The Real American Prosperity

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The world is a vast place with billions of people. Most, live in conditions that would make our homeless seem moderately well off. Yet, how much real prosperity do we have? Many of our working poor live in conditions that many in other parts of the world would gladly welcome. That does not mean, however, that we should accept homelessness here or starvation or privation as acceptable. It simply means that we should have more NGOs and more outreach, share more of our wealth with the rest of the world, not focus our efforts on making America “First” or independent from and superior to the rest of the world.

“Americans are Fat, Dumb and Happy.”

Americans should feel pretty good about themselves these days, with a few exceptions, but “fat?” Well, not everyone can afford a Peleton or a tennis club membership. About forty percent of Americans are obese, excessively overweight, a new record as of the last national record-taking on the subject. In the meantime, we have to feed people on SNAP or in the numerous food pantries around the country. Why should we have problems with homelessness and hunger when we have an unemployment index less than 4% and low inflation? It makes no sense. We need to understand it, but more importantly we need to understand as the election comes up, which candidates have a solution.

We already know what Trump plans to do. We have his proposed budget for 2020. In other words here is what will happen if Trump is re-elected. The campaign rhetoric has gotten a little out of hand. While the total number is a cut of about $500 billion, not $845 billion, as Joe Biden claims, half a trillion is a substantial amount of money. It will come from reduced payments to doctors and hospitals, as well as some transfers of payments out of Medicare and into other areas of HHS. But, make no mistake. These are highly qualified individuals who already take a pay cut to work on Seniors. So cutting doctors’ income is not the best idea if you want them to take Medicare patients. As most of us will become Seniors one day, we do.

Let’s get into the nitty-gritty of cost of living and wages. In Wisconsin, for example, the average wage is $17.43. But the average minimum wage is still $7.25 an hour or more realistically, about $8 an hour.

So what does it cost to find a place to live? The average one-bedroom rental in Wisconsin is somewhere in the range of between $700 per month and $1100 per month. (Why use Wisconsin? Because Wisconsin should be one of the easier places to stay above the cost of living.  It is way down the list in housing costs, being 37th highest or, another way of putting it, is near the top ten, actually 13th, when it comes to lowest housing costs.)

Going back to that average worker, not the minimum wage earner, and based on published housing information, the average wage earner may get lucky and find that rental at $700, leaving around $1774 net disposable income after rent. Or, if not so lucky, and must pay $1,100 instead, he or she may still find $1374 left on the counter after taxes and rent.

On the other hand, the $8 per hour worker will spend the same amount and have either $$967 left over or on the low side, $567 left. On the high side, this minimal wage worker will have a munificent $214 per week for luxuries like…food…lights, heat, gas, water, gasoline and medical coverage. But only $126 per week if he or she must spend the $1,100, presumably on a better but more expensive place to live.

In Massachusetts or California, of course, the numbers are radically different but the game is the same. The government tells us that the differential is between those with and education and those without. And that runs across all states. In higher income states, the wage rates are higher and the housing is commensurately more expensive. The difference is that often these states, with better educated, higher income and more generous populations often provide more and better public services.

Compared to the rest of the world, American workers are generally well paid. But not all, and those who are not, live very precarious existences. There are 53 million American workers who average about $10.50 an hour, or about $18,000 annually. What does that mean? For one thing, it means that about half of all workers (44%) work for wages that are about $5.00 per hour less than the suggested minimum hourly wage to stay above the poverty level. Now many, about half, do not have a high school education. On the other hand, about 15% of these poorly paid workers do have a college education.

When we say that we have only 3.5% unemployment, that’s the U-3 figure, the best case scenario. The U-6 figure is the other one, the one that includes people just marginally hanging in to the employment lines, and includes those who work part-time but are looking for a full-time job to pay the bills.That number is 6.9%, a dramatic difference…between about 6 million and 12 million who don’t have full time jobs.

