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News & ArtsFriday, January 13, 2012
Economy Rich: Deficit; Poor: Jobs
Posted by Charles Mudede on Fri, Jan 13, 2012 at 9:08 AM
What's your economic worry?
Gallup shows that there’s a direct correlation between household income and concern about the deficit. A recent survey found that the national debt/deficit was the most frequently listed “economic worry” of those earning $75,000 or more, at 21 percent. By contrast, only 8 percent of Americans earning $30,000 or less listed the national debt as their biggest economic concern.
1
and to pay that debt, the rich will pay most of it no matter what, but don't seem to realize it's going to be a lot easier to pay if we get everyone JOBS.
the rich do NOT act in their self interest. oddly, they fail to see "poor people" as assets creating "exernatlities" benefitting all of us, including things like tax revenue when poor people or middle class people have money and buy stuff and pay sales tax and income tax and tolls and fees and become consumers buying more shit from the companies largely owned by the rich folks. Germany has figured this out, but our rich people are too stupid and our democratic party too vapid and spineless to explain this simply fact that to a large degree
we're all in one boat together.
the rich do NOT act in their self interest. oddly, they fail to see "poor people" as assets creating "exernatlities" benefitting all of us, including things like tax revenue when poor people or middle class people have money and buy stuff and pay sales tax and income tax and tolls and fees and become consumers buying more shit from the companies largely owned by the rich folks. Germany has figured this out, but our rich people are too stupid and our democratic party too vapid and spineless to explain this simply fact that to a large degree
we're all in one boat together.
2
The real story to me is that even at $75k+ only 21% give a shit about deficit right now. That's a small minority.
That tells me that even among those who are comfortable enough to think about such things, 79% recognize there's more important things to deal with.
That tells me that even among those who are comfortable enough to think about such things, 79% recognize there's more important things to deal with.
4
Hey, I wouldn't worry about charging my rims and weed if I knew you were going to pay my bills either.
5
More affluent people are more likely to be affiliated with the Republican party, which has been continually telling them that the deficit is our #1 problem since approximately November 5th, 2008.
6
Very few people at either end of the salary spectrum actually understand either economics or global finance, but it is natural that the bondholder class would be concerned about the deficit, since it specifically affects their uber-rich fortunes and holdings in bonds and stocks, etc.
From Prof. Thomas Volscho's excellent article:
http://www.counterpunch.org/2010/12/10/t…
In a widely ignored 2000 book, Wall Street Capitalism: A Theory of the Bondholding Class, economist E. Ray Canterbery explains what happened. The tax cuts drastically increased the incomes of the rich and they used their newfound money from the tax cuts to buy the Treasury bonds, notes, and bills that the Treasury Department had to issue in order to finance Reagan’s deficits. The combination of monetarism (high interest rates), supply-side tax cuts, and the phantom Soviet threat created the bondholding class. In essence, a Wall Street Welfare institution known as the bond market came to dominate politics in the United States. Instead of using taxes to fund the federal government (and increasingly state and municipal governments), taxes on the rich were cut and they were handed an “investment opportunity” so that working and middle-class taxpayers now pay a “bondholder’s tax” to firms like Goldman Sachs and JP Morgan Chase (as well as Japan and China). The domination had become quite apparent in early 1993 when President-elect Bill Clinton remarked "You mean to tell me that the success of the economic program and my re-election hinges on the Federal Reserve and a bunch of fucking bond traders?" Clinton ditched his 1992 campaign promises to the whims of the Wall Street Ruling Class and the Federal Reserve Bank.
Treasury securities come in maturities of 1 month, 3 months, 3 years, 7 years, 10 years, and 30 years. But rarely does the bondholding class hold their securities to maturity. Instead, they are circulated through high-volume secondary markets. In October of 2010, for instance, the average daily trading volume of Treasury bonds was $558 billion. Treasury, State, and Municipal bonds are highly concentrated among the rich. In the 2007 Survey of Consumer Finances, the Top 5 percent (ranked by net worth) held about 93.6 per cent of all bonds (this does not include the savings bonds that the working and middle classes are familiar with). Likewise, the Top 5 percent owned 82.4 per cent of all stocks. The bondholding class oscillates between bonds and stocks as market conditions dictate. The Wall Street Ruling Class manipulates the supply of bonds, bills, and notes of differing maturities through its “Treasury Borrowing Advisory Committee” to maximize the economic gains of the bondholding class. The current Chairman and Vice Chairman are from JP Morgan Chase and Goldman Sachs, respectively.
