Not saying there isn't a problem, because there definitely is, but this household budget analysis we here so often is more than a bit of oversimplification

The only complication involves what you're doing to remedy the fact that you're spending more than you're making.  No one agrees on what to cut (without mentioning that a large % of the money spent is simply used inefficiently, or that budgeting out 10 years is pretty stupid).  The problem is actually pretty simple - we're spending more than we make.

 

Speaking of a 10 year budget, and extending the analogy, the government would like you to believe they "cut" money from the budget moving forward because next year they had "budgeted" to spend $40,000 but now they are only going to spend $39,000.  Thus, they cut $1,000 off the budget.  That doesn't count as a budget cut to me, when you're already spending only $38,000.

^^ I think it serves one simple purpose, to show the scope of the 'cuts' in a manner everyone can understand. It reinforces that we've got a long way to go to close the funding gap.

That's how I took it. Simply an illustration that almost everyone can relate to

^ Millions of people are in for a rude awakening when banks go after them for the difference if they let a house go because it's not worth what it was. They can go after the many years later.

 

Nothing a BK won't fix. But you are correct, many are already getting 'surprised' by the banks coming after them for the balance of the bill.

I just think that this effort to mask the natural complexities of governing a diverse, industrialized nation of 300 million people is causing more problems than it is solving.  It's 'folksy' so politicians like to distract the voters with it.  But it's out of context and misleading to people who don't know any better.  But it makes for great talking points I suppose.  Any serious discussion about our debt problem needs to begin and end with social security, medicare/medicaid and defense spending.  Everything else is just colored bubbles for you to stare at in amazement.

 

But if you want to make the analogy, then it would be properly framed by most of the family's debt being held by mom.  The debt that is held outside the family is viewed more as an asset to the debt holders than a running tab the debt holders are calling about every 5 minutes.  Oh yeah, the family would also have to be able to raise their income at will if they collectively decide to do so..... and of course there would have to be one of those trees in the backyard my dad always talked about.

it does show the scope of our debt & defecit, but  what it doesn't show is that we can substantially grow our tax revenue if we pull out of this recession and can substantially cut our defecit & debt if we pulled out of the wars and changed a few other unsustainable practices...

Greece on strike again as more austerity looms

Greek parliament to vote on more austerity measures

 

"LONDON (MarketWatch) — Normal life in Greece was once again disrupted Wednesday, as tens of thousands joined a 48-hour general strike to protest the latest round of austerity measures as the nation teeters on the brink of default."

 

"The protests underscore the level of public frustration with the cost-cutting measures the government has taken in an attempt to reduce Greece’s deficit and keep receiving financial aid from international lenders, as the local economy remains mired in a severe recession."

 

"The BBC, citing police, reported that more than 70,000 people took part in demonstrations in central Athens."

http://www.marketwatch.com/story/greece-on-strike-again-as-more-austerity-looms-2011-10-19

 

And speaking of Spain.

 

Moody's downgrades Spain on growth slowdown

 

"SAN FRANCISCO (MarketWatch) -- Moody's Investors Service said late Tuesday it downgraded Spain's government bond ratings to A1 from Aa2. The ratings agency said "no credible resolution of the current sovereign debt crisis has emerged," and that worsening global growth is hurting Spain's already moderate growth prospects. "Lower economic growth in turn will make the achievement of the ambitious fiscal targets even more challenging for Spain," Moody's said in a statement. The outlook is negative."

http://www.marketwatch.com/story/moodys-downgrades-spain-on-growth-slowdown-2011-10-18

^^ & ^^^ I agree that the diagram, and others like this do nothing to speak toward a solution. What I would like to see in examples like this are categories breaking down what that $3.8T is being spent on. It's all well and good to scream about out of control spending out of context. It's another when you realize 'oh, maybe I or someone I know benefits from that, and it's not so black and white'.

 

But I do think a simple diagram helps the casual reader (i.e. someone that isn't immersed in discussing the budget deficit on a daily basis, but should probably understand that there is a real issue) understand that we're past the point of overly simplistic solutions like 'cut spending' or 'raise taxes' or '9-9-9'

This is the chart that matters and the people who need it dumbed down from here, probably shouldn't involve themselves in the budget/debt debate anyway....

