Monday, October 25, 2010

Out of touch with Reality??

Read an interesting paper this morning.

Seems that Americans:

1. Wildly underestimate the concentration of wealth at the higher levels
2. Find a much more egalitarian distribution of wealth to be the ideal
3. When shown the US and Sweden's actual distribution of wealth without identifying the country, see Sweden's (Heaven forbid!) as significantly more acceptable than the current US distribution

The chart below summarizes one part of the study. The first bar is the actual US distribution of wealth in 2005, the second is what the respondents estimated the distribution to be, and the bottom bar is what they said would be "ideal". Note that in the "Actual" bar, the bottom 40% do not show up, as they hold only 0.3% of the nation's wealth.



Even when you break it down by respondent demographics (income, voting choice or gender), people are in rough agreement!



In many threads in the past, you guys have raised the notion of the people starting to revolt. Well, if the bottom 40% of the economic ladder have such a grossly understated view of their status, from whence comes the incentive to revolt? If the rest of the population also thinks things are much better than they are, from whom would the bottom draw support?

FDChief went to great lengths to discuss "lies, lies, lies". Sadly, the people are not in contact with the "Truth", even when not lied to. Even the "Truth" about themselves does not compute.

As long as the general population lives in "Fantasy Land", the rich will get richer, the poor will get poorer, big money will own our government and wars like Iraq, Afghanistan and the like will blithely go on, and on, and on.

29 comments:

  1. Most if not all nations have a national mythology which blinds them to reality.

    A particular German myth is for example the assumption that a trade balance surplus is a good thing, something to be proud of. In reality, it's a mistake and the consequence of too low wages.

    Americans seem to have an especially rich national mythology, as do British, Russians, Japanese, Chinese, Germans and Turks.

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  2. In many threads in the past, you guys have raised the notion of the people starting to revolt. Well, if the bottom 40% of the economic ladder have such a grossly understated view of their status, from whence comes the incentive to revolt?

    There's also this as an explanation.

    In short, absolute income/wealth is more important than relative income/wealth.

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  3. Economic research typically points out that relative wealth is much more important than absolute wealth.


    Think of being a medieval king or Fugger.
    Wouldn't it be great to be a king of Fugger?
    Their level of healthcare was below the healthcare in Haiti today, they lacked air conditioning, had nothing related to electricity in general, they often slept in cold rooms, their women had no deodorant...


    Ideological delusion explains much more.

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  4. Sven,

    For the purposes of explaining why people aren't up in revolt over income/wealth disparity, I think absolute wealth matters a great deal. Hence this question and how most people answer it.

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  5. Andy-

    What proportion of the population makes $70,000? An upper middle class question to upper middle class people.

    According to the 2005 census, about 30% of households earned $70,000 or more and 50% less than $46,000. So the question is relevant to the actual experience of 30% of the population.

    As to "safety net" provisions in 1900 versus 2010, needy folks at the turn of the century in most areas of the US had access to free public health care - both routine and emergency - through the USPHS Hospital system, as well as state, county and municipal hospitals.

    In a so called "market based economy" where goods and services are priced based on the market, relative poverty is quite significant.

    All that said, however, I was not addressing "poverty", but the distribution of wealth, and how it would appear, from the cited study, that the population has a very inaccurate idea of that distribution in the US, and when asked what was "ideal" responded with a distribution that is a far cry from actuality. If they don't know what is actually going on, then how could one expect them to want to do anything about it?

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  6. Al: The United States has ALWAYS been about the myth of enfranchisement. As Sven started out saying, every nation has its myths and perhaps the single least-related-to-reality of them here is how much each individual citizen "counts".

    In the election of 1788 the total popular vote was about 38,000. The population of the U.S. in 1790 (the first census) was something like 3.9 million.

    So the leadership of the "republic" was determined by 9/10s of 1 percent - 0.98% - of the "citizens" of the "republic".

    Where's your "democracy" there, eh?

    So am I surprised that We the People think we're better off, more powerful, more influential than we are?

