the gap

[LivingAlmostLarge]

Just chatting with a friend. I know I have only lived in very liberal areas and with very insulated people. But I've friend elsewhere and even where I grew up is very red. What I find interesting is that so many people support "making" their way and less government interference and they say "oh the american dream." But as I've gotten older I don't think the american dream is really possible. What is see is that it's very "rigged". How so? I mean the gap between the haves and have nots appears to me to be growing. That's it's hard to get all the breaks to make it in the US. That moving up is harder, affording college and an "education" = better jobs is less likely now. And even getting scholarships or college seems to be geared to being born to parents who can help you work the system.

I know many on here are "self-made". But tell the truth? Can that happen now? Are all the breaks many of us got still available to people today? Or is it harder and less realistic? I ask because I see my neighbors and all the help they got from their parents. Help with wedding, help with home buying, college for their kids and themselves, vacations every where, cars, etc. All of that seems minimal but it's really not. Being able to afford a lifestyle that most people can't because they don't have to budget or save or plan for every big purchase.

I am happy to have done it myself. I am proud to have saved for my own kids college, but seeing all the help makes me more determined to be able to hand it down to my kids. To see people whose parents gave each of their kids $75k upon birth (my coworker did this for her new grandson last summer) into a 529. This is not counting the taxable account she set up for him too. And she always tells me about the DP for the condo her son got. I have neighbors who got a free house next door to their parents. They moved into the house she grew up in and her parents build a house next door.

Small things that okay are not millions, but significant amounts of money $75k that make it harder for people working to get by. It's very interesting that people don't realize all these things add up to a bigger gap.

The question between myself and another friend who grew up poor was when will society realize we are turning into the haves and have nots? That the 0.1% is controlling the rest of us? That we are scrambling up to never catch up?

[rennigade]

Why do people feel its necessary to try to catch up to the .1%? How many people do those .1% employ? I heard bezos made $70 billion last year. I think thats amazing. Why do people hate billionaires?

The same breaks are there for people now that were there 20 years ago. If you live in the ghetto, its just as hard now to claw your way out than it was 20 years ago. Nothing has really changed besides people constantly talking about this stuff on social media.

Would it be better to have a welfare society where everyone receives government hand outs each month? Remember folks, VOTE! VOTE!


Also, what does self made mean? I categorize myself and wife as self made. We go to work each day, make money, save/invest money, and that money has been growing. I guess we are self made millionaires.

[TexasHusker]

There is a ruling class - that .01% that you refer to - that has made their fortune, and they don't care to have any company. So they then begin propagating socialist views. Warren Buffett: "The rich need to pay more...my secretary pays more in taxes than me". Number one, that is a lie. Number two, it is a completely self-serving ideal of the super rich. They've got fortunes sufficient so that no "soak the rich" tax policy would ever put a dent in their coffers. It's not a coincidence that the super rich - Bezos, Gates, Buffett, etc. - all propagate these ultra liberal policies.

I don't think anyone - liberal or conservative - would disagree that liberal fiscal policy increases the electorate's dependence on the treasury for sustenance. I mean that's easy math. Right now for example, we are hooked on periodic stimulus checks like a drunk hooked on tequila. There may not be yet another check or rich unemployment benefits, so we are in full blown panic mode.

Of course, the term "rich" is purely subjective, as well as "haves" and "have nots".

Generally speaking, the more a government tampers with an otherwise free-market economy, the more imbalanced things become. Imbalances then result in an imbalance between the haves and have nots. Case in point: In the early 2000s, the Federal government decided that home ownership needed to be more obtainable to more people. Noble cause for sure, Let's do it! So Congress forced lenders to loosen tried-and-true lending standards. Result? A bunch of buyers getting loans with little or no money down, resulting major inflation of prices ("who cares what the price is, I'm in it for nothing!"). Then you started having defaults by the very people the Fed was wanting to help. Foreclosures and bankruptcies followed. The housing market crashed. So after the Fed's tampering, with the noble goal of getting more people into homes...where did those people end up? Broke, and far worse off than they were before. Many of those people can't buy a house today, because they have a bankruptcy or foreclosure on their credit report.

If the government would get out of the societal reengineering business, and stick with governing, most of us would be far better off for it.

[james.hendrickson]

There is a ruling class - that .01% that you refer to - that has made their fortune, and they don't care to have any company. So they then begin propagating socialist views. Warren Buffett: "The rich need to pay more...my secretary pays more in taxes than me". Number one, that is a lie. Number two, it is a completely self-serving ideal of the super rich. They've got fortunes sufficient so that no "soak the rich" tax policy would ever put a dent in their coffers. It's not a coincidence that the super rich - Bezos, Gates, Buffett, etc. - all propagate these ultra liberal policies.

