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On July 1st the interest rate on student loans rises from 3.4 percent to 6.8 percent of this year.
One year ago, the trillion dollar mark was crossed for the amount owed and required to be paid back for a student’s education..
3.4 to a 6.8 is a doubling… Just on a gross scale, off a Trillion dollars, the interest per year is jumping from $34 billion to $68 billion. On a $16 trillion GDP, that is nothing. But when you look at other figures, that jump has shocking consequences for the world-wide banking system.
The post graduate boom is usually what drives our economy. New cars, New electronics, New houses. Dining out. Spontaneous purchases. A study by the New York Federal Reserve shows that graduates are living austerely to pay of their gigantic debt, most of which are more costly than the mortgages owned by middle America. Asking someone to buy a house while paying off their educational loan, is equivalent to asking then to buy a second house while still paying off their first, How rich does one have to be in order to do that? What amount of yearly income is required to do that? +$125,000? Does this mean there will be no net new buyers of houses for 20 years? Anyways, after July 1st, there will be $34 billion less with which to purchase houses.
The Department of Education predicts a default rate of 13.4%… Off a trillion that means $130.4 billion dollars will be the amount defaulted. $130.4 billion.
So adding the two together, the upcoming shock on our economy will now cost $198 billion. Poof, right out the door, $198 billion. Gone from our economy.
Tran Union a credit reporting agency says the data in it’s files show that almost half, or 43.5% of student debt is in deferment. In dollars off that trillion total, that would amount to $435 billion dollars of debt not being paid in a timely fashion.
Particular concern must be paid here, because more than half of college graduates under the age of 25 are either unemployed or underemployed — the highest rate in 11 years, according to an analysis of government data.
Putting the two together, we have half of those required to pay $435 billion defaulted, who are either under or unemployed.
As we saw with mortgages, when people can’t pay, there is no notice, They just walk away.
A nation depends upon its newest generation to lead them forward with energy and enthusiasm, long after the previous ones are tired and ready for rest. This generation is coming out on the playing field, weighed down like knights of old, in ancient armor…. The upcoming football game does not look promising… Their best 100 yard dash is just under 10 minutes.
Because Social Security is getting cut down, you choose to put your money in an IRA… Since doing percents are easy with amounts starting with a one and ending in zeros, let us assume you choose to put $100,000 in an IRA for 20 years…. The Wall Street firm will charge you 2%. You think, $100,000? 2%, ok … $2,000 over 20 years that’s nothing.. I’ll still have 98% plus interest over 20 years…
You think? This is Wall $treet we’re talking about……
So take this interest compounding calculator. … Seriously, you need to do this. Right click it into a new tab so your computer doesn’t have to download flipping back and forth….
Add $100,000 as principle. No new additions on the first round. Time Frame: 20 years. For the interest rate put in negative 2. Since you are going to be receiving only 98% of your earnings on a yearly basis, a negative 2 works better than having to do the extra step latter and subtracting two totals.
Hit total… At 2% compounded off that $100,000 you originally placed,… after commissions all you will have left is $66,760… Wall $treet takes 1/3 of what you earn…..
Not convinced? Let’s go a different way. Let’s say you will average 7% increases with a 2% commission… We’ll do it in two steps. We will use the calculator to figure out what we would have earned at 7%, and again, what we would have earned at 5%. We will subtract the two to see how much Wall $treet is taking out from your future…
At 7% increases we would have earned $386,968 over 20 years with no additions after the initial deposit. At 5% increases our total maxes out at $265,329. That 2% costs us…..$121,639 dollars…. The same 1/3 as above….
The argument can be made that since we agreed to it in the beginning and never got it, the commissions really doesn’t cost us anything. But if we change the wording so we say that it costs us $121,599 in “potential earnings” that clears that hurdle and if probably a more truthful line.. But there is no question …. these calculations show us how much Wall $treet intends to make when our retirements go their way instead of coming through Social Security….
