U.S. Economy Is Increasingly Tied to the Rich

[jackace]

http://finance.yahoo.com/family-home/article/110258/us-economy-is-increasingly-tied-to-the-rich

According to new research from Moody's Analytics, the top 5% of Americans by income account for 37% of all consumer outlays.

By contrast, the bottom 80% by income account for 39.5% of all consumer outlays.

The data may be a further sign that the U.S. is becoming a Plutonomy–an economy dependent on the spending and investing of the wealthy. And Plutonomies are far less stable than economies built on more evenly distributed income and mass consumption.

Even more evidence that we are not heading for a very sustainable recovery.

 

[Cogman]

We are just exiting a recession. It is no shock that the lower/middle class gets hit the hardest from a recession vs the upper class.

Whats happening? The rich are spending just as much as usual while the poor and middle class are saving their pennies. That generally tends to skew things.

 

[brencat]

We are just exiting a recession. It is no shock that the lower/middle class gets hit the hardest from a recession vs the upper class.

Whats happening? The rich are spending just as much as usual while the poor and middle class are saving their pennies. That generally tends to skew things.

Agreed. And this recession is particularly nasty because it was driven by a popping of a credit bubble...a far more dangerous situation than when the internet bubble popped which mainly affected stupid investors. When a credit bubble pops, the debt is still there, like an anchor around your neck. Those that bought too much house and are now underwater but still have jobs are basically stuck in their custom made debtor prison. Going to be a while before "normal" growth resumes.

 

[StageLeft]

The rich are accelerating away at ever faster paces from the middle and lower in the US.

 

[Jaskalas]

The rich are accelerating away at ever faster paces from the middle and lower in the US.

So it's time to lynch them is it?

 

[StageLeft]

So it's time to lynch them is it?

 

[MJinZ]

So it's time to lynch them is it?

No, car jack and grand theft.

 

[Moonbeam]

http://finance.yahoo.com/family-home/article/110258/us-economy-is-increasingly-tied-to-the-rich







Even more evidence that we are not heading for a very sustainable recovery.

How much do you think the rich give to their servants, the Republican party to keep the rest of the people in a constant state of agitation against the Democratic party where the only possible hope for them lies? I know, I know, they own them too. And whose fault is that?

 

[Phokus]

So it's time to lynch them is it?

The very threat is what got us our social safety net (and ironically saved capitalism). Our complacency is what is causing our current malaise.

 

[xj0hnx]

Rich people are spending more money than poor/middle class, film at 11. Where's the news?

 

[Phokus]

Rich people are spending more money than poor/middle class, film at 11. Where's the news?

There's something seriously fucking wrong if the top 5% of this country is spending almost as much as the bottom 80%

And by their very nature, the poorer you are, the more you're FORCED to spend your money.

 

[xj0hnx]

How much do you think the rich give to their servants, the Republican party to keep the rest of the people in a constant state of agitation against the Democratic party where the only possible hope for them lies? I know, I know, they own them too. And whose fault is that?

What? There's no rich democrats? Democrats haven't done anything to help Wall Street? LOLOLOLOLOL!!!! Pretty funny considering this administration is full of Sachs employees and tax cheats, you democrats are the funny.

 

[xj0hnx]

And by their very nature, the poorer you are, the more you're FORCED to spend your money.

Really? seems this very thread is about how rich people spend more money. Or are they just shelling out money for stuff they could be getting free?

 

[spidey07]

What this really highlights is the Obama tax increases starting 1/2011 will have much more detriment than folks realize. If 37 percent; of ALL consumer spending is done by the top 5 percent income earners, it is a terribly stupid idea to impose massive tax increases which would drive down spending even further.

If you really want to kill the economy, then raise the taxes of the top 5 percent tremendously and take away their deductions (mortgage interest), force them to pay more into social security, put a medicare tax on their capital gains (already law thanks to the healthcare crap), enact marriage penalties for dual income earners. Oh WAIT A MINUTE! That is Obama's tax plan!

 

[Phokus]

Really? seems this very thread is about how rich people spend more money. Or are they just shelling out money for stuff they could be getting free?

Yes really. If you only make $20k per year, you are most likely going to spend almost all of it on food/shelter/clothing/etc.

If you make $10 mil a year, you are, on average, not going to spend as much of a proportion of your money.

My comment was more about the extreme wealth distributions between the rich and poor.

 

[Pens1566]

Really? seems this very thread is about how rich people spend more money. Or are they just shelling out money for stuff they could be getting free?

