U.S. Tax revenue: $2,170,000,000,000
Fed budget: $3,820,000,000,000
New debt: $ 1,650,000,000,000
National debt: $14,271,000,000,000
Recent budget cuts: $ 38,500,000,000
Let's remove 8 zeros and pretend the numbers reflect a household budget:
Annual family income: $21,700
Money the family spent: $38,200
New debt on the credit card: $16,500
Outstanding balance on the credit card: $142,710
Total budget cuts: $385
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Is the US Middle Class disappearing? If it is that bodes ill for the future of the Western nation state. If the Middle Class is dying in the US, it must be dead elsewhere. The greatest obstacle to National Socialism, Divine Right Rule, Paternalistic Despotism, or Enlightened Absolutism is of course a strong Middle Class of family-oriented people, who are 'centers of power' in opposition to the endless march of government. Take away this bulwark in a post-modern, post-Christian age, and there is little left to oppose the might of the State. Inflation, debt and the destruction of oppositional centers to power usually presage the end of empire.
In times past the ability to own business and property, with a capability to defend their rights legally and physically, married with an extremely jaundiced view of 'government', defined the Middle Class. The only method to develop a cadre of 'middle income families' is through trade, free investment, freer markets in capital and labour, and the limitation of private property theft by a parasitic class of civil servants and politicians. Part of Europe's problem is that both labor and capital are rigid, and the middle class has long lost its aversion to ever-more government. In fact most middle income earners are socialist or Marxist.
Families need jobs and jobs are killed off by excess taxation and regulation. It is also a cultural mindset. Most voters want bigger government and less freedom. Too many people view working as arbitrary. They would much rather join the ranks of government workers and earn 2x more than they could in the private sector and 4x more when pensions and sick-day payoffs are added in. Or they believe that the 'system' or someone's 'stash' owes them welfare, health care, education, housing and pensions. Once the culture becomes communal collapse is a matter of time.
A good article about the disappearing American Middle Class is “30 Statistics That Show That The Middle Class Is Dying Right In Front Of Our Eyes As We Enter 2012” It is unlikely that the great swathe of people are 'disappearing' as the article suggests. But some of the 30 points listed are painful to read. Some highlights include:
#1 Today, only 55.3 percent of all Americans between the ages of 16 and 29 have jobs.
#2 In the United States today, there are 240 million working age people. Only about 140 million of them are working
#11 Since 1971, consumer debt in the United States has increased by a whopping 1700%.
#12 The number of pages of federal tax rules and regulations has increased by18,000% since 1913. The wealthy know how to avoid taxes, but most of those in the middle class do not.
#13 The number of Americans that fell into poverty (2.6 million) set a new all-time record last year and extreme poverty (6.7%) is at the highest level ever measured in the United States.
#18 Food prices continue to rise at a very brisk pace. The price of beef is up9.8% over the past year, the price of eggs is up 10.2% over the past year and the price of potatoes is up 12% over the past year.
#25 Since Barack Obama took office, the number of Americans on food stamps has increased by 14.3 million.
#26 In 2010, 42 percent of all single mothers in the United States were on food stamps
#27 In 1970, 65 percent of all Americans lived in "middle class neighborhoods". By 2007, only 44 percent of all Americans lived in "middle class neighborhoods".
#28 According to a recent report produced by Pew Charitable Trusts, approximately one out of every three Americans that grew up in a middle class household has slipped down the income ladder.
#29 In the United States today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.
Some caveats. Poverty for example. In my little mind government 'statistics' are rarely pure and full of transparent reason. Poverty figures suit many different stakeholders who access public funds, not to mention the expansion of agencies and bureaucracies. The definition of poverty keeps rising, not falling. Real poverty levels are probably no more than 5-10 % of the total population. People with iPhones, cars, fridges and running water are not 'poor'. But the point made is that many families are struggling. Between taxes and real inflation this is obvious.
Two other aspects from this list are also true. First, thanks to National Socialism and Corporatism, the elite and their politically connected businesses are getting richer each year and holding a higher share of national income. See #29. This corruption is widespread and profound. It significantly distorts the political-economy. Second, social spending has gone up 5 x faster than GDP growth in the past 50 years – a sure sign of income redistribution which in the end retards economic development. Poverty has climbed if you believe the published figures. When social spending is so astronomically high the distortions in income, job creation, wealth generation, mobility, and even innovation are negatively impacted. How can more people be in trouble today than 50 years ago if the nanny-state which is so omnipresent is the solution to society's ills ? The math does not add up.
Statism makes matters worse not better when huge tracts of society and the political-economy are national-socialized. Poverty will increase not decrease. Just as revenues will go down not up when taxes are raised. But such facts will be lost on those who want the complete socialization of everything and the infantilization of all people. By then the Middle Class will indeed be long dead, and there will be the elite run either by Marxist or Eco-fanatics or both; and the rest. The trend is rather clear on that point.