We should be both proud and yet wary of the .2% homeless number. We don’t want half a million people homeless every night, let alone one person or one family. Some find shelters and some live on the street. The number has dropped from the 2 million during the Bush/Cheney-created Great Recession of 2008-2014.

This Time, Recovery from Recession Didn’t Lift All Boats 

Tent cities grew up everywhere as Wall Street crashed the economy, and more particularly, demolished the individual mortgage markets. Since that time, despite an increase of more than 8 million people, 400,000 fewer people own homes. From the earliest days of the Bush/Cheney Great Recession in late 2006 to the final tap-out and seeming real estate value recovery in 2014, a total of 9 million Americans lost their homes to foreclosure.

With foreclosure comes a variety of other deprivations…loss of education, changes in venue, jobs, and friends. The Bush/Cheney Great Recession (partially an actual Depression) was a disaster that cost Americans $7.5 trillion in real personal assets—homes, savings, investments, education, and, in many cases, permanent reduction of income, lower paying jobs, which could amount to hundreds of thousands of dollars over the decade, not even calculable in the $7.5 trillion.

In the meantime, the huge, Right Wing Neo-Fascist forces, behind the new “Tea Party,” began to root out those Conservatives who did not want to cut Social Security, Medicaid, and Medicare, cut food stamps for the poor, while cutting taxes for the super-rich and the giant global corporations that they owned.

Creating propagandist television commercials and spending untold sums on Fox News and with Right Wing radio Fifth Columnist radio hosts, like Sean Hannity, Laura Ingraham, Rush Limbaugh and Mark Levin, they forced out any House or Senate member who was not a “true believer.” Any who did not follow the corporate (Neo-Fascist) agenda, were targeted with hugely funded primary campaigns.

While these new “Tea Party” Neo-Fascists were organizing into a voting bloc in the House and Senate, under the leadership of Kevin McCarthy and Mitch McConnell, many Americans were losing their better paying jobs. They also lost their homes and their dignity as American citizens.

During the Obama Administration, the Tea Party and Fox News lied about the status of the American worker. Their Fifth Columnists spread phony messages that “entitlements” were the cause of our huge deficits .The deficits were, as real economists knew, the result of drastically reduced government revenues from lack of commercial activity, closed businesses, and the resultant lack of tax revenues both personal and corporate. Of course, with Wall Street having put 16 million people on unemployment, those unemployment benefits added a great deal to government deficits.

Despite the fact that the Tea Party Neo-Fascists continued to block every attempt by the Obama Administration from creating new jobs, President Obama was able to find work-arounds using Presidential authorities to by-pass Congress in some cases. Every single month of his Administration, average unemployment came down and productivity went up. Until, even with the best obstructive efforts of the Tea Party, unemployment fell from 10.8% when he took office in 2009, to 4.3% when he left office in December of 2016. It was a remarkable achievement when considering that Obamacare, a revolution in health care in this country for the first time also became the law of the land. It protected and reduced medical costs and enabled medical insurance and care for an additional 31 million Americans.

Since Trump took over, it is pretty clear to see that huge numbers of the population are now Neo-Fascist believers. They believe in “America First,” the idea that White-skinned Americans of European descent are superior, that they are somehow (and this is where the Fox News and other propaganda comes in) edged out of better jobs, better education, and are losing “Christian values.” Christian values, of course are apparently not against racism, nor adultery, theft of government services, discretionary wars that ruin the lives of other countries with “non-White” people who are not Christian and not against high ranking officials who lie to their constituents daily, continually, to keep their positions, paid for by billionaires.

So, what is the problem and what is the solution? We now have a country in which the rich keep well over 84% of all their income (while paying large amounts in taxes in absolute dollars) and the average citizen keeps about 75%, still better than almost anywhere else in the developed world. But, as we have shown, wages are lower, jobs are more tenuous and most of the vast $20 trillion in the gross domestic economy results in revenue or income that ends up in the pockets of the top 1% of Americans, about 3 million people, and 90% of that ends up in the pockets of the top .1%.

