The rich getting richer and the poor......

[safeharbor37]

........Wealth and Income are not the Same........
One of the most enduring economic myths in our society is that the rich keep getting richer, while the poor keep getting poorer.
It isn't true.............
The households of people ages 70-74 have the highest average wealth of any age group in America, but less than half the income of those in the 35-44 age bracket................Real disposable income, which is essentially total after-tax income, rose 25.2 percent from 2000 to 2009. At the same time, however, households got smaller, as more people divorced, or rejected or delayed marriage. So total spending went up, while average household income — due to the larger number of households — went down...................We often hear, for example, that the top 20 percent of U.S. households receive roughly 50 percent of total income, while the bottom 20 percent receives less than 4 percent. According to the Census Bureau's household data and quintile distribution, this is correct...............The problem is that we are not told that the top 20 percent of households includes four times as many workers as the bottom 20 percent, and nearly six times as many full-time, year-round workers.
.... from 1996 and 2005.....Almost 58 percent of those in lowest income group in 1996 moved to a higher group by 2005. About a fourth of them rose to middle- or upper-middle class incomes; more than 5 percent made it into the highest income group — in 10 years. The only group experiencing a decline in income was the richest 1 percent. This is hardly what most people have been led to believe.
www.sacbee.com/2011/03/23/3499318/cunningham-wealth-income-are-not.html

Statistics don't lie, but liars sure can do statistics ~ and quote them.

[jkapp]

Like I always say, statistics are so abstract you can pretty much get any number/result you want

[Mkitty is pro kitty]

Statistics don't lie, but liars sure can do statistics ~ and quote them.

Like I always say, statistics are so abstract you can pretty much get any number/result you want

OMZG!!!! People misuse statistics!!!1! Well people misuse words too, so for consistency's sake are you going to stop using them too? Hey, words don't lie, but liars sure can do words/sentences and quote them; like I always say, words are so abstract, you can pretty much get any sentence/meaning you want

I await your well-worded response.

[safeharbor37]

Statistics don't lie, but liars sure can do statistics ~ and quote them.

[rockon]

Or figures lie and liars figure.. Or as one lawyer said.. If the laws are in your favor use the laws. If the facts are in you favor then use facts and if neither are in your favor then you have to claim insanity, incompetence, racism or try to marginalize your opponent. Sound familiar?

[Savoir Faire-Demogague in NJ]

Or figures lie and liars figure.. Or as one lawyer said.. If the laws are in your favor use the laws. If the facts are in you favor then use facts and if neither are in your favor then you have to claim insanity, incompetence, racism or try to marginalize your opponent. Sound familiar?

Yes, or just say you are making up the facts, even when one is quoting a credible source.

Reminds me of a few months ago, when I made a post about a lady I met online who grew up in Venezuela. She told me her opinion of Chavez, which I posted here. Immediately, the usual suspects went into attack mode.

[Deleted]

Mar 28, 2011 12:04:10 GMT -5 safeharbor37 said:

Statistics don't lie, but liars sure can do statistics ~ and quote them.

Are we to assume that the quote from the OP is exempt from that statement?

[safeharbor37]

The article is very short and to the point. It makes a few points which contradict what one sees every day in the media and on this board. It's mainly informative.
The article is not balanced, it is balance . There are two sides [or more] to every story, but we rarely get one side or the other so we have to take advantage of opportunities to counter folk wisdom [or propaganda] or we'll be led down the garden path by smooth talking seducers who have everything but our best interest in mind.
It's interesting how often people just keep arguing their point of view without ever trying to inform it. Click the link, read the article. You'll be better informed no matter what your opinion.

[safeharbor37]

Are we to assume that the quote from the OP is exempt from that statement?

No. It merely adds to ones information if one chooses to take advantage of it. {see my post above]

[AgeOfEnlightenmentSCP]

The problem is that we are not told that the top 20 percent of households includes four times as many workers as the bottom 20 percent, and nearly six times as many full-time, year-round workers.

Work = Income? Get outta here! WHY don't they tell us this stuff?!?

[henryclay]

Work = Income? Get outta here! WHY don't they tell us this stuff?!?

Well, it's like this paul. If people were out working, , , look how many people would lose their jobs.

I talked to a retraining class a while back. They had signed up because they were laid off and on union benefits and unemployment. Some of them were completely happy. The comment was made that if it weren't for them being on the dole all the people who kept their benefits coming would be out of a job.

