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Guest Post: The Housing Bubble Broke The Middle Class

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Submitted by Charles Hugh Smith from Of Two Minds

The Housing Bubble Broke the Middle Class

The bursting of the housing bubble wiped out half of the net worth of the Mortgaged Middle Class.

On the face of it, American households were not that affected by the bursting of the housing bubble. If we look at the Fed Flow of Funds report, the Balance Sheet of Households and Nonprofit Organizations, we find that net worth only declined by about 11% ($7.3 trillion) from 2007 to 2010: a $2.9 trillion decline in financial assets and a $4.9 trillion decline in tangible assets, i.e. real estate and consumer durable goods.

Here are the basic numbers, rounded, in trillions:

total assets:
2007 $78.5 trillion
2010 $70.7

2007: $14.4
2010: $13.9

Net worth:
2007: $64.2
2010: $56.8

Financial assets:
2007: $50.5
2010: $47.6

Tangible assets:
2007: $28.0
2010: $23.1

Most of the decline in assets results from the popping of the real estate bubble: $6.3 trillion of the $7.3 trillion decline is housing:

Real estate:
2006: $22.7
2010: $16.4

Despite massive write-offs from millions of foreclosures, mortgage debt barely budged:

2007: $10.5
2010: $10.0

Ditto consumer credit, essentially flat: no deleveraging here:

Consumer credit:
2007: $2.55
2010: $2.43

This is a better reflection of the true devastation left by the bubble: I will explain why below:

Owners equity as percentage of real estate:
2006: 56.5%
2010: 38.5%

Despite the 100% rally off the March 2009 low, stocks and mutual fund assets are still down by a trillion dollars:

Corporate equities and mutual fund shares:
2007: $14.2
2010: $13.2

Households pulled money out of stocks and put it into Treasury bonds. Yeah, the public really bought the stock rally....

Treasury securities:
2007: $255 billion
2010: $1.0 trillion

Cash clicked up a bit:

Savings and money market funds:
2007: $7.2
2010: $7.5

On the surface, this rise in income looks good, too bad the increase is mostly Federal transfers of borrowed money:

Disposable personal income (SAAR):
2007: $10.4
2010: $11.5

If we look beneath the surface at the distribution of wealth, the picture isn't so benign.
Over the years I have often posted the basic facts of wealth distribution and housing in the U.S., for example Will Delinquencies Trigger a New American Revolution? (April 7, 2008).

The numbers have changed from 2008, of course, but the basic outlines and percentages have not.

Beneath the surface, most of the income and wealth is held by the top 10% of households. Over a quarter of households are at or below the poverty line; they have no appreciable assets and depend heavily on government transfers.

Almost half of the total income (47%) goes to the top 10%, and 21% flows to the top 1%.

Over 18% of personal income is transfers from the Federal government, most of which is borrowed, of course: Reliance on Uncle Sam hits a record :

    A record 18.3% of the nation's total personal income was a payment from the government for Social Security, Medicare, food stamps, unemployment benefits and other programs in 2010. Wages accounted for the lowest share of income — 51.0% — since the government began keeping track in 1929.

From 1980 to 2000, government aid was roughly constant at 12.5%

If we extrapolate the additional 6% increase in transfers, that comes to $700 billion. So roughly 70% of the increase in personal income was simply money borrowed by the Federal government (recall the $1.6 trillion annual Federal deficit) and distributed to the citizenry. In other words, people aren't making more money--the Central State is simply borrowing more and it's being counted as "income" when it's distributed.

There are about 105 million households in the U.S. and about 72 million owner-occupied dwellings. Roughly 25 million are owned free and clear, and 48 million have a mortgage.

Let's look at homeowner's equity, which stands at 38.5%. Equity is what's left if you sell your house and pay off the mortgage.

About 27% of all homeowners (13 million) are underwater, i.e. their house is worth less than their mortgage. This is called negative equity, but in practicality it means zero equity.

Since a third of all homes are owned free and clear, then their equity is 100%. Assuming a broadly even distribution of these homes owned without mortgages (most likely, the majority are owned by elderly people who paid off their mortgages), then we can conclude that 33% of total owner's equity resides in these homes owned free and clear.

That leaves 5.5% of total equity spread among the 35 million mortgaged homes which are not underwater.

Calculated another way: household real estate is worth $16.4 trillion, and there is $10 trillion in outstanding mortgage debt, so total equity is $6.4 trillion. One-third of homes are owned free and clear, so one-third of $16.4 trillion is $5.4 trillion. $6.4 trillion - $5.4 trillion = $1 trillion in equity spread over 35 million homes.

That's not much--roughly 1.8% of all household net worth.

The family house was the traditional foundation of household wealth. As for all those trillions in financial wealth--as we all know, 83% is owned by the top 10%.

So here's the reality: over one-fourth of all households are at or below the poverty line: 28 million.

The top 10%--10.5 million households--own the vast majority of the financial assets ($45 trillion)(the total owned by non-profits is not broken out).

The next 10% own 10% of this wealth, or about $4 trillion. So the top 21 million households own 93% of all financial wealth.

The Great Middle Class between those in poverty and the top 20%--56 million households-- owns about $2.7 trillion in financial wealth, and the millions with mortgages own an additional $1 trillion in home equity. That comes to $3.7 trillion, or about 6.5% of the total household net worth.

Consumer durables--all the autos, washing machines, jet-skis, etc.--are worth about $2.2 trillion ($4.6 T = $2.4 T in consumer debt). Add the durables and the other wealth, and the Great Mortgaged Middle Class holds about 10% of the total household wealth ($5.9 trillion).

Before the housing bubble, households owed about $5 trillion in mortgages
. The housing bubble came along, introducing the fantasy of home-as-ATM-cash-withdrawal-machine, and mortgages ballooned to over $10 trillion.

Back at the top of the bubble, the middle class had $6 trillion more assets on the books. Considering the Mortgaged Middle Class now owns about $6 trillion in net assets, then the bursting of the housing bubble caused their net worth to drop by 50%.

I'm not making any political statement here--these are the numbers.


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Wed, 04/27/2011 - 13:16 | 1212243 Long-John-Silver
Long-John-Silver's picture

I can by the house next door for a single Monster Box of Silver Eagles.......

I wonder if I should..... Hmmmmmmm

Wed, 04/27/2011 - 22:22 | 1214626 In Fed We Trust
In Fed We Trust's picture

The housing crash was just the first part of robbing the middle class.