We now remember why Franklin D. Roosevelt went with Social Security in the first place. Those who saved across all their lives, can not afford to live after they stopped working.
Jeff Christopher followers stage a show of force to give Sussex County an idea what will happen once a sheriff gets full power to make arrests base on his arbitrary judgment.
All three of his followers think this is what America needs more of.
Forget about the deficit. Forget about class struggle. Forget about intra-class equity. Forget about soaking the rich….
“Just forget about it…..”
Our current tax base inequity is killing our economy….. Not just ours, but the global economy as well. The solution to the worlds economy is our tax rate, right here in the USA….
Imagine all the wealthy in the United States. It is here. It is full of one color.
Now, let us show you how that wealth was divided just before 1980. That was the beginning of the Republican Party (you know what I mean).
Now, let us show you how wealth is divided with the closest available figures today.
Now let me show you how the US dominates the worlds wealth.
It is pretty clear to everyone that the economy is driven by demand. If there is demand, then investment flows into options to create more supply. When supply is higher than demand, cutbacks have to occur until both are closer in alignment. Right?
So the big global economic problem is…. in America there is a lack of spending!…. Unfortunately it has been going on 5 years. and a lot of this lack of spending comes from the collective behavior across this country now put towards paying down individual debt from what we once spent in our past….
The solution is to spend more. The burden on spending more must lie with those who have money to spend.
This group failed us. The trickle down theory never trickled down. Seriously? Why would it? Who except the Mother Theresa’s of us, would simply give our money away to help the poorer and downtrodden?
Our forefathers lived through this a hundred years ago. If you want to see our future, study the economy from the Civil War to the Great Depression. Business and the wealthy could not be trusted to look out for anyone’s interests. There had to be another way.
We stumbled upon it funding WWII. Tax wealth. Use that as seed investment money. Build things.
Has anyone ever thanked our forefathers for their investment into the building of a vast network of interstate highways? Imagine if we had counted upon the private sector to make this improvement to our lives?
Highways were paid for by taxing those “with money”. As seen above, in the past the middle class had money and chipped in accordingly. Today that money is no longer in middle class hands and is instead of being reinvested it is now getting siphoned off-shore where it does no good what so ever.
Until Americans return to the good habit of spending, the soft economy will continue…. To get that quick transfusion which will jump start our economy, our nation needs to put money back into the hands of the middle class, so they will again start buying things that employ people….. The middle class likes to spend. They are the gas that runs the economy’s engine.
The simplest method accomplishing this, is to increase the taxes a little bit on those who have way too much money. …
Studies show that for every penny in increased tax, there is 99 times that economic benefit as that penny circulates through the system until it again finally settles into the pockets of the rich. From there, it needs to be recycled again so we can again create the type of pie chart above showing the golden days when wealth rested in the hands of those who would run right out and spend it….
The answer is not socialistic, that is to take money away from the wealthy. Oh no. Instead, it is to temporarily borrow it, to force their investment into the economy so all again reap the benefits, not just the 1%…. Seriously, we should all get rich together, and we will, once we raise taxes on ”Those Few Who Will Not Spend…..”
Thanks Nancy. Tom Carper sponsored, and Chris Coons endorsed, a bill that shuffles money around the Agriculture Department to keep our food inspectors fully employed.
Our food will not be uninspected now because of the Republican induced sequester. Politics are one thing. People dying are another. The only protection Americans have between themselves and unscrupulous cut-throat foreign food processors, is the FDA. Eliminating them would the the death of us all. Remember the tainted pet food?
I’m glad our delegation stepped up to protect them… However this gave me pause. Where the money was being shifted from….