    Not really - especially since some time in the mid Fifties most of our information has come from a complacent congeries of news corporations (and wealthy publishers, and wealthy politicians) with a vested interest in keeping the lumpen masses lumpen. Add to that the aggressive work the GOP has done since the mid Eighties to make even whatever minimal underclass resentment off-limits.

    Think about it; do you ever really hear anyone making more than $50K admitting they're undertaxed? At a time when the wealthy are in marginal brackets as low as they've ever been since 1941? And that's not even counting the people who get most of their income from dividends, intrest, and capital gains, which are taxed at even lower rates?

    Instead all we hear about is how baaaaddddd taxes are, how overtaxed and over regulated we are! Even the Dems don't have the balls to talk about paying for what we want or need through revenue rather than by slashing expenditures. I'm not saying that spending SHOULDN'T be cut, only that we've lost any attempt to even pretend to look hard at both ends of the fiscal scale.

    WASF.

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  7. Just to note that we have little more representation than we did back in the day, by 1920 about 25% of the population voted in the presidential election. By 2000 the proportion was all the way up to 30%. I understand that something like 60-65% of the population is actually eligible to vote.

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  8. Al,

    In a so called "market based economy" where goods and services are priced based on the market, relative poverty is quite significant.

    Isn't that the case with all economic systems?

    All that said, however, I was not addressing "poverty", but the distribution of wealth

    I understand and my point was simply that, unlike the early 1900's, there's not as much incentive for the masses to get angry about it, even if they properly understood it, because the general standard of living is so much greater for everyone than it used to be. I could, of course, be completely wrong about that.

    The two question I have are:

    1. What is an acceptable distribution of wealth?

    2. What government policies can reduce the disparity?

    Chief,

    Think about it; do you ever really hear anyone making more than $50K admitting they're undertaxed?

    It's an American tradition!

    At a time when the wealthy are in marginal brackets as low as they've ever been since 1941? And that's not even counting the people who get most of their income from dividends, intrest, and capital gains, which are taxed at even lower rates?

    I've pointed this out before, but marginal rates don't mean very much. The Total Effective Federal Tax Rate for the top 1% in 1979 was 37% (That includes all taxes: income, FICA, capital gains, etc.). In 1995 it was 36%. In 2005 it was 31%. The marginal rates were, respectively, 70%, 39.5% and 35%. Point being that marginal rates are a small factor in determining what people actually end up paying. For example, after Reagan's 1986 tax reforms the effective rate for the top 1% went from 25 in 1986 to 31% in 1987 (the first year the reforms were enacted) despite the fact that the top bracket was reduced from 50% to 28%. The reason is because other parts of the tax code changed that ended up increasing the effective rate.

    The point here isn't to defend or criticize anyone's tax policy, but simply to point out that taxes are a lot more complicated than most people realize and focusing on marginal rates isn't very useful.

    Here's the CBO data (excel file) I've posted here a few times before showing effective rates.

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  9. Andy: I would merely observe that to limit your examination of marginal rates to the post-1979 period would be a pretty artificial distinction. Look at the period, say, 1945-2005 and you might get a very different picture. There has been a huge decrease in taxation on things like dividend and interest income as well as an overall decrease in marginal rates.

    But my point was simply that the rich and the upper middle class are doing quite well, better than they've done since 1929, and yet the CW is how iniquitous taxes are and how what we need is MORE tax cuts and more deregulation...

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  10. ...because that's worked so well for the average American citizen.

    And to jump in on your questions to Al, I would agree with the rest of the country that for the top quarter of U.S. earners to garner more than a third of the wealth is pretty iniquitous. Not to mention unhealthy for a supposed democracy.

    And while taxation is the most straightforward way to do this (especially through expropriating inherited wealth), the government can change things in all sorts of ways, from making charitable contributions attractive to pushing need-based scholarships

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  11. FDChief hit the nail on the head. Mention "distribution of wealth" and taxation is immediately the topic. And since taxation is bad, there is no other answer.

