Republicans and the Housing Crash

Recently I published a series of articles that argued for a fairer distribution of incomes and wealth in the USA. My articles contained data that clearly showed the extent of the problem. For example, since the housing crash, the lower 40% of Americans (125 million people) own only a pitiful 3/10 of 1% of the nation’s private wealth, and many millions now have negative net worth. Another example shown was that CEO’s now earn 400X the average worker’s income, a ratio that has increased from 40X to 400X over the last few decades.

Not only are these distributions immoral and unsustainable, but I am convinced that Mitt Romney lost the election to Obama because of these disparities, which was Obama’s main campaign message. The reaction to my articles by some conservative readers, and discussions with my friends about politics in general, have convinced me that people who still have good jobs and people who are comfortably retired, like me, have no idea of the extent of the suffering caused by the catastrophic housing bubble and crash – and that the after-effects of this disaster have not improved very much.

Many people have little sympathy for those who lost heavily in the crash. While it is true that some people took advantage of the bubble to gain ownership of homes they could not afford, and others acted foolishly by remortgaging their homes, I have lots of neighbors all around me who did nothing wrong and still lost all their equity. These folks are angry and despairing.

Relatively well-off Americans with conservative leanings absolutely must come to understand the fundamental changes caused by the housing crash that have and are occurring in this country – and must adjust their thinking to the new realities. If they do not, the conservative values that made this country great are finished, and this does not bode well for its future and for our grandchildren.

America's lost trillions

By Chris Isidore CNNMoney June 9, 2011

NEW YORK (CNNMoney) -- "One reason that the U.S. economy still struggles to achieve