You probably mean that median household "income" (not net worth) didn't return to 1999 levels in the recent expansion. Median and Mean net worth of households did continue to rise since 1999 despite the Nasdaq meltdown -- that had little or no effect on median households -- due to rising home values. See the Fed's Survey of Consumer Finances; 2004 is the latest. That's why the collapse of the housing bubble is so important.
You'll need to wait for the Fed's separate report on Household Debt Service and Financial Obligations that depend on the rates of interest that households pay on their soaring debts. But the debt itself is in the Fed's Flow of Funds report released on Thursday. Look for the file on "balances." You can also go to my company's website (http://www.mbginfosvcs.com/) to see graphics of the soaring ratio of household debt o disposable income, assets and net worth. (Left hand side, second from top at this moment.) There is also a link to the Fed's Flow of Funds data.
Charles McMillionEPer: CHARLES McMILLION (not verified)
It is very significant, I think, that in this past expansion median household net worth never matched its high from the 1990s expansion -- this will be the first time since the great depression that the middle class as a whole is moving, secularly, in the wrong direction.
If mean net worth is declining, just imagine what is happening to median net worth!
In that regard, is the figure for Household Debt Service and Financial Obligations Ratios, specifically total household debt as a percentage of income, buried in the flow of funds report somewhere (and if so, where?) . Or do I have to wait for a separate report?
ThanksEPer: New Deal democrat
the re-engineering the stratification of global wealth.
Yes, energy economics is another topic that is so full of confusion, bloggers clarifying on which one is economically viable and more importantly is the true energy creation vs. the cost of more consequences in production that I have yet to swim through.
.........my fellow blogger malcontent is heavily into the hidden connections and agendas revolving around the 'financialization' of global politics. If that's the right way to say it.
I'm more into things such as:
As weapons to use against the individuals, groups and cabals who are engineering the stratification of wealth...world wide.EPer: A.Citizen
If you haven't read it, I recommend: The Prize : The Epic Quest for Oil, Money & Power, by Daniel Yergin.
This is not an "anti" anything book but is an incredible detailed history of world domination the oil economy and the resulting politics.
On Iraq, assuming they were going after grabbing oil markets and so on, I still don't see how that adds up to the current costs. It has to be the entire privatization agenda.
It would be nice is someone calculated out the % drop in income for Americans due to oil and if anyone noticed Dubai is talking about not using the dollar against their own currency recently.
I was reading your diary and thinking, "here is what the democratic platform should be" and there it was in your final sentence.
As an aside, re the anthrax attacks, I've done the opposite change of mind from most people. Originally, I thought it was a copycat, then I changed my mind, I believe it was Muhammad Atta's cell (maybe explains why they went to Portland ME the last night to meet somebody).
Reasons: it happened right after 9/11, and hasn't happened since. One of the targets was a National Enquirer editor who lived near Atta in Florida and had made fun of OBL (a really strange target otherwise). The anthrax was only mailed to Senators, nobody in the house (perhaps because the plane that crashed in PA was specifically aimed at the House of Representatives).
Nice work, rdf.EPer: New Deal democrat
and I'm not gonna take it anymore?
From the Elephant Man:
I'm a human being, not a consumer!
Can I sell my citizenship on the new free market?
You would think the Democratic platform would write itself and we certainly need to demand it.
Believe it or not Democratic leadership right now is giving Bill Gates his own personal hearing so he can blather on about NASSCOM (Microsoft is a member of NASSCOM), ITAA's demands for global labor arbitrage vehicles.
I'd say Democratic leaders aren't exactly hearing the American people by this latest event. (I am left politically but I have to call 'em as I see 'em).
I also want to point out that your posts are really blog posts (blog posts are traditionally more original writings and details). On here when you do a blog entry it goes to the front page and gets more exposure and you deserve more readers.
I'm working on the site to make the navigation better and the forums really need it.
But your writings deserve to be on the front page in my opinion.
I think the stock market is Populist. Anything that affects the US national interests, working America's interests to me is Populist . Sometimes solutions presented that sound great in philosophy and theory have dire consequences to the United States, such as "comprehensive" immigration reform is one that comes to mind. Others that sound very anti-US worker in theory such as corporate tax code while it might seem to give corporations what they want, can actually be populist in that it has a strong positive effect in investment and jobs in the US. I'm posting relevant snippets in the forum on it.
I'm hoping our job is to dig out the nitty gritty, which frankly rarely occurs in the press. I mean if you have congress representatives not reading the bills, never mind the press and analyzing the details before something passes how can we expect to get reforms in the US national interest?
I'm not so sure on your analysis though because I'm waiting for those massive write downs to be announced, but I do find it bizarre that we get all of these really bad economic indicators and yet it goes up.