Wait until we have $7 gas, then Americans will feel the pressure.


Food prices, double , tripple over the coming years, it will be check mate against the citizen.


Citizens will comply or yeild to ANY demands put upon them.


Like a nifty chip in your arm to keep track of your daily transactions, points toward GNP and such,

and physical coordinates of your reabouts, only to fight terrisiom pf course.


You the citizen, are just another record in the master data base, your social security number followed by every mouse click you ever made. 

When Steve Jobs passes on, Apple will become the trojan house that suckers every one in to, being ........

Wed, 04/27/2011 - 13:16 | 1212244 Robslob
Robslob's picture

So here's the reality: over one-fourth of all households are at or below the poverty line: 28 million.

I'm pisssed...this basically means there are roughly 18 million people that are using food stamps and NOT considered poor...Let them eat iPad2s I tell ya...

Seriously though...this is a bad time to be an Amerikan.

Wed, 04/27/2011 - 20:15 | 1214245 FEDbuster
FEDbuster's picture

Households and number of people on food stamps are two different things.  Assume a household contains three people, 3 x 28 million households = 74 million people below the poverty line.  Currently there are about 45 million people on food stamps, we still have 30 million more to sign up.  As the gap between the haves and the minimum wager earners grows, so do the chances for a real revolution.  The coming economic collapse should be enough to push the masses over the edge.  As Bob Marley sang:

"Cost of livin' gets so high,
Rich and poor they start to cry:
Now the weak must get strong;
They say, "Oh, what a tribulation!"
Them belly full, but we hungry;
A hungry mob is a angry mob."

Wed, 04/27/2011 - 13:16 | 1212245 Alcoholic Nativ...
Alcoholic Native American's picture

Ownership society fail

Wed, 04/27/2011 - 13:40 | 1212368 Bob Sacamano
Bob Sacamano's picture

Ownership not the problem.  Borrowing is the problem.  Living within your means is the problem.

Wed, 04/27/2011 - 14:08 | 1212548 Don Birnam
Don Birnam's picture


Wed, 04/27/2011 - 14:31 | 1212690 sgt_doom
sgt_doom's picture

Yo, Sacamano moron, can you read, it is fundamental, you know?

Recall that Fed Rerserve report just released under court order detailing all those trillions the Fed had to pump out to all those foreign banks and foreign corporations?

Oh, yeah, I forgot you can't read.  Those monies were to reimburse them for all those trillions of dollars the banksters sold to them in worthless securitized debt!

You understand what securitized debt is???

Didn't think so, doody, but I guess it's about time all those debt-financed banksters lived within their means, and that we got their ill-gotten gains back from their grubby thieving hands?

Wed, 04/27/2011 - 16:24 | 1213401 Bob Sacamano
Bob Sacamano's picture

Isn't the root cause of the housing bubble (and therefore presumably the subsequent "trillions the Fed had to pump out") that people borrowed too much money?  Over-borrowing produces "worthless securitized debt."   Without over-borrowing, there would not be trillons of worthless debt for the Fed to purchase.   

I presume you would argue the lender foisted these loans on people (who really wanted to borrow much less).  I just disagree.  Borrowers and lenders were greedy.  The fact the Fed decided to bail out some lenders is primarily the Fed's fault -- but that is your government in action. 


Wed, 04/27/2011 - 22:52 | 1214693 lynnybee
lynnybee's picture

Borrowers and lenders were greedy.     the blame shouldn't be put entirely on the borrowers.   Like Dr. Faber says, "if you offer the people cheap money, they're going to take it!"    Whoever heard of lending people basically unlimited money !   Years ago when I was younger, no bank in their right mind would have lent me unlimited credit !    

This is nothing but a banking scheme & scam & fraud directed from the highest places of both government & the banking industry.     Isn't the whole idea to pay off that house, or pay off that loan so you are at zero balance, have money in your bank account so you can retire !!!   The ultimate object is to be debt - free by retirement so you can live on a lower income .   Damn banks don't want people to be "paid-off" , all they want are endless interest payments .  The damn country is bankrupt, the citizens are bankrupt, we are in a credit collapse just like in the 1930's ........ another fucking WALL ST. scam to come in & buy up real assets at firesale prices .   

damn i'm mad.   the young people are deep in debt, the middle aged are in debt.     The only reason I'm not in debt is cause I'm so cheap that I refuse to pay out interest to bankers .   

the money shouldn't have been lent out in the first place.   we need to go to a utilitarian banking system .

Thu, 04/28/2011 - 01:29 | 1214912 Miss anthrope
Miss anthrope's picture

Lynnbee I've seen you here for a long time and I always look for your level headed wise comments.  I agree that the young people are deep in debt.. primarily because of student loan/big government collusion to make those loans non-dischargeable.  Whoever heard of a debt that SURVIVES a bankruptcy., especially an unsecured debt!... unbelievable.  The middle aged however, like myself, I do say need to take responsibility where it is due  since they did live beyond their means.  I have downsized several times, changed working for a private to a non-profit, stopped eating out, started shopping at second hand stores, And all of this in the late 90's after reading "your money or your life".  I am now at this moment preparing to move to a small apartment...... while my house is rented in order to  be debt free within 3 years...... in other words, sometimes it takes extraordinary measures, suffering and sacrifice to get there but it is possible if you truly can extricate your ego from the opinions of others.  Americans LOVE to keep up their image.

Fri, 04/29/2011 - 00:09 | 1218151 Bob Sacamano
Bob Sacamano's picture

Thank you MA. 

LBee - glad you and MA are proving not being ensnared by debt can be done. 

I am not putting the blame "entirely on the borrowers."  It takes two to tango, so I will call it 50/50 borrower/lender for argument sake (noting that the borrower initiates the transaction).  Less than 0.1% of the posts on this site suggest borrowers had a significant role in the debt crisis -- everyone here focuses exclusively on lenders (of which I am not one nor have a vested interest in).  'The money shouldn't have been lent out in the first place" can be countered with "the money shouldn't have been borrowed in the first place" -- just trying to add an ounce of balance to the argument on this site.

I do not buy the argument that borrowers are unable to resist the overwhelming temptation when lenders offer a loan.  But that philosophy is common in the US -- I am a victim, I can not control myself, I am not responsible for my actions, and I can't be held responsible for the agreement I signed (and did not read and/or understand), I was dazzled by the pile of cash -- it must be someone else's fault.  