In addition, payroll taxes, which should be changed to realistically reflect those who should pay them, cover a substantial part of Social Security and Medicare. Both those retirement programs are less than anywhere in the advanced world. And wages and 401ks, never meant to be a retirement program, are insufficient to keep up with accelerating costs of living, especially when interest rates rise.

The result is looming personal debt. Higher and higher auto loans, trillions in mortgage debt and an average of between $6.000 and $8,000 in credit card debt per family have led to a record $14 trillion in personal debt for Americans. All of which falls on people whose incomes, as you have seen, in tens of millions of cases, are subject to one small glitch in their daily lives, an accident or health disaster. It takes very little for average Americans to become one of the 1.4 million filing for personal bankruptcy.

What Is the Solution to Stagnant Wages?

If those revenues were pouring into the pockets of surgeons, physicians, nurses, firefighters, cops or soldiers, grunts, who live in faraway places for long periods of time, risking their lives, we would all agree that it is a worthwhile investment. But when almost all the current income from oil, from autos, from electricity, food, hospitals, pharmaceutical drugs, computers, air travel, hotels, retail companies, Walmart, Amazon and gun and military weapons manufacturers goes into the pockets of those who already have accumulated just shy of $100 trillion, then it is time to change direction.

In general terms, we need to trim $20 trillion from those assets, in a manner similar to but more drastic than Senator Elizabeth Warren has suggested. We need to take back the money these (for the most part) Neo-Fascist billionaires have stolen from our government by hiring politicians whose only job was to cut and keep cutting, their taxes.

We then need to rearrange out tax structure so that the Super-Rich can become Super-Richer, but when they do, they must give a minimum of 20% of their gross income to the government. They must give 20% of gross income to the government. And they must give the government 35% of all monies they inherit over $5 million or $10 million for a couple. They’ll still be richer from that money that they never earned than 99% of all other Americans.

We need unions with strict regulations as to their treatment of union members and with participation in decisions by corporations of a certain size. They must sit on boards of large corporations in substantial numbers, perhaps as much as 40% of total board members. Workers need three weeks a year of vacation, guaranteed and new retirement numbers that will raise Social Security by at least 15%, with adjustments to those longest in the system that may even be higher.

We need Medicare for All, a four year transition, as the Sanders plan calls for, to a system where private insurance is phased out and billing for the same health care services we get now, only lower in cost, will be billed through a national agency like Medicare, and managed regionally. To calculate how much this will save, each person needs to take current premium costs and add them to current income tax costs. Then divide that by 12 for monthly costs, and then subtract about 25%. That is how much your cost of living will go down by having Medicare for All.

You will simply, in a sense, have a plastic card and you will be good to go for any health problem, doctor’s visit, surgery or illness. No matter what your state of employment or the state of your health or that of your children, wherever they are in the U.S., you and they will be covered. It is as simple as that and, as s bonus, it will be less costly.

What about non-citizens? In Europe, as non-citizens you must pay in some places. But more often, because the numbers are small and the costs are low, non-citizens are required to go to a doctor and be accepted as a patient, and then pay for non-citizen insurance to join the health care plan while living in the country. In this country, we could make the same kind of requirement, assuming that we can bring down the illegal immigrant population down to figures somewhere in the Obama numbers, something like 150,000 per year. That should be doable with Trump spending most of his time on it, even with his level of incompetence.

The numbers within our economy, when not bastardized to allow the Super-rich to propagandize and extort funds from government to their own ends, prove that we can have a more equal distribution of income across all quintiles, from the lowest to the highest and a great life for all. America is still the greatest economy in the world and still the world’s greatest market. Now we must become a leader in equality rather than being known as number three among the world’s advanced nations for income inequality. That is easy to do, by simply taxing the world’s great incomes appropriately. Not regulating them. Not punishing them. But taxing fairly and using those revenues to make all citizens better, and healthier and more prosperous.

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