Eweek reporting Silicon Valley Losing It's Middle Class:
The effects of a sub-prime mortgage crisis, financial market volatility and a shifting global economy are disproportionately affecting midwage technology workers in Silicon Valley.
In 2006, only 46 percent of the jobs in Silicon Valley were midwage, paying between $30,000 and $80,000 a year, down from 52 percent in 2002, according to the 2008 Index of Silicon Valley, sponsored by Joint Venture, a public-private partnership, and the Silicon Valley Community Foundation, a nonprofit.
Meanwhile, the percentage of higher wage jobs remained relatively stable at 26 to 27 percent, while low-wage jobs grew from 22 to 27 percent in the same period
It sounds like we need a political action to change the bankruptcy law.
We have other problems also on the insourcing front, Bill Gates is once again getting his own personal hearing as the lobbyists storm the hill demanding their global labor arbitrage agenda and the Dems are way too willing to give it to them.
I'm kind of surprised by this Bernanke move actually.
Increase or peak? I have no idea, peak would be a guess.
What I do know it that my grandfather lived through the 1930s depression. In 1933 he took a job with the railroad and his family was ok after that. But he never, never, ever kept any money in a bank after 1929.
I saw him pull out a wad of bills and pay cash for a 1957 Chevrolet. He died with money saved in his sock drawer. Remember his longstanding fear of banks, I have recently moved a sum home for emergencies because I think our economy is completely hollow we are in such debt -- not me prsonally, the country. Since the 1980 I believe the value has been harvested (merged and stripped, off-shored, etc.) and all that is left is hollow debt.
My mother's second husband was a boy during that depression. His family survived by eating a lot of apples. When he died in 2000, he still hated eating apples because of the memories of having only apples to eat.
An asside: No one in my family ever did use debt except for their mortgage. They believed in paying cash. But now few people hesitate to buy something that they don't have the cash for. Most people's budget problems would dissappear if they only used cash.)
That depression must have been horrible on people and it certainly left long lasting effects on anyone I knew who lived through it. But I feel influenced by it even these generations away, because of my family's stories.EPer: Silverbird (not verified)
Unfortunately you are claiming this national sales tax is going to do what you claim and it will not. A VAT would. This is a value added tax.
I don't think Progressive taxes are "out of date" in fact the Progressive tax code is one of the reasons we built up a middle class in the 20th Century.
Liberals seem to have closed minds on thie subject. What was a wonderful idea seventy of eighty years ago (the progressive income tax) is out of date in a global economy I don"t favor the FairTax for many reasons, but it would send a check or bank transfer to every person to pay all taxes up to the poverty level. So only non essentials are taxed.
Your employer really pays your income taxes and social security taxes. Usually you do not even see or feel the money. Your taxes are really just a part of what your employer charges for whatever he sells.
Buy American to support our government. Buy imports and we get nothing..
I would prefer just charging the retailer 20% of his gross sales. We could fund all kinds of social services
Imagine getting 20% o ever CD, Movie, Athletic Ticket
I don't like all the fine points of the FairTax, but it has something called a prebate. It sends everyone a check or bank transfer that is enough to pay all taxes up to the poverty level.
Our businesses would be in a better position globally if Social Security, Medicare, and health insurance were all financed by a tax on all goods and services purchased here including imports. Workers would keep more of their paychecks and even receive a monthly check from the government to cover all taxes up to the poverty level.
The huge disparity of income in our country is largely due to businesses that are not labor intensive like movies, sports, and software. Bill Gates for instance hires programmers in India and the creation and packaging of CD’s and DVD’s is largely automated. Consider the amount of money that would be raised by a 25% tax on movies, CD’s, sporting events and gadgets made elsewhere. Some of our super stars might have to settle for a couple million dollars less. The loopholes found by CPA’s and tax lawyers in our tens of thousands of pages of IRS regulations further exacerbates the situation.
It is very doubtful whether thieves, drug dealers, prostitutes and illegal aliens are now filing these earnings on an income tax.
So far as I know, the words "progressive" and "sales tax" are incompatible.
The "sales tax" is about as regressive as you can get.EPer: MikeR
Matching Private Savings with Federal Dollars (1999), not specific to these exact proposals, gives a little more insight into the idea of private savings accounts.
