NEW AND IMPROVED

This blog is now sugar FREE, fat FREE, gluten FREE, all ORGANIC and all NATURAL!!

Saturday, May 17, 2014

IS THE MIDDLE CLASS DISSAPEARING


IS THE MIDDLE CLASS DISSAPEARING
a cranky opinion (sort of) for
 
CRANKY OPINION SATURDAY
The following is a mish-mash of opinions that goes nowhere and comes to no conclusions.  Your opinions are welcome cause I don't really have one this Saturday.

Is the middle class in this country really disappearing, or is it just more expensive to be middle class in this day and age?

People today, need…HAVE to have, things that did not exist years ago.

A mobile phone with internet access can cost $100 a month.  It is a luxury for sure, but it is difficult to compete in any environment without one.

I guess you could live without cable or satellite TV, but you would be somewhat of an outcast in school or around the water cooler if you did not follow the latest hit shows.

A bus or train was all the transportation needed for the middle class of yore, but today’s familes have two bread winners, and with suburban sprawl, two cars becomes a necessity.  Tack on all the expenses that go along with a car; insurance, maintenance, parking and more…it gets real expensive.

The middle class I knew owned a home.  It is tough today to own when all the new houses being built are 3000 square foot and more.

Taxes hurt the middle class today more than yesterday.  The graduated income tax table has not kept up with middle class needs and today’s “middle class” income is liable to be taxed at a 25% or more rate compared to a 10% rate.

The middle class today requires two wage earners; that means they have to pay for child care which eats into disposable income.

Children are more expensive today than ever.  A ball and a bike would keep other generations of children happy.  Today, children need i-crap, gaming stuff PC’s and more or they are considered deprived.

There are many reasons for the disappearance of the middle class.  The new economy requires more brain than brawn, and the recession has left even the brainy unemployed.  Additionally, government regulations have made small businesses and self-employment more difficult and expensive and wages in general have not kept up with inflation. 

The increased needs and demands by the middle class for goods and services which used to be reserved for the wealthy, if they existed at all, have simply made the expected standard of living more expensive than in the past.

The gap between the wealthy and the middle class is growing.  We could tax the wealthy to reduce this gap, but that has proved to only lower the income of the wealthy without raising the standard of the middle and lower income classes.  It will close the gap, but will it make anyone feel any better?

Education is one answer.  Improving worker productivity to bring manufacturing back to this country is part of the puzzle, but I don’t think either is the solution.  Our economy, the world economy, has so fundamentally changed, the answer to the disappearing middle class will require more than the tired old politics of raising the minimum wage, taxing the rich, and doling out government cheese.

Raising safety nets does not help the middle class. Lowering the income of the wealthy will not help the middle class.  We must find a way to boost the opportunities of our average citizens.  The average citizens are the backbone of our country.  If we lose our backbone, everyone will fall.

No, I have no answer, other than our smart people need to seek new tactics to shore up the base of our economy.  Acknowledging that things have changed and that new ideas are needed, is a start.

Unfortunately, that is all I've got. 

I'm not sure what the preceding was, kind of an opinion...I guess.  Mrs Cranky doesn't know either.       

15 comments:

  1. I used to wish I could be middle class. Now I'm happy to stay on the breadline.
    I'm used to managing on less, so when the economy eventually crashes, I'll be fine.

    ReplyDelete
  2. Excellent post Cranky. Yes, the baseline for a "decent standard of living" is rising, but it's undeniable the rich are indeed getting richer, the poor are getting poorer, and the middle class has been economically stagnant for the past 30 years.

    Fixing this isn't easy, you're right. You can't just slap a tax on the rich and then spread this windfall around the middle class. That will kill incentive to work all the way around. Bad move.

    Here's what is happening now: The entrepreneur works smart and hard and makes $50M. Good for them. They worked for it, they deserve it. But then they figured out they can use their wealth to buy influence in Washington or maybe in their state legislature and parlay that into even greater wealth. Sometimes they can do it individually as the Koch Bros are doing, sometimes they band together in groups (banking, pharma, agriculture, energy, etc). What they get for their "campaign contributions" is essentially rich man's welfare; a bunch of tax loopholes, exemptions, deductions, write-offs, etc.

    Their $50M suddenly becomes $100M, not because of their even harder or smarter work, not because they're making more things of even greater value, but because of a massive transfer of money from the people's treasury. And it's legal because they've bribed the very people who get to define what is and isn't legal.

    The remedy: An all new tax code. You work hard, you make money, you pay your fair share of taxes. Period. The net result will be that the rich WILL pay more in taxes, but only because they'll lose the smorgasbord of tax breaks they've been receiving at the middle class's expense.

    Yes, they'll squeal. Cry me a river. At least it's fair.

    ReplyDelete
    Replies
    1. I'm going to just throw this out having given it a good 10 minutes of thought myself.


      End all deductions after $500,000 income, then start the graduated table over again.

      Deductions only reduce the first $500,000 of income, then taxed on graduated scale:

      10% first $20,000/ 15% next $20,000 ...........32%$100,000-$500,000 then start over (no more deductions allowed) $500,000-$520,000 10% $520,000-$540,000 15% etc. etc.