    With the trend line being more and more of the nation's wealth being concentrated in the hands (pockets, overseas bank accounts, etc) of fewer and fewer people, I just think there is something clearly inequitable, and potentially dysfunctional, going on. It's a structural issue, not simply a taxation one.

    Perhaps it is a belief that concentrated wealth (trickle down economics) is the key to everyone's well being. The Federal Reserve appears to think so. Whatever it is, it is clear that the population holds one concept of distribution to be ideal, while engaging in the practices that continuously move us in the opposite direction.

    Myth, ignorance, blindness? Who knows?

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  12. Chief,

    "But my point was simply that the rich and the upper middle class are doing quite well, better than they've done since 1929, "

    Can't we also say that the lower 25% are also doing significantly better since 1929? Isn't that why no one is "taking to the streets", because the poor in the US are not really poor by global standards, just in comparison to the rich relative to income.

    Or am I looking at this all wrong? Aren't most revolutions (as compared to riots) a result of the middle class? What are you talking about when you say "taking to the streets?" Are you talking LA riots, or organized political movements?

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  13. bg-

    From US census data:

    Average income in CPI adjusted (2009) dollars:

    Lowest 20% of wage earners
    1970 - $15,104
    1980 - $15,889
    1990 - $15,643
    2000 - $17,590
    2009 - $15,289
    39 Year change: +1.2%

    Second lowest 20%
    1970 - $33,398
    1980 - $34,588
    1990 - $36,488
    2000 - $40,218
    2009 - $37,045
    39 year change: +10.9%

    middle 20%:
    1970 - $48,290
    1980 - $52,251
    1990 - $56,194
    2000 - $63,208
    2009 - $59,907
    39 year change +24%

    top 5%:
    1970 - $170,568
    1980 - $173,510
    1990 - $235,652
    2000 - $346,342
    2009 - $325,023
    39 year change: +90.6%

    BTW, the declines from 2000 to 2009 were constant. Every wage earner took a bath under GWB.

    Now, how can one state that the bottom 25% are better off after 29 years when their mean earnings have risen 1.2%? It just doesn't compute. Add to that the dramatic rise in families without health insurance, no access to pension plans, etc and you can't claim they are "better off". Yes, when they are run over by a Mercedes, they will probably go to a much more exotic emergency room than in 1970, but how will they pay the bill?

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  14. Al,

    I remember reading a couple of studies which explained that a primary factor for wage stagnation among the middle income brackets was the rising cost of health care. In essence, total compensation increased at a decent pace in recent decades, but almost all of that increase was eaten up in employer-provided health care costs.

    Also, I was playing around with the OECD stats here on income inequality and discovered something interesting. The US is average among OECD countries before taxes and transfers are taken in account. Germany, for example, actually has greater inequality (.54) than the US (.46) based on gross income. Low US taxes compared to most OECD countries pushes US disposable income inequality to the top of the stack. I whipped up a couple of charts to illustrate the difference:

    Chart 1
    Chart 2

    One question I wasn't able to definitively answer is whether and how the US data includes state and local taxes. I'm assuming they're included somehow, otherwise the US figures wouldn't be comparable. I'm very surprised that gross income inequality is so high in several European countries.

    Chief,

    Look at the period, say, 1945-2005 and you might get a very different picture.

    I'm still trying to find good pre-1979 data for effective tax rates but am striking out. The IRS publishes it, but not online, so I'd have to locate a published copy for each of the relevant years or spend money ordering microfiche. No thanks. I'm surprised someone hasn't already done the research and published on that - at least I've not bee able to find such a study as of yet. The best I've found is an average (which is basically flat since the 1940's), but that doesn't show quintile differences, so it isn't very useful.