 

 

Special note to those who think the debt/deficit is caused only by welfare recipients who are too lazy to work, do the math and you'll figure out that wiping out welfare entirely (for the lazy and those who truly need it) would be like feeding a tic-tac to a whale.  The big 3 (defense, SS, and medicare/medicaid) ALONE exceed our tax revenue by more than $500,000,0000,000.00  :-o

This is the chart that matters and the people who need it dumbed down from here, probably shouldn't involve themselves in the budget/debt debate anyway....

 

 

Special note to those who think the debt/deficit is caused only by welfare recipients who are too lazy to work, do the math and you'll figure out that wiping out welfare entirely (for the lazy and those who truly need it) would be like feeding a tic-tac to a whale.  The big 3 (defense, SS, and medicare/medicaid) ALONE exceed our tax revenue by more than $500,000,0000,000.00  :-o

 

We can just print more money, right? Matter of fact, just print $500,000,000,000.00, it won't be worth anything on the world market, but everyone will get paid. I am sure their might be some minor side effects for doing this, but the bill will paid.

That probably wouldn't be a component of the package I would envision, but to each his own.  My preference would likely involve massive "defense" cuts, a raised eligibility age for social security and medicare, and the creation of a specific enforcement agency tasked to investigate and act upon fraud in all entitlement programs such as medicare, disability, welfare, etc.  I would also think about consolidating Homeland Security into the FBI and other consolidations where efficiency may warrant such action.

That probably wouldn't be a component of the package I would envision, but to each his own.  My preference would likely involve massive "defense" cuts, a raised eligibility age for social security and medicare, and the creation of a specific enforcement agency tasked to investigate and act upon fraud in all entitlement programs such as medicare, disability, welfare, etc.  I would also think about consolidating Homeland Security into the FBI and other consolidations where efficiency may warrant such action.

 

Hope you got that my comment was just a joke (should have used a funny face). I agree, their needs to be a balanced approach to the issues. I would add to the list the need to enforce current laws related to business/wall street.

U.S. "misery index" rises to highest since 1983

 

"CHICAGO (Reuters) - An unofficial gauge of human misery in the United States rose last month to a 28-year high as Americans struggled with rising inflation and high unemployment.

 

The misery index -- which is simply the sum of the country's inflation and unemployment rates -- rose to 13.0, pushed up by higher price data the government reported on Wednesday.

 

Consumer prices rose 3.9 percent in the 12 months through September, the fastest pace in three years."

http://finance.yahoo.com/news/US-misery-index-rises-to-rb-3376231513.html?x=0&.v=1

That probably wouldn't be a component of the package I would envision, but to each his own.  My preference would likely involve massive "defense" cuts, a raised eligibility age for social security and medicare, and the creation of a specific enforcement agency tasked to investigate and act upon fraud in all entitlement programs such as medicare, disability, welfare, etc.  I would also think about consolidating Homeland Security into the FBI and other consolidations where efficiency may warrant such action.

 

Hope you got that my comment was just a joke (should have used a funny face). I agree, their needs to be a balanced approach to the issues. I would add to the list the need to enforce current laws related to business/wall street.

 

Yes.  I picked up the sarcasm and reciprocated in the first sentence of my reply.

In the past I have touched on the derivatives markets and how MASSIVE and unregulated it is. I also believe that a lot of the effort going on to save banks and keep countries from defaulting is really about keeping the deriviatives market from coming undone. Because, if it ever does come undone all the money on the planet will not be able to overcome these leveraged debts.

 

What is a Derivative? http://en.wikipedia.org/wiki/Derivative_(finance)

 

As you can see from this article, BoA has about $1.04 trillion in deposits (and I am sure they have a nice chuck of other assets). But I am also sure it doesn't come close to covering their $75 trillion in derivatives.

 

So what has BoA done. They have moved a noticable amount of derivatives onto their 'insured' subsidiary. This move would put the FDIC on the hook for some of the loses if the subsidiary or BoA would go under. In other words they are moving leverage debt onto the taxpayer.