Ugh

 

[Genx87]

There's something seriously fucking wrong if the top 5% of this country is spending almost as much as the bottom 80%

And by their very nature, the poorer you are, the more you're FORCED to spend your money.

Why? They make more money and consume more products. They also pay a larger % of the income tax pie. I bet you are shitting your pants at the idea 5% of the income tax filers pay such a large % of the reciepts!

 

[HendrixFan]

What this really highlights is the Obama tax increases starting 1/2011 will have much more detriment than folks realize. If 37 percent; of ALL consumer spending is done by the top 5 percent income earners, it is a terribly stupid idea to impose massive tax increases which would drive down spending even further.

If you really want to kill the economy, then raise the taxes of the top 5 percent tremendously and take away their deductions (mortgage interest), force them to pay more into social security, put a medicare tax on their capital gains (already law thanks to the healthcare crap), enact marriage penalties for dual income earners. Oh WAIT A MINUTE! That is Obama's tax plan!

Did you read jackace's post? It answers your statement:

The data may be a further sign that the U.S. is becoming a Plutonomy–an economy dependent on the spending and investing of the wealthy. And Plutonomies are far less stable than economies built on more evenly distributed income and mass consumption.

45 percent of our GDP is already government spending (federal, state and local). If you tax the rich more the money taken in from taxes doesn't disappear, it still gets moved around and put right back into the economy. That already happens with 45% of our economy, and letting the Bush taxcuts fade away won't really move that but a few percentage points.

What it will do is address the statement quoted above, from jackace's original post, which responds to your fear mongering. It shaves a few percent off the top to spread around the bottom, where it can help to stabilize the economy by being more evenly distributed.

 

[Genx87]

Did you read jackace's post? It answers your statement:



45% of our GDP is already government spending (federal, state and local). If you tax the rich more the money taken in from taxes doesn't disappear, it still gets moved around and put right back into the economy. That already happens with 45% of our economy, and letting the Bush taxcuts fade away won't really move that but a few percentage points.

What it will do is address the statement quoted above, from Moonbeam's original post, which responds to your fear mongering. It shaves a few percent off the top to spread around the bottom, where it can help to stabilize the economy by being more evenly distributed.

Why is it it appears the larger the govt grows the gap between rich and poor increases? Perhaps because when govt grows the people who benefit most are the rich? Govt projects arent given to the poor to manage. When a road is needed to be built it is given to a construction company owned by the rich with the hope trickle down economics will filter down to the poor slob holding a road sign. But profits are held by the rich.

 

[spidey07]

Mark my words, you kill the spending of that top 5 percent and we are going to tank even worse. Then again that's what Obama wants, he's doing this on purpose. I don't think people realize just how much money we're talking about here in terms of tax increases. It's not just the federal tax increase, it's all the rest piled on top of it. HENRYs are in that area and are set to get killed.

 

[xj0hnx]

Yes really. If you only make $20k per year, you are most likely going to spend almost all of it on food/shelter/clothing/etc.

... And? Not everyone is rich ...get over it.

If you make $10 mil a year, you are, on average, not going to spend as much of a proportion of your money.

Ok, so "FORCED to spend your money" isn't really what you meant, being poor you spend more money on necessities. So what? That's life.

 

[Phokus]

Why? They make more money and consume more products. They also pay a larger % of the income tax pie. I bet you are shitting your pants at the idea 5% of the income tax filers pay such a large % of the reciepts!

The funny thing is, the rich pay such a large amount of tax compared to everyone else because they've gotten massively richer whereas the salaries of everyone below have remained stagnant for 30 years.

If you actually looked at the proportion of their incomes that they pay, they really don't pay that much.

http://blogs.wsj.com/economics/2010/02/17/a-look-at-the-tax-returns-of-the-top-400-taxpayers/

The 400 best-off taxpayers paid an average tax rate of 16.6%, lower than in any year since the IRS began making the reports in 1992.

People like you and your way of thinking are what's wrong with this country

 

[Moonbeam]

What? There's no rich democrats? Democrats haven't done anything to help Wall Street? LOLOLOLOLOL!!!! Pretty funny considering this administration is full of Sachs employees and tax cheats, you democrats are the funny.

You don't read too good do you!

 

[GuitarDaddy]

Well doh!

A democratic economy is like a game of monopoly, if you play long enough the majority of the moolah winds up in just a few hands. If you don't have some mechanism of redistribution like progressive tax rates and reasonable estate taxes then the economy will eventually work its way towards serfdom until reset by revolution.

 

[xj0hnx]

You don't read too good do you!

Good enough to see your partisan wizardry "How much do you think the rich give to their servants, the Republican party"