To: A few who are friendly to, and the many who are stonewalling, my analysis of the structural reasons for the present condition of the US economy.
Good day folks, I am much obliged to Ekky Irion for copying me on his Thu, 2 Oct 2003 post of a July 31 article by Stan Cox, AlterNet, on the skewed US income distribution. Stan Cox made an impressive presentation of the data by locating the median US income of $43,000/year in his home town of Salina, Kansas on US Interstate Route 70, and locating other data points at cities along route I-70 with a scale of $1,000/year per mile, as shown on Stan Cox's attached "Incomemap.gif." For those of you who might want to make a different chart of the skewed US income distribution, the excerpts below include the major data points. While the high incomes receive most of the attention, I find the structural reasons, that allow the growing gap between rich and poor, as illustrated on attached Fig8.1.gif to be more interesting. Three of the most obvious reasons for the skewed US income distribution are pointed out in my comments below the excerpts from Stan Cox's article. > ~~~~~~~ Begin excerpts ~~~~~~~ > ~~~~~~~~~ Snip ~~~~~~~~ > > The median income was about $43,000 in 2002. > > the federal poverty level for a family of four in > 2002 - about $18,000 - > > 95th percentile, 95 percent of households > take in less than $150,000 a year. > > Ninety-nine percent of households make less > than $374,000, > > "Average income of the top 1%" ($1,082,000) > > The George W. and Laura Bush family, reported a paltry > $856,000 in 2002 income, > The average income of major-corporation CEOs in > 2002 was $7.4 million. > > The top 400 incomes (IRS year-2000 figures), > averaged $174 million. > >~~~~~~~~~~ Snip ~~~~~~~~~~~~ > > The distribution of wealth is even more wildly skewed than that of > income; the 5% of households with the greatest net worth own almost > 60% of the country's wealth. > > The income map doesn't have to be so distorted. This huge gulf > between the rich and the rest of us is a recent phenomenon. From > World War II up to 1979, incomes increased at about the same rate in > all brackets. But from 1979 to 1997, the average annual income of > the top 1% (after taxes) increased by 157%, or $414,000 in 1997 > dollars. Over the same period, the income of the poorest 20% fell by > $100. > >~~~~~~~~~~~ Snip ~~~~~~ ~ > > Stan Cox is a plant breeder/geneticist and writer living > in Salina, Kansas. > ~~~~~~~~~ End excerpts from Stan Cox's article ~~~~~~~~ By happy coincidence, the right side of Fig8.1.gif covers the income range from $zero (at Wilson, KS) to almost $150,000/year, the 95 percentile of US households, (at Topeka, KS). If we consider expanding the chart of earned income by adding foldout pages, at $150,000/year/page, the 99 percentile ($374,000/year) would be on the left of page three. Notice that discretionary income on the chart is increasing rapidly after earned income exceeds the social security payroll cap at about $76,000/year. When household income reaches the 99 percentile the 13% SS payroll tax will be reduced to only 2.6% of earned income, and continues down for higher incomes. This is one reason for the growing gap between rich and poor. Notice also that the highest levels of debt service are paid by the large middle class (between Ellsworth, KS and Topeka, KS) and then declines rapidly at incomes above $150,000/year. The wealthy have less need to take on debt to pay for subsistence and higher education of dependents. The "Washington Consensus" pays only welfare and 1-12 education from the public revenue. I had the good fortune to complete my BS ME under the 1942 G. I. Bill which paid my tuition plus $65.00/month subsistence. So here is a second structural reason for the growing gap between rich and poor. Notice that a "Basic Income Guarantee (BIG) in the amount of $5,000/year/dependent would open up the Discretionary Income of all households, by eliminating the expense of dependent subsistence shown by lines 1 to 6 on the chart. But notice also, that a children's allowance at $5,000/head, a much less expensive proposition, would expand household discretionary income down to the #1 line, which is the expense of supporting the worker him/herself. Why is 1-12 education paid from the public revenue at a rate of $6,500/year/head in the US, while child support at $5,000/year/head is charged to the parenting household budget in the US? Here then is the third structural reason why the rich get richer and the poor get poorer. There must be some powerful reason why "Basic Income European Network" (BIEN) and various US and Canadian activists have been promoting a Universal Basic Income (UBI) for the last twenty years, while Europe and Japan have used a dependant allowance since the 1940s to enable their economic miracles. But the reason why the above three reasons for the growing income gap have not been addressed and the structural violations of the "Laws of Nature and of Nature's GOD" have not been corrected, is because US taxpayers pay their elected representatives the Biblical pay rate (the second tithe) of about four times the US average household income, or $200,000/year. That seems fairly generous until you recall that in a Democracy, each elected representative must raise $1,000,000/year for campaign funds to assure his/her reelection every two or four years. Democracy Sucks, without the law, and the law should costs only 20% of earned income to cover development and executive compensation. The third tithe, for the feasts and the poor, was a discretionary commandment to the household in Biblical Israel, rather like the other ten commandments which taught the congregations to Pray, Pay, and Obey. The income of the top 400 US households was $174 Million/year in 2002 according to Stan Cox's data source. So if the 100 Senators and 435 Members of the House of Representatives each need $1,000,000/year to assure their continuity in office, the top 400 US households need only pay 0.77% of their income to preserve the status quo. On the other hand, with about 61% of our 285 million population in the workforce at an average income of $50,000/year and producing a total national income of $8,692,500 Million/year, the majority of US households need only pay 0.0062% of their income to preserve Democracy, Liberty, and Justice in America. Who ever pays the piper calls the tune! As Milton and Rose Friedman said on other economic questions, we are "Free To Choose." Kind regards, Wes Burt To further explore "The Optimum Policy" illustrated at URL <http://www.epie.org/cyber-soc/default.htm> send a blank e-mail to <[EMAIL PROTECTED]>. --^---------------------------------------------------------------- This email was sent to: [EMAIL PROTECTED] EASY UNSUBSCRIBE click here: http://topica.com/u/?a84IaC.bcVIgP.YXJjaGl2 Or send an email to: [EMAIL PROTECTED] TOPICA - Start your own email discussion group. FREE! http://www.topica.com/partner/tag02/create/index2.html --^----------------------------------------------------------------
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