 

BofA Said to Split Regulators Over Moving Merrill Derivatives to Bank Unit

 

"Bank of America Corp. (BAC), hit by a credit downgrade last month, has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits, according to people with direct knowledge of the situation."

 

"The Federal Reserve and Federal Deposit Insurance Corp. disagree over the transfers, which are being requested by counterparties, said the people, who asked to remain anonymous because they weren’t authorized to speak publicly. The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting, said the people. The bank doesn’t believe regulatory approval is needed, said people with knowledge of its position."

 

"Bank of America, which got a $45 billion bailout during the financial crisis, had $1.04 trillion in deposits as of midyear, ranking it second among U.S. firms."

 

“The concern is that there is always an enormous temptation to dump the losers on the insured institution,” said William Black, professor of economics and law at the University of Missouri-Kansas City and a former bank regulator. “We should have fairly tight restrictions on that.”

 

"Bank of America’s holding company -- the parent of both the retail bank and the Merrill Lynch securities unit -- held almost $75 trillion of derivatives at the end of June, according to data compiled by the OCC."

http://www.bloomberg.com/news/2011-10-18/bofa-said-to-split-regulators-over-moving-merrill-derivatives-to-bank-unit.html

^ BoA is a disaster.  What's odd is I was a customer of theirs from 2001-2006 before moving back to Ohio and I was pretty happy with their general banking services.  But their mortgage division is a nightmare, they should have never acquired Countrywide, and based on what I know of the internal operations, there's more bad stories to come before things turn around (if they can turn them around).  They almost need a Lee Iacocca type story to get things in the right direction.

I wonder what the neighbors next door will think if they don't meet the qualifications? Or the new home buyer that can't get the same interest rate? What a mess and we just keep making it worse. The effort to keep prices elevated is sad. Let prices readjust to income, this will create a stronger more stable housing market and economy in the long run.

 

President Obama to Announce Major Revamp of Home Lending Program, HARP

 

"Las Vegas –  Seeking to breathe new life into a sagging economy, President Obama will attempt an executive branch rescue of homeowners trying to refinance underwater mortgages, with a new initiative that lets people with little or no equity get a better interest rate at a reduced cost.

 

The initiative, the first in a series of announcements expected this week by the president, applies to homeowners with federally guaranteed mortgages who are current on their payments."

Read more: http://www.foxnews.com/politics/2011/10/24/white-house-to-announce-major-home-lending-revamp/#ixzz1biCFrlrD

 

 

World power swings back to America

 

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8844646/World-power-swings-back-to-America.html

 

...the China-US seesaw is about to swing the other way. Offshoring is out, 're-inshoring' is the new fashion.

 

Boston Consulting expects up to 800,000 manufacturing jobs to return to the US by mid-decade, with a multiplier effect creating 3.2m in total. This would take some sting out of the Long Slump.

...more...

 

 

Don't worry, there's always Vietnam, Malaysia, the Philippines, India and the entire continent of Africa to find cheaper labor.

^True.  In my experience there have been three basic reasons why my company has brought manufacturing BACK from China, India, or the Philippines.

 

1) Shipping costs.  Obviously pegged to fuel prices.

2) Increasing labor costs.  We've seen spikes in labor costs from mainly Indian and Chinese suppliers.

3) Poor quality.  The hidden costs of outsourcing.

 

We had a supplier in India that was machining some raw castings for us.  The quality was very poor compared to our US vendor and we even had to recall product due to a quality issue from the vendor in India.  Turns out that the culture is very much different over there regarding quality.  The machinist had made a mistake and created a hole that was slightly too large and he was unable to install an item to spec.  So what did he do?  Instead of scrapping the part like he should have he decided to glue the item into the hole.  Apparently scrapping a part comes with serious consequences at this shop so machinists were doing whatever they could to avoid scrapping parts.  Needless to say we don't work with them anymore and brought the work back to the US.

 

The tide is turning on outsourcing for a lot of companies. 

