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The crisis of middle-class America

Toshi

Harbinger of Doom
Oct 23, 2001
29,534
3,011
http://www.ft.com/cms/s/2/1a8a5cb2-9ab2-11df-87e6-00144feab49a.html

The crisis of middle-class America
By Edward Luce
Published: July 30 2010 17:04 | Last updated: July 30 2010 17:04

The Freemans Mark and Connie Freeman live in north-west Minneapolis. They have a joint income – from several jobs – of $70,000. Last year they fought off repossession
Technically speaking, Mark Freeman should count himself among the luckiest people on the planet. The 52-year-old lives with his family on a tree-lined street in his own home in the heart of the wealthiest country in the world. When he is hungry, he eats. When it gets hot, he turns on the air-conditioning. When he wants to look something up, he surfs the internet. One of the songs he likes to sing when he hosts a weekly karaoke evening is Johnny Cash’s “Man in Black”.

Yet somehow things don’t feel so good any more. Last year the bank tried to repossess the Freemans’ home even though they were only three months in arrears. Their son, Andy, was recently knocked off his mother’s health insurance and only painfully reinstated for a large fee. And, much like the boarded-up houses that signal America’s epidemic of foreclosures, the drug dealings and shootings that were once remote from their neighbourhood are edging ever closer, a block at a time.

What is most troubling about the Freemans is how typical they are. Neither Mark nor Connie – his indefatigable wife, who is as chubby as he is gaunt – suffer any chronic medical conditions. Both have jobs at the local Methodist Hospital, he as a warehouse receiver and distributor, she as an anaesthesia supply technician. At $70,000 a year, their joint gross income is more than a third higher than the median US household.

Once upon a time this was called the American Dream. Nowadays it might be called America’s Fitful Reverie. Indeed, Mark spends large monthly sums renting a machine to treat his sleep apnea, which gives him insomnia. “If we lost our jobs, we would have about three weeks of savings to draw on before we hit the bone,” says Mark, who is sitting on his patio keeping an eye on the street and swigging from a bottle of Miller Lite. “We work day and night and try to save for our retirement. But we are never more than a pay check or two from the streets.”

...
 

stoney

Part of the unwashed, middle-American horde
Jul 26, 2006
15,866
2,096
Colorado
I for one, will likely cut my donations (currently around 5% of income) and my spending if taxes are raised. I have been eating out more lately, and that will stop. It might not be a lot, but that $300/week is going into the local economy.
I am pretty confident in the thought that the 5% I give directly to charitable organizations is a larger dollar amount than if I give it to the govt as taxes and see how they allocate it.
 

stevew

unique white person
Sep 21, 2001
34,104
4,432
instead of handing out crisp 20's to the homeless i've cut it back to chilled 40's of colt 45.

they don't complain.
 

Pesqueeb

bicycle in airplane hangar
Feb 2, 2007
31,098
6,150
Riding the baggage carousel.
:confused:
How the fvck are people making 70k a year who purchased a home for 50g 21 years ago not making ends meet? How is that possible? Where on earth are these people spending their money? We paid 168k for our house. The wife and I cleared very low 6o's last year, we pay extra against our principal every month, we pay extra on the motorcycle every month. We paid off our cars, the jeeps been paid for for 6 years, the subie for 2.5. WTF are these people spending money on?
/rant
 

Toshi

Harbinger of Doom
Oct 23, 2001
29,534
3,011
I for one, will likely cut my donations (currently around 5% of income) and my spending if taxes are raised. I have been eating out more lately, and that will stop. It might not be a lot, but that $300/week is going into the local economy.
I am pretty confident in the thought that the 5% I give directly to charitable organizations is a larger dollar amount than if I give it to the govt as taxes and see how they allocate it.
Besides the fact that your sentence doesn't quite make sense as written, how do you come to this conclusion? Have you factored in the cheap oil that our military subsidizes, the BART and Caltrain that your Cali taxes subsidize, your subsidized roads, fire and EMS services, etc.?

Hint: yuppies going out to dinner is not what makes America run.
 