Now there's an example of genius for you. Pure genius.

[formerexpat]

I'm not sure why anyone reads and article of an authors interpretation of statistics and takes the opinion as fact.

A lot of authors have no background or understanding of math and statistics. I tend to agree with what Mr Cunningham has said in this article [based on my own review of the statistics] and his background in economics, statistics and mathematics seem to speak highly to his competence about understanding and digesting the information compared to some others that write about the topic.

[handyman2]

Tis true some of the rich are getting richer but the margin is getting smaller. Some of the rich are just treading water and some rich are getting poorer but not poor.

[AgeOfEnlightenmentSCP]

Mar 28, 2011 17:49:34 GMT -5 henryclay said:

Work = Income? Get outta here! WHY don't they tell us this stuff?!?

Well, it's like this paul. If people were out working, , , look how many people would lose their jobs.

I talked to a retraining class a while back. They had signed up because they were laid off and on union benefits and unemployment. Some of them were completely happy. The comment was made that if it weren't for them being on the dole all the people who kept their benefits coming would be out of a job.

Now there's an example of genius for you. Pure genius.

That's not unlike the former Speaker of the House of Representatives, the third in line for the Presidency, Nancy Pelosi saying that unemployement creates jobs

[hello fromWarsaw]

Horse patoot. The top 2% have doubled their wealth under voodoo, the top 1% quadrupled, and the top 413 families make as much as the bottom 60% of the population. The rich/poor gap has never been as big, upward mobility never so low. 70% believe the rich should be taxed more, and nothing happens. Pffffft!

[hello fromWarsaw]

Jay Coggins says your boy and his council are full of crappe, and are playing games:

www.startribune.com/opinion/commentary/118806644.html

my dam* computer anyway...somebody copy that tyvm...

[dancinmama]

Mar 29, 2011 0:13:05 GMT -5 hello fromWarsaw said:

Horse patoot. The top 2% have doubled their wealth under voodoo, the top 1% quadrupled, and the top 413 families make as much as the bottom 60% of the population. The rich/poor gap has never been as big, upward mobility never so low. 70% believe the rich should be taxed more, and nothing happens. Pffffft!

Okay, but the question is, "What would you consider rich?" If you look at the cost of living in New York City or San Francisco, it's hugely different from the cost of living in other areas of the country. $100-150K does not go nearly as far. So how do you determine WHO is going to pay more?

[hello fromWarsaw]

Economists, a famously contentious bunch, disagree about many things. On the question of economic inequality, though, they disagree hardly at all: American inequality is high and rising.

Economists use three main tools to study inequality. They measure poverty.

They compute the Gini coefficient. And they compare the income or wealth of the rich (or the very rich) to that of the rest of us.

On all of these counts the U.S. record since 1970 is grim for all but those at the top.

The Census Bureau's 2009 poverty threshold for a family of two adults with two children was $21,756; for a single adult aged less than 65, it was $11,161.

The poverty rate, giving the percentage of Americans living below this threshold, varies over time as the economy waxes and wanes.

Lately it's been rising. In 2009, 43 million Americans, one of every seven (14.3 percent), lived in poverty. That's up from 25.5 million (12.6 percent) in 1970.

The Gini coefficient measures inequality for all of us, not just the poor. It can be zero (if income is distributed equally); it can be 100 (if, impossibly, a single family captures the entire national income), or anything in between.

A higher Gini means more inequality.

The Census Bureau tells us the U.S. Gini has risen from 39.4 in 1970 to 46.2 in 2000, and to 46.8 in 2009.

Government programs and taxes can and do reduce inequality, though. After accounting for their effects, the U.S. Gini coefficient falls to 38.

How does this compare to Ginis for other rich countries? We take the top prize. Our 38 leaves us tied with Portugal atop the rankings of the richest countries. American exceptionalism indeed.

Not since the Roaring Twenties have the richest in America had it so good.

Economists Thomas Piketty and Emmanuel Saez have calculated the share of U.S. income going to the top 1 percent of American households.

The share was a lofty 18.9 percent in 2007, more than double the 8.3 percent from 1970. The 2007 number was last surpassed in 1928, when the share reached 19.6 percent.

And the other rich countries? The most recent numbers for Germany and Japan, for example, are 8.9 percent and 9.2 percent. We win again, going away.

