluggish | The Economist


*Still sluggish *
Oct 22nd 2013, 15:58 by G.I. | WASHINGTON, D.C.

WHEN the Federal Reserve began open-ended bond buying with newly printed money last fall, it hoped to generate forward momentum in the labour market. And as recently as August it seemed to have succeeded. But the recent data suggest a frustrating reversal of that momentum, with no clear explanation. Non-farm payroll employment rose just 148,000 in September from August, well below Wall Street's consensus expectation of 180,000. This was the second weak reading in a row, and vindicates the Fed's decision not to dial back its $85 billion of bond-buyding, dubbed quantitative easing or QE, last month.

Revisions to prior months' payroll gains were roughly offsetting. A big chunk of September's gains were in state and local employment. This would normally be a source of celebration since state and local austerity has been such a powerful headwind for the economy. But the pickup in government hiring has been more than offset by a slowdown in private job creation, to a monthly average of 129,000 in the last three months from 232,000 last December. Weak job gains were matched by equally tepid wage gains of just 0.1%.

The only positive, if it could be called that, is the decline in the unemployment rate to 7.2%, a near-five year low, from 7.3%. Before rounding, the drop was barely noticeable. Meanwhile, the labour force participation rate held at a multi-decade low of 63.2%. Unrounded, it actually slipped further. All of the drop in unmployment from 7.8% last December has been due to lower participation, which means fewer unemployed are recorded as looking for work, rather than higher employment. The "non-employment" rate, which is simply everyone not working as a share of the civilian, non-institutional population, has remained at 41.4%, as the nearby chart shows.

This is not primarily due to a weak economy; the number of people not in the labour force who want a job has actually fallen 9% since December, to 6.2m. The people leaving the labour force don't want to work.

Exactly why the labour market has rolled over is something of a mystery. Other, less comprehensive information is more upbeat: unemployment insurance claims through September had fallen steadily, though they have been heavily distorted since by technical problems. Surveys of hiring and confidence were also generally positive, although they took a hit during the government shutdown. The rise in mortgage rates since the spring has taken a bite out of housing. But construction employment actually rose a relatively healthy 20,000 in September. Finance did, however, lose 2,000 jobs, which was probably related to layoffs of mortgage bankers. Federal spending cuts related to the sequster may be to blame.

Even before today's report the Fed was not inclined to dial back its $85 billion a month of bond purchases, financed by printing money, when it meets again on October 29th and 30th. It could still begin to taper at its December 17-18 meeting, even if the labour market still appears soft, provided officials are relatively confident the outlook, as reflected in other data, is for improvement. But it will be hard to say by December whether that improvement has happened. The government shutdown directly reduced employment for October, and an index compiled by Gallup suggests private job creation also slowed that month. A weekly index developed by the White House Council of Economic Advisers suggest private job creation dropped by 120,000 in the first two weeks of October. Moreover, the shutdown interrupted the Bureau of Labor Statistics' data collection for the report. The household survey, which yields the unemployment and labour force data, started a week later than usual. The shutdown did not affect the collection of the data reported today although it delayed the release by 18 days. 

At least one broker today said the data would keep the Fed as "on hold." That's not accurate: as long as QE remains a positive number, the Fed is not on hold: its balance sheet is still expanding and monetary policy is becoming more, not less, stimulative. This distinction may be trivial to the public but it's important to the Fed, where officials agree that the pace of balance sheet expansion has to slow and only disagree on when and how quickly. Charlie Evans, president of the Chicago Fed, indicated only $500 billion more in bond purchases beyond September will be needed, which would imply an end in March at the current pace, or somewhat later if tapering begins soon. Jay Powell, a Fed governor, emphasized recently that "what matters is the overall stance of policy, not the pace of asset purchases." In other words, the date when tapering begins is less important than how large the balance sheet ends up. The later tapering begins the more rapid it will proceed to achieve a given target for the balance sheet.

Ben Bernanke could yet make the taper his last act as chairman in January, but the odds now favor it being Janet Yellen's first act as chairman, in March. She will not do so lightly; she is, if anything, more intent than Mr Bernanke on applying as much monetary stimulus as possible to get employment up faster. But within the Fed there is a growing desire to shift the burden of stimulus to the short-term interest rate and away from quantitative easing. Still, the decision to taper will not be an easy one. Fed officials have often been muddled in explaining the criteria for beginning and ending QE, but one thing is clear: they had hoped the labour market would be gaining, not losing, momentum by now. The exit seems no clearer than when this round of QE started a year ago.


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