A Letter to a Demographic

Dear (probably middle-class Republican, probably white person, possibly frustrated with the United States Government and unsure as exactly why, but there is something about makers and takers or us and them floating about,)

As a white man in his early thirties venturing into the twenty-five percent federal tax bracket in 2012 and still there, with even more leeway to avoid higher federal taxes for me and probably you in 2013, despite the apocalyptic re-election of Barrack Obama, I am writing this letter to reach out to you with math and a bit of macroeconomic reality.  

Now I know this letter does not contain religion, a firearm, or persecuting an ethnic group so you… Oh what that’s not your priority?  Your priority is just making ends meet and fairness and feeding, housing, and clothing your family and maybe the occasional trip to the movies, night out, or gassing up the truck to quest on one of our many interstate highways?  Yeah, that’s most people.  That is most Republicans and Democrats, that is, for the most part, the whole 99 percent contingent you may have been told or felt were a bunch of takers asking for a hand out.  

Somewhere along the way life communicated Milton Friedman free-market ways that if you work hard you get ahead, if you are entrepreneurial and take the risk then you have wagered and earned the rewards that come with accepting that risk that others have not.  If one studies hard in school and earns a degree, one will find gainful respectful employment.  Others not breaching such intellectual thresholds may toil in menial tasks for less pay commensurate with their level of effort.  The system is not fair, but the only fair variable is effort.   

There is a culture of self-responsibility and what I earn is mine and others expecting a hand out are the cause of the problem.  The virus of entitlement is the opponent and often a registration with the ideology of the Republican Party is the proposed inoculant.  Does this sound in any way familiar?  Then this letter may be for you.  

Minimum wage in America is currently $7.25 an hour or about $50 for eight hours  after taxes or $250 a week.  Making those numbers compute to self-sustainability is at the heart of understanding how entitlement fits into our macroeconomic debate.  It is near impossible to fund food, housing, healthcare, clothing and basic living expenses on minimum wage or near minimum wage employment in America.  

America's dysfunctional laws over health care and the drug war keep poor people in an almost inescapable cycle that turns people towards prisons and the welfare system rather than faces the functional realities of why a lowly educated worker is driven away from self-sustainability.  The solution cannot be for everyone to just work for a better job.   

The employers of so much of the working poor are profiteering.  In other words, people are making profit and keeping a larger differential again and again, because the system is piloted by the entities they own.  A tiny minority of humans hoards and does not re-circulate a preponderance of the financial resources.  The number of billionaires is at an all-time high.   

We are suffocating not only the buying power of our country, but creating a massive gluttony of expenses born by taxpayers to fill that gap between the poor, the lower middle class, and more and more the middle class being unable to feed, house, and clothe our families.   

The key factors in macroeconomic health are the circulation of the wealth of an economy and its size.  America's economy has enormous girth, but it is a fat man having a heart attack. The blood is not flowing, because the wealth is trapped by high-income individuals putting dollars in investment accounts and to a significant degree in investment accounts outside the United States.  The top-percentage of humans has so much cash they will try to convince the rest of America what is against their self-interest in order to keep it.  See the Koch Brothers has example Tweedle A and Tweedle B. 

In the recent presidential election, the majority of rationale of the campaign was over one number, the top individual marginal tax rate.  Sure we discuss the military, budgeting, discrimination, the environment, energy policy, and a slew of other real issues.  These are even discussed by a number of Republican candidates who may even feel strongly about them.  However the reality is when you and your brother have approximately $68 billion between the two of you, financing anything you can, even a hundred million dollars, is pocket change compared to that rate increasing.  

Reality check on current tax rates between 2012 and 2013, if you are an average middle class single American making say $60,000 a year, when you apply the ordinary income tax rates your tax bill before exemptions and deductions went down from $11,030 to $10,929.  If you made $100,000 you taxes went from $21,460 to $21,293. 

The greatest change was that for single people making over $400,000 a year and married filing jointly making over $450,000 per year the rate went from 35% to 78%.  So yeah, 'they' don’t get to keep most of what they make after 'they' have made $400,000, but that’s closer to fair, sort of right? 

Oh, I’m sorry my math was wrong.  That four-letter dirty word math, I keep forgetting math and facts.  The rate went from 35% to 39.6%.  Four point six percent increase, that’s it.  That’s what you may have been told is socialism or the horrid inducement for employers to conduct mass layoffs and post “out of business” signs.  How will the corporations survive?  (Also corporate tax rates have not changed as of yet.) 

When you visualize a welfare king or queen, think of a CEO.  Think of soybean subsidies for Monsanto in the farm bill.  Think of taxpayer subsidized loans through Fannie Mae that bail out Citi Bank to reduce the one thing banks are supposed to be responsible for, the risk on the mortgages they profit from.  No, Citi Bank splits mortgages into 66 silver pieces in investment accounts sells it all over, gets insured by ING, and doesn't care what the home owner makes, because the taxpayers are on the hook.  Is that every loan, no, but that form of welfare is real welfare.  

Think of medical device companies and pharmaceutical companies piggy-backing off research done at public universities and the NIH and charging taxpayers a 3,000 percent mark-up for drugs and healthcare devices. That's welfare.  

The percentage of poor people getting month-to-month assistance is pennies in comparison.  Give a man an opportunity to work and he will.  Give him a minimum wage job in America and he is forced to grasp at straws to pick up the difference between what puts food in his family's mouth and a roof over his head. There are way more people in that boat than lazy assholes who simply do not want to work.   

Think of what drives you to get up to your job in the morning after you are tired from family duties.  Now think of a guy making $7.25 an hour or maybe $12 or something that makes it hard to make ends meet.  Then think about that four point six percent and what that represents.  Think about the total dollars in our economy and where they are kept.   

Here is my take on trickle-down economics.  Imagine a cave with stalactites of currency trapped on the ceiling guarded by a colony of bats.  The blind mammals go out and in the cave at will.  Sure there are a lot of bats, but in comparison to the ground, its like one bat for every ten thousand insects or some high multiple, but you get my point.

The floor is covered in bat guano and a few stalagmites.  The insects feed off the guano and the water dripping down from the ceiling.  Occasionally the stone of the Earth crawls upward through deposits from above and a similar mineral comes down to form a column to support the cave’s structurally integrity.  We use the strength of labor and owner to make sure the whole place does not crash down.

But mostly it’s a sea of insects crawling hungering for whatever happens to drop and a bunch of rock that stays flat.  We have to make sure the environment is right for the stones to meet; otherwise, humans will act like entirely different life forms when in fact our mutual environment makes us interdependent for survival.  

What is a poor person supposed to do for health care, for food, for a home, for transporation on $1,000 a month?  Should the government dictate the minimum of what poor people make; well you can tax wealthier people more and you can raise the minimum wage to a more reasonable amount as a start.  You can also look at stuff like the earned income credit, Medicaid and other programs as alternate versions of minimum wage to manipulate.

Every economic fact and indicator points towards the majority of corporations employing minimum-wage individuals have profit to spare and the idea of raising prices to pick up the difference is an empty threat, because while a company can control its own prices, it rarely can control an entire market.  (See Wal Mart, McDonalds, Target, Walgreeens, Appleebees, ADM, Home Depot, etc.)

A maximum federal tax rate that goes from 36% to 39.6% does not create socialism.  Other major changes would be the decriminalization of most drugs, moving to a single payer health care system and incentivizing local farming by overhauling the infrastructure of how food ends up in our grocery stores and how it is subsidized.  Those are middle class issues whether the Republicrats and Democrans want us to realize they are or not.   

When a man is taught to vote against his own self-interests, he is inviting his own extinction.  

Peace