      Whatever...play with numbers. Thus ending ridiculous deductions for super rich, but not screw them over (Before Regan tax rate was 90% over $100,000...of course there were deductions for everything, dinners lunches, whores etc. Hell my Grandfather deducted his boat...the joke was he should have named it "Sundry" because that was where he listed it on his return.)


      As to campaign funding...I got nothing. Frauds on both sides and crooked politicians how do you stop that, been going on for longer than hooking...actually kind of the same thing.

      Delete
  3. you raise excellent points. in addition to the middle class 'shrinking', our country's infrastructure is going to hell in a handbasket, too. we need funds to fix roads, railways, bridges, sewers, etc. i do believe the tax breaks given to the ultra-wealthy have to be reduced to help fund these 'basics', too.

    ReplyDelete
  4. Perfectly put. I have nothing to add because you've said it all, and perfectly set out the problem. I think about this a lot too as do many many people these days - and so far, we've for nothing.

    ReplyDelete
  5. The first problem is we don't have any smart people in government with solutions. They keep doing the same thing and expect different results. Not going to happen.

    Have a fabulous day. ☺

    ReplyDelete
  6. WE need to find ways to support small enterprise even more whether it is sustainable energy, new technologies or even truck farmers. They may not be middle class, but they will not longer be the working poor.

    ReplyDelete
  7. Amen to EVERYTHING you said here! When I remind my kids that I grew up with only three channels on a black and whit TV and one land line phone---that way back was also a party line (REMEMBER THOSE??) and that microwaves did not exist…..they look at me like I'm from the Jurassic era. They just don't get it! Loved this and tweeted it.

    ReplyDelete
  8. First, I want to thank you for visiting my blog! I enjoyed this post and agree with everything you wrote. I laugh at my younger co-workers who can't live without their phones in their hands and facebook to find out how family and friends are doing. I have a cell phone..not a fancy one, just one that I am grateful for when I'm on call at the hospital and I don't have to stop and find a phone to call back in! (yep, that's how we did that in the 70's and 80's!) I don't own a big screen TV but do have cable and internet...hey, I love HGTV...just don't need to see it on a 60in. screen! I think the days of the McMansions are coming to a close. The trend is living smaller, less debt, and raising a few chickens or goats. I live in a small, rurual town so this is not an impossible life to live. But even urban communities have garden plots to share and I read recently many folks are leaving the "burbs" to head back to the city. So I guess the idea of "middle class" should change to "survival class" and that has to be a personal lifestyle change. I worry about future generations..but my parents worried about us that were raised in the 60's. I'm a big believer in small business. We lost a ton of factory jobs here in Ashland...the former balloon capital of the country...but many small manufacturing and retail have made a comeback here. Our downtown is fighting it's way back too. I just hope the bigwigs in Washington don't completely kill us off. I'm in healthcare and right now, that's a changing and scary place to be. Thanks for letting me vent! Hope you have a great weekend!

    ReplyDelete
  9. As a student of history I just want to point out that every great civilization was built on the backs of a prosperous middle class and when that group of people no longer prospered the civilization fell. This happened to the Egyptians, Greeks, Romans, and even the British Empire. Money can be consolidated into the hands of a powerful few but they can't hold on to it forever.

    ReplyDelete
  10. I think it is disappearing, I think its replaced with the working poor, so we have poor, working poor, rich. I don't know what the answer is either, but I know in my particular field, I'm being replaced by technology and foreign workers (work sent off shore). I'll be lucky if I finishout my next 9 years of working in this particular field or if it will be extinct. I love your i-crap terminology; that is a good one! No answers here, but lots to think about.

    betty

    ReplyDelete
  11. I dunno, my feeling has been that the middle class is re-normalizing. For quite some time the middle class has expanded to include, maybe unrealistically, a larger and larger part of the population to the point where what we call 'poor' really is not that. Growing up we were genuinely poor yet not destitute but in today's world, with what little we had, we'd be considered destitute even though we weren't.

    Every family is assumed to need a car for every driver. I can remember sharing a car with 3 other drivers. Everyone is assumed to deserve a cell phone. We had one home phone and that was it. Everyone is assumed to need cable. I first had cable almost a year out of college.

    Not much to say about the disparity up to the stupid rich other than we're just idiots. We have ways of fixing such things but somehow get fixated on taxes rather than using our heads and using laws on the books and perhaps fixing some of our dumber laws.

    ReplyDelete
  12. There's no incentive to save for the future, with interest rates a mere pittance. Oh, wait. People don't have money left over to save.

    ReplyDelete
  13. I do think the gap is widening between the middle class and the rich. My thinking is to focus on getting out of debt and saving money where I can. I think the middle class is in trouble until the cost of college goes down which will be pretty much never. So much debt for school now it's really sad. I'm glad I went to community college.

    ReplyDelete
  14. Very well said my friend. I could go on a tirade right now but as you have covered most of my thoughts I will just say kuddo's.

    ReplyDelete

I love comments, especially some of my commenters are funny as heck!

Oh, and don't be shy, Never miss a Cranky Post.

Sign up for an email of every post...over there...on your right...go on!