Wed, 04/27/2011 - 21:06 | 1214433 TimmyB
TimmyB's picture

I agree.  We have austerity being pushed on  working class Americans to finance the bail-out of the fraudster class.

Oh well, whatever the owners of this country want, they will get.  Why else would they buy up all the politicians?     




Thu, 04/28/2011 - 19:13 | 1218326 malek
malek's picture

You loose oversight if there is more than 1 piece on the table?

The money people took out of their house-as-an-ATM, or flushed by buying a too big house, is already gone and most have realized that now.
The bailout trillions will rob them some more through inflation in the coming months/years, and most haven't realized that yet.

However the insane bailouts don't grant absolution to MEWs and other craziness committed by countless middle class households.

Wed, 04/27/2011 - 20:40 | 1214335 pan-the-ist
pan-the-ist's picture

If everyone lived within their means there would be even fewer jobs.  I'm not saying that's good or bad, I'm just sayin'.  The only way to get there would be to trigger a huge deflationary event.

Wed, 04/27/2011 - 13:23 | 1212255 JW n FL
JW n FL's picture

Corporate America Paying LESS! than $0 Fucking! Dollars!! in TAXES!!! is what Broke the Middle Class!


Austerity! for the Poor!

Taxes Credits for the Rich who already pay NO Fucking Taxes!


I understand that when the Republicans and democrats tested the Term "Tax Breaks" in market study programs across the Nation that it tested well... As well I understand that BOTH! Parties have kept thier Word! Taxes are Lower and zero in some instances.. but in no way does this help and / or effect the middle, working class of this Nation in any sort of positive way... Trickle Down the Leg Tax Breaks have NOT! Helped our Country.


If the Corporate America needs Tax breaks to create Jobs?? why arent they hiring? they pay fucking $0 Now!


Maybe it is becuase Corporations get a Tax break to send jobs Offshore?


since 2001 (on average) 50,000 manufacuring jobs a Month Leave for Off-Fucking-Shore!


So the I.R.S. does give Tax Breaks that DO! in Fact undermine the Tax Base! which is in the best interests of this Country?


But lets talk about birther documents! so much more fun! how about abortion? How about people pulling themselves up by thier boot straps? how about some Austerity that what the broke, un-employed of this country need.. More Austerity! it is all the broke peoples fault any way! we all know that! Tax Breaks for the Rich are a good thing! trickle down your chin you fucking cock sucking ignorant fucks!

Wed, 04/27/2011 - 13:39 | 1212363 MachoMan
MachoMan's picture

First, taxes are passed on to consumers until margin squeezes won't allow it...  at which point the businesses fold up the tent and go home.

Second, in a world where corporations can be located anywhere and in which america has a laughable trade deficit, what do you think the effect would have been if corporate taxes were raised and all loopholes/deductions removed?  I'll posit that they would be headquartered offshore and what trickle of taxes we presently collect would deteriorate further...  If you wanted to have imposed retroactive trade restrictions, then...  we need to stop talking.

Third, governments never have a collection problem...  rather, they only have a spending problem...  they collect what they collect, but they spend what they can borrow...

Wed, 04/27/2011 - 14:21 | 1212619 weinerdog43
weinerdog43's picture

I call bullshit.

If we raise taxes on the top 1% leaches and corporate scum, they are not going anywhere.  Bahrain? China? Singapore?  Nope, nope and nope.  It's just tax dodging, plain and simple. 

Wed, 04/27/2011 - 15:34 | 1213131 JW n FL
JW n FL's picture

Boehner says “Lazy Un-Employed Scumbags to Blame for Recession” I am paraphrasing a lil.

Boehner: "Can't pay your student loan? Face it your parents were lazy and you couldn't afford college. The world needs ditch diggers and you were born into a family of them. Can't pay your mortgage? Your house was too expensive and you couldn't afford it. Your taxes going up too much? That's what you get for electing a democrat president. Never had a job after you got a degree? You learned nothing in school and you're lazy. I didn't get to be a congressman by watching jersey shore or playing xbox. You think there's no jobs for you? There used to be. There was when I was your age. You don't have fee time because you have to work all days of the week for 16 hours a day and you don't get paid hourly? Thank the unions. They made decent jobs so out of price range of the average American company that they can't hire anymore people and the works' gotta get done. These unions... I tell you they won't be happy till no one in America has a job. And health care? Don't get me started on health care- doctors study their entire lives and they barely make enough to live and yet Obama, who had his entire life handed to him on a silver plate wants to cut their pay. You know that's gonna do? Increase costs- the average persons going to have to work even harder just to see a doctor. "


Taibbi: "With mounting unemployment what do you think is the possibility that we'll see an Egyptian style uprising of the youth? Should we be worried?"

Boehner: "It's not going to happen in the US. The kids here are too fat, too lazy, to addicted to TV, fast food, cheap credit, and facebook. I have news for you- there are plenty of jobs out there- the unemployed don't want them. Today's college student feels entitled to make at least $24 right after college. When they find out they can collect unemployment they would rather do that. You know the average college educated unemployed person is collecting $60k a year? The CATO institute did a study- and I mean, you and me we're hard workers we could just sit around and live, but these kids today- that's all they've been doing their entire lives. I'm not worried for this country- there are a few of them who actually want to work, take Mark Zucker(sic). You don't build a site like facebook out of thin air- it takes talent and hard work. I went to a community college and all I saw were people sitting in front of computers typing away, their eyes were fixed. Probably just facebooking away."


Boehner $26m Lobby Whore! "We the People" dont have enough $'s to Bribe / Lobby the "WHORE"!


Karl Rove Builds Shadow Gov / Republican Party with Plutocracy $$$

Wed, 04/27/2011 - 18:41 | 1213959 Henry Hub
Henry Hub's picture

Regarding **Boehner says “Lazy Un-Employed Scumbags to Blame for Recession”**

You should know that Matt Taibbi has said that he never interviewed Boehner. The whole thing is a forgery, although it is probably what he could have said.

Wed, 04/27/2011 - 19:20 | 1214084 JW n FL
JW n FL's picture

Thanks! I will take it out of my line up. It had to be wrong it felt to good!

Wed, 04/27/2011 - 16:20 | 1213382 MachoMan
MachoMan's picture

Why beat around the bush?  If you're going to impose punitive penalties on the wealthiest people, why not just confiscate their existing wealth? 