Toshi

Harbinger of Doom
Oct 23, 2001
29,534
3,011
:confused:
How the fvck are people making 70k a year who purchased a home for 50g 21 years ago not making ends meet? How is that possible? Where on earth are these people spending their money? We paid 168k for our house. The wife and I cleared very low 6o's last year, we pay extra against our principal every month, we pay extra on the motorcycle every month. We paid off our cars, the jeeps been paid for for 6 years, the subie for 2.5. WTF are these people spending money on?
/rant
… their 20 year old autistic son? Health insurance? One of the families had a car payment, and in that case then I have less pity for them if they bit off more than they can chew.
 

Silver

find me a tampon
Jul 20, 2002
10,846
0
Orange County, CA
I for one, will likely cut my donations (currently around 5% of income) and my spending if taxes are raised. I have been eating out more lately, and that will stop. It might not be a lot, but that $300/week is going into the local economy.
I am pretty confident in the thought that the 5% I give directly to charitable organizations is a larger dollar amount than if I give it to the govt as taxes and see how they allocate it.
:rofl:
 

stoney

Part of the unwashed, middle-American horde
Jul 26, 2006
15,866
2,096
Colorado
Besides the fact that your sentence doesn't quite make sense as written, how do you come to this conclusion? Have you factored in the cheap oil that our military subsidizes, the BART and Caltrain that your Cali taxes subsidize, your subsidized roads, fire and EMS services, etc.?

Hint: yuppies going out to dinner is not what makes America run.
Toshi,
we've discussed this before. I WANT expensive oil, it will force people and corporations to become more efficient regarding transportation, distribution networks, etc. As for paying taxes, if Im paying out of pocket 70k/year I can be pretty confident that my putting that towards highways, public transport, and schools will have a greater effect than that amount broken over hundreds of states, municipalitites, and organizations sucking from
the public teet.
I would love to see a check box at the end of your taxes to say where your funds are going. Highways, schools, etc with a % next to each. Watch public funding work like private industry, where funds go where the public thinks they should. If no one puts money towards highways and they go to ****, watch the funds fly in next year. With public providers not knowing when thy might get money again, you would expect budgets to be run tight with unnecessary personel and expenditures cut.
I know it's a pipe dream, but the idea that 60% of GDP growth coming from govt spending is insane. The funds have to come from somewhere and it not public employee pay checks. It's coming from those of us who are working our asses off in private business to make money.
 

Silver

find me a tampon
Jul 20, 2002
10,846
0
Orange County, CA
Toshi,
we've discussed this before. I WANT expensive oil, it will force people and corporations to become more efficient regarding transportation, distribution networks, etc. As for paying taxes, if Im paying out of pocket 70k/year I can be pretty confident that my putting that towards highways, public transport, and schools will have a greater effect than that amount broken over hundreds of states, municipalitites, and organizations sucking from
the public teet.
I would love to see a check box at the end of your taxes to say where your funds are going. Highways, schools, etc with a % next to each. Watch public funding work like private industry, where funds go where the public thinks they should. If no one puts money towards highways and they go to ****, watch the funds fly in next year. With public providers not knowing when thy might get money again, you would expect budgets to be run tight with unnecessary personel and expenditures cut.
I know it's a pipe dream, but the idea that 60% of GDP growth coming from govt spending is insane. The funds have to come from somewhere and it not public employee pay checks. It's coming from those of us who are working our asses off in private business to make money.
:rofl:
 

dante

Unabomber
Feb 13, 2004
8,814
9
looking for classic NE singletrack
So let me get this straight... if you have an AGI of $250k / year (so salary WAY above it), and your taxes go from 33% to 36%, that means you'll pay an extra $7500 in taxes (per year).

Because of that, you're going to stop donating 5% ($12,500) and eating out for $300/week ($15,600).

Yeah, somehow I'm not buying that. You'll have to cough up an extra $7500, so you're going to cut $28,000 out of your budget?? Huh?
 

Pesqueeb

bicycle in airplane hangar
Feb 2, 2007
31,098
6,150
Riding the baggage carousel.
… their 20 year old autistic son? Health insurance? One of the families had a car payment, and in that case then I have less pity for them if they bit off more than they can chew.
They have health insurance, the article talks about how the first family had to pay "a large fee" to get the autistic son back on the insurance, which I could guess might be the cause of the fact that they are three months behind on the mortgage, if they didn't have any money saved and I still don't understand how that’s possible.