High fuel costs and chronic unemployment in the U.S. (read: flat or declining labor costs here) could tip the scale. Interesting that the traditional manufacturing cities -- not the Sun Belt -- are seeing spikes in manufacturing activity. Places like Cleveland, Akron, Youngstown and Pittsburgh are seeing some of the fastest rising manufacturing activities in the country.

So if oil goes up every time we show signs of economic recovery, how are we going to recover?

 

Oil price rises above $90 on signs of growth

By Chris Kahn

AP Energy Writer / October 24, 2011

 

NEW YORK—Oil prices on Monday climbed to the highest level in more than a month on signs of economic growth in the U.S. and Asia.

 

Benchmark crude rose $3, or 3.5 percent, to $90.41 per barrel at midday in New York. Prices haven't been above $90 per barrel since Sept. 15. Brent crude rose $1.40 to $110.86 a barrel in London.

 

Prices rose as a string of acquisitions and a better profit forecast from Caterpillar sparked a rally on Wall Street. Major stock indexes were up more than 1 percent. The Nasdaq was up 2 percent.

 

READ MORE AT:

http://www.boston.com/business/articles/2011/10/24/oil_above_88_amid_signs_of_asia_economic_strength/

^True.  In my experience there have been three basic reasons why my company has brought manufacturing BACK from China, India, or the Philippines.

 

1) Shipping costs.  Obviously pegged to fuel prices.

2) Increasing labor costs.  We've seen spikes in labor costs from mainly Indian and Chinese suppliers.

3) Poor quality.  The hidden costs of outsourcing.

 

We had a supplier in India that was machining some raw castings for us.  The quality was very poor compared to our US vendor and we even had to recall product due to a quality issue from the vendor in India.  Turns out that the culture is very much different over there regarding quality.  The machinist had made a mistake and created a hole that was slightly too large and he was unable to install an item to spec.  So what did he do?  Instead of scrapping the part like he should have he decided to glue the item into the hole.  Apparently scrapping a part comes with serious consequences at this shop so machinists were doing whatever they could to avoid scrapping parts.  Needless to say we don't work with them anymore and brought the work back to the US.

 

The tide is turning on outsourcing for a lot of companies. 

 

Doing business overseas is a serious hassle for everyone involved. Companies wouldn't do it if it didn't save a significant amount of money. When the cost advantage disappears, jobs return. Imagine if companies weren't saddled with health care costs in the U.S. I'll say it again -- the lack of nationalized healthcare in the U.S. is a even bigger economic problem than it is a societal one.

From The Telegraph:

 

World power swings back to America

By Ambrose Evans-Pritchard, International Business Editor

5:53PM BST 23 Oct 2011

 

The American phoenix is slowly rising again. Within five years or so, the US will be well on its way to self-sufficiency in fuel and energy. Manufacturing will have closed the labour gap with China in a clutch of key industries. The current account might even be in surplus.

 

Assumptions that the Great Republic must inevitably spiral into economic and strategic decline - so like the chatter of the late 1980s, when Japan was in vogue - will seem wildly off the mark by then. 

 

Telegraph readers already know about the "shale gas revolution" that has turned America into the world’s number one producer of natural gas, ahead of Russia. 

 

Less known is that the technology of hydraulic fracturing - breaking rocks with jets of water - will also bring a quantum leap in shale oil supply, mostly from the Bakken fields in North Dakota, Eagle Ford in Texas, and other reserves across the Mid-West. 

 

"The US was the single largest contributor to global oil supply growth last year, with a net 395,000 barrels per day (b/d)," said Francisco Blanch from Bank of America, comparing the Dakota fields to a new North Sea. 

 

Total US shale output is "set to expand dramatically" as fresh sources come on stream, possibly reaching 5.5m b/d by mid-decade. This is a tenfold rise since 2009.

 

"The implications of this shift are very large for geopolitics, energy security, historical military alliances and economic activity. As US reliance on the Middle East continues to drop, Europe is turning more dependent and will likely become more exposed to rent-seeking behaviour from oligopolistic players," said Mr Blanch.