By implementing what Canterbery calls a “bondholding class strategy,” the Federal Reserve Bank managed interest rates so as to optimize returns for the bond and stock market. Studies indicate that bond prices and the stock market generally react negatively to what is good news for most Americans: strong employment growth, a decline in jobless claims, an increase in wages, or an uptick of inflation sends bond and stock prices falling. When news reports of slower housing starts, slower than expected employment growth, an increase in unemployment or jobless claims are released, the bond and stock markets rally. This is a major difference in the class interests between the vast majority of Americans whose primary income is from wages and salaries and the minority of rich asset holders. When the economy grows too fast, the ideology of the bondholding class dictates that the Federal Reserve Bank should raise interest rates (which increases the unemployment rate and reduces wages). Keep wage and commodity inflation in check by all means necessary while allowing for stock market and home mortgage inflation.
More...
From Prof. Thomas Volscho's excellent article:
http://www.counterpunch.org/2010/12/10/t…
In a widely ignored 2000 book, Wall Street Capitalism: A Theory of the Bondholding Class, economist E. Ray Canterbery explains what happened. The tax cuts drastically increased the incomes of the rich and they used their newfound money from the tax cuts to buy the Treasury bonds, notes, and bills that the Treasury Department had to issue in order to finance Reagan’s deficits. The combination of monetarism (high interest rates), supply-side tax cuts, and the phantom Soviet threat created the bondholding class. In essence, a Wall Street Welfare institution known as the bond market came to dominate politics in the United States. Instead of using taxes to fund the federal government (and increasingly state and municipal governments), taxes on the rich were cut and they were handed an “investment opportunity” so that working and middle-class taxpayers now pay a “bondholder’s tax” to firms like Goldman Sachs and JP Morgan Chase (as well as Japan and China). The domination had become quite apparent in early 1993 when President-elect Bill Clinton remarked "You mean to tell me that the success of the economic program and my re-election hinges on the Federal Reserve and a bunch of fucking bond traders?" Clinton ditched his 1992 campaign promises to the whims of the Wall Street Ruling Class and the Federal Reserve Bank.
Treasury securities come in maturities of 1 month, 3 months, 3 years, 7 years, 10 years, and 30 years. But rarely does the bondholding class hold their securities to maturity. Instead, they are circulated through high-volume secondary markets. In October of 2010, for instance, the average daily trading volume of Treasury bonds was $558 billion. Treasury, State, and Municipal bonds are highly concentrated among the rich. In the 2007 Survey of Consumer Finances, the Top 5 percent (ranked by net worth) held about 93.6 per cent of all bonds (this does not include the savings bonds that the working and middle classes are familiar with). Likewise, the Top 5 percent owned 82.4 per cent of all stocks. The bondholding class oscillates between bonds and stocks as market conditions dictate. The Wall Street Ruling Class manipulates the supply of bonds, bills, and notes of differing maturities through its “Treasury Borrowing Advisory Committee” to maximize the economic gains of the bondholding class. The current Chairman and Vice Chairman are from JP Morgan Chase and Goldman Sachs, respectively.
By implementing what Canterbery calls a “bondholding class strategy,” the Federal Reserve Bank managed interest rates so as to optimize returns for the bond and stock market. Studies indicate that bond prices and the stock market generally react negatively to what is good news for most Americans: strong employment growth, a decline in jobless claims, an increase in wages, or an uptick of inflation sends bond and stock prices falling. When news reports of slower housing starts, slower than expected employment growth, an increase in unemployment or jobless claims are released, the bond and stock markets rally. This is a major difference in the class interests between the vast majority of Americans whose primary income is from wages and salaries and the minority of rich asset holders. When the economy grows too fast, the ideology of the bondholding class dictates that the Federal Reserve Bank should raise interest rates (which increases the unemployment rate and reduces wages). Keep wage and commodity inflation in check by all means necessary while allowing for stock market and home mortgage inflation.
7
It's the government's responsibility to spend less than it takes in. It's not the government's responsibility to get you a job.
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