Figure nice round numbers: 70000/12-25% tax rate= 4375 a month. 30 year mortgage @8 percent on 50000 = 367 a month. That leaves them just over $4000 a month for bills, living expenses and the kid. The state is paying for the son to attend class at teh community college. I wouldn't know what it cost to raise an autistic kid per month. Going what I assume is high at 2G's a month for health care, meds, etc. that still leaves you almost 2000 a month to get by. Based on that math I can see how things might be tight, but I would be shocked if the family is spending 2 grand a month to support the kid but perhaps we should defer to MMike on that subject. I am by no means an expert on raising a child with a medical issue.


The second family is just as questionable IMHO. Husband makes 70k, wifey makes 10800 a year, that means they make over 80k a year. The family almost has the house paid off that by my math they purchased at roughly 55,000.
Mark calculated they have paid $163,000 so far on a house they bought for less than one-third of that amount
(163000 X .33333= 54,332) So where did the money go? Sure, the wife had a medical bill for $17000, but again, no savings? You mean to tell me the husband with the 70000 a year job has no insurance? :confused: Something in both of these cases just doesn't add up. The only thing I can figure is both of these families must have been using the houses as atm's to buy **** they didn't need. Just like tons of other families now so badly "suffering" because of the housing bust. If that’s the case, :nopity: Maybe the article is poorly written/edited or the families were not forthcoming. Else wise I just can't understand how someone making that damn much money with such low fixed expenses can have no savings and be in arrears.

What I do think the article speaks to is the growing income gap and middle class income stagflation, and the damage that our for profit "health care" industry does to people, and I do believe those are most assuredly issues that need to be addressed. But using these families as examples of that IMHO does not make that point at all, and again, the math doesn't add up.
 

Serial Midget

Al Bundy
Jun 25, 2002
12,867
1,678
Fort of Rio Grande
As individuals, we're the only ones who can adapt to our particular circumstances; neither of these stories seems particularly tragic or even news worthy. With the exception of an autistic child, I see no problems these people didn't create themselves. This middle class diaper fest annoys me.
 
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Pesqueeb

bicycle in airplane hangar
Feb 2, 2007
31,098
6,150
Riding the baggage carousel.
As individuals, we're the only ones who can adapt to our particular circumstances; neither of these stories seems particularly tragic or even news worthy. With the exception of an autistic child, I see no problems these people didn't create themselves. This middle class diaper fest annoys me.
:stupid:
This is exactly what I've been trying to say. :thumb:
 

stoney

Part of the unwashed, middle-American horde
Jul 26, 2006
15,866
2,096
Colorado
So let me get this straight... if you have an AGI of $250k / year (so salary WAY above it), and your taxes go from 33% to 36%, that means you'll pay an extra $7500 in taxes (per year).

Because of that, you're going to stop donating 5% ($12,500) and eating out for $300/week ($15,600).

Yeah, somehow I'm not buying that. You'll have to cough up an extra $7500, so you're going to cut $28,000 out of your budget?? Huh?
Principle. Either way, I am already jumping up two tax brackets due to my new job. The added increase is more insult than injury.
 

KavuRider

Turbo Monkey
Jan 30, 2006
2,566
3
CT
As individuals, we're the only ones who can adapt to our particular circumstances; neither of these stories seems particularly tragic or even news worthy. With the exception of an autistic child, I see no problems these people didn't create themselves. This middle class diaper fest annoys me.
:thumb:

The article lost me when it said "they are only 3 months behind on their mortgage". Seriously? I don't blame the bank for clamping down on their ass then.
 

Toshi

Harbinger of Doom
Oct 23, 2001
29,534
3,011
Principle. Either way, I am already jumping up two tax brackets due to my new job. The added increase is more insult than injury.
Why don't you go all John Galt and live a principled, poor, tax-free life instead? :rolleyes:
 

ohio

The Fresno Kid
Nov 26, 2001
6,638
4
SF, CA
Because I want to enjoy the fruits f my labors. I did the work, I want to reap the benefit.
You want to enjoy the fruits of your labor by NOT going out to dinner anymore?

And teach a lesson to the US government by ceasing to donate to NON-government organizations?

And you're upset that you jumped UP two tax brackets while working in finance in the midst of the worst financial crisis in at least 20 years?