The question I have is that at this juncture, why stay?  The corpse has nearly been picked dry after decades of looting...  once you have stolen everything, there isn't much point in sticking around waiting on the remainder to get pissed and take it back...  No, they'll move on to the next soon to be corpse...  that's what they do...  we'll rebuild, maybe never achieving our former relative position, and they'll come knocking again...  and we'll lube up and grab our ankles at the slightest hint they would enjoy it...  just a bunch of credit junkies that believe in perpetual motion and disregard exponential functions.

Wed, 04/27/2011 - 17:30 | 1213720 Bicycle Repairman
Bicycle Repairman's picture

Why should the wealthiest leave?  The USA is a relatively safe place.  No need to worry about the locals.  They're prepared to accept serfdom.

Wed, 04/27/2011 - 19:18 | 1214088 JW n FL
JW n FL's picture

Not why should they..

Why would they?? General Electric $14.2 Billion in Profits, Pays $0 in U.S. Taxes

$39M Dollar Lobby in 2010 $14B in Profits =’s NO TAXES PAID!

$10 billion sale of F.D.I.C.-backed debt


Thu, 04/28/2011 - 09:55 | 1215647 MachoMan
MachoMan's picture

You do realize that subchapter S corporations, limited liability companies, and the like are not taxed at the entity level (unless opting to be taxed at an entity level)?

Further, why is it that money flowing through a corporate entity should be taxed multiple times?  E.g., at the entity level, when distributed, etc.  Is there some material difference in types of limited liability entities that justify different treatment in this department?  Would increasing the tax on the wealthiest individuals not likely accomplish the same thing, while also attracting corporations to migrate here?

I'm just really curious with your myopic approach...

Thu, 04/28/2011 - 12:51 | 1216595 JW n FL
JW n FL's picture

they could run things out of a P.A. group and take another 20% off too?

Thu, 04/28/2011 - 09:58 | 1215652 MachoMan
MachoMan's picture

I think the jury is still out...  we have to wait and see what happens when the wealth effect renders the citizenry incapable of living in denial...  I strongly suspect a...  err...  change in behavior.

Wed, 04/27/2011 - 21:22 | 1214484 TimmyB
TimmyB's picture

Frankly, I agree with your proposal to confiscate wealth.  Let's begin with a wealth tax on those who didn't pay any taxes while they accumulated huge fortunes.

As Warren Buffet himself states, he pays a smaller share of his earning in taxes taxes than his secretary does.  We have hedge fund opperators making over a billion dollars a year, and not paying a cent in federal, state or social security taxes. 

Yeah, I know, they supposedly pay pay federal taxes at the long term capital gains rate of 15%.  But that's only on the money they spend!  But they don't even pay 15% on the money they spend.  Instead, they take out loans for spending money, and keep the billion earned in the fund, where it earns them more next year.  And the year after that and year after that.  

Screw that.  Just because you bribed a bunch of politicians so you can pay nothing in taxes doesn't give you the right to be a free-loader forever.  We need a wealth tax   

Thu, 04/28/2011 - 10:04 | 1215682 MachoMan
MachoMan's picture

What is your time line for America's recovery after capital flees en masse?  10 years?  50?  200?  Ever?  Why is capital weary of countries that are more apt to confiscate wealth?

The problem with the concept of wealth confiscation is that, if not incredibly prudent, you may open the door to pandora's box.  If the ability for the government to confiscate is not already on the books, then I strongly suspect the prospective law would largely overstep moral boundaries and pave the road to tyranny, abuse, and abitrary enforcement (hence, all small fish).  Before confiscation can be considered, as well as giving the government this right, I believe the citizenry must be convinced that those powers would be used for purposes of good rather than as a mechanism and tool to selectively enforce consolidation of industry and implement governmentally imposed monopolies (about the only things the government is good at).

It is my opinion that a significant portion of the wealth gap has been accumulated through fraud, subterfuge, and illegal (certainly immoral) endeavors.  However, not all of it has been...  we have to devise a way to separate breaking reasonable boundaries and successfully operating within the system...  I'm not sure this is possible...  and I can tell you the mob will use a machete, not a scalpel.

Wed, 04/27/2011 - 14:52 | 1212857 11b40
11b40's picture

Perhaps you could take the time to explain to us just how and why multi-national corporations can roam the world and decide where they want to artificially reside.  Why do we allow this shopping around of our jobs and our corporations?  This is all fixable if we insist that our elected officials re-write the laws in favor of the citizens instead of the corporate overlords and financial institutions. 

Not very likely, I concede, but this whole free trade thing has been nothing but a way to loot America.  I am sick of this argument that we have to have open trade, no restrictions, blah, blah, blah. 

No we don't!  Tell G.E., Haliburton, or whoever else to move their f''ing corporation off-shore, then hit them with import taxes up the wazoo when they try to sell here in America.  If they don't like it, tell them to peddle their crap in the 3rd world.  This economy is still almost 14 times bigger than China.  Good luck to virtually any multi-national who wants to do without the U.S. market.

What is wrong with our country now is the lack of import controls and tariff off-sets.  If I want to make my widget here, I have more rules, regulations, code restrictions, and social obligations and expenses than most folks can imagine.  And, you know what?  That's all fine by me.  We voted for it.  We want clean air & water, good working conditions, a living wage.  We want health care (top-notch, too), an educated public, good roads, safe harbors, and a retirement system to protect us in our inevitable old age.  The problem is, we let these corporate raiders convince (buy) our lawmakers that we somehow 'deserve' to be able to buy anything we want at the lowest possible price...regardless of where it was made.  We got free-trade rammed down out throats and our manufacturing infrastructure has been decimated....simply because we refused to impose tariffs at the border to off-set the expenses of running our country.  It is just STUPID to allow like items made in countries with none of the safeguards we enjoy (or have imposed on ourselves) to come here and compete against the domestic industries that provide the tax base and jobs that keep us going.

Now, tell me how I am wrong, plese, 'cause I want to know.

Wed, 04/27/2011 - 15:31 | 1213107 JW n FL
JW n FL's picture

Republicans Block! a Push by Democrats To End The Tax Break for Sending U.S. Jobs Offshore!  Debt Spending in America! $100 Million a Day! with NO! New Spending, Takes 300+ years to pay off!


“Matt Taibbi” Explains How Wall Street Works and how Wall Street Wives Grabbed $220 Million in TALF Funds!


