Middle class being wiped out
By John Seiler
It’s not just the recent economic and political nonsense by both parties that’s hurting the middle class. It’s more than four decades of it. A new study finds:
“The median net worth of American households has dropped to a 43-year low as the lower and middle classes appear poorer and less stable than they have been since 1969.
“According to a recent study by New York University economics professor Edward N. Wolff, median net worth is at the decades-low figure of $57,000 (in 2010 dollars). And as the numbers in his study reflect, the situation only appears worse when all the statistics are taken as a whole….
“Fully 85 percent of self-described middle-class adults say it is more difficult now than it was a decade ago for middle-class people to maintain their standard of living. Of those who feel this way, 62 percent say “a lot” of the blame lies with Congress, while 54 percent say the same about banks and financial institutions, 47 percent about large corporations, 44 percent about the Bush administration, 39 percent about foreign competition and 34 percent about the Obama administration.”
Typical of these polls, the real culprit was not fingered in the question: The U.S. Federal Reserve Board. In 1968, Richard Nixon — native of Orange County, Calif. — was elected to protect the “silent majority,” as he called it, a/k/a the middle class. In 1971, the fool took us off the gold standard.
Since then, the Federal Reserve Board has waged an unrelenting assault on the middle class by debasing the currency, with the dollar’s value dropping from $35 an ounce of gold in 1971 to $1,711 today. That’s a loss of 98 percent of its value.
In the 1970s, tax rates remained the same — meaning the middle-class was jammed up into higher-income tax brackets, where they remain. Reagan indexed the rates to inflation, but only as of 1985. It wasn’t retroactive.
So, in 2012 Mr. & Mrs. America pay the high tax rates of millionaires of 1971.
Reagan’s tax cuts, although needed, mainly went to the wealthy. The middle class got tax cuts from the Gipper. But he also increased the FICA/Socialist Security tax as part of the Greenspan Commission in 1983. Those tax increases essentially repealed Reagan’s middle-class tax cuts.
And inflation is why the middle-class in California pays the staggeringly regressive state income tax rate of 9.3 percent, which in the 1960s only affected millionaires.
Greenspan later, of course, became the inflationist head of the Fed, his policies especially destroying the dollar when he panicked after the 9/11 attacks in 2001.
Today, President Obama, Democrats running the Senate and Republicans running the House don’t really care about the middle class. If they did, they would take retiring Rep. Ron Paul’s advice to “End the Fed.”
And they would roll back middle-class tax rates to 1971.
If you’re in the middle class, as I am, here’s your future:
May 18, 2013