I just want to make sure I have all of this understood clearly and accurately before I ridicule your logic mercilessly...
 

dante

Unabomber
Feb 13, 2004
8,814
9
looking for classic NE singletrack
Principle. Either way, I am already jumping up two tax brackets due to my new job. The added increase is more insult than injury.
Really? No offense, Mark, but that's one of the worst, most selfish things I've heard you say. You're doubling (more than doubling?) your salary. You're probably almost (actually?) doubling your take-home, since you won't pay SS tax on the additional amount that you're making. Hell, that alone probably makes up for any jump in income tax brackets. But, because of having to pay an extra $7,500 on this new salary that's 5 times the median income in this country you're going to cut back on charitable donations and on spending money (totally almost $30,000) that actually stays in your community just on general principle. New toys, new M3, that's fine, but no money for poor or for local people who might need it most.

:rolleyes:
 

kidwoo

Celebrating No-Pants Day
Aug 25, 2003
24,941
3,641
In my pants
So someone at least tell me I'm not the only one who scratches their head when joker references people on this forum that he gives financial advice to.

Who are you idiots?
 

Silver

find me a tampon
Jul 20, 2002
10,846
0
Orange County, CA
Really? No offense, Mark, but that's one of the worst, most selfish things I've heard you say. You're doubling (more than doubling?) your salary. You're probably almost (actually?) doubling your take-home, since you won't pay SS tax on the additional amount that you're making. Hell, that alone probably makes up for any jump in income tax brackets. But, because of having to pay an extra $7,500 on this new salary that's 5 times the median income in this country you're going to cut back on charitable donations and on spending money (totally almost $30,000) that actually stays in your community just on general principle. New toys, new M3, that's fine, but no money for poor or for local people who might need it most.

:rolleyes:
It makes perfect sense once you realize he has the principles of an insufferable cunt who unfortunately was born in the wrong country and time to have his neck under a guillotine blade.

Just when you think you can't think less of a person, they go and surprise you...
 
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stoney

Part of the unwashed, middle-American horde
Jul 26, 2006
15,866
2,096
Colorado
Really? No offense, Mark, but that's one of the worst, most selfish things I've heard you say. You're doubling (more than doubling?) your salary. You're probably almost (actually?) doubling your take-home, since you won't pay SS tax on the additional amount that you're making. Hell, that alone probably makes up for any jump in income tax brackets. But, because of having to pay an extra $7,500 on this new salary that's 5 times the median income in this country you're going to cut back on charitable donations and on spending money (totally almost $30,000) that actually stays in your community just on general principle. New toys, new M3, that's fine, but no money for poor or for local people who might need it most.

:rolleyes:
Dante - God I hate it (and really appreciate it) when you make me look at things from other angles. I'll have wife call the CPA to see where we settle with all of the changes. I didn't realize that my SS output didn't grow in kind with the income (always just assumed it did). That will make a big difference actually. I factor 30% of my income is a loss to taxes, and if that % doesn't change due to the drop in SS draw, I am flat and don't care. If it works out, which it sounds like it will, I'll give Wife a semi-free reign to donate to charities

As to Silver's comment, I was homeless a little over seven years ago, and while I was growing up we lived out of our van on multiple occasions. I and my Dad have busted our asses to get the opportunities that I have been able to take advantage of. I am living the American dream, and doing it on dollars that I have earned (instead of borrowing). If that level of hard work and frugality has made me an insufferable cunt, then so be it.

Ohio - Dante called it spot on by calling me selfish.
 

kidwoo

Celebrating No-Pants Day
Aug 25, 2003
24,941
3,641
In my pants
If that level of hard work and frugality has made me an insufferable cunt, then so be it.
Do you REALLY think that's why he called you that? Leave it to a selfish, insufferable cunt to play the victim. :rofl:



Come on man. Read your own posts sometime. No one is calling you names for getting a job and moving out of a van.


And yes I took the time to post this because I care. :cupidarrow:
 

Silver

find me a tampon
Jul 20, 2002
10,846
0
Orange County, CA
Ohio - Dante called it spot on by calling me selfish.
No, he didn't. He should have called you stupid as well. Palin stupid, actually. You seriously did all that ranting and had no idea that social security taxes phase out?

Let me guess, you think that "tax brackets" mean that all your income is taxed at the highest rate as well, dontcha?
 