 

Meanwhile, the China-US seesaw is about to swing the other way. Offshoring is out, 're-inshoring' is the new fashion. Continue:

 

Continued: http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8844646/World-power-swings-back-to-America.html

 

So if oil goes up every time we show signs of economic recovery, how are we going to recover?

 

Oil price rises above $90 on signs of growth

By Chris Kahn

AP Energy Writer / October 24, 2011

 

NEW YORKOil prices on Monday climbed to the highest level in more than a month on signs of economic growth in the U.S. and Asia.

 

Benchmark crude rose $3, or 3.5 percent, to $90.41 per barrel at midday in New York. Prices haven't been above $90 per barrel since Sept. 15. Brent crude rose $1.40 to $110.86 a barrel in London.

 

Prices rose as a string of acquisitions and a better profit forecast from Caterpillar sparked a rally on Wall Street. Major stock indexes were up more than 1 percent. The Nasdaq was up 2 percent.

 

READ MORE AT:

http://www.boston.com/business/articles/2011/10/24/oil_above_88_amid_signs_of_asia_economic_strength/

 

I beleive that this is the spot price.  In fact the markets have long ago priced in much higher price per barrel to around 115 -120 dollars.  plus, all it takes to kill the price is a rumor that economic growth is contrcting

Yes it is, and it's for West Texas Intermediate which is one of many, many different types of crude oils produced throughout the world. It is a sweet oil that is highly desirable, but is more regional not an accurate global benchmark anymore. Instead, Brent is probably closer to the sourness of oils produced globally but requires more refining. And it is more expensive to buy than WTI.

Cleveland suburbs featured in pix and in the story of this NYT article:

 

http://www.nytimes.com/2011/10/25/us/suburban-poverty-surge-challenges-communities.html?_r=1&smid=fb-nytimes&WT.mc_id=US-SM-E-FB-SM-LIN-OCS-102511-NYT-NA&WT.mc_ev=click

 

Cleveland suburbs featured in pix and in the story of this NYT article:

 

http://www.nytimes.com/2011/10/25/us/suburban-poverty-surge-challenges-communities.html?_r=1&smid=fb-nytimes&WT.mc_id=US-SM-E-FB-SM-LIN-OCS-102511-NYT-NA&WT.mc_ev=click

 

 

This is certainly not just a Cleveland problem, but unfortunately this article is just more bad press for Cleveland. Most of those suburbs discussed are getting poorer due to suburban sprawl, with the new residents being the former urban poor. The real story should be the shift of middle class money to the exurbs.

They are probably getting poorer ALSO due to the poor economy, which is what is happening in Dayton.  I don't think you can blame this increase in suburban proverty just on sprawl anymore, given how deep the economy crashed.

 

 

They are probably getting poorer ALSO due to the poor economy,

 

True, but several of those suburbs of Cleveland that were mentioned are bungalow belt areas that were in decline well before this current horrible economy.

I agree with Rustbelter.  This was happening long before the great crash of 2008.  Question is--when are Americans going to run out of places to run to? 

Vatican Calls for 'Central World Bank' to Be Set Up

 

"The Vatican called on Monday for the establishment of a "global public authority" and a "central world bank" to rule over financial institutions that have become outdated and often ineffective in dealing fairly with crises."

 

“The 18-page document, "Towards Reforming the International Financial and Monetary Systems in the Context of a Global Public Authority," was at times very specific, calling, for example, for taxation measures on financial transactions.”

http://www.cnbc.com/id/45013499/

 

Why the employment situation will not got better.  This is more "political economy", but illustrates how we are more in a 1870s laissez faire situation & why a 1930s/40s "New Deal" wont happen:

 

How The Austerity Class Rules Washington

 

The event spotlighted a central paradox in American politics over the past two years: how, in the midst of a massive unemployment crisis—when it’s painfully obvious that not enough jobs are being created and the public overwhelmingly wants policy-makers to focus on creating them—did the deficit emerge as the most pressing issue in the country? And why, when the global evidence clearly indicates that austerity measures will raise unemployment and hinder, not accelerate, growth, do advocates of austerity retain such distinction today?

 

Again, to repeat, the issue with this recession is the massive collapse in employment and that the recovery is not generating enough work at living wages.  Profitabilty and growth we have, but not employment and pay.