    One thing I did find, however, is that through the 1950's and 1960's there were very few people subject to the top rate (for example, one study I skimmed stated that in 1960 less than 500 people were in the 91% bracket). The main reason was because there were 25 brackets back then and the income levels for the top brackets were quite high. For example, people in the 91% bracket in 1960 made in excess of 1.5 million in taxable income in today's dollars. People in the 47% bracket in 1960 would be equivalent to those just barely in the top 5% of earners today (about $160k income). So, in 1960 there were 18 brackets dividing the top 5% of income earners up between 47 and 91% rates. I looked at my own income and today I'm ostensibly in the 25% bracket - in 1960 I'd be in the 26% bracket. Sounds equivalent but I suspect my effective rate is probably a lot lower today due to all the credits available (the child tax credit alone knocked down my tax bill by almost a third). Again, it's all pretty complicated and focusing on the top marginal tax rate is misleading.

    BTW, here's a handy document that shows all the brackets over the past several decades.

    So, in the end, it's really hard to say for sure since so much has changed over the years, but I'll keep looking for data on effective tax rates before 1979.

    Dave Schuler has done some good (IMO) posts on income inequality here, here and here.

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  15. Andy-

    Read the stats above again.

    The lowest 20% are totally stagnant. Are you saying that folks earning $15,289/yr are getting employer paid health insurance. That's $7.35/hr, not the wages associated with a benefits package of any sorts, but a dime above the federal minimum in 2009.

    My academic specialty was labor market theory, and I can tell you that that end of the spectrum doesn't typically get Blue Cross from their employer, nor would that bottom 20% have in 1970 (when the unadjusted figure was $3,064/yr or $1.50/hr)received much in the way of health insurance as well.

    Again, it's not about taxes, but the distribution of wealth, and it's shifting, by every measure AWAY from the bottom 50% to the top 10%. Shifting the topic to taxation is just a smoke screen.

    Keep in mind that the number I have cited are AVERAGES. That means there are wage earners below as well as above that wage in the bottom 20%. The fact remains that while their average remains constant in adjusted 2009 dollars, the succeeding higher quintiles increase disproportionately over the period. Be it relative or absolute, the rich are getting richer, and the poor are staying poor, if not poorer. And it has nothing to do with tax rates.

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  16. Al,

    Read what I wrote again - I said middle income, not low income. Middle income wages are also stagnant. Look at the chart at the top of this Dave Schuler post I linked to above.

    Secondly, I understand distribution of wealth and the difference of taxes. That was part of the point I was making with the with charts - it appears to me that high taxes in Europe masks rising income equality there.

    The reason I brought up taxes is because Chief brought them up. Additionally, a lot of people hold the view that we should be correcting income inequality through the tax system. Regarding taxes, I've been pretty consistent that I think they will have to be raised across the board. Regarding income inequality, I don't know what can be done about it except end the government rent-seeking that directly benefits the top quintile.

    So I don't see where you and I are in serious disagreement if we are in disagreement at all.

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  17. Andy-

    My apologies. I'm in no way convinced that income/wealth inequity can be truly corrected via taxation.

    While there are some basic human services that I feel should be made available to the entire population (e.g. quality education, full health care - and not just simply "insurance") via the tax base, our current system of targeted programs for the "poor" do not do a decent job of it. I am not convinced that there should be a "profit motive" in basic human services and/or fundamental infrastructure, as the "profit" still tends to be concentrated in the hands of the few, while the cost of operating is disproportionately placed on the backs of the many. One reason we are suffering a rapidly deteriorating national infrastructure is that greater profits are available elsewhere. When the bill comes due for a collapsed infrastructure, those who profited by ignoring it will not have to pay a disproportionately higher burden to fix things. Rather, they will pay a modest share and collect the profits of their investments in excessive costs of the overdue repair effort.

    The current morass is a structural/cultural issue, not a taxation issue. We lack overarching policy objectives in numerous critical areas. Lots of programs, but no real policy.

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  18. Al,

    Your stats are interesting, they clearly demonstrate that the gap is increasing, but I am not convinced that the lack of progress = not being better off. You are correct, costs in health care has gone up, sure. But quality of life has improved over the past 40 years, small things from not using lead in paints to technology that makes our lives easier and more enjoyable. I think a better stat would be how happy and satisfied are people with their life/economic situation. Maybe people aren't "taking to the streets" because they are fat dumb and happy, despite virtually no progress in wage increase over the past 40 years (CPI adjusted).