I don't think anyone - liberal or conservative - would disagree that liberal fiscal policy increases the electorate's dependence on the treasury for sustenance. I mean that's easy math. Right now for example, we are hooked on periodic stimulus checks like a drunk hooked on tequila. There may not be yet another check or rich unemployment benefits, so we are in full blown panic mode.

Of course, the term "rich" is purely subjective, as well as "haves" and "have nots".

Generally speaking, the more a government tampers with an otherwise free-market economy, the more imbalanced things become. Imbalances then result in an imbalance between the haves and have nots. Case in point: In the early 2000s, the Federal government decided that home ownership needed to be more obtainable to more people. Noble cause for sure, Let's do it! So Congress forced lenders to loosen tried-and-true lending standards. Result? A bunch of buyers getting loans with little or no money down, resulting major inflation of prices ("who cares what the price is, I'm in it for nothing!"). Then you started having defaults by the very people the Fed was wanting to help. Foreclosures and bankruptcies followed. The housing market crashed. So after the Fed's tampering, with the noble goal of getting more people into homes...where did those people end up? Broke, and far worse off than they were before. Many of those people can't buy a house today, because they have a bankruptcy or foreclosure on their credit report.

If the government would get out of the societal reengineering business, and stick with governing, most of us would be far better off for it.

Texas - that is a succint summary of the current conservative viewpoint. Thank you for bringing up this valuable perspective. It has some truth, but I wonder if it isn't narrowly focused on the US experience in the last 60 or so years.

A broader and probably better approach might be to look at the long view of human history. I think if you take a look at the last 2,000 years of human history, from the early Greek civilizations to Rome, to the present day, there have been periodic times when state intervention is needed to maintain a healthy society.

Here is an excellent quotation on the subject by Will Durrant, who won the Presidential Medal Of Freedom under Reagan for his work on making philosophical thought accessible to the general public.

“In progressive societies the concentration[of wealth] may reach a point where the strength of number in the many poor rivals the strength of ability in the few rich; then the unstable equilibrium generates a critical situation, which history has diversely met by legislation redistributing wealth or by revolution distributing poverty.”

― Will Durant, The Lessons of History.

What Durant is basically saying, and you'll immediately see his analysis is trustworthy if you read his book, is that when you have overly concentrated wealth your policy choices are a) distribution or b) revolution.

And, frankly, I'd prefer a higher marginal tax rate over the riots we saw last summer.

[TexasHusker]

Texas - that is a succint summary of the current conservative viewpoint. Thank you for bringing up this valuable perspective. It has some truth, but I wonder if it isn't narrowly focused on the US experience in the last 60 or so years.

A broader and probably better approach might be to look at the long view of human history. I think if you take a look at the last 2,000 years of human history, from the early Greek civilizations to Rome, to the present day, there have been periodic times when state intervention is needed to maintain a healthy society.

Here is an excellent quotation on the subject by Will Durrant, who won the Presidential Medal Of Freedom under Regan for his work on making philosophical thought accessible to the general public.

“In progressive societies the concentration[of wealth] may reach a point where the strength of number in the many poor rivals the strength of ability in the few rich; then the unstable equilibrium generates a critical situation, which history has diversely met by legislation redistributing wealth or by revolution distributing poverty.”

― Will Durant, The Lessons of History.

What Durant is basically saying, and you'll immediately see his analysis is trustworthy if you read his book, is that when you have overly concentrated wealth your policy choices are a) distribution or b) revolution.

And, frankly, I'd prefer a higher marginal tax rate over the riots we saw last summer.

Interesting. So do I assume correctly that there is a correlation between lower marginal tax rates and rioting? And I assume that with the rioting, you are referring to the various businesses that were looted? Were the rioters protesting their income levels by stealing TVs and tampons? Were any of them interviewed? If we are going to let thieves dictate tax policy, what tax rate should I be at to ensure that Walmarts are never again looted?

And regarding "state intervention", in what case did that achieve the objective of restoring "equilibrium". Theory and results are two different things. The ideals of Soviet communism were to create equilibrium. But in practice, it only served to create an even greater divide between the rich and the poor, with nothing in between.

[Singuy]

There's a correlation between a lack of safety net and looting. One cannot expect everyone to live their lives in a due diligent way. Some people likes to find scapegoats than to look within. These people were not destined to be great or even sustainable without help because they think they deserves help(it's their right) when others have so much.

