Tag Archives: Middle Class

News

Annual median household income down $4,500 since Democrats won Congress in 2006

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Median Household Income Under Obama
Median Household Income Under Obama

The Wall Street Journal reports.

Excerpt:

The recovery that began four years ago has been one of the weakest on record, averaging a little more than 2%. And it has not gained speed. Growth in the fourth quarter of 2012 was 0.4%. It rose to a still anemic 1.8% in the first quarter but most economists are predicting even slower growth in the second quarter.

We hope the predictions of a faster growth in the second half will be right, but the Obama Treasury and Federal Reserve have been predicting for four years that takeoff was just around the corner. Stocks are doing great, and housing prices are rising, but job growth remains lackluster. What has never arrived is the 3%-4% growth spurt during typical expansions.

[…]What about the middle class that is the focus of Mr. Obama’s rhetoric? Each month the consultants at Sentier Research crunch the numbers from the Census Bureau’s Current Population Survey and estimate the trend in median annual household income adjusted for inflation. In its May 2013 report, Sentier put the figure at $51,500, essentially unchanged from $51,671 a year earlier.

And that’s the good news. The bad news is that median real household income is $2,718, or 5%, lower than the $54,218 median in June 2009 when the recession officially ended. Median incomes typically fall during recessions. But the striking fact of the Obama economy is that median real household income has fallen even during the recovery.

While the declines have stabilized over the last two years, incomes are still far below the previous peak located by Sentier of $56,280 in January 2008. No wonder Mr. Obama is now turning once again to his familiar political narrative assailing inequality and blaming everyone else for it. He wants to change the subject from the results on his watch.

The core problem has been Mr. Obama’s focus on spreading the wealth rather than creating it. ObamaCare will soon hook more Americans on government subsidies, but its mandates and taxes have hurt job creation, especially at small businesses. Mr. Obama’s record tax increases have grabbed a bigger chunk of affluent incomes, but they created uncertainty for business throughout 2012 and have dampened growth so far this year.

The food stamp and disability rolls have exploded, which reduces inequality but also reduces the incentive to work and rise on the economic ladder. This has contributed to a plunge in the share of Americans who are working—the labor participation rate—to 63.5% in June from 65.7% in June 2009. And don’t forget the Fed’s extraordinary monetary policy, which has done well by the rich who have assets but left the thrifty middle class and retirees earning pennies on their savings.

Mr. Obama would have done far better by the poor, the middle class and the wealthy if he had focused on growing the economy first. The difference between the Obama 2% recovery and the Reagan-Clinton 3%-4% growth rates is rising incomes for nearly everybody.

And remember, thanks to Obamacare, medical insurance premiums have soared over $3,000. We are getting poorer because of Obama’s big government policies.

Whose fault is it?

In the 2006 mid-term elections, the Democrats took over the House and Senate. That was the beginning of the Nancy Pelosi and Harry Reid spending spree. Millions of dollars have been wasted on ineffective government programs, handouts and bailouts. We’ve had trillion dollar deficits for the last four years under Obama, and over 8 trillion added to the national debt since Pelosi/Reid 2007. All that deficit spend does have an effect on economic growth – businesses know that they are going to have to pay it off at some point, either through higher taxes or inflation or both.

News

Democrat-run California now leads America in poverty rankings

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From the Daily Caller, a story about what happens when you allow Democrats to dominate at every level of government for years and years and years.

Excerpt:

The Golden State has reached a poverty rate that is now twice as bad as West Virginia’s and substantially worse than the rates of poverty in Mississippi, Alabama, Arkansas and Texas, according to a new measure of poverty developed by the federal Census Bureau.

Democrat-run California earned its last-place rank under the federal government’s new measure of poverty, which incorporates more detailed analyses of welfare payments and the local costs of food, gasoline and housing. (View the new census data report)

The state’s costs are boosted by its environmental and workplace regulations, and by 38 million residents’ competition for housing close to the sea.

