Meanwhile, the greatest threats to our Democracy is the concentration of the wealth in the hands of the few, the growing gap between the upper and lower middle class, the ignorance, know-nothing thinking, greed and the venality of Trump and his legion of haters, bigots, and flat-earthers!. The increase in poverty is related to many factors. The first factor has been the decline of the middle class as our economic society has changed from diamond shape with a large middle class and small levels of the very poor and the very rich and the top and bottoms of the diamond to an hourglass with a small middle class at the pinch of the hourglass along with a large lower middle class and poor on the bottom and with a growing number of upper middle class and rich at the top.
Since Reagan resources have been flowing to the rich through fiscal policies regarding taxation and spending. In 1980, there were 12 billionaires, today there are over 735. The wealth of America has flowed from the large middle class to 735 families which control over $4.7 trillion of America’s wealth, and the 3-4% (12-5 million) who control another $5-2 trillion. The six Walmart heirs, who control $150 billion, have more wealth than the bottom 40% of the American population. This trend was accelerated in the four years of the Trump Administration. In 2016, there were 525 Billionaires and by December of 2022, that number grew to 735 and increase of 40%. Currently Elon Musk’s net worth is estimated to be $219 billion. (who knows now?)
Under Nixon and other presidents there was revenue-sharing to the states, but that has declined. This revenue funded infrastructure projects which created domestic jobs. Under Republican Administrations there has been a trend towards corporate conglomeration, the rise of giant box stores and marginalization of labor. As the influence of trade unions has declined, real wages have not kept up with inflation. Corporate compensation for high paid executives accelerated dramatically from 1970 through 2000, with a 3500% increase in Fortune 500 CEO pay as their wages went from a ratio of 37 to one over their average employee to over 1000 to one. In the same vein they received a tax cut from the Kennedy top bracket of 70% to Reagan’s 28%. The average worker in these companies saw his real wages go up, after discounting inflation, less than 10%. In 2017, US Corporations paid a smaller percentage into the Federal Treasury than at any time since the Federal Income Tax (FIT) was established in 1916.
In 2019, the Federal Reserve published its 40 year (since 1980) evaluation of Asset Allocation. In those 40 years, $21 trillion went to the 1% and $900 billion was lost by the bottom 50%! If one added $4 trillion that was also transferred to the next 3-4% of the top earners, the total transference would be about $25 trillion. As anyone can see, $25 trillion is a lot of money! It basically reflects the Republican incurred deficits (Recessions and recoveries) since the end of Bill Clinton’s 2nd term, when the National Debt stood at $5 trillion. It is now about $30 trillion,
Many on the right complain about the National Debt and its threat to our economic stability, but few are being realistic about what can be done. The Debt cannot be balanced on the backs of people who least can afford to pay or afford to lose vital services. That is a formula for social upheaval and revolution. Again, the National Debt on September 30, 2017, the end of the fiscal year, was $20.4 trillion. On September 30, 2021 the National Debt was $30 trillion. Obama added $6.9 trillion to the Debt in eight years following the Great Recession, the worst economic period we endured since the Great Depression.
In four years, from the end of the Fiscal Year in 2017 until September 30, 2021 the Debt increased $9.6 trillion in just four years. At the end of the Fiscal Year, the National Debt was at $30.9 trillion. If one counts the increase in Debt from January 20, 2017 to January 20, 2021, the debt increased from $19.9 trillion to $27.8 trillion, or $7.9 trillion. Of course, this includes the huge deficits caused by Trump Administration, reflective of tax cuts, an economy that never grew above 3% for the first 18 months of the Trump and ministration and was under 2% for the 15 months before the last quarter of 2019. It also includes the expensive rollout of vaccines, the cost of the recovery, not unlike what faced the Obama Administration from 2009 through 2011.
How to reduce the National Debt:
1. Bring back the Kennedy Era top tax bracket of 70% of incomes over $2 million.
2. Have a minimum tax on all income above $15,000, even with deductions
3. Eliminate the mortgage deduction over $750K
4. Eliminate all generation skipping trusts
5. Cap yearly contributions for the wealthy into IRAs or 401ks
6. Eliminate all overseas tax shelters
7. Raise the Corporation tax back to Clinton Era 39%
8. Eliminate all corporate stock options for executive pay
9. Tax corporate Golden Parachutes at their full value as soon as they are given.
10. Tax corporate health insurance as income for anyone making over $1 million per year
11. Force repatriation of all overseas sheltered income
12. Cut and cap the sale tax in every state to 5% and add a 1% Federal sale tax
13. Cap the property tax, in every state, to 3% with a Homestead rule, limiting any yearly increase.
14. Raise the state income tax to make up the loss on property taxes and fund the public schools statewide.
15. Reinstate the draft for the Army and maintain as a volunteer force the Air Force, Navy and Marines
16. Cut farm subsidies, currently $5 billion, the annual cost for all farm support is between $15 and $35 billion annually.
Causes for poverty
1, Generational poverty, passed from parent to child
2. Failure to take advantage of education, bad parenting
3. Single parent homes and illegitimacy
4. Ignorance resulting from a lack of an education
5. Lack of vocational schools, inability to hold a job
6. Not teaching financial fundamentals to children
7. Poor savings habits, most Americans do not save
8. Excessive credit card debt, inability to manage a personal budget
9. Conspicuous consumption, buying what is not needed
10. The excessive cost of higher education,
11. Endemic regional unemployment, the rise of the Big Box store
12. Lack of Federal revenue-sharing to low income areas
13. The high cost of housing, the lack of federally subsidized housing
14. Lack of workforce housing
15. Healthcare needs, and the lack of insurance
16. Too low of a minimum wage
Illegitimacy has become endemic and it is one of the leading causes of poverty:
By the way, no matter what one’s social proclivity is: illegitimacy is over 50% in America. Today the overwhelming majority of black children are raised in single female-headed families. As early as the 1880s, three-quarters of black families were two-parent. In 1925 New York City, 85 percent of black families were two-parent. One study of 19th-century slave families found that in up to three-fourths of the families, all the children had the same mother and father.
Today’s black illegitimacy rate of nearly 75 percent is also entirely new. In 1940, black illegitimacy stood at 14 percent. It had risen to 25 percent by 1965, when Daniel Patrick Moynihan wrote “The Negro Family: The Case for National Action” and was widely condemned as a racist. By 1980, the black illegitimacy rate had more than doubled, to 56 percent, and it has been growing since. Both during slavery and as late as 1920, a teenage girl raising a child without a man present was rare among blacks. In 2012 29.1% of Hispanic children were born out of wedlock. In that same year, non-Hispanic white illegitimacy was 17.2%. Has it changed in ten years for all groups? Yes, it has gotten worse.
Have Illegitimate Births Reached Crisis Levels?
- The median age for a woman to become a mother: 25.7 years.
- Living the Middle Class lifestyle means needing more education than ever before, which is causing couples to put off getting married more often.
- Cohabiting couples are less likely to have job prospects or economic stability.
- Only 38% of American women will be married by the time they reach the median age of motherhood.
- For women who have a high school diploma and some college, 58% of the births to this group are considered illegitimate children.
- If a couple is living together when they have a child, but not married, then there is a 39% chance of the family unit disintegrating. It’s just 13% for a married couple.