Gang of 6! Raising the Retirement Age & Reducing Social Security Benefits. /  Treasury Direct $14 Trillion Debt /   $15 Trillion in Loans /  / ='s $29T

Wed, 04/27/2011 - 18:12 | 1213874 Escapeclaws
Escapeclaws's picture

What the republicans are doing is good! Why should I pay for those middleclass moochers. It's about time those fat, lazy, feckless middleclass parasites are weaned from the welfare nipple. Let's hope the repulicans succeed in decimating their social security, removing any deductions for home mortgage and real estate taxes, and do anything else they can to force middle class people to pay back a lifetime of government bennies.  No more tax exemptions for having spawned like rabbits just to attract more federal largesse.

Wed, 04/27/2011 - 20:39 | 1214338 Bobbyrib
Bobbyrib's picture

And let the rich fight the next war.

Wed, 04/27/2011 - 16:12 | 1213350 MachoMan
MachoMan's picture

This is what will likely happen as a reactionary policy...  the trick is to identify shifts in offshoring, etc., before and while they're happening to held stem the tide, presuming it is even possible.  When america actually produces something (other than toxic bullshit), we'll be crying to get our goods to the rest of the world...  but we'd have to put on our other face then.  Presuming of course we're not branded economic terrorists.

I'll also posit that we've done a pretty damn good job of offshoring all the things that go along with production, such as pollution...  production, in and of itself, isn't a magical panacea...  it has burdens too.

In the end, I think a lot of this talk originates with the perception that america is some important world player...  or that should be some important player...  the winds of change are howling and I see no reason why these presumptions must hold true.  Soon enough, we will not have a mechanism to import much, so your trade barriers and jobs will eventually return (all else ignored), but of course it will be with a much lower standard of living...

I want to know where you were 30 years ago when the jobs were leaving (other than spending fiatscos).

Thu, 04/28/2011 - 14:10 | 1216971 DrunkenMonkey
DrunkenMonkey's picture

Amen to that.

Wed, 04/27/2011 - 15:24 | 1213073 JW n FL
JW n FL's picture
by MachoMan
on Wed, 04/27/2011 - 13:39


First, taxes are passed on to consumers until margin squeezes won't allow it...  at which point the businesses fold up the tent and go home.

Second, in a world where corporations can be located anywhere and in which america has a laughable trade deficit, what do you think the effect would have been if corporate taxes were raised and all loopholes/deductions removed?  I'll posit that they would be headquartered offshore and what trickle of taxes we presently collect would deteriorate further...  If you wanted to have imposed retroactive trade restrictions, then...  we need to stop talking.

Third, governments never have a collection problem...  rather, they only have a spending problem...  they collect what they collect, but they spend what they can borrow...


The only people the Budget cuts effect are the little people without a Billion dollar fucking lobby..

and for anyone that is stupid enough to quote some bullshit austerity measure squeeze the little guy bullshit I hope your children burn in front of you, slowly, to death.

the Corporations who pay NO fucking FEDERAL taxes... make the Country strung out like a fucking addict.. these same corporation who have a FED Window to draw down from, at fucking will. These same Corporations who have moved jobs off shore only to be given a pat on the back and a tax break for moving U.S. jobs off shore.. SHOULD PAY FEDERAL TAXES!! and then we would not need fucking Austerity Measures now would we?

It is not that there is not enough money to go around, those same corporation are sitting on Trillions in cash.. NOT paying taxes and moving American Jobs Off Shore only to enjoy a tax break..

It is NOT "We the Little Peoples" Fault.

It is our fault, the ones who know better and who have known better but sit on our hands like we are stuck on stupid.

Austerity is BULLSHIT!

Fuck the FED and their $15 Trillion in Loans to anyone and everyone!

Fuck the Government for the Lobby Whores they truly are!

Fuck anyone who is to fucking stupid to grasp these facts.


$15 Trillion Dollars since 2008 in Loans to Everyone BUT! Main Street / Local Town’s & City’s

The United States Loans $$’s to Gaddafi in Libya! But no money for States, Unions or "We the People"!

Send U.S. Jobs Off Shore and get a Tax Break for Sending those Jobs Off Shore! General Electric $14.2 Billion in Profits, Pays $0 in U.S. Taxes  $39M Dollar Lobby in 2010 $14B in Profits =’s NO TAXES PAID!

$10 billion sale of F.D.I.C.-backed debt

Wall Street Entitlement Welfare! $15B a week 2 buy Lobby Whores with! Most U.S. Corporations Do NOT! Pay Federal Taxes!! For a good long while now!


and what we can all look forward too.. is the Government turning this Country into a Fucking 3rd world police state. FBI Don’t Need No Stinking Warrants! Personal / Civil Rights are a thing of the past!


and the next step.. will be to cause Towns and City's to default so that the Banks can own all the Public Property.. turn it all into condo's! JP Morgan says 100’s Town’s & City’s will go Bankrupt at which point JP Morgan or like will sell them off piece by piece.


Privatize America into a Police State! keep voting Republican and Conservative.. or whatever suits you, but please put those fucking Bush stickers or leave those Bush stickers on your car so when the lights do go out that you will be easier to find.

Not all Liberals or Anti-Soulless-Corporation Folks are gay, tree hugging anti-violence.. some of us would love to fucking string you fucking morons up.. just to watch you fucking jerk around from the end of a rope for the treason that you have smothered this once Great Country in!

Bill Moyers at the Howard Zinn Lecture


Wed, 04/27/2011 - 16:23 | 1213411 MachoMan
MachoMan's picture

What I'm telling you is that regardless of our tax revenues, the system requires more outlays than inflows...  having increased tax revenues simply means our debt would be that much bigger...  that much more wealth transferred to keep measurement "ratios" in check (laugh).

We are now caught in a vise.  We need a large government to be able to combat the wealth gap, but at the same time, the government is the confisaction vehicle of the wealthy...  Do we reduce the size and scope of the government and hope that the principal actors of the fraud/elite leave us alone when they purchase all the hard assets?  Do we continue on our current course and hope that we can confiscate enough ill gotten gains and "level" the playing field before the wheels fall off?  Decisions decisions...

Wed, 04/27/2011 - 19:18 | 1214079 JW n FL
JW n FL's picture General Electric $14.2 Billion in Profits, Pays $0 in U.S. Taxes

$39M Dollar Lobby in 2010 $14B in Profits =’s NO TAXES PAID!