Toshi

Harbinger of Doom
Oct 23, 2001
29,534
3,011
This thread has proved to be more fruitful than I had anticipated
 

ALEXIS_DH

Tirelessly Awesome
Jan 30, 2003
5,562
310
Lima, Peru, Peru
As individuals, we're the only ones who can adapt to our particular circumstances; neither of these stories seems particularly tragic or even news worthy. With the exception of an autistic child, I see no problems these people didn't create themselves. This middle class diaper fest annoys me.
i disagree.
is newsworthy as an anecdotal tale of the new american middle class and the problems it faces now (health care cost, housing bubble which probably werent as much of an issue a generation ago).

it also goes against what used to be a common perseption of being middle class in one of the wealthiest countries.
 

Serial Midget

Al Bundy
Jun 25, 2002
12,867
1,678
Fort of Rio Grande
i disagree.
is newsworthy as an anecdotal tale of the new american middle class and the problems it faces now (health care cost, housing bubble which probably werent as much of an issue a generation ago).

it also goes against what used to be a common perseption of being middle class in one of the wealthiest countries.
I'm just shy of 45 years old and I have heard similar stories every year since the 1970s, it seems someone is always left behind - usually because of their unwillingness or inability to adapt.
 

jimmydean

The Official Meat of Ridemonkey
Sep 10, 2001
31,199
4,466
Portland, OR
I'm just shy of 45 years old and I have heard similar stories every year since the 1970s, it seems someone is always left behind - usually because of their unwillingness or inability to adapt.
No, there is a serious gap where the middle class used to reside. Not saying there should be no personal responsibility, but the fact remains that the difference between the haves and have nots has been increasing quite a bit.

I blame Obama, it makes me feel better.
 

jimmydean

The Official Meat of Ridemonkey
Sep 10, 2001
31,199
4,466
Portland, OR
It's from the New York Post, but it makes some interesting points.

1. According to a 2009 poll, 61% of Americans “always or usually” live paycheck to paycheck, which was up from 49% in 2008 and 43% in 2007.
2. 36% of Americans say that they don’t contribute anything to retirement savings.
3. A staggering 43% of Americans have less than $10,000 saved up for retirement.
4. 24% of American workers say that they have postponed their planned retirement age in the past year.
5. The number of Americans with incomes below the official poverty line rose by about 15% between 2000 and 2006, and by 2008 over 30 million US workers were earning less than $10 per hour.
6. According to Harvard Magazine, 66% of the income growth between 2001 and 2007 went to the top 1% of all Americans.
7. In New York, the top fifth of earners collect more than 53% of the income; the bottom fifth takes home less than 3%.
8. Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32% increase over 2008.
9. Only the top 5% of households have earned enough additional income to match the rise in housing costs since 1975.
10. For the first time in US history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
11. In 1950, the ratio of the average executive’s paycheck to the average worker’s paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
12. As of 2007, the bottom 80% of American households held about 7% of the liquid financial assets.
13. The bottom 40% of income earners now collectively own less than 1% of the nation’s wealth.
14. Average Wall Street bonuses for 2009 were up 17% when compared with 2008.
15. The average income of the top fifth of New York families is 8.7 times greater than that of the bottom fifth. This is the biggest difference of all states.
16. The average income of families in the top 5% in New York was five times greater than the average income of families in the middle 20% of earners. Again this is the biggest difference of all states.
17. The average federal worker now earns about twice as much as the average worker in the private sector.
18. An analysis of income tax data by the Congressional Budget Office found that the top 1% of US households own nearly twice as much of America’s corporate wealth as they did just 15 years ago.
19. The average time needed to find a job has risen to a record 35.2 weeks.
20. More than 40% of Americans who are employed now work in often low-paying service jobs.
21. For the first time in US history, more than 40 million Americans are on food stamps, and the US Department of Agriculture projects that number will go up to 43 million Americans in 2011.
22. What American workers compete with: In China a garment worker makes approximately 86 cents an hour, and in Cambodia it’s 22 cents an hour.
23. Despite the financial crisis, the number of millionaires in the US rose a whopping 16% to 7.8 million in 2009.
24. About 21% of all children are living below the poverty line in 2010 — the highest rate in 20 years.
25. According to Professor Emmanuel Saez of the University of California at Berkeley, the top 10% percent of Americans now take in approximately 50% of the income.
 

jimmydean

The Official Meat of Ridemonkey
Sep 10, 2001
31,199
4,466
Portland, OR
Also, while it may not be the norm, in my industry, the pay difference between the CEO and the lowest paid is staggering. And while there have been no raises at my company in 3 years, management has not had to take pay cuts.