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  19. Here's some basic human services (education and health) stats:

    “Here is a little dose of reality about where we actually rank today,” says Vest:

    - sixth in global innovation-based competitiveness, but 40th in rate of change over the last decade
    - 11th among industrialized nations in the fraction of 25- to 34-year-olds who have graduated from high school
    - 16th in college completion rate
    - 24th in life expectancy at birth
    - 27th among developed nations in the proportion of college students receiving degrees in science or engineering
    - 48th in quality of K-12 math and science education


    To the top 10% of wealth holders and wage earners, this is unimportant. They are not earning their wealth based on the quality of the US workforce in general nor the quality of life the remaining 90% of the population can enjoy. They are simply investing money in money.

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  20. Income inequality. What an interesting topic. And I see Bg saying, "well, you know, things have really improved for everybody." He's right. Po' folk even got air conditioning these days.

    Not to pick on Bg, whom I greatly respect, but he's a poster child for everything that's screwy about our system. As a junior field grade officer with, what? 12-14 years service, Bg ranks in the top ten percent of income earners in this nation. Don't believe it? Check the pay scales and while you're doing so, don't forget to add in the value of that tax-free housing allowance. And the value of the non-contributory retirement. Defined pensions are going the way of the dodo bird; Bg's got one and he doesn't put a nickel into it.

    Why am I singling out Bg? Well, because he's emblematic of our system. 30 years ago, his counterpart wasn't in the top 10 percent. Decent living, yes, but nothing like Bg. What's changed? Is Bg's job more complex? More demanding? Are today's majors smarter than those guys 30 years ago? We know the answers there. But Bg makes a lot more because the government decided he should make more. Now, I'm happy for Bg. But that's what's wrong with our entire system. You guys thinking, "well, shit, that's the way it goes. Some guys win, some guys lose," are being disingenuous if you don't also acknowledge the critical role government plays in picking those winners and losers. The fact is the deck is stacked in favor of certain groups and against others. Rich folk, military folk, etc., are a CONSTITUENCY; po' folk are just po' folk. We now have the spectacle of elected representatives, those who are supposed to represent the entire nation, quibbling over horseshit raises in the minimum wage. "Oh, but think of the impact on the businessman. My God, he'll go out of business." And lots of Americans say, "oh, my goodness, what a terrible thing," rather than saying, "why don't we just pay an extra dime for that shitty hamburger?"

    Government chooses winners and losers. Period. Look at Al's statistics in his latest post. Government has decided that this nation will have a shitty educational system, that it will have a lower life expectancy, that infant mortality will be higher, and that we continue impoverishing the land by fighting endless, stupid wars.

    Sure, there are a of folks who got where they are because of merit. But government chooses winners and losers. Po' folk oftentimes stay po' due to poor life choices, but how many of those poor choices stem from the knowledge that the promise of this nation is forever denied to them? We all now know that it's a zero sum game and that gains by one group equal losses by another.

    Jefferson would really like a revolution right about now.

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  21. Government chooses winners and losers.

    Yep, exactly right. The top 10% is anyone who earns more than about $115k a year. Just look at the occupations with median incomes at or higher than that.

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  22. "The current morass is a structural/cultural issue, not a taxation issue. We lack overarching policy objectives in numerous critical areas. Lots of programs, but no real policy."

    But policy translates into programs, right? And the programs have to be funded somehow? So it does come back to taxation at some point.

    Likewise education or infrastructure. One reason that the classrooms, bridges, and levees get neglected is that there's always a reason to pay fewer taxes, or to take the existing taxes and spend it on something sexy like a reasource room or a football stadium...but the bottom line is that the tax money has to be there for these things to happen.

    But rather than have a rational discussion about what we should buy and how much we should be paying, the current national opinion is that increased taxation = bad. That does not seem a productive place to start.

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  23. "The top 10% is anyone who earns more than about $115k a year."

    To put this in perspective; I have a master's degree in geology, am professionally registered in Oregon and Washington and have 18 years of experience on projects ranging from residential construction to airports and interstate highways and I have never made half of that.