[…]Democratic California Gov. Gerry Brown’s office did not release a comment Nov. 15 about the new ranking, but did note that he would be attending a housing conference, the “Greenbuild International Conference and Expo,” in San Francisco Nov. 16.

[…]The report estimates that roughly 8.8 million people in California were poor during between 2009 and 2011, when Democrats controlled the state legislature and governorship, as well as the White House.

The stunning reversal in fortunes for the Democrat-dominated state — once a worldwide symbol of glitz and wealth — is underlined by previous census reports, which showed that only 11.1 percent of the state’s population was poor in 1969.

Only 13.7 percent of Americans were poor in 1969, and many of them were found in the agricultural states of the Old South. A third of Americans in Mississippi, and a quarter of Americans in Arkansas, Louisiana, South Carolina and Western Virginia, were poor.

Forty years later, after waves of federal and state regulations on housing, banking, health care and air quality, and amid increased financial aid for unmarried parents, youth, immigrants and unskilled people, the national poverty rate has climbed to 15.8 percent, according to the new Census Bureau measure.

The new measure supplants a poverty gauge developed in the 1960s. It incorporates the economic impact of welfare programs, transportation and child-care costs, changes in child-rearing practices — especially the impact of single parents raising kids — plus differences in the region’s average prices and health care costs.

The new ranking leaves California at the bottom, along with and close to the 23.2 percent poverty rate in the District of Columbia.

[…]The well-being of Californian children has also shriveled in recent decades, partly because of the state’s declining education sector, according to a July report by the Annie E. Casey Foundation.

California just voted to raise their state income tax. Because they do not understand economics. They do not ask how a policy impacts all people. They do not think beyond stage one. They do not learn from history and experience. Economics is just not what socialists *do*. The primary goal of the socialist is to demonize the other, to feel good about himself, and to project an image to others of being “nice” in order to be liked. When you elect narcissists like this, all you get is rhetoric, never results.

That rhetoric certainly seems to work on certain segments of the electorate – those who don’t follow current events and who don’t understand economics. The truth is that hard-headed capitalism, the rule of law, free trade and property rights, helps the poor more – by growing the economy so that the poor will have jobs. We need to learn as a nation that demonizing “the rich”, raising taxes and spending ourselves into enormous debt is not going to help the poor. Self-aggrandizing talk doesn’t help the poor.

Commentary

How would raising taxes on the rich affect middle class working families?

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Investors Business Daily explains.

Excerpt:

Raising taxes on all those above $250,000 as Obama proposes would raise just $34 billion. That’s a whopping 3% of our $1.1 trillion deficit. Even if you seized all their income, it would only run the government for three months.

So the idea that taxing the wealthy will reduce the deficit is false. This is just class warfare, pure and simple.

Even so, Obama compounds the fib by going on to say his tax hike will have virtually no impact on small businesses. He notes, for example, that 97% of all small businesses would be untouched by his tax hike.

True, but irrelevant, as Treasury Department data show. For while there are 34.8 million small businesses in America, 30 million of those employ no workers.

Just 4.8 million, or 12%, employ workers. But an even smaller number — just 1.2 million — earn 91% of all the small business income. These are Obama’s “rich.”

But while they make up just 3% of all small businesses, they employ a stunning 54% of the total private U.S. workforce.

They are, in short, the nation’s job creators. And their owners, who report their small-business income on their personal income tax return, will be taxed at a higher rate by Obama.

So don’t be fooled. It’s not really the “wealthy,” as Obama says, who’ll get taxed. It’s small businesses. And it will have a devastating impact on jobs.

How devastating? A recent study by Ernst & Young noted that Obama’s tax hike, far from being “balanced,” would cost 700,000 people their jobs.

And it will no doubt kill hundreds of thousands if not millions more jobs in the future as would-be entrepreneurs decide not to start businesses in such a hostile tax and regulatory environment.

It’s important for us to realize that the people voting for Obama have no idea about these facts. A lot of people are annoyed that we lost the election last week. I think that if we want to win the next one then we have to start to think about becoming more persuasive with the people around us. We have to learn to deflate the slogans of those on the left with facts.