The Pryor/Blunt/Coons amendment adds no additional cost to the bill. Instead, it moves one-time funding for school equipment grants and deferred maintenance on buildings and facilities at the U.S. Department of Agriculture…
One time funding for school equipment grants, meaning many schools in Delaware which thought they would soon be on the receiving end of new refrigeration units to safeguard school lunches, must now remain using the old pre- 1930′s models currently in place. It also means when the sequester is done, and funds return, their will be less spent on helping Americans, because it will be shuffled to cover the depreciation currently not charged because of this amendment.
When are we going to stop pussy footing around the real issue, and tax the wealthy at the rate of their hero, Ronald Reagan’s first tax cut level, until we have paid off our deficit? The middle class should not bear the cost of the wealthy’s bad investments. The top 1% should be the first to anti up, and then, only when they have nothing left, should the middle class even be asked to sacrifice…..
America is being spoon fed raw sewage and is then arguing which medicine is better to cover up the symptoms….. Tax the wealthy and all our dreams will come true. America can be healthy again….
Chart Courtesy of Dartagnan
One can see the split between those who grew up still under the New Deal, and those who came after Conservative Reaganomics…. It is enough to make one cry…..
Courtesy of Wikipedia.
After all the bluster dies down, Historians will revisit this era and come to this conclusion.
In order not to tax the top 1% an additional $85 billion dollars, the 99% was made to suffer for it….
Cost = $85 billion.
Let us compare that to wealth, not income, to see how that $85 billion stacks up….
The current household wealth of the United States is listed between $64 and $65 trillion dollars…. We are going to draw the line at at the top 20% and bottom 80% of the population.
The top 20% owns 89.9% of the nation’s wealth. The bottom 80% owns 11.1%…. In dollars that stacks up as follows:
- Top 20% owns $58 Trillion in net worth.
- Bottom 80% has $ 7 Trillion of net worth.
Ok. now we have the dollar figures. Let us break down the population. Since we are dealing with government services we must assume that affects everyone, so we are going to use the 315 million population figure for our calculations.
- Top 20% of population equals 63 million people.
- Bottom 80% of population equals 252 million people.
So now let us see how that works out per person. For both income levels we are going to divide the total wealth by the total persons and get the total wealth per person…
- 58 Trillion divided by 63 million people gives a per person average of…$841,269 per citizen.
- 7 Trillion divided by 252 million people gives a per person average of … $27,777 dollars per citizen.
Ok so here is what historians will find. If we tax the existing revenue for the $85 billion difference it will only hit the top group of 20%… If we sequester or cut out of our national budget, it will only hit those in the bottom 80%…
To see what the average hit will cost, we will take the $85 billion and divide it among the number of people in that income range. Then later we will apply that to their wealth and see who has the greater and who has the less percentage…
- $85 Billion sequestered spread over 63 million 20%’ers comes to $1349 each.
- $85 Billion sequestered out of the 252 million 80%ers comes to a tiny…. $337 each…
So here is the fun part.
- That $1349 is this percent of $841,269… 0.16% of one percent.
- That $337 is this percent of $27,777…. 1.2 percent…
Each person in the bottom 80% is paying roughly 8 times more of a burden to their wealth than paid by those in the top 20%……. When our economy fails and historians look back and say, didn’t anyone crunch the numbers? Well, yes? Someone did..
And if fairness is truly an America virtue, then once we know that a 8 to 1 ratio exists, it become easy to figure out how to divide the costs equally… (8x +1x = $85B) then we should have a tax hike of $75 billion and sequester or cut of $10 billion to give every America an equal percentage bite out of their wealth….
As one progresses through life one becomes more humble. When young, one believes it is his own actions that create his or her success. Old age tells us it was just luck. We see others come later, more talented, smarter, better looking, not achieving what we once did. We have to accept we were just simply in the right place at the right time to grasp an opportunity.
Being thoughtful people, as one sees more, one ponders more. Similarities do take place on opposite sides of the globe. Similarities that perhaps could be random, but for them to occur in non random frequencies, belies something else might be in play.