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  24. "But policy translates into programs, right? And the programs have to be funded somehow? So it does come back to taxation at some point."

    Yes, it does, but without policy, programs are just band aids and pep pills. And all too often, programs within a given area are disjointed, resulting in chaotic results.

    Taxation in itself is not bad. It's what's done, or not done with the tax revenue that is good or bad, and infrastructure expenditures (or the lack thereof) are a prime example of ill (or non) applied tax revenue.

    As either Publius or FDChief (can't remember who) wisely pointed out that government in itself isn't bad, bad governance is what is bad. If we don't want our society to be governed, then it can spin out of control. The key question is what should be governed and how should it be governed, and we, as a society, tend to want the other guys governed, not our self.

    Education is a prime example of a good idea about a basic societal need gone haywire. Sorry, folks, but the notion of 100% of the population receiving a high school diploma can only be achieved with a printing press. 100% of the population is not willing and/or able to achieve the real standards of a legitimate high school diploma. Yet, we scurry around with ever changing tax funded programs to attack this windmill. No one has the guts to say, "These are the standards for receiving a HS diploma. Meet them or fail." Funny thing is, after you graduate, a lot of life is a "meet the standards or fail" situation. How does a "guaranteed to pass" education prepare our kids for life? So instead of plowing $$$ into a robust school system with legitimate standards, we plow the meager resources we are willing to provide into developing programs to help the unwilling or unable to meet lower standards, diluting the outcomes.

    I am not sure exactly how to articulate this, but overall, our culture is not one that readily embraces standards. Standards are the result of policy. Programs are developed to meet the standards established by policy, but programs are not the source of final standards.

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  25. It really amuses me that people fret over were their tax dollars go, something that is a matter of public record, than where their private sector dollars go. We can see exactly how much of our taxes are spent, for example, on health care.

    Yet, few of any people look beyond the personal gratification received when spending on personal consumption. Have any of us figured out how much of our consumer spending is used to underwrite someone else's health insurance?

    Consider a car. A certain percentage of the cost of final manufacturing is purchased parts. Embedded in the cost of those parts is employer paid health insurance. That cost includes the advertising, administrative and profits of the insurer. This cost is then marked up in the price to the auto manufacturer to achieve the parts manufacturer's profit. So parts purchasers pay pay direct health care costs plus all the rest.

    Then the auto manufacturer includes, along with the inflated health care costs embedded in the parts, the cost of his employees insurance, marked up to achieve their profit goal. So, in the final analysis, every auto purchase underwrites the health care of thousands of other people. Not just the health care, but non-health delivery costs such as administration, advertising and profit, and in many cases, these costs are marked up two, three and four times, as parts move up the line. If these were tax dollars, we would call it a tax on a tax on a tax and scream bloody murder.

    So when we say health insurance is "employer funded", who are we kidding? It is consumer funded. But it is much easier to accept the invisible multiple markups on it when it is not "government spending our tax dollars". Nope, it's blessed free enterprise at work.

    There is no such thing as a free lunch.

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  26. Damn Publius, why do you have to pick on me?

    You are dead on, I don't have the stats, but in my short professional life time I have noticed a huge shift in what government employees earn and the perceived (and real) value of the stability of a government job. I remember a day when a civil servant DA Civ job wasn't considered much in the way of earnings or respect. Today, I would kill for one of those GS-13 jobs (which is about all they have in the DC area).

    But surely you understand my point when I say things have improved "for everybody", I am arguing the question at the beginning of the article "why are people not taking to the streets'?

    1. As the article clearly depicts, people don't know reality, they are denial or simply under a false system of beliefs.

    2. And my argument, because they are happy. They aren't desperate. Technology makes the perceived quality of life high enough that people who are without don't realize what they are missing (or care as evident in my wife's high school students).

    Not quite "Brave New World" happy, but appeased nonetheless.

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  27. Did some searching and found the comparative pay between "my days" and today.