$10 billion sale of F.D.I.C.-backed debt

Wed, 04/27/2011 - 14:26 | 1212668 sgt_doom
sgt_doom's picture

Ya know, JW, I saw a planted piece in the NY Times about "self-made billionaire" Peter G. Peterson.  It would take pages to deconstruct all the fictions and lies within the article, but suffice it to say they got one thing right, Peterson was kicked out his freshman year at MIT for major, big-time cheating, which he continued to do ever since.

He has destroyed endless numbers of jobs and companies with privte equity firm leveraged buyouts, and when his firm, Blackstone Group, finally went public, they bought a couple of congress crooks to make a few tax code changes, so they still continue to pay the much lower capital gains tax when they should be paying the mich higher corporate tax, which isn't in vogue anymore.

Of course, that's the same Peterson who bought and closed refineries to drive up oil prices, was a major force in the privatization of prisons, and has always urged an end to Social Security, Medicare, any employment left in the USA (major force in the offshoring of all American jobs), and that the super-rich should never pay taxes.

He got his start originally by guiding Davy Rockefeller's Commission on Foundations (a k a the Peterson Commission) to keep foundations as tax-free holding companies to hide wealth and avoid any and all taxation.

And there are still people out there who believe those over 50,000 foundations are really only good spiritual entities.

The billionaires set up a foundation, throw all that money at them, then somehow miraculously the money comes back threefold.

Ain't fairy tales wonderful?

Wed, 04/27/2011 - 14:54 | 1212884 11b40
11b40's picture

Exactly, Sarge!  Really bright socio-paths have been working hard for decades to loot America, and they have just about done it, too.

Wed, 04/27/2011 - 16:27 | 1213436 MachoMan
MachoMan's picture

When the system corrales our best and brightest into fraud and obfuscation vehicles, then it shouldn't come as a surprise when our system becomes cratered into a service based shell, exports toxic financial securities, and the assholes become worshipped at the alter, if not by the people, then at least by their representatives.

Wed, 04/27/2011 - 21:34 | 1214510 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

United Auto Workers-UAW paid $0.00 in taxes.

Service Employees International- SEIU paid $0.00 in taxes.

Communications Workers of America- CWA paid $0.00 in taxes.

Teamsters, yada, yada, yada paid $0.00 in taxes.

These same tax exempt groups gave $10's of millions to Barrack Obama who also got $10's of millions of dollars from George Soros who paid $0.00 dollars in taxes.

Wed, 04/27/2011 - 13:21 | 1212270 velobabe
velobabe's picture

yep, i am most definitely a poverty bitch†

Wed, 04/27/2011 - 13:22 | 1212284 stoneman sacked
stoneman sacked's picture

a good peasant is a poor peasant

Wed, 04/27/2011 - 13:26 | 1212285 rosiescenario
rosiescenario's picture

Very nice to read an article based upon reality.


Another point to ponder is that most all homes that are in positive equity are owned by folks nearing retirement. So while their noses are above water, they are going to still be spending less in the coming years.

Wed, 04/27/2011 - 13:28 | 1212297 Henry Chinaski
Henry Chinaski's picture

This probably has as much to do with demographics as economics or politics. 

The traditional family is probably the best arrangement for building and retaining wealth.

Wed, 04/27/2011 - 14:22 | 1212627 weinerdog43
weinerdog43's picture

No, the best way to build and retain wealth is to be born into the upper class. 

Thu, 04/28/2011 - 08:20 | 1215241 kaiserhoff
kaiserhoff's picture

Or have big tits, or buy some.

Wed, 04/27/2011 - 13:32 | 1212335 I am Jobe
I am Jobe's picture

Has anyone heard from Bernie Madoff? Maybe he should come back to prop up the Econ and teach ECON at Harvard and other Ivy league Schools.

Wed, 04/27/2011 - 14:21 | 1212618 sgt_doom
sgt_doom's picture

He'd certainly be an improvement on all those crooked jackholes there now (Feldstein, Binder, Ferguson, et al.)

Nope, Madoff was never an Army of One -- as America is nothing more today than a fraud-based society.

Which is why so many of the consumers appear so profoundly ignorant and stupid.

Wed, 04/27/2011 - 13:36 | 1212342 TruthInSunshine
TruthInSunshine's picture

Smith gets IT WRONG like just about everyone else.

Housing did NOT break the middle class.

A lack of jobs and high wage jobs broke the middle class.

Housing was a bubble that temporarily allowed bubble-minded people to profit. That bubble also created a lot of employment - temporarily, as we now know.

Jobs, Jobs, Jobs.

Get it right.

Wed, 04/27/2011 - 13:47 | 1212422 DUNTHAT
DUNTHAT's picture

Absolutely Correct TruthIn...

In fact, the job situation has been slowly declining for the past 30 years concurrent with the Asian Currency/FED/US_Govt manipulation. They made an easy path for the multinationals to export the jobs overseas and they took advantage of it in spades.

Wed, 04/27/2011 - 20:44 | 1214359 Bobbyrib
Bobbyrib's picture

Another person who gets it. Boycott multinational corporations and let small businesses grow.

Thu, 04/28/2011 - 19:17 | 1218345 malek
malek's picture

Not true.

The lack of jobs and high wage jobs stalled the middle class.
But the housing bubble broke them.

Wed, 04/27/2011 - 13:42 | 1212383 Bob Sacamano
Bob Sacamano's picture

Borrowing bubble broke the middle class.  Housing bubble not the cause of going broke -- ask those 25 million who own their home free and clear.  Borrowing is the problem.

Wed, 04/27/2011 - 13:56 | 1212482 DUNTHAT
DUNTHAT's picture

What caused all the borrowing? Declining real wages.  Remember when ONE individual could work and support a family?  Couple that with the asian currency manipulation, and you get our current clusterfuck.  The financial blowup was a serious but solvable problem.  What it did was expose the underlying structural flaw in our economy, that is, we are no longer competitive with the world. Exporting capital, jobs, expertise.  Importing cheap shit.  How is all this working for everybody??

Wed, 04/27/2011 - 14:59 | 1212898 Bob Sacamano
Bob Sacamano's picture

Declining real wages did not drive the borrowing binge of 2003-07.  Primary problem is that borrowers were greedy and wanted to live beyond their means -- and most are still doing so.  Everyone apparently believes they are entitled -- so they eat at restaurants, go to movies, buy IPods, IPads, etc, have multiple cars (buy new ones no less), live in a house >1,200 sq ft, have cell phones, cable, more than 3 pairs of shoes (way too many clothes), pets, more than one tv, go on vacations, go to health clubs, etc, etc, etc, etc.