It is with that in mind, I notice that across the red states of the United States, primarily a bastion of fundamentalist conservative theocracy, the weather is changing. Basically, there is no rain…. Secondly I have noticed that the weather in Oklahoma is every year, corresponding more and more like those dry, hot , sandy climes on the other side of our planet, which coincidentally, are also occupied by a bastion of fundamentalist conservative theocracies, practicing something very similar to Oklahoma policy but over there it is called Shara Law…
The unproven theory, one derived deeply out of the forges of possibility from quantum mechanics, is that as we evolve to think like Muslims, our weather evolves to behave like we are Muslims.
Currently there is no difference between those thought processes and actions of legislatures of Oklahoma, and those existing in Muslim countries like Pakistan, Somalia, and Yemen…
The climate is racing to catch up to the Middle East with this three year drought in Oklahoma….
As any follower of monotheism well knows, when a people sin and go the wrong way, the weather catches up to punish them. I simply am offering that is what is happening in Oklahoma….
Unless you read one of the big newspapers you will never hear of this… From yesterday’s sequestration hearings on Capitol Hill:
United States Army Chief of Staff Raymond T. Odierno elaborated on the impact that these indiscriminate, across the board cuts would have on military readiness in the Pacific and the United States Pacific Command.
“First, as I talked about 80% of our force having to stop training this year that includes our forces in Hawai’i, that includes our forces in at Fort Lewis that are in PACOM so they will be significantly degraded capabilities that they would have to respond to anything that goes on within Pacific Command. Additionally, the Army is responsible for providing a significant amount of communication support, intelligence support, logistical support to the PACOM Theater. Their ability to do that will also be affected by sequestrations specifically in the Fiscal Year 13 but beyond. We have tried to fence our capability in Korea to make sure they are at the highest readiness level. We will continue to do that. But the cuts in family programs, cuts in soldier programs, cuts in our civilians will also impact Korea as well. So for us it has a significant impact on our ability in the Pacific for the next several years,” said Odierno.
- 80% of our forces will have to stop training this year.
- Communication support, intelligence support, logistical support to the PACOM Theater; their ability to do that will also be affected by sequestrations specifically in the Fiscal Year 13 and beyond.
- Our capability in Korea to make sure they are at the highest readiness level. We will continue to do that to the best that our finances will allow us. But cuts in family programs, cuts in soldier programs, cuts in our civilians will also impact Korea as well…
- Just as we trim the forces in South Korea, North Korea puts us on a Defcom 4.
It is obvious with yesterday’s nuclear explosion on the northern half of the Korean Peninsula, we can’t cut the Pacific. If we try we are going to run cost overruns. This is just as silly as your boss setting financial goals that have never been proposed before and you simply know you will go over them. You accept that because it is impossible to meet them.
So how can we fix it?
We need just $86 billion extra per year. That is a lot for you and me, but for the wealthy, that is nothing. In fact Kinder Morgan just bought out Caldone for 8% of that: $5 billion. Prior to that, it just spent $21 billion on El Paso Gas. One company buying another company it didn’t need. Comcast just bought NBC for $13 billion. That’s almost half the total amount needed, thrown away on another company that would have been fine if left alone. See how easy it is?
Just a few more companies like that, and we could pay enough to keep our military in top shape. We don’t need sequestration.
Bill Gates, Warren Buffett, $86 billion is nothing to them. Each alone could cover the cost of our military.
Point is, we have the money just sitting there. Sitting out there all alone, saying “take me, take me.” All we have to do is go get it, and we can cut our deficit at the same time as we keep ourselves protected by having a first rate defense.
It is no different than a family of four on a tight budget, stopping beside a field of wild strawberries and picking their next few meals.
We can do this… $86 billion on just the top richest 400 people is only $215 million each… That is nothing, nothing to them. What farmer will miss having wild strawberries getting picked out of his hay crop? As a nation, let’s just take it; it is there, it is begging for it, and we’d be doing an awful lot of good for everyone involved….