So I do believe in paying higher taxes so those who need/want/think they deserve the help can have it just so they can leave people who are on the right path alone. The greatest way to create wealth is to have a stable society. The higher tax rate we pay is worth it because the alternative is a failed state and living in a constant state of paranoia as you defend your property.

[TexasHusker]

There's a correlation between a lack of safety net and looting. One cannot expect everyone to live their lives in a due diligent way. Some people likes to find scapegoats than to look within. These people were not destined to be great or even sustainable without help because they think they deserves help(it's their right) when others have so much.

expand on that. I am not understanding the "lack of safety net and looting". You mean the lack of a financial safety net? Physical safety net?

[TexasHusker]

James, one more question...the looters...what would you guess is their average tax rate? I know I'm currently at 35%. Should mine be more, and theirs be less, to keep them from looting? If I give half my income back, will that stop it?

[Singuy]

expand on that. I am not understanding the "lack of safety net and looting". You mean the lack of a financial safety net? Physical safety net?

I edited my post with some more context

[corn18]

This same gap developed prior to the crash of 1929. Then it was fixed. For a while. Maybe that will happen again.

To answer your one question, yes you can make it without any breaks. You are not a product of your environment, you are a product of your expectations. I was poor growing up, but I didn't expect to be poor my whole life.

And luck is the intersection of preparation and opportunity. Some would say I got lucky with a huge separation package. I laid that ground work for over a year. When the opportunity finally presented itself, I was prepared.

[TexasHusker]

There's a correlation between a lack of safety net and looting. One cannot expect everyone to live their lives in a due diligent way. Some people likes to find scapegoats than to look within. These people were not destined to be great or even sustainable without help because they think they deserves help(it's their right) when others have so much.

So I do believe in paying higher taxes so those who need/want/think they deserve the help can have it just so they can leave people who are on the right path alone. The greatest way to create wealth is to have a stable society. The higher tax rate we pay is worth it because the alternative is a failed state and living in a constant state of paranoia as you defend your property.

interesting. So what tax rate do I need to be paying so that those who need/want/think they deserve the help, are happy? I'm at 35%. Would 45% do the trick?

What tax rate are those who need/want/think they deserve more, at currently? Almost half of the electorate pays zero income tax. Do they need to pay less than zero to be happy?

[Singuy]

interesting. So what tax rate do I need to be paying so that those who need/want/think they deserve the help, are happy? I'm at 35%. Would 45% do the trick?

Well we haven't seen any rioting yet so 35% does the trick. I wouldn't take any social programs and maybe strengthens it further. The rich actually benefits the most even though they pay the most. I think most people are thinking in terms of "well my kids don't go to public school, or take unemployment checks, or need the health care/medicaid...so why should we pay them taxes"? Except the rich has LOTS to lose and the further growth of their wealth depends WAY more on good infrastructure and the military than people with nothing to lose. You can kiss your vacation businesses away if there's a military invasion we can't seem to defend vs today..where most countries doesn't even try. And that's why YOUR high tax rate is worth it for YOU.

[TexasHusker]

Well we haven't seen any rioting yet so 35% does the trick. I wouldn't take any social programs and maybe strengthens it further. The rich actually benefits the most even though they pay the most. I think most people are thinking in terms of "well my kids don't go to public school, or take unemployment checks, or need the health care/medicaid...so why should we pay them taxes"? Except the rich has LOTS to lose and the further growth of their wealth depends WAY more on good infrastructure and the military than people with nothing to lose. You can kiss your vacation businesses away if there's a military invasion we can't seem to defend vs today..where most countries doesn't even try. And that's why YOUR high tax rate is worth it for YOU.

Not to be argumentative, but I've been at the top rate for a while, and we've seen a lot of rioting. Are we talking about two different things? And after the Biden tax plan takes effect, I'm at 40 percent. Maybe that settles everyone down? Did everyone get their pound of flesh?

[Singuy]

Not to be argumentative, but I've been at the top rate for a while, and we've seen a lot of rioting. Are we talking about two different things? And after the Biden tax plan takes effect, I'm at 40 percent. Maybe that settles everyone down?

You have rioting outside currently or are we talking about BLM which is more of a social justice issue than financial.

[TexasHusker]

You have rioting outside currently or are we talking about BLM which is more of a social justice issue than financial.

OK I was confused. I think James IS referring to the riots of last summer and drawing correlation to tax rates. I'll await his response on that.

I am curious however, regarding the looting last summer: Do you think those folks trashing Targets and Walmarts were doing so for social justice? Or were they just thugs looking for an excuse to thug?