I know I make about half what I'm worth here in Southern Oregon compared to Portland, but that isn't the case at the executive level.
 

Silver

find me a tampon
Jul 20, 2002
10,846
0
Orange County, CA
I'm just shy of 45 years old and I have heard similar stories every year since the 1970s, it seems someone is always left behind - usually because of their unwillingness or inability to adapt.
Sure, if you ignore every economic number related to wealth equality in the US over the last 45 years. Which you apparently have been.

edit: Income mobility, also.
 
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SkaredShtles

I love NEWCASTLE and will ONLY drink NEWCASTLE!!!!
Sep 21, 2003
51,779
4,686
In a van.... down by the river
It's from the New York Post, but it makes some interesting points.

1. According to a 2009 poll, 61% of Americans “always or usually” live paycheck to paycheck, which was up from 49% in 2008 and 43% in 2007.
2. 36% of Americans say that they don’t contribute anything to retirement savings.
3. A staggering 43% of Americans have less than $10,000 saved up for retirement.
4. 24% of American workers say that they have postponed their planned retirement age in the past year.
5. The number of Americans with incomes below the official poverty line rose by about 15% between 2000 and 2006, and by 2008 over 30 million US workers were earning less than $10 per hour.
6. According to Harvard Magazine, 66% of the income growth between 2001 and 2007 went to the top 1% of all Americans.
7. In New York, the top fifth of earners collect more than 53% of the income; the bottom fifth takes home less than 3%.
8. Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32% increase over 2008.
9. Only the top 5% of households have earned enough additional income to match the rise in housing costs since 1975.
10. For the first time in US history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
11. In 1950, the ratio of the average executive’s paycheck to the average worker’s paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
12. As of 2007, the bottom 80% of American households held about 7% of the liquid financial assets.
13. The bottom 40% of income earners now collectively own less than 1% of the nation’s wealth.
14. Average Wall Street bonuses for 2009 were up 17% when compared with 2008.
15. The average income of the top fifth of New York families is 8.7 times greater than that of the bottom fifth. This is the biggest difference of all states.
16. The average income of families in the top 5% in New York was five times greater than the average income of families in the middle 20% of earners. Again this is the biggest difference of all states.
17. The average federal worker now earns about twice as much as the average worker in the private sector.
18. An analysis of income tax data by the Congressional Budget Office found that the top 1% of US households own nearly twice as much of America’s corporate wealth as they did just 15 years ago.
19. The average time needed to find a job has risen to a record 35.2 weeks.
20. More than 40% of Americans who are employed now work in often low-paying service jobs.
21. For the first time in US history, more than 40 million Americans are on food stamps, and the US Department of Agriculture projects that number will go up to 43 million Americans in 2011.
22. What American workers compete with: In China a garment worker makes approximately 86 cents an hour, and in Cambodia it’s 22 cents an hour.
23. Despite the financial crisis, the number of millionaires in the US rose a whopping 16% to 7.8 million in 2009.
24. About 21% of all children are living below the poverty line in 2010 — the highest rate in 20 years.
25. According to Professor Emmanuel Saez of the University of California at Berkeley, the top 10% percent of Americans now take in approximately 50% of the income.
You know 98% of statistics are made up, right? :D
 

jimmydean

The Official Meat of Ridemonkey
Sep 10, 2001
31,199
4,466
Portland, OR
An interesting piece from this mornings WSJ.

http://finance.yahoo.com/family-home/article/110258/us-economy-is-increasingly-tied-to-the-rich

Who cares how the rich spend their money?

Well, perhaps everyone should these days. Consumer spending accounts for roughly two-thirds of U.S. gross domestic product, or the value of all goods and services produced in the nation. And spending by the rich now accounts for the largest share of consumer outlays in at least 20 years.

According to new research from Moody's Analytics, the top 5% of Americans by income account for 37% of all consumer outlays. Outlays include consumer spending, interest payments on installment debt and transfer payments.

By contrast, the bottom 80% by income account for 39.5% of all consumer outlays.

It is no surprise, of course, that the rich spend so much, since they earn a disproportionate share of income. According to economists Emmanuel Saez and Thomas Piketty, the top 10% of earners captured about half of all income as of 2007.