Inequality of income is high, but inequality of wealth is much higher still. Those on Forbes magazine's 2010 list of the 400 richest Americans, headed by Bill Gates with a net worth of $54 billion, together own wealth totaling $1.27 trillion.

Compare that with the total net worth of the bottom 50 percent of households: $1.61 trillion as of 2007, the most recent number.

That's right. The 400 richest people in the country are worth nearly as much as the poorest 57 million households.

And the Gini coefficient for household wealth, as opposed to income? An eye-popping 86.5.

Income mobility, on which Cunningham dwells at some length, is different than inequality, but related in an important way.

High mobility, if true, sums up the American dream and lightens the burden of inequality. It means that the poor have a good chance to climb the economic ladder.

Economists measure mobility in different ways. Some compare all families at two different moments, say 10 years apart; they find that mobility appears to be relatively high.

This is the approach taken in the government reports cited by Cunningham.

It has a serious weakness. Using it, much of what appears to be mobility is just college students beginning their careers or older workers retiring.

That's not income mobility. It's the normal cycle of economic life.

One can, more usefully, compare families only to others in the same age cohort over time. By this measure mobility is much lower, and it's hardly budged in two generations.

In a recent study, economist Wojciech Kopcuz of Columbia and his coauthors estimated mobility by looking within cohorts.

They found that only about one person in 30 can expect to move from the bottom 40 percent of the income scale into the top 20 percent within 10 years. Mobility is not high, and it is not rising.

There exists a determined and noisy band of American inequality deniers, to which Cunningham evidently belongs. We all need to on guard against believing the things they know that just ain't so.

In other words, Pffft!! You've been duped AGAIN!! Pub dupes!!

[hello fromWarsaw]

And that's the way it's going to stay as long as Pubs get their way ffs.
Oh, sorry. But it appears you are repeating US history. The non rich have to fight, for their right, etc. And the greedy mega rich Pubs have a huge propaganda machine, part of which is this bought off Economic Research Council.

[straydog]

HC:
I talked to a retraining class a while back. They had signed up because they were laid off and on union benefits and unemployment. Some of them were completely happy. The comment was made that if it weren't for them being on the dole all the people who kept their benefits coming would be out of a job.

SD: I really like how these liberal pundits go on TV and say things like:

"Laying of too many government employees will be devastating to an already fragile economy."

This is partially true, a whole lot of government employees losing their jobs will certainly take some spending out of the economy, but in the long run, the taxes to pay for those workers should also go down, A good amount of the 'Mickey Mouse' regulations that they enforce will either go unenforced, or should just be written out completely.

So it will hurt a little in the short run, but in the long run, lower taxes, less regulators and regulations, and increased savings (that will strengthen the lending power of the banks) should create a business boom which will more than compensate for the loss of spending of the formerly employed government workers-who will hopefully now be working in the private sector.

[privateinvestor]

Mar 29, 2011 6:13:29 GMT -5 @toughtimes said:

Well guys, I'm working and seeing half the income I did before, so it's not like I'm getting wealthier. In fact, I'm taking money out to survive even while working 37 1/2 weeks. If work made one rich, the richest people of all would be the illegal aliens.

Thanx for sharing that with us here...but remember toughtimes don't last forever and there is always 2012..toughtimes.

Rich people make money the old fashioned way, they earn it with a few exceptions of course. They inherit, invest, and use creative tax accountants...try it sometime toughtimes you might like it

[rockon]

Have to disagree that all rich people make money the old fashion way, by earning it. I'm afraid many are making and keeping their money by making donations to the right elected government officials.
The concept of a progressive tax rate fixing any inequality problem is just a myth. We already have a very progressive tax rate and the very wealthiest still avoid paying their share of taxes. We just need to cut off the money flow between these individuals and our elected officials (otherwise known as bribery), enforce a simple and fair tax for all and most of these issues would resolve themselves.
One other fact that must be considered in these studies is that as we raise the income amount that qualifies families as impoverished there will naturally be a higher number of people considered to be impoverished. The same happens as our government keeps instituting new programs for "helping" people. It's a vicious cycle because the number of dependents just increase which then allows the government to "help" more people.

