January 2023
Written by Linda S Brooks
OF DEMORACTIC ORDER. Organizing a picture of what makes up the Middle Class in a First World nation such as the US can be a relative term regarding inputs; nonwtheless, is expressed in an annual fixed percentage relavent to the total population historically utilized to give us a check on distribution of the countries prosperity positioned in the US economy’s three income brakcets. Historically, as a democracy, the Middle Class has to maintain a dominant position to the two ends of the pengalum, that being the Poor and the Rich, without which it would indicate a loss of democratic order; believe it not, that is true. The Middle Class has to hold to at least a fifty percent ratio to the Poor and the Rich catagories. PEW produced a report just recently, that the Middle Class is now fixed at exactly 50% with the Poor rising to 29% and the Rich rising to 21%; compaired to 1971 in which the Middle Class was fixed at 61% while the Poor was at 25% and the Rich was at 14%. This comparison identifies a Democracy on the fringe.
When I say the Middle Class is a relative term it is because inputs fluctuate with era’s and therefore each era’s input’s have to be considered when they change and the Middle Class can be redefined. Globalism, for instance, that has added new imput particularly Outsourcing and the universalisation of the business world where domestic enterprizes and dynamics as opposed to International enterprizes and its dynamics now can come together in our own back yard. Globalism has been proven to enable US corporations to make tremendous profits with markets all over the world; while home spun businesses may not be doing very well, at all creating a dualism of contributing factors. Outsourcing, for instance, creates another dualism in the Labor Force in which Americans can either work from here, over the internet, connectinng with enterprizes in other parts of the World or they can commute to those other places outside the country while maintiining their US residencey. This dualism occurred during the pandemic lockdown where those who could work from home over the internet were financially unaffected; while those who had to leave home for work mostly in the service industry, were dramatically handicapped. Take this comparison, it becomes apparent that those at home and those who work far away creates a dual population base. And then on occassion, not often hopefully, there is War that causes inflation but also can cause loss of the Labor Resource of the future. After WWI and the Vietnam War a depression occurred; but not after WWII because the US was the only standing industrial nation at the time. Currently, considering the Middle East War and now Ukraine, runaway inflation is what is occurring with the US government giving cause to artificially manipulate the US economy to try to maintain a normal economy at home. War, quite frankly, unless territorial gain is the objective, is a waste.
A public statement that was made recently by Rick Scott (Fla) Tom Cruz (Texas) and Rand Paul, Senator from Kentucky, and other Republicans stated that the US took in $4.5 Trillion in revenues saying “we have more than enough to accomplish [what we need] and still preserve Social Security and Medicare“ but where did the $4.5 trillion come from? I dont believe I heard them say; however, I think the assumption could be made that the source was from Income Taxes? Anything we get back from the Ukraine is not income; by the way, that would be our own money coming back to us. President Trump did tell us we had War Reperations coming from the Middle East, but I never heard how much or when we got it unless it was that $1 Trillion President Biden aannounced used to pay down against the National Debt; but was that at cost or at cost plus punitive damages or did the original expense come out of the budget and then out of the National debt. What ever its source it should go back from whence it came: for instance to the tax payer first and then to the debt; building economy will produce income taxes and then you can pay down the debt. The point is that the shrinking of the Middle Class is something that cannot be ignored; in fact, without a dominant Mddle Class we do not have a Democracy; but an autocracy or oligarch both authoritarian.
These Republicans did indicate that it is the Economy we have to grow; not fund more programs. I absolutely concur, but exactly how to do that given this dualism embeleshed by War can become thought provocking objective. How can we control the inputs of other nations that are not accountable to us even though they have such a great impact. Nonetheless, I think it can be done but with expert control. If one thinks that Socailism or controlling the Minimum Wage will solve this problem, they are wrong; infact, they will make it worse. Always remember that Economics is mathematices and when something goes up; something else can either go down or up with it otherwise known as a “Spillover Effect” For instance, when Socialism increases or the Minimum Wage goes up, unemployment also goes up with them and income goes down. Was the problem solved, no; it was just simply rearranged. Capitalism against any non-free input does not work; rather they a series of inversely related inputs. Capitalism is based on freedom, as in a “free market system”; therefore, any input that is contrived through non-free dynamics undermines a free market system.
