6 ms·

There is no more "middle class". Trust me, I grew up there, and it is gone, gone gone. It has nothing to do with the fact that they can't/couldn't buy into st

by swamp40 13y ago

There is no more "middle class". Trust me, I grew up there, and it is gone, gone gone. It has nothing to do with the fact that they can't/couldn't buy into stocks while the getting was good - and crowdfunding is nothing more or less than a new type of lotto ticket for them. The sophisticated investors have been putting one over on the new, unsophisticated money for a long time. It has always been that way, and always will be. Still not responsible for the demise of the middle class. $18,000 a year health insurance for a family of four, homes that cost 10x your annual wage, companies that toss 40+ year olds with 20 years loyalty into the profit volcano, student loans of $150K+ that can't be discharged with bankruptcy and suck you down till the day you die, nursing homes that burn $4K/month for 20 years or until you run out of assets...THAT's what killed the middle class.

jmspring 13y ago
I'm not convinced it is gone yet. In the Bay Area (a lifer, myself), yes, you aren't buying a house anywhere near the critical mass -- maybe in Stockton, Brentwood, etc...maybe...assuming you have the job. That said, large parts of this country (and it's not small) do have industries that are thriving and housing prices that aren't insane. So "no middle class"? I disagree with. Certainly an endangered one. However, if we keep up the diversity in terms of regions, population centers, etc. it will be hard to wholly homogenize that. And, I agree, costs are going up.
- wavesounds 13y ago
  It doesn't matter if its gone or not yet. The point is its clearly leaving. Wages are decreasing, prices for food, gas, school, health care, housing, taxes are all going up. More money is being amassed in the 1% and less in the 99% (this article is one example of why) and none of these trends show any signs of reversing. Solution is simple too, just tax the rich more and redistribute that wealth where its needed. There's no reason to feel guilty about this, we fight their wars, work in their factories, guard their houses and build their roads, if they want to keep this the greatest country on earth they need to invest more in the middle class, like they used to [1]. [1] http://www.americanprogress.org/issues/2012/08/pdf/middle_class_policies.pdf http://www.americanprogress.org/issues/2012/08/pdf/middle_cl... - first chart
  - csomar 13y ago
    I once read an article that taxing all the rich by a %100 rate won't help the govrnement run for more than a couple days. I don't remember the link, but it'll be helpful if someone could.
    - muzz 13y ago
      if that number were true, then I would be all for it. even with a restrictive definition of "rich", and even at the current rates (top marginal of 39.6%), 2 days out of 365 days of spending is less than 1% of govt expenditures, and even a small number of "rich" people would be paying more than that.
    - jholman 13y ago
      I've seen a video with a guy ranting about that, but I'm not looking for it again, because I think he's spinning PR and doing dodgy math. Thought experiment time. Look at http://www.cbo.gov/publication/42870 http://www.cbo.gov/publication/42870 (which is discussing 2007, so if you can find a more-up-to-date source, I'd love that). From that article, the top quintile paid an average rate (not their marginal rate, of course!) of 25.1% of their income in federal taxes, and that these payments made up 68.9% of all federal income taxes. A little arithmetic there shows that if you upped their federal taxes by 50%, they'd lose 12.5% of their gross, and that would cover 100% of the revenue currently generated by federal personal income taxes. So if you wanted to tax the rich and not tax the poor, and by "tax" you mean "federal income tax", it's hugely doable! If you're wondering how much of total federal revenue is personal income tax, it appears to be around 40% to 50%. http://www.taxpolicycenter.org/briefing-book/background/numbers/revenue.cfm http://www.taxpolicycenter.org/briefing-book/background/numb... http://www.usgovernmentrevenue.com/fed_revenue_2007USrn http://www.usgovernmentrevenue.com/fed_revenue_2007USrn So that means that the 25.1% of income paid by the top quintile makes up 0.68*0.42 == 28.5% of federal revenue. It's pretty clear that if you kept the second-to-top quintile taxed as they are