[safeharbor37]

rekon,
Your remark about the "progressive" income tax system brings up the subject of the difference between "tax rates" and "tax collected." The argument about "tax rates" [Bush tax cuts for the rich] is misleading intentionally because it serves the agenda of liberal Democrats. Real tax reform would require at least that "tax rates" be directly related to "the tax actually paid." Deductions and other "tax breaks" explain most of the discrepancy between perceived tax rates and actual tax rates, but every government regulation has potential to disrupt legitimate income and the taxes paid on it.

[Value Buy]

I have to ask.
Do the illegal immigrant families count in the statistics?
I would assume they would fall into the lower economic groups.

We also have to figure in the underground economy, which no one ever talks about any more. It is huge, and does not get counted in the statistics.

[dancinmama]

Mar 29, 2011 1:44:19 GMT -5 hello fromWarsaw said:

And that's the way it's going to stay as long as Pubs get their way ffs.
Oh, sorry. But it appears you are repeating US history. The non rich have to fight, for their right, etc. And the greedy mega rich Pubs have a huge propaganda machine, part of which is this bought off Economic Research Council.

Seems to me there are plenty of rich Dems.

[dancinmama]

It seems to me that part of the problem for the poor is the lack of jobs (and I'm talking about prior to the recession).

In recent years, U.S. policies have encouraged a shift in jobs overseas. If these jobs had stayed in the U.S. where they belong, perhaps the rich/poor gap would not be as great. I know it would still be bad, but people who cannot get jobs are going to be in poverty.

[AgeOfEnlightenmentSCP]

Mar 29, 2011 0:13:05 GMT -5 hello fromWarsaw said:

Horse patoot. The top 2% have doubled their wealth under voodoo, the top 1% quadrupled, and the top 413 families make as much as the bottom 60% of the population. The rich/poor gap has never been as big, upward mobility never so low. 70% believe the rich should be taxed more, and nothing happens. Pffffft!

The rich ARE taxed more. In fact, they're the ONLY ones that pay. The working poor and middle class pay the low, flat, payroll tax. ALL other taxes are paid by the "rich".

Consider the federal income tax...

The top 50% of income earners pay 97% of all income taxes collected

The top 1% of income earners pay 39% of all income taxes collected (That, by the way, is UP 2% from 2000 when Bush took office)

And this is a fact. It is not in dispute:

In 1980, when the top income tax rate was 70%, the richest 1% paid only 19% of all income taxes, now- with a top rate of 35%, they pay more than double that share.

online.wsj.com/article/SB119786208643933077.html

Last week the Congressional Budget Office joined the IRS in releasing tax numbers for 2005, and part of the news is that the richest 1% paid about 39% of all income taxes that year. The richest 5% paid a tad less than 60%, and the richest 10% paid 70%. These tax shares are all ...

[safeharbor37]

I think that most would learn from reading Cunningham's article for the information it provides. www.sacbee.com/2011/03/23/3499318/cunningham-wealth-income-are-not.html
As I previously stated, it is not "balanced," but provides "balance" to articles such as that by Coggins which are the sort that you're most likely to see referenced in the MSM.
"Income mobility, on which Cunningham dwells at some length....has a serious weakness. Using it, much of what appears to be mobility is just college students beginning their careers or older workers retiring." from Coggins, suggests that "college students beginning their career" are from families which are in the same income bracket as the one to which the recent graduate aspires. He doesn't say so, but it does suggests that the professor also has an ax to grind.
Cunningham's article's title is "Wealth and Income are not the Same" and has a lot to do with his conclusions. Some are too dense to pick up the point and it's probably not worth the effort to try to explain to those or to those who don't bother to read or think, but note that if one has a million dollars in a savings account, the income from that million dollars would probably put the "millionaire" at the poverty level in terms of income, but at a net worth of a million dollars + value of house, etc., one would also be considered "rich."
I'm just trying to shed some light on the matter.

[workpublic]

How did people dramatically increase spending on shrinking paychecks?

easy credit?

[safeharbor37]

How did people dramatically increase spending on shrinking paychecks? The answer is: They didn't.

They did increase spending. But paychecks weren't shrinking.

Instead, the number of individuals per U.S. household was shrinking, which lowered the average.

Real disposable income, which is essentially total after-tax income, rose 25.2 percent from 2000 to 2009. At the same time, however, households got smaller, as more people divorced, or rejected or delayed marriage. So total spending went up, while average household income — due to the larger number of households — went down. www.sacbee.com/2011/03/23/3499318/cunningham-wealth-income-are-not.html