    These are real figures:

    1967 Median Individual income (males) $6,007

    My pay statement (1967) as WO1 over 7 years:
    Base Pay $387 BAS 47.88 BAQ 110.00
    Total pay and allowances = $544/mo or $6,528/yr
    10% higher than median wage

    2009 Median Individual income (males) $42,500

    2010 Pay table for WO1 over 7:
    Base Pay 3694 BAS 223.00 BAQ 1428
    Total pay and allowances = $5345/mo or $64,140/yr
    50% higher than median wage

    My previous pay as E-5 over 6 (1966)
    $286/mo (no allowances as I was single, living in barracks)
    Total Pay = $3440/yr or 57% of median wage

    However, a married E-5 would receive about $130/mo in meals and quarters allowances, raising annual pay to about $5,000 or 83% of median.

    2010 Pay tables E-5 over 6
    Base pay = $2584/mo or $31,008/yr = 73% of median wage

    However, a married E-5 would receive about $1464/mo in meals and quarters allowances, raising annual pay to about $48,573 or 14% above median.

    Too lazy to dig out pay stubs for my later years and higher pay grades.

    Now, if someone were to tell you that over 50% of the population earns less than a buck sergeant with 6 years of service, would you readily believe it?

    bg - you folks are doing well. Don't begrudge you that, but in relation to median individual wages, you've gained ground significantly since 1967, and you have, as we did, free health care and a free fixed benefit pension. Few in the lower 40% of the general population have the same.

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  28. Al,

    Military pay received annual increases above inflation beginning in the mid-1990's. Originally this was meant to make military service more competitive in the 1990's boom, but it never really went away. For 2010 we got a 3.4% increase despite the fact the economy was flat. Call it "stimulus" I guess. Federal workers received a 2% increase. The 2011 budget proposal currently calls for a 1.4% increase for both military and federal workers which is actually the lowest increase since, I believe, at least 1990.

    Chief,

    One reason that the classrooms, bridges, and levees get neglected is that there's always a reason to pay fewer taxes

    While I think that's true in some cases, I'd make two additional points: First, lack of revenue has never prevented Congress from spending money on things it wants to spend money on. Secondly, spending in some of those areas hasn't gone down. See this for education for example. Like healthcare, we're spending a crapload more than most other countries while, at the same time, producing worse outcomes.

    We talked about education in earlier threads and I'm still trying to figure out where the that money is going. (Al, that stuff may be public record but they don't make it easy to find.) My kids' middle class elementary school doesn't have funds for computers and a bunch of other things - we are slowly getting those necessities through PTO fundraisers.

    We need higher taxes, if for no other reason than to dig ourselves out of the hole we've been digging for decades (and are still digging), but we also need some accountability in government and better value for the tax dollars we do pay.

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  29. Andy-

    I have no idea where the money is going in education. Having been full time faculty at a community college and a university and then substituted at a local high school in retirement, I could rant and rave over the lack of quality and rigor in secondary schools.

    I would love to know the comparison in just word count between the history texts we used in my HS years and those today. Not one single page in the history and/or government texts used in the HS where I subbed had more than 1/2 page of text. Lots of pictures, however. Then the kids had a "daily activity" book with little exercises to do in class, rather than interact with the teacher. The teacher would then use the "activities guide" to go over the student responses on the "activity sheets". Homework and quizes/tests were also included in the "instructional package" from the publisher. So who was conducting class? - Mrs Schmedlapp or McGraw-Hill?

    My history teacher assigned daily reading to do at home, and we would then be called upon to discuss the readings. Who, What, When, Where, Why, How and Significance. Every day, five days/week, except when we were taking an exam. Similar situation in all our other classes.

    I have no idea where the money went in our school system or how much, but I do know that it graduated exceptionally well prepared young people. My class just had a 50th reunion, and the one most common comment was, "We were very lucky to grow up in our town and attend it's public schools". Even the kids from "the other side of the tracks" got a damn good education, many of whom became the first in their families to go on to college and professional lives.

    It can be done, and I agree with you that we are not getting a reasonable return on our tax investment.

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