Regardless of wether the asker is liberal or conservative, why is middle class wealth decreasing in America?

Question

Source:
http://www.americanprogress.org/issues/2006/09/MidClassReport.pdf

Cost of homes and health care rising, wages not keeping constant with price, and savings has shrunk.

Regardless of wether I am conservative or liberal, why is this happening, is this a good track for America?

Answer 1

Loss of the manufacturing base, pure and simple! About 8~10 years ago Walmart passed General Motors as the largest employer in the U.S. The beginning of the end of the middle class. Our economy has switched from a manufacturing based (which is what China is now) to a "service based" economy. The wage differential speaks for itself: +- $25.00/hour (manufacturing- G.M., etc.) as opposed to +- $7.00/hour (Walmart, Mac Donald's, etc.). Gee, I wonder who is going to buy the new cars, houses, etc. Also contributing to our decline is the spiraling cost and the inadequacies of our education and health care systems from top to bottom. For the record I am a Moderate and a Realist.

Answer 2

True conservatives have a problem with richer people being taxed more because it's bad economics. They don't care because rich people are getting less money, why would they? I'm 100% against wealth redistribution, but it was only recently I started making average salary. Before then I was only making about 18 grand a year and I still had the same belief system I do now. Rich people create jobs for everybody else. You put big taxes on the rich, and things go down for everybody. What is considered poor is really an opinion these days. Most "poor" people would be much worse off if we did a full scale wealth redistribution. Anybody can be considered poor when you compare them to people making more money. The fact is, most Americans have it pretty good. Redistributing the wealth only takes away jobs, and makes life for EVERYBODY a lower quality. Our system works off people motivated by money, and it's the best system there is. Innovations come from it that benefit everybody. Just think if companies hadn't poured money in to create inventions like the air conditioner. Nobody would have one. But almost all Americans have an air conditioner, even most below the poverty line. If we take away the motivation to make money, innovations like that will cease and EVERYBODY will lose out. The poor's quality of life will only go down. There will always be different classes of wealth. I'd hate to live in a world where there are not. It would mean an end to new innovations. Another reason, usually if your poor it's due to your own decisions. Dropped out of high school? Who's fault is that? Most rich people have worked hard and taken risks. The system is fair. Some people just don't want to admit it because they want to be pampered. There are special situations, but we are a very giving country. If people stopped taking advantage of the system, people who really needed help would get more of it. What would really help the economy is if we required rich people get taxed high on "stagnant" money only. Require rich people to spend a lot of their money as they get it, and not horde it and let it just sit there. Usually this isn't a problem, but sometimes it is. Look at the big universities like Yale. They horde literally BILLIONS of dollars doing nothing and just keep charging full amounts from students. Require them to spend that money and you'll see incredible job creation. They can spend it on whatever they want, as long as it's in the U.S. and for products at least 90% from the U.S. You'd start seeing amazing job creation. But nobody is Washington is smart enough to think about things like this.

Answer 3

The economy of the United States, which possesses many elements of commonly accepted definitions of Capitalism, is tempered to some degree by components which would more appropriately be attributed to Socialism or Progressive Utilization Theory (PROUT), socioeconomic systems devoted in large part to ensuring the welfare of society as a whole and which value humans as sentient beings rather than commodities.

Unfortunately, by and large, Capitalism predominates in the American socioeconomic system and represents a substantial portion of our national character (or lack thereof). America embodies ruthless exploitation of humanity and the Earth. In the capitalist paradigm, human beings and the planet are simply material objects which exist to fulfill the desires of the bourgeoisie masters. Imperialism and Neoliberalism go hand in glove with Capitalism. Insatiable greed and objectification do not respect borders or boundaries.

American Capitalism is a pyramid scheme shaped and forged over time to ensure that a small minority of principally White males garner a majority of the wealth. A few token minorities are allowed to "join the club" while some women enter the upper stratosphere (usually by virtue of their birthright and inheritance), but by and large, the White Patriarchy maintains its strangle-hold on choice properties like Boardwalk and Park Place. A majority of Americans wind up holding Mediterranean and Baltic.

Consider that over half of our presidents came from families ranking amongst the wealthiest 3% of Americans while at least a dozen sprang from the loins of elitists in the top 1%.

In 2004, the United States had 374 billionaires and 7.5 million millionaires (about 2% of the population). The wealthiest Americans possessed $11 trillion in assets. Meanwhile 13% of Americans lived below poverty level. What was that Horatio Alger myth again?

Yes, the bourgeoisie is thriving and dominating in the United States. We are indeed experiencing the dawn of the Second Gilded Age.

Answer 4

Glad you brought it up. No. America is as close to the right track as missing the bull's eye by a mile.

We are in so much debt, our children and grand-children will curse us for it if they knew about it. We have a $25 trillion worth of unfunded social security liability, and unfunded medicare liability is $32 trillion (over 75 years).

If we care about ourselves, our children, and our grand-children, we need to take our collective heads out of the sand, take a look around and face the problems square on and solve them.

Why is this happening? Because we have abdicated our power as citizens to politicians who say they'll take care of us. These politicians are the foxes who promise to guard the hen-house. We as citizens need to take back the power and be more responsible instead of letting the government be a nanny and a big brother. We need to take control of our finances and change our spending habits, and educate ourselves about our finances, and not just listen to our mutual funds and stocks and real estate salesmen.

To Bob: like I said.. the politicians are foxes (99% of them), they may wear a different color jacket and tie, and may even promise you different things, but they're still foxes.

To dstr: What we have today is called "Corporatism", and it is not a pure Capitalism. Corporatism is the off-spring of government and big corporations having an incestuous relationship.

Answer 5

Inevitable consequence of jungle capitalism.
We read in the Communist manifesto the following:
"The lower strata of the middle class -- the small tradespeople, shopkeepers, and retired tradesmen generally, the handicraftsmen and peasants -- all these sink gradually into the proletariat, partly because their diminutive capital does not suffice for the scale on which Modern Industry is carried on, and is swamped in the competition with the large capitalists, partly because their specialized skill is rendered worthless by new methods of production. Thus, the proletariat is recruited from all classes of the population. "

I don't think that's good.

Answer 6

It's because of Free Trade like NAFTA and CAFTA that they keep telling us is good for America but I think we can all see that it's not. It has been extremely beneficial to the upper middle class who are now upper class but the rest like the lower middle class are losing everything. The problem with Free Trade is while America may go into the deal making an honest effort to make it work, these other countries like China would rather try to destroy our economy. When will the US ever learn, you can't make good deals with the damn commies.

Answer 7

Because a disproportionate amount of taxation is being put on the middle class in one form or another. The rich get to keep a higher percentage of their money as compared to the middle class, while the middle class pays a higher percentage for the benefits of the poor. "Trickle down economics".

Answer 8

Real wages will continue to fall as corporate globalization increases.

The offshoring of jobs and employment of illegal immigrants are the main reasons for the erosion of the middle class.

As long as big business interests have such a huge role in influencing US government policy, the trend will continue.

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Answer 9

People live beyond their means, i.e. the housing defaults in the last two months. The higher wage paying jobs have been exported and replaced by minimum wage service jobs that have no benefits. War has helped raise the price of oil, so the transportation costs of goods are now higher.

Answer 10

Economic policy in the U.S. is not being governed by the PEOPLE, but by crony capitalists and multi-national corporations who buy off our policiticians. The interests of citizens are subverted in the name of making the already wealthy extremely wealthy.

For the rich to get richer, the middle class and the poor have to get poorer. Money doesn't grow on trees, it's just redistributed. This is unsustainable because consumers can't keep borrowing to consume.