Posted on 02/18/2005 9:55:18 AM PST by Willie Green
I don't "condemn" Bush's economic policy totally, I do believe in tax cuts as a way to spur growth. What I do condemn, is freely trading with potential adversaries like China. We should be working to build the economy of our "allies", not tyrannical dictatorships. America's trade policy with China should equal the one we have with Cuba, but right now it's hypocritical.
Sorry. Life is tough. As John Wayne would say: "Life is tougher if you're stupid". Do you want a country that takes care of you or do you want a country that lets you do what you want as long as you don't hurt anyone? What say you?
No doubt life , but you have to give the less educated (including those with less innate intellect) at least a chance, otherwise they end up being dependent on others, if not the general society. Yes, I am doing quite well, but I come from a family of great intellect, and graduated second in my engineering class. My significant other, she's not done too well the last five years in her career options. While beautiful, she doesn't posses my mathematical skills, and she is deeply committed to religion rather than stealing the pants off of people in sales.
Her career options have dwindled, along with the base pay of those positions. She does have a degree, and was making in the $30's back in the 90's. Now the best she can find is $30K, with 60 hour weeks. Thankfully we don't need the money that badly, and she's staying at home to help me deal with my stressful job which is earning enough for us both. But if we both were going through what she's been going through, I would be quite miserable.
Well that's great, except the problem is the government can't keep giving tax cuts indefinitely, especially if the median income they are subtracting from as a percentage keeps going down. The government needs a specific amount to operate, and right now it's spending more than it's earning, hence the skyrocketing debt. I applaud Bush's goal of cutting government waste and givaways, but unless he does it faster than is being approved, the government's required income is being squeezed between a falling income base of the citizens, and the reduced percentage they can extract as taxes.
Sure it does, goods production includes manufactured goods,of course.
So has Commerce re-defined "goods production" to fit some new political imperative?
Why don't you tell me? And while you're at it, find a graph that only shows "Manufacturing".
True, but as the graph in post #239 shows, median income usually drops during and immediately after a recession. I have no doubt median income will start rising again. And aside from income, household net-worth is at a record high.
Thanks, just my own personal experiences.
Sadly, the losers in the 'economy' vote Democrat, straight ticket. That fact that the trade barriers were dropped (for the most part) during during Slick's administration will be lost on them.
Well in a way it's paid off for them, starting with welfare and FDR, although he at least made some of them dig ditches and fill them back up. As you say, they don't have the intellect to understand the issues, and Clinton triangulated them on welfare as well. Guys like Kerry and Gore are their real saviors, thank God the votes in this country kept those guys out of office. But unless the average worker in this country doesn't overcome their fear of their jobs being replaced by overseas slave labor, there could be a resurgence of complete protectionism. I don't favor that at all, my position is simply tariffs against tyranny, and unfortunately the majority of our trade inbalance right now is with communist China.
Uhhh, real income is adjusted for inflation.
Based on? The history of it being cyclical? Is that it? I hope it does, but don't have blind faith.
Thanks, as you know I'm not an economist, being a computer engineer by trade. But if you look at that chart, aren't the rising incomes aligned with times of higher inflation? Take the 80's for example.
...people with $300K incomes don't buy $9 chinese toasters, they buy $150 ones made in england from williams-sonoma that last a lifetime...
That might be true. Wealthy people do like nice things, and more power to them.
But what if I take the $141.00 dollars I saved on the Chinese toaster and invested it and received a 10% return on that investment. Assuming I could get close to that return, and the Chinese toaster lasts a year, it looks like I'm making money and toast.
You misunderstand. The chart has already taken inflation out. Inflation may have been 5%, but incomes rose more.
I understand, thanks. I'm asking could the presence of inflation have been a booster to incomes, aren't they overlapping? And now we have low inflation, and incomes are dropping. Perhaps it's more related than the specific value attributed to the "inflation" variable itself. Not being stubborn, just wanting to know why there seems to be a relationship between the two.