A lingering question is whether a 401(k)-type plan design is sensible when the target population consists of low- and very low income workers, as is the case with the two Social Security-based proposals. Incentives provided by matching contributions will be successful only if workers can afford to take advantage of them, and many low- and very low income workers cannot or do not. Perhaps federal resources would be better spent on direct subsidies for the poor in retirement than on a complicated incentive program that may produce only a marginal increase in savings. It might also be better to target savings incentives to those who can afford to save and are motivated to respond. With these considerations in mind, a federal 401(k) approach has some merit, but creating a stand-alone federal program does not. One alternative to consider is subsidizing contributions into IRAs and other 401(k)-type plans while providing very similar rules for taxing contributions and benefits. This would preserve the savings incentives that are the essence of these proposals while reducing their complexity and cost
I'm sorry I don't think so and NAFTA Is the symbol for overall bad trade agreements, i.e. the China PNTR and the WTO.
So, ok, this is an open blog but I need you to prove your claim by the math. Let's see, trade deficit about ~6% of total GDP...wage ratios anywhere from 3:1 to 60:1 in labor cost savings by global labor arbitrage alone (moving to a foreign nation US industries). ok, so US corporations by keeping their profits offshore, pay no US tax now...but explain precisely how this not only brings in that capital back into the US and explain further how that encourages US multinationals to invest those profits back into the United States with this plan, esp. I'll assume this sales tax will affect their cash outlays on investment within the US itself since it is a tax on all goods within the US. Corporations are shoppers (consumers) too.
If you want to suggest a VAT I can live with that one but something as regressive sounding as a national sales tax, doing away with the IRS, i.e. Hucklebee's plan, you better crank some numbers over here to justify this blog.
i.e. explain how this is not regressive when right now private equity managers are making a killing with a 15% tax rate in effect and explain how the super rich pay more in taxes with this plan. Explain how wealth redistribution will occur under this plan and not enable the robber barons of the 21st century further.
Can't? Well, then how about looking at VAT for this will accomplish what you claim without the introduction of a massive regressive tax. I understand the desire to abolish the IRS and taxing that 1 trillion dollar underground economy. But here you penalize US production equally with foreign imports and that does not help at all in terms of boosting domestic production. This is in effect a hidden VAT but on US producers! So beyond capturing the 1 trillion underground economy, and doing away with the IRS which sounds good to us all, this is a very regressive tax and I'm not talking about the poor, I'm talking about the super rich versus the US middle class and that's where it is astoundingly regressive.
Does it make any sense at all to tax American workers for working, American investors for investing and not tax imports?
NAFTA is Not the Main Problem
Early in our nations history, states were not allowed to place tariffs on goods produced in another state. This was done because it was believed that free trade would benefit the entire country.
Most states then wisely instituted sales taxes and derived income from all things purchased in their state. This way the state gained income from all businesses selling things on their turf. It is somewhat like, if a neighbors cows are going to graze (sell things) on our farm, we should share in in the profits.
It is obvious that all of our income taxes and Social Security taxes paid by workers, investors and corporations have to be embedded in the prices charged for American goods and services making us less competitive. Prices of imported items and out-sourced jobs do not include these taxes. Foreign corporations are doing business and earning money in our country and are contributing little or nothing for the privilege. In a global economy, this is insanity!
Replacing our present national income tax and Social Security taxes with a progressive national sales tax would have many benefits. It would:
Only tax things over the poverty level
Tax imports too, instead of only American labor and investment
Also tax things made with outsourced labor
Lower the cost of hiring American workers
Improve our balance of payments
Get more income from industries that hire few workers
(i.e. Athletics, Rock Stars, Movies, CD’s. TV, drugs, etc.)
Ones that earn huge profits & Pay outlandish salaries
Save Social Security & Medicare
Maybe fund healthcare
Eliminate the IRS - audits, loopholes, forms, time & expenses
Make US a partner of every business selling things in the USA
Get taxes off of the top, not after questionable deductions.
All industries (foreign and domestic) would then start contributing their share of the costs of our infrastructure, from which they benefit when doing business here.
It is complicated. Supply and Demand determines the price of things.
The cost (price plus tax) of things would stay about the same. On our products the tax would be added at the end instead of being embedded in the price. Importers would have to adjust their prices because customers are apt to buy fewer items when the tax is added. Consumers will think of the total cost when deciding upon a purchase.
Ralph R. Layman Sr.
I'm just reading and certainly agree that most people have not even lived with 1981 to remember.
Ya know we need more people on here who can understand what you are saying. I think that's why you are getting readers but not to many comments.
(to all of you chickens out there, stop lurking and post a comment, do you believe inflation will peak or will continue to increase?)
That would make a nice poll actually.
Debt industry regulation is an important step, but others are needed. The biggest underlying source of consumer debt is rising income inequity. The second biggest is the economic damage caused by the war on Iraq.
People have less money so they are borrowing just to try to keep up with their past living standards. Our nation will have to abandon corporate controlled trade and make the rich pay their fair share in taxes. The war will have to be put to an end too.
By the way, you will get more comments with a gentler Captcha.EPer: libhomo (not verified)