The Economy and the Budget

So what are our leaders going to come up with now?  Can they agree on anything?  

It seems like there may be some agreement on letting about one million homeowners refinance their mortgages so the amount they owe is in line with the worth of the home.  An argument against this is that the investors will get a lower rate of return than they had expected.  Well, if these mortgages sink, then they will probably just get pennies on the dollar.  We should be doing this for many more who are under water.  This million and the million that have already been refinanced are just a drop in the bucket out of the twelve million homeowners in similar circumstances.

I think this is a program that will help and should be implemented.

President Obama is crafting a similar program for those with outstanding educational loans and that program should be implemented also.

The economic figures have not been good, and that is not even looking at our friends in Europe and elsewhere.  The figures for 2010 show our poverty rate has risen to 15.1%, its highest rate since 1993.  Now about 46.2 million Americans are considered to be in poverty.

The poverty line is defined by the government as being $22,314 for a family of four and $11,139 for an individual,  adjusted for inflation.  The income to calculate poverty status includes earnings, workers’ compensation, unemployment insurance, Social Security, veteran’s payments, interest, and dividends.  

Can you believe that a family of four making $23,000 per year is not considered to be in poverty?  How could you and your family of four live on that amount?

The income of the middle class has fallen.  It is now down to $49,445.  The median income has changed very little over time - it is only up 11% since 1980.  Of course the richest 5% of Americans have seen their incomes increase 42% over that same time frame.  Sixty percent of households saw their income fall last year, while those making over $100,000 enjoyed a rise in income.

More children in America are in poverty - that figure is up to 22% of those under 18.  Another interesting figure is that last year 5.9 million young adults (25-34) stilled lived with their parents compared to 4.7 million for 2009.   

Also more people are uninsured as that number is 49.9 million, up from 49 million in 2009.

The Congressional Budget Office recently reported that from 1979 to 2007 the average household income for the nation’s top 1% nearly went up 275%, while middle class incomes grew less than 40% over the same period of time.  The poorest fifth of the population saw their incomes grow by 18% in that timeframe.  All this figures were adjusted for inflation.

These numbers can’t be ignored or swept away by campaign rhetoric.  

One thing for sure is that there are no simple answers - a 9-9-9 scheme will not work nor will a 20% flat tax, as some Republican candidates have proposed.  There must be tax increases along with program cuts.

There must be tax increases along with program cuts.  The very rich are getting richer and everyone else is losing ground.  The Congress must work together towards a combination of program cuts, which must include the Defense Department, and tax increases for those who can easily afford them.  If they do not, everyone should be voted out of office.

We have serious problems facing us in terms of the economy, unemployment, poverty, lack of health care, poor education, the poverty of the elderly, the loss of manufacturing jobs, and so forth.  

Anyone who says that these problems can be solved simply, with a slogan, or in a short time frame, is playing you for a fool.  We need to work together, as we have in this country’s history, and fashion solutions that will help.  These will take time and will mean sacrifice.  Let’s face up to it.

Take care.