Well, let's all hope that things improve. Going from ~$34,000 to $43,318 in 36 years is about $250 per year, or less than 1% per year growth in household income -- and this during a period where many households were shifting into two income families -- is in my book not very good.
| Year | Civilian Age Population (14 years and older) | Employed | Percentage |
|---|---|---|---|
| 1980 | 167,745 | 106,940 | 63.8 |
| 1981 | 170,130 | 108,670 | 63.9 |
| 1982 | 172,271 | 110,204 | 64.0 |
| 1983 | 174,215 | 111,550 | 64.0 |
| 1984 | 176,383 | 113,544 | 64.4 |
| 1985 | 178,206 | 115,461 | 64.8 |
| 1986 | 180,587 | 117,834 | 65.3 |
| 1987 | 182,753 | 119,865 | 65.6 |
| 1988 | 184,613 | 121,669 | 65.9 |
| 1989 | 186,393 | 123,869 | 66.5 |
| 1990 | 189,164 | 125,840 | 66.5 |
| 1991 | 190,925 | 126,346 | 66.2 |
| 1992 | 192,805 | 128,105 | 66.4 |
| 1993 | 194,838 | 129,200 | 66.3 |
| 1994 | 196,814 | 131,056 | 66.6 |
| 1995 | 198,584 | 132,304 | 66.6 |
| 1996 | 200,591 | 133,943 | 66.8 |
| 1997 | 203,133 | 136,297 | 67.1 |
| 1998 | 205,220 | 137,673 | 67.1 |
| 1999 | 207,753 | 139,368 | 67.1 |
| 2000 | 212,577 | 142,583 | 67.1 |
| 2001 | 215,092 | 143,734 | 66.8 |
| 2002 | 217,570 | 144,863 | 66.6 |
| 2003 | 221,168 | 146,510 | 66.2 |
| 2004 | 223,357 | 147,401 | 66.0 |
My own guess is that we will see a reversal for 2005 -- I certainly hope so. If the participation rate slips down in the early 1980s range without seeing some real growth in wages, then that's not going to be good for our tax base at all -- or individual Americans.
But we are seeing good growth in some key areas: production of durables did quite respectably last year, our exports of goods set a record, with capital goods making a good showing.
And on the legislative side, I have hopes that we will see good repatriation of foreign profits this year as well as seeing some improvement due to tort reform.
But the trade deficit is worrisome. As good as exports have been, the blowout numbers on the import of goods are worse. And I don't like to see us losing good industries such as textiles and furniture.
That doesn't sound like much. And you are correct, there are many more 2 income households now, but the average household also is smaller than it used to be.
Inflation erodes income unless you have a contract that adjusts for it, and that is a small % of the population. The important thing is productivity increases. They allow companies to increase profits and salaries without raising prices.
And now we have low inflation, and incomes are dropping.
We've had low inflation for a long while. Incomes are dropping recently because of the recession we just had. And the bursting of the telecom bubble.
This unhealthy societal development is a radical departure from the past American norm where it was commonplace that the man of the household worked while the wife stayed home and took care of the kids (instead of dumping them off to the nearest Day Care Center). By including the other spouse in this graph, it neatly covers up the fact that for families today to make ends meet requires that both spouses have to work.
If this graph only included the primary breadwinner of each household the income trend would be most certainly down. But of course that would highlight the truth that per capita incomes and especially after-tax purchasing power have been declining in America for decades now...and that little ditty is something our political leaders don't like to advertise.
"We have imports going through the roof but still nobody would consider putting any tariffs on these products. Even a measly one or two percent tariff on selected goods would bring in billions to the Federal Treasury. Let's make some money on this trade deficit!!"
I have a much better idea. What about adopting a National Retail Sales Tax (in the form of HR 25, the FairTax bill) and start taxing imports the exact same way that we tax domestic production. When we add a 23% sales tax on to imports, that will be much more effective than a 2% tariff and the WTO and our trading partners couldn't say anything, since we would be taxing imports the same way that we tax our own production.
Most Americans don't even realize that the current tax system provides a bias in favor of foreign producers in our own system. No wonder we have a huge trade surplus!!
"The inherent disadvantage of tariffs over an income tax is that tariffs will bring on retaliatory tariffs from our trading partners."
I was wondering when someone would make that point. The other problem is WTO sanctions.
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