 

So this austerity thing is to downsize government to accomodate the economic transformation of the US to a high unemployment/low wage economy, and economy that can't generate enough revenue to support government services and benefits that it once could.

 

 

 

 

 

 

 

True, but several of those suburbs of Cleveland that were mentioned are bungalow belt areas that were in decline well before this current horrible economy.

 

They were declining along with the Cleveland economy since 1970.  Cleveland was not much different than the rest of Ohio, seeing the collapse in living wage industrial employment.  So places that were the product of this are the ones seeing the most hurt as Ohio gets poorer and poorer, and yes, this IS long term,  a 30 year or more trend.

 

 

 

I think the point is that the communities that are really in trouble (such as Garfield Hts) are communities which were hastily built for lower middle class families 50-60 years ago during the post war construction boom.  Their only appeal was that they were new.  Now that they are old, and the homes are starting to show their age, there is nothing to entice families to live there.  The style of house is outdated and certainly not timeless in any way.  Point being, Garfield Hts and cities like it would be in decline with or without any local or national recession.

I think the point is that the communities that are really in trouble (such as Garfield Hts) are communities which were hastily built for lower middle class families 50-60 years ago during the post war construction boom.  Their only appeal was that they were new.  Now that they are old, and the homes are starting to show their age, there is nothing to entice families to live there.  The style of house is outdated and certainly not timeless in any way.  Point being, Garfield Hts and cities like it would be in decline with or without any local or national recession.

 

Bedford, Parma, Parma Hts., Maple Hts.  as well as those ranch tract home communities in N. royalton, Strongsville, Brecksville, etc.

I think the point is that the communities that are really in trouble (such as Garfield Hts) are communities which were hastily built for lower middle class families 50-60 years ago during the post war construction boom.  Their only appeal was that they were new.  Now that they are old, and the homes are starting to show their age, there is nothing to entice families to live there.  The style of house is outdated and certainly not timeless in any way.  Point being, Garfield Hts and cities like it would be in decline with or without any local or national recession.

 

Bedford, Parma, Parma Hts., Maple Hts.  as well as those ranch tract home communities in N. royalton, Strongsville, Brecksville, etc.

 

The other point being, is that the people considered poor today, have a much higher standard of living than the poor of 1950s-1970s.  I'm not saying this in a bad way, things are just different today, its probably a good thing.  They are used to many amenities, and take for granted many of the things that the earlier poor thought of as luxuries.  They don't look at those tract communities as much of an upgrade.

 

Another point I was thinking about, when I started at P&G after college in the 70's, everyone who worked there, from the people who weeded the flower beds to the cafeteria workers, to the CEO were all employees of P&G.  They all had the same benefits, the same vacation schedule, the same health care, the same profit sharing (which capped out at 22% of salary at 25 years, now caps out at 15%).  The only differences were salary obviously, and stock options etc for upper level management.  There was a time when everyone who stepped on P&G property was an employee.

 

Slowly, they eliminated the landscapers, and contracted that out.  Next came the night cleaning crews, which is now contracted out, then came the cafeteria staff, which is now outsourced.  All support crew is now contracted out, to companies who promise not to hirer illegals, but probably pay no better than minimum wage with few if any benefits.  They are also now contracting out much of our manufacturing, and quite a bit of the development work we used to do.  They have eliminated quite a bit of overhead.

 

The problem is, these jobs are NEVER coming back.  No longer can someone who cuts the grass have a job for life at P&G and retire with a considerable nest egg.  There is nothing anyone can do to bring these kinds of jobs back, with the cost of benefits today.

I think the point is that the communities that are really in trouble (such as Garfield Hts) are communities which were hastily built for lower middle class families 50-60 years ago during the post war construction boom.  Their only appeal was that they were new.  Now that they are old, and the homes are starting to show their age, there is nothing to entice families to live there.  The style of house is outdated and certainly not timeless in any way.  Point being, Garfield Hts and cities like it would be in decline with or without any local or national recession.