now (12% of federal revenue), cut payroll taxes in half (to say 20% of federal revenue), and kept the non-tax revenue (roughly 10%), that the remaining 58% could be met by slightly-worse-than-doubling the taxes on the rich. Again. Double taxes on the richest quintile, keep taxes as they are on the next richest quintile, halve payroll taxes, and keep non-taxes, and you're done. You can set corp taxes to zero, and also income taxes for the bottom 60% to zero. So. If you want to tax just the richest 1%, you can't run the country on that. But you absolutely can run the country just by taxing the rich. If you wanted to. (Note: this was a thought experiment, not advocacy. I am not a fan of this proposal. I just want to demonstrate that videos like the one I've seen, saying it's impossible to just tax the rich, are using shaky math.)
Domenic_S 13y ago
The middle class forsook classic middle-class values (free time, time with family, a small home in the 'burbs, seeing raising kids as something worth your time, etc) to play the money game with the rich folk, and surprise surprise, they're getting outplayed. The only winning move is not to play.
- intended 13y ago
  Thats very revisionist. Lets take an average middle class person pre boom: You are urged to take out a mortgage against your property because "House prices have only gone up!". Your banks are giving you great rates, "you'd be an idiot to not take them. We're giving it out to people with No Income, No Job or Assets! We made the cover of Time with the way prices are going up!" Everything is rosy, and you would be remiss and getting behind if you didn't take care of your future. This is what people faced. Do note - the Middle class isn't the one responsible for manipulating the banking system or creating exotics to over leverage a housing bubble. Nor are they the ones who are meant to be the educated sophisticated investors. Further the root of the issue, the housing bubble, required banks to actively sell their products, all the while telling average people that its all turning out great! In essence: the Banks were derelict in their duty to be wary of leverage, and abused the information asymmetry they enjoyed to convince customers to "Just get a mortgage! You can get that new kitchen you always wanted". I'd say the middle class got played.
  - Domenic_S 13y ago
    Obviously they did, that was my point. The middle class was (and continues to be) manipulated. Instead of one-income households being typical, two-income households are typical, and guess what happened to housing prices as that started to happen?
- jgh 13y ago
  Wages have stagnated for 40 years and everything else is getting more expensive, what are people supposed to do? If wages had have continued growing with productivity as they should have, would we have had the middle class looking for fast cash in the stock market in the 90s? Or in the housing market of the 2000s?
_pmf_ 13y ago
> homes that cost 10x your annual wage Well, welcome to Europe. > $18,000 a year health insurance for a family of four > student loans of $150K+ Nope, not Europe after all.
- smackay 13y ago
  Don't cherry pick. Student loans, though a new idea in the UK, are rapidly inflating in price. Not to the astronomical levels of the USA but heading in that general direction. Care for the elderly is a growing rapidly also. I don't have any close family in that situation but I there are extended family members who are and the costs are comparable to the figure quoted - though I don't have exact figures. So, not so different after all.
  - cmdkeen 13y ago
    UK student loans are nothing like the USA. It is in effect a graduate tax that you may or may not stop paying one day. Your repayments are a fixed percentage above a very generous floor, with no effect on credit ratings, mortgage applications or anything else. UK student loans will never destroy anyone's life.
    - hipsters_unite 13y ago
      Yes, but £27,000+ minimum of debt for an undergraduate degree is still a lot of money. Plus cost of living is very high for most places in the UK where there's lots of employment to be found.
      - lmm 13y ago
        It's not a #27000 debt in any meaningful sense. It's a slightly higher tax rate and some smoke and mirrors.
      - cmdkeen 13y ago
        To make it clear you repay at 9% of your income above £21,000, and get a year's grace just after graduating. There are no consequences to failing to pay it back if your income is below £21k.

