Tag Archives: American middle class

Exactly What Did The Stimulus Do?

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The American Thinker posted an article today about what happened to the Middle Class under President Obama. Basically the value of the American dollar shrank and the Middle Class shrank.

The article reports:

A December 2015 study of the American middle class done by the Pew Research center found that for the first time in over forty years the middle class no longer includes the majority of Americans.  The plain fact is, after the largest so-called stimulus government spending program in world history, conducted by President Obama and his Democratic Party, both the number of persons in the middle class and the proportion of the population shrank.

The Pew Hispanic Center May 2016 Study found that at the end of President Obama’s second term, the middle class had been shrinking in the vast majority of metropolitan areas of the US.  The important of the metropolitan areas is that 1) 76% of all Americans live in metro areas, 2) metro areas are the areas where most jobs are located, and 3) illegal immigration is promoted in metro areas all across the nation.

While the shrinking middle class proves that government cannot raise the incomes of middle class persons in the US through stimulus spending, at the same time it shows that the increasing tax burden on the middle class eats away at their disposable income and their lack of spending hurts the local economies.

The article concludes:

The Tax Foundation also looked at the sources of state and local taxes and published a study in June 2017.  While property taxes remain the single greatest source of tax revenues, the idea that the property tax goes solely to fund public services such as police, water and sewer maintenance, street lighting, etc. is now a lie in many areas.   The Illinois Policy Institute audited all the cities of Illinois and found that in 10 of the cities including Chicago, all of the property taxes collected go only to pay public sector pensions.  This leaves a huge gap in the funding of local public services, which is why Chicago has the highest sales tax, some of the highest taxes on tobacco products, alcoholic beverages, etc.

OXFAM reported that during Obama’s terms, 95% of the wealth created went to the top 1% of the world’s wealthy.  This can be interpreted as proof that stimulus programs don’t work or, as I have argued, that the spending was never intended to stimulate the economy: only to bolster the equities values of public sector union pension plans, since they are the largest contributors to the Democratic Party’s national machine in all fifty states.  We are losing our incomes because we’ve been forced to subsidize Obama’s political party.   The debt, Fed balance sheet, and financial instability indicate there’s no end in sight. 

There are a number of conclusions we can draw from this. First of all, when workers in local municipalities formed unions, bad things happened. Unions donate to political candidates. Therefore people elected to municipal offices have an incentive to be nice to unions. How do you be nice to unions and also nice to taxpayers? When negotiating contracts, you provide benefits that will not immediately show up in the budget. You create unfunded liabilities such as permanent health care for retirees or wonderful pensions that employees don’t have to pay into.  Unfunded liabilities are the burden that is poised to sink many of our towns and cities in America.

In actuality, if the federal government had simply given every taxpaying American $40,000, the stimulus would have been cheaper and actually made a difference in the average American’s life. Instead, the President who claimed to represent the little people simply paid off the wealthy donors who paid to elect him.

What Does This Mean For America’s Future?

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The Washington Examiner reported today that the rate of homeownership in America has declined steadily since 2006.

The article includes the following graph:

HomeownershipThe article explains:

The only age group that saw a rising homeownership rate over the past year was 35-44-year-olds, with younger and older people turning more to renting.

So let’s take a look at this from a broader perspective. Part of the decline is due to the housing bubble. However, we need to look at the impact of homeownership on our society and how the decline in homeownership will impact us in the future.

Homeowners are invested in their houses and in their neighborhoods. Generally speaking they take pride in both and will endeavor to keep both their homes and neighborhoods clean and crime-free. Under most circumstances, a home will increase in value, providing a basic investment for people who may not be able to invest in other assets. The increase in renters means an increase in landlords, people who own the rental property. It seems to me that the increase in landlords and renters is an indication that the middle class is being squeezed out economically. I understand that in many parts of the country housing is extremely expensive, but there are also areas of the country where jobs are available and housing is reasonably priced. I fear that the decrease in homeownership represents a moving away from the idea of owning something, taking care of something, and having an asset in the future. It may be a reflection of our instant gratification society rather than an economic indicator. It also may be a reflection of the American culture versus the culture of the large number of immigrants currently coming to America from different countries. Private property rights are one of the backbones of our freedoms–other countries may not have those rights. In order to keep our middle class strong economically and help keep our neighborhoods crime-free, we need to encourage all Americans, whether they were born here or just arrived from another country, to own homes and take care of them.

The Real Number In The Economic Recovery

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Investor’s Business Daily posted an article today about the impact President Obama’s economic policies have had on middle-class Americans. The numbers are not good.

As you can see from the chart, there are more people in poverty, the median household income has dropped, and the average income for the bottom fifth of American households has gone done. That is not a recovery.

The article reports:

A couple of months ago, he (President Obama) was in Wisconsin, crediting his policies for “record” job growth, tumbling deficits and big gains in the stock market.

“Step by step, America is moving forward,” he said. “Middle-class economics works. It works. Yes!”

It’s hard to see any evidence of that in the Census numbers. Indeed, the latest report shows that, despite more than six years of economic “recovery,” the middle class is, incredibly, worse off than at the end of the Great Recession.

From 2009 to 2014, real median household income dropped by more than $1,000 — or 2.3% — to $53,657. (And that decline would likely have been steeper if not for a 2013 change in the way the Census does its annual survey.)

Obama’s economy has been particularly harsh on those already at the bottom. Census data show that the bottom fifth of households saw their average income fall by 8% from 2009 to 2014.

Looked at another way, the share of households with incomes below $25,000 climbed from 22.4% to 23.6% over those years.