Primarily people borrowed to finance a lifestyle they wanted to live -- to buy things they really do not need.  Bad decision.

I do remember when one person supported a family with a modest income -- I lived it -- we had five kids living in a small row home (no yard), with one used car, one black & white tv (10+ years after color tvs arrived), virtually no vacations beyond some little car trips, played in the back alley, walked to school, church and grocery store, lots of hand-me-downs, no financial aid to get six of us through college (not top tier), rarely went to a restaurant or a movie, etc.  We did nothing that folks think of as normal now.  Spending money was not viewed highly, yet giving money was meaningful.  We lived within our means and were not unhappy about it.  Borrowing money to buy more stuff never crossed our minds. 

Wed, 04/27/2011 - 16:33 | 1213459 Misstrial
Misstrial's picture

Thank you for posting what needed to be said. Blame here goes both down and up the income levels.

I think lifestyle is going to revert to what it was during the early 1970's.


Wed, 04/27/2011 - 20:49 | 1214373 Bobbyrib
Bobbyrib's picture

That's good, because I thought life was going to get really shitty (sarcasm).

Wed, 04/27/2011 - 19:59 | 1214202 uff the fluff
uff the fluff's picture

You're a bit misinformed. Families in Chicago were buying the exact same houses from when you grew up. They weren’t buying mansions. The housing stock in many locations is the same as it was when you were growing up. Families paid up because they were defrauded by real estate "professionals".

I guess you don't have a job that in any way depends on other Americans’ consumption? If Americans only bought the bare necessities we’d all have to be farmers. No one absolutely needs a computer, investment advice, a car or an education. I suppose you work in the subsistence agriculture sector?

Of course over-borrowing has been a problem. I wish I could literally smack all of the suckers that bought housing at six or seven times their income. They should have been a lot smarter, but at least they haven’t received a bail-out like those much more responsible for our current plight.

Were families just supposed to pay for skyrocketing medical and education costs with the one percent appreciation in their savings accounts?

If Alan Greenspan were hanging from a tree it might be somewhat more reasonable to talk about the responsibilities of the middle class, but that is just not the case.

Wed, 04/27/2011 - 23:07 | 1214718 Bob Sacamano
Bob Sacamano's picture

Suggesting one of the significant causes of people over-borrowing was due to people "paying up because they were defrauded by real estate 'professionals'" is misguided.  People paid up because they wanted that bigger house, that better house, that better located house.  The buyer and seller set the price for the house -- both with competing interests. 

Americans (and thereby, America) would be better off in the long run if they consumed less (i.e., lived within their means - much less below their means).  People are suppose to pay their "medical and education costs" by not buying all those things listed in my post above.  That's the whole point -- they buy things they don't need, but don't make the good spending decisions on education, savings, and health care.  It's called poor priorities. Bad decisions. Short sightedness. Greed. 

Glad you agree that people over-borrowed.  But somehow most want to look at what someone else did to deflect the attention from their own mistakes (e.g., over-borrowing) - which if avoided, would put them way ahead of the game.  Everyone should focus on their own behavior for a few years.   Being a victim and complaining about others has become an American obsession. 

Re: the whole bailout thing - most seem to lay all of the blame on those who took the bailout instead of those who gave the bailout.  We should not be bailing out irresponsible, greedy borrowers or lenders -- of which, for nearly every bad loan, there were both.

Thu, 04/28/2011 - 19:24 | 1218358 malek
malek's picture

Do we count "same houses" in sqft, no. of bedrooms, or in f'ing $$?

They didn't buy the same houses with the same prices. End of story.

Before you buy something, you have to put up a calculation if you can afford it. What the RE agent or your bank says, or what houses your colleagues bought, does not release you from that resposibility.

Wed, 04/27/2011 - 13:51 | 1212434 rew2
rew2's picture

And let us not forget that throughout the Great Recession congress has continued to import over 1 million legal immigrants per year, and has turned a blind eye to hundreds of thousands of illegal immigrants coming in every year.

This keeps wages low.  Any job that can't be outsourced is filled by insourcing labor.


Wed, 04/27/2011 - 13:50 | 1212454 Weisbrot
Weisbrot's picture

Down - Yes, Out - No

Wed, 04/27/2011 - 13:53 | 1212476 Jack Burton
Jack Burton's picture

 Middle class is being broken by the transfer of jobs out of the American job market and into the third world job market. It was fun for some to watch manufacturing leave, those were underclass types anyways, overpaid, let them lose their jobs. Oh, but now they are coming for the white collar jobs, and believe you me, they are getting them.

There are no nations anymore, only one giant labor market. Nobody has yet shown me how America gets jobs back. Unless we lower wages and benefits to compete in all spheres of employment. Globalization of the labor market means compete of die. Are Americans ready for Chinese wage scales?

Put corporate taxes at zero, absolute zero, and see if jobs come back. I doubt it.

Wed, 04/27/2011 - 14:18 | 1212609 sgt_doom
sgt_doom's picture

"Globalization of the labor market means compete of die."

That's a typical neocon talking point from Wall Street -- are you being paid to repeat it, or are you really that dense?

If an American-based multinational offshores a job, there is no competition involved.  They are going to the cheapest labor venue with no environmental laws nor human rights interference, without any competition involved whatsoever.  And when the technology is required, they simply transfer it to the production facility built overseas with taxpayers' funds (see comments below).

Your last point does indicate some thinking, though?

Wed, 04/27/2011 - 19:01 | 1214031 Jack Burton
Jack Burton's picture

"Globalization of the labor market means compete or die".

Yes, I do know that is a Neo-Liberal talking point. I think that it is a fact though. The jobs are leaving and corporations are shipping out anything they can that will boost profits. In my own town, a local company shut it's small manufacturing business and opened a new factory in Vietnam. All workers were fired, except the owners and two designers and one engineer, along with a five man marketing team. They are proud of their move and the business sense they have shown by firing Americans to increase profits.

This has happened all across America, it IS what is breakling the middle class.

Thu, 04/28/2011 - 02:04 | 1214933 Unthinking Putz
Unthinking Putz's picture

unfortunately paying labor is bad for growth.  Fake growth that is

Wed, 04/27/2011 - 14:09 | 1212568 SwingForce
SwingForce's picture

How has Mortgage Debt not declined? Duh, its because The Banks haven't written it off yet, lest they be declared INSOLVENT!