by swamp40 13y ago

jmspring 13y ago

I'm not convinced it is gone yet. In the Bay Area (a lifer, myself), yes, you aren't buying a house anywhere near the critical mass -- maybe in Stockton, Brentwood, etc...maybe...assuming you have the job. That said, large parts of this country (and it's not small) do have industries that are thriving and housing prices that aren't insane. So "no middle class"? I disagree with. Certainly an endangered one. However, if we keep up the diversity in terms of regions, population centers, etc. it will be hard to wholly homogenize that. And, I agree, costs are going up.

wavesounds 13y ago
It doesn't matter if its gone or not yet. The point is its clearly leaving. Wages are decreasing, prices for food, gas, school, health care, housing, taxes are all going up. More money is being amassed in the 1% and less in the 99% (this article is one example of why) and none of these trends show any signs of reversing. Solution is simple too, just tax the rich more and redistribute that wealth where its needed. There's no reason to feel guilty about this, we fight their wars, work in their factories, guard their houses and build their roads, if they want to keep this the greatest country on earth they need to invest more in the middle class, like they used to [1]. [1] http://www.americanprogress.org/issues/2012/08/pdf/middle_class_policies.pdf http://www.americanprogress.org/issues/2012/08/pdf/middle_cl... - first chart
- csomar 13y ago
  I once read an article that taxing all the rich by a %100 rate won't help the govrnement run for more than a couple days. I don't remember the link, but it'll be helpful if someone could.
  - muzz 13y ago
    if that number were true, then I would be all for it. even with a restrictive definition of "rich", and even at the current rates (top marginal of 39.6%), 2 days out of 365 days of spending is less than 1% of govt expenditures, and even a small number of "rich" people would be paying more than that.
  - jholman 13y ago
    I've seen a video with a guy ranting about that, but I'm not looking for it again, because I think he's spinning PR and doing dodgy math. Thought experiment time. Look at http://www.cbo.gov/publication/42870 http://www.cbo.gov/publication/42870 (which is discussing 2007, so if you can find a more-up-to-date source, I'd love that). From that article, the top quintile paid an average rate (not their marginal rate, of course!) of 25.1% of their income in federal taxes, and that these payments made up 68.9% of all federal income taxes. A little arithmetic there shows that if you upped their federal taxes by 50%, they'd lose 12.5% of their gross, and that would cover 100% of the revenue currently generated by federal personal income taxes. So if you wanted to tax the rich and not tax the poor, and by "tax" you mean "federal income tax", it's hugely doable! If you're wondering how much of total federal revenue is personal income tax, it appears to be around 40% to 50%. http://www.taxpolicycenter.org/briefing-book/background/numbers/revenue.cfm http://www.taxpolicycenter.org/briefing-book/background/numb... http://www.usgovernmentrevenue.com/fed_revenue_2007USrn http://www.usgovernmentrevenue.com/fed_revenue_2007USrn So that means that the 25.1% of income paid by the top quintile makes up 0.68*0.42 == 28.5% of federal revenue. It's pretty clear that if you kept the second-to-top quintile taxed as they are now (12% of federal revenue), cut payroll taxes in half (to say 20% of federal revenue), and kept the non-tax revenue (roughly 10%), that the remaining 58% could be met by slightly-worse-than-doubling the taxes on the rich. Again. Double taxes on the richest quintile, keep taxes as they are on the next richest quintile, halve payroll taxes, and keep non-taxes, and you're done. You can set corp taxes to zero, and also income taxes for the bottom 60% to zero. So. If you want to tax just the richest 1%, you can't run the country on that. But you absolutely can run the country just by taxing the rich. If you wanted to. (Note: this was a thought experiment, not advocacy. I am not a fan of this proposal. I just want to demonstrate that videos like the one I've seen, saying it's impossible to just tax the rich, are using shaky math.)

Domenic_S 13y ago

The middle class forsook classic middle-class values (free time, time with family, a small home in the 'burbs, seeing raising kids as something worth your time, etc) to play the money game with the rich folk, and surprise surprise, they're getting outplayed. The only winning move is not to play.

intended 13y ago
Thats very revisionist. Lets take an average middle class person pre boom: You are urged to take out a mortgage against your property because "House prices have only gone up!". Your banks are giving you great rates, "you'd be an idiot to not take them. We're giving it out to people with No Income, No Job or Assets! We made the cover of Time with the way prices are going up!" Everything is rosy, and you would be remiss and getting behind if you didn't take care of your future. This is what people faced. Do note - the Middle class isn't the one responsible for manipulating the banking system or creating exotics to over leverage a housing bubble. Nor are they the ones who are meant to be the educated sophisticated investors. Further the root of the issue, the housing bubble, required banks to actively sell their products, all the while telling average people that its all turning out great! In essence: the Banks were derelict in their duty to be wary of leverage, and abused the information asymmetry they enjoyed to convince customers to "Just get a mortgage! You can get that new kitchen you always wanted". I'd say the middle class got played.
- Domenic_S 13y ago
  Obviously they did, that was my point. The middle class was (and continues to be) manipulated. Instead of one-income households being typical, two-income households are typical, and guess what happened to housing prices as that started to happen?
jgh 13y ago
Wages have stagnated for 40 years and everything else is getting more expensive, what are people supposed to do? If wages had have continued growing with productivity as they should have, would we have had the middle class looking for fast cash in the stock market in the 90s? Or in the housing market of the 2000s?

_pmf_ 13y ago

> homes that cost 10x your annual wage Well, welcome to Europe. > $18,000 a year health insurance for a family of four > student loans of $150K+ Nope, not Europe after all.

smackay 13y ago
Don't cherry pick. Student loans, though a new idea in the UK, are rapidly inflating in price. Not to the astronomical levels of the USA but heading in that general direction. Care for the elderly is a growing rapidly also. I don't have any close family in that situation but I there are extended family members who are and the costs are comparable to the figure quoted - though I don't have exact figures. So, not so different after all.
- cmdkeen 13y ago
  UK student loans are nothing like the USA. It is in effect a graduate tax that you may or may not stop paying one day. Your repayments are a fixed percentage above a very generous floor, with no effect on credit ratings, mortgage applications or anything else. UK student loans will never destroy anyone's life.
  - hipsters_unite 13y ago
    Yes, but £27,000+ minimum of debt for an undergraduate degree is still a lot of money. Plus cost of living is very high for most places in the UK where there's lots of employment to be found.
    - lmm 13y ago
      It's not a #27000 debt in any meaningful sense. It's a slightly higher tax rate and some smoke and mirrors.
    - cmdkeen 13y ago
      To make it clear you repay at 9% of your income above £21,000, and get a year's grace just after graduating. There are no consequences to failing to pay it back if your income is below £21k.