Among blacks, it went from 35.5% to 36.8%.

President Obama has practiced policies of increased taxation, overregulation, and crony capitalism. All of these policies waste money and inhibit economic growth. Our debt is growing, and if we do not change course in the next election, we will probably not survive as a country.

Some Good News and Bad News In The October Employment Numbers

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Yesterday Investors.com posted an article about the employment numbers released by the Bureau of Labor Statistics on Friday.

The jobless rate is 5.8%, the lowest since June 2008. However, the Labor Force Participation Rate (the percentage of Americans of working age who are working) is at 62.8 percent, essentially flat since April according to the Bureau of Labor Statistics website.

Despite these relatively good numbers, consumer confidence is still low, Part of the reason for that is what has happened to Middle Income family income since 2007.

The article at Investors.com reports:

Real median household incomes fell 6.6% from $55,627 in 2007 to $51,939 at the end of last year. It will take years to recoup that loss. Meanwhile, male workers’ incomes have been in a tailspin for over a decade.

Private-sector wages grew 2% from last year in October — just barely ahead of the 1.7% rise in inflation.

So lack of opportunity stemming from 2% GDP growth and slow-growing family incomes have put average Americans in a sour mood.

The article at Investors.com further reports:

It’s policy failure. We and others repeatedly warned that President Obama’s massive stimulus, cheap money and heavy-handed regulation were a recipe for stagnation. That’s exactly what happened.

Each era of big government tinkering ends with the the economy being systematically run into the ground by Keynesian policymakers — and with economists pondering whether it’ll always be this way.

“Are you better off today than you were four years ago?” President Reagan famously asked in the 1980 campaign. Today, Americans seem to be saying no.

I hope the new Republican Congress will have the courage to encourage the President (strongly) to change direction.

The Unions Have Opposed ObamaCare For A While

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On July 18, the Schoolcraft County Republican Party website posted a copy of a letter from Jimmy Hoffa, Teamsters’ President, Joseph Hamsen UFCW President, and D. Taylor UNITE-HERE President.

This is the letter:

Dear Leader Reid and Leader Pelosi:

When you and the President sought our support for the Affordable Care Act (ACA), you pledged that if we liked the health plans we have now, we could keep them. Sadly, that promise is under threat. Right now, unless you and the Obama Administration enact an equitable fix, the ACA will shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class.

Like millions of other Americans, our members are front-line workers in the American economy. We have been strong supporters of the notion that all Americans should have access to quality, affordable health care. We have also been strong supporters of you. In campaign after campaign we have put boots on the ground, gone door-to-door to get out the vote, run phone banks and raised money to secure this vision.

Now this vision has come back to haunt us.

Since the ACA was enacted, we have been bringing our deep concerns to the Administration, seeking reasonable regulatory interpretations to the statute that would help prevent the destruction of non-profit health plans. As you both know first-hand, our persuasive arguments have been disregarded and met with a stone wall by the White House and the pertinent agencies. This is especially stinging because other stakeholders have repeatedly received successful interpretations for their respective grievances. Most disconcerting of course is last week’s huge accommodation for the employer community—extending the statutorily mandated “December 31, 2013” deadline for the employer mandate and penalties.

Time is running out: Congress wrote this law; we voted for you. We have a problem; you need to fix it. The unintended consequences of the ACA are severe. Perverse incentives are already creating nightmare scenarios:

First, the law creates an incentive for employers to keep employees’ work hours below 30 hours a week. Numerous employers have begun to cut workers’ hours to avoid this obligation, and many of them are doing so openly. The impact is two-fold: fewer hours means less pay while also losing our current health benefits.

Second, millions of Americans are covered by non-profit health insurance plans like the ones in which most of our members participate. These non-profit plans are governed jointly by unions and companies under the Taft-Hartley Act. Our health plans have been built over decades by working men and women. Under the ACA as interpreted by the Administration, our employees will treated differently and not be eligible for subsidies afforded other citizens. As such, many employees will be relegated to second-class status and shut out of the help the law offers to for-profit insurance plans.

And finally, even though non-profit plans like ours won’t receive the same subsidies as for-profit plans, they’ll be taxed to pay for those subsidies. Taken together, these restrictions will make non-profit plans like ours unsustainable, and will undermine the health-care market of viable alternatives to the big health insurance companies.

On behalf of the millions of working men and women we represent and the families they support, we can no longer stand silent in the face of elements of the Affordable Care Act that will destroy the very health and wellbeing of our members along with millions of other hardworking Americans.

We believe that there are common-sense corrections that can be made within the existing statute that will allow our members to continue to keep their current health plans and benefits just as you and the President pledged. Unless changes are made, however, that promise is hollow.

We continue to stand behind real health care reform, but the law as it stands will hurt millions of Americans including the members of our respective unions.

We are looking to you to make sure these changes are made.

James P. Hoffa
General President
International Brotherhood of Teamsters

Joseph Hansen
International President
UFCW

D. Taylor
President
UNITE-HERE

I am not under the illusion that union leaders will suddenly become conservatives–that is not going to happen. But understand that the unions provide the majority of funding and volunteers for Democrat Party candidates. The unions often pay their members to show up at rallies or to do stand-outs for Democrats. If the unions are unhappy with ObamaCare and decide to sit on their hands in 2014, the Democrat Party will be severely impacted. This is a letter that will that Congressmen Pelosi and Reid will read carefully.

Just for the record, the worst-case scenario on this would be for President Obama to somehow carve out an exception for the unions. Hopefully enough Americans are paying attention right now to prevent that from happening.

 

 

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