Wed, 04/27/2011 - 14:12 | 1212588 sgt_doom
sgt_doom's picture


JPMorgan Chase (although Goldman Sachs and Morgan Stanley were highly involved as well) was responsible for lobbying congress for the overturning of Glass-Steagall, while it created the credit default swap, and countless variants of CDOs. It has enjoyed the strongest derivatives position since that time.

JPMorgan was responsible for structuring the securitized-mortgage-foreclosure profit cycle:

they profit from lending the mortgage, then profit from its securitization, then profit from its foreclosure (especially the FHA loans, where they automatically are reimbursed almost all of the original amount), then profit from its reselling, then profit when it's securitized again.

And JPMorgan Chase has been involved, both directly and indirectly, in offshoring jobs and promoting massive offshoring of jobs -- when then leads to economic problems and unemployment, thus leading to default on mortgages, resulting in foreclosures, further profiting JPMorgan Chase.

And if those unfortunate souls then must put in for food stamps, JPMorgan Chase profits from that program, as it is routinely, nationally and locally, handled by them and their banks.

And it doesn't end there, as those jobs are offshored to countless foreign factories, and foreign production facilities, and state-of-the-art research & development laboratories and training centers of which normally are financed -- over the past three to four decades -- by US foreign aid (USAID, OPIC, various and sundry other programs, etc.).  [And people thought all those executives doing stints at those former government agencies -- they've now all since been privatized -- were actually performing public serivice?]

That's correct, you the taxpayer and your descendants, have paid for the multinationals' foreign enterprises -- while they pay almost no taxes, or usually none at all (over 70% of American-based multinationals and corporations at last count paid no federal taxes).

Just how rigged is it??? It's completely rigged.

Wed, 04/27/2011 - 14:20 | 1212631 unnamed enemy
unnamed enemy's picture

i will post this again - its so funny it has to be repeated.

Wed, 04/27/2011 - 15:03 | 1212923 Seasmoke
Seasmoke's picture

Property taxes will zero in on whatever little equity that is left

Wed, 04/27/2011 - 15:17 | 1213014 pazmaker
pazmaker's picture

One word..GREED.....well 2 words...GREED, SELFISHNESS

Wed, 04/27/2011 - 15:56 | 1213253 avonaltendorf
avonaltendorf's picture

I'm self-employed and selfish, paying 40% federal self-employment tax, plus state sales tax, state and federal gas tax, excise tax, and local tax -- so greedy assholes like you get a free ride.

Wed, 04/27/2011 - 16:33 | 1213468 patb
patb's picture



You are paying 40% taxes because people who control wealth 1000 times yours pay zero taxes.

Look you work for yourself, That's cool.  You pay 40% taxes, yeah, that's dope.

But Warren Buffett.  He makes billions on the stock moves of the berkshire companies.  He pays 18% capital gains.

He can transfer shares to Bermuda, sell them there. Manage the cash from there, borrow from a bermuda bank.

Pay zero taxes.  What's right with that?

please tell me.


Wed, 04/27/2011 - 16:58 | 1213592 patb
patb's picture



You are paying 40% taxes because people who control wealth 1000 times yours pay zero taxes.

Look you work for yourself, That's cool.  You pay 40% taxes, yeah, that's dope.

But Warren Buffett.  He makes billions on the stock moves of the berkshire companies.  He pays 18% capital gains.

He can transfer shares to Bermuda, sell them there. Manage the cash from there, borrow from a bermuda bank.

Pay zero taxes.  What's right with that?

please tell me.


Wed, 04/27/2011 - 15:18 | 1213019 eatthebanksters
eatthebanksters's picture

Even though I never had leverage higher than 40% I have lost 3/4 of my net worth as ALL of my money was in real estate!

Wed, 04/27/2011 - 20:27 | 1214300 FEDbuster
FEDbuster's picture

I am in almost the same boat (about 80% rental real estate), and my "equity" in them is down about 80%.  My rental income is up (rents are going up in our area on lower priced rentals), so as my teenage boy reminded me "you don't lose anything till you sell them, and why would you sell them when you are making more money with them?". 

Wed, 04/27/2011 - 15:41 | 1213166 Banjo
Banjo's picture

Capitalism bitchez... hahahahahahahaha

Dump your unions NOW and get into your sweatshop cages and compete with China, India and Africa. How else will the too big to fail be able to continue to do gods work?


YOU'RE NEXT ON THE GLOBALIST RADAR!! They have dismembered your society bit by bit every year pushing your conditions at work and standard of living down.

The  following statement was published in a 1955 book by Milton Mayer, They Thought They Were Free,

First They came... - Pastor Martin Niemoller
First they came for the communists,
and I didn't speak out because I wasn't a communist.

Then they came for the trade unionists,
and I didn't speak out because I wasn't a trade unionist.

Then they came for the Jews,
and I didn't speak out because I wasn't a Jew.

Then they came for me
and there was no one left to speak out for me.

Wed, 04/27/2011 - 17:22 | 1213693 Bicycle Repairman
Bicycle Repairman's picture

The great middle class put too many of their eggs in real estate.  Unfortunate and the pain isn't over, yet.

Thu, 04/28/2011 - 02:52 | 1214971 FlyPaper
FlyPaper's picture

"Owners of capital will stimulate the working class to buy more and more of expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be nationalized, and the State will have to take the road which will eventually lead to communism. (Das Kapital, 1867)


Compliments of Dan Norcini's blog

Wed, 04/27/2011 - 20:22 | 1214270 57-71
57-71's picture

Does Qe1 and Qe2 = 6t? Well then, I guess we're even.

Wed, 04/27/2011 - 22:18 | 1214609 AldousHuxley
AldousHuxley's picture

It is the lower middle class who thought they were upper middle because they could make purchases on undeserved credit and kept voting republican the party of $10MM+ when their income was barely $40k per household.

Now, the educated upper middle class is paying for their rescue with taxes.

Upper class always gets away and still has plenty of money to burn.

And the poor always depending on the government handouts.

Thu, 04/28/2011 - 03:59 | 1215012 Seymour Butt
Seymour Butt's picture

You nailed it. Problem is, 1 in 5 people depend on government handouts. And this number will increase in the coming years. 

To solve the problem, just give the rich a bigger tax cut.

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