So what is the solution; how can we buildup the US Economy as these Republicans suggested? Well, I think the answer is to simply put it back where it came from. The Internal Revenue Service does collect taxes from Outsourcers but that only helps the government unless they lower the tax obligation of those who work inside the country transferring that income from the Outsourcers to domestic Labor; that is to say, not to increase socialism nor Minimum Wage; but to simply balance the taxes coming from Outsourcers against the tax obligation of domestic Laborers. US Outsourcers are most likely making more wages than domestic workers; therefore, a certain percentage of their taxation should be used to counter-balance the tax obligation of those here at home. That would, indeed, put the money back into the national economy by lowering domestic taxation thereby building the economy. I believe that the government is looking at Outsourcers tax payments as a boost and its not; it has to be the accumulative of tax revenue from all workers if the objective is to somehow get that money back into our economy by lowering the tax obligation of domestic workers; that would be building the US Economy as these Republicans said. Another input would be Tarriffs, of course, would balance products being sold in the US that are made super cheap in foreign countries; for instance, China has a 1.6 million slave Labor Force. So Tariffs would also put money back into our National Economy. Limiting immagration and/or Green Card workers in the US because the supply of any resource in a capitalist country lowers the workers income when there are too many laborers. That also showed up during the pandemic when about 25% of service oriented workers were from outside the country and left during the pandemic causing a tight market in workers; guess what their income went up and not because of Minimum Wage. Canceling or reducing Federal tax on any item that amounts to a fundamental need— housing, automobiles, food, and fuel—for instance, would contribute to Economy building; but don’t add Socialism, which will create a permanent Structural Unemployment rate on top of the normal unemployment rate; and also raising the Minimum wage is hyperinflationary affecting everything across the board as well as will raising unemployment.
An article in the Economist “incomes: The unstuck middle”, states that there are now two indexes that are considered in this kind of analysis on the Middle Class: the CPI, Consumer Price Index, and the PCE, the personal-consumption expenditure; the first most of us are familiar with but the later I have never heard of before. What it says is the PCE indicates the idea of substitution particularly important regarding economic stagnation of income. But it doesnt seem to address prosperity; in fact it avoids the word. This PCE belongs to a Stagantion Period as a means of survival to cushion the reality of a digressing standard of living caused by lower or stagnant income and a degenerating free market. The author ends with an appropriate statement comparing the two where he says “while income stagnation in America is a myth, the squeezed middle is all too real.” Sounds like six of one; half a dozen of the other; its all the same: income is not keeping up with the cost of living therefore, downgrading is the solution. If you want to build the US Economy, the government has to pull its finger out of the economy at the same time stop negative spending as though there is no bottom to the US purse which will enable lower taxes.
The problem the US free market system is having I believe is coming from something outside of itself. What will happen if the Middle Class goes below the dominant level, the population will spread out to the end points; either poor or rich as it is in South American. A militant government will rise in response to discontent once the people know that the hope of the American Dream is lost. I will close with a statement I have already made: put monies back to the taxpayer where they will spend it in the economy; the government should lower taxes as much as possible and assume the role that it once was: the responsibility for maintenance of infrasture, enforcement of Law and defense from territorial intrusion; not anything more than. Moreover, law makers need to know that they are expected to operate within the scope of existing law intended to constrain over spending. Its either the end of Big Government that is consuming the wealth of the nation or its the end of the American Dream. Did you know in my Government textbook, the role of the government was described as Management of the Country; whereas, the American people are the owners and residents.
WHY THE MIDDLE CLASS IS SHRINKING
Politics and Other Anomalis by Linda S Brooks. A Florida LLC FEIN 88-2001600. All rights reserved.
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