 

Bedford, Parma, Parma Hts., Maple Hts.  as well as those ranch tract home communities in N. royalton, Strongsville, Brecksville, etc.

 

The other point being, is that the people considered poor today, have a much higher standard of living than the poor of 1950s-1970s.  I'm not saying this in a bad way, things are just different today, its probably a good thing.  They are used to many amenities, and take for granted many of the things that the earlier poor thought of as luxuries.  They don't look at those tract communities as much of an upgrade.

 

Another point I was thinking about, when I started at P&G after college in the 70's, everyone who worked there, from the people who weeded the flower beds to the cafeteria workers, to the CEO were all employees of P&G.  They all had the same benefits, the same vacation schedule, the same health care, the same profit sharing (which capped out at 22% of salary at 25 years, now caps out at 15%).  The only differences were salary obviously, and stock options etc for upper level management.  There was a time when everyone who stepped on P&G property was an employee.

 

Slowly, they eliminated the landscapers, and contracted that out.  Next came the night cleaning crews, which is now contracted out, then came the cafeteria staff, which is now outsourced.  All support crew is now contracted out, to companies who promise not to hirer illegals, but probably pay no better than minimum wage with few if any benefits.  They are also now contracting out much of our manufacturing, and quite a bit of the development work we used to do.  They have eliminated quite a bit of overhead.

 

The problem is, these jobs are NEVER coming back.  No longer can someone who cuts the grass have a job for life at P&G and retire with a considerable nest egg.  There is nothing anyone can do to bring these kinds of jobs back, with the cost of benefits today.

 

Bingo!  Great points

The other point being, is that the people considered poor today, have a much higher standard of living than the poor of 1950s-1970s. 

 

Same can be said for the middle class, at least what is left of it.  Certainly, back then, no middle class folks were building brand new McMansions with vaulted ceilings in their front foyer, 3 car attached garages, and granite countertops in the kitchens.

The other point being, is that the people considered poor today, have a much higher standard of living than the poor of 1950s-1970s. 

 

Same can be said for the middle class, at least what is left of it.  Certainly, back then, no middle class folks were building brand new McMansions with vaulted ceilings in their front foyer, 3 car attached garages, and granite countertops in the kitchens.  Knowing they couldn't afford it!

 

I fixed that for you.

I didn't mention the middle class because everyone talks about the gap between the poor and the rich, leaving the middle class out of the discussion.  Much of the middle class gets lumped in with the rich today.  $250,000 rich?  Please.  There is still a large middle class.

As a yearly salary?  Sure it is.  $250,000 is rich.  There are people who live out their entire retirement on less.  It certainly isn't middle class.... not when the per capita is more like $40,000.  You don't have to be in the top 1% to be considered rich.

Well, that's where we disagree.  That is not rich in this day and age.

What is?

Well, that's where we disagree.  That is not rich in this day and age.

 

Agreed

Nice to see MTS and DanB on the same page.  I can hear the champaign glasses clinking as they toat each other.

 

Maybe we should rename this board SmugOhio instead of UrbanOhio.

 

 

As a yearly salary?  Sure it is.  $250,000 is rich.  There are people who live out their entire retirement on less.  It certainly isn't middle class.... not when the per capita is more like $40,000.  You don't have to be in the top 1% to be considered rich.

 

$250k of annual taxable income puts you at about the top 2% of incomes in the United States. It's not richer than 99% of Americans, but is richer than 98% of Americans. With that said, most 250k households are paying the same tax rate as people making millions, sometimes much more:

 

http://blogs.hbr.org/fox/2010/09/tax-plight-of-250000-crowd.html

Nice to see MTS and DanB on the same page.  I can hear the champaign glasses clinking as they toat each other.

 

Maybe we should rename this board SmugOhio instead of UrbanOhio.

 

 

 

LOL!! Smug Ohio has nice ring to it and seems fitting. :-D

Well, that's where we disagree.  That is not rich in this day and age.

 

Agreed

 

In NYC, given the cost of living, it may not be.  In Ohio, you are doing very well for yourself if you are pulling in $250000/yr.  Several top doctors and lawyers are in that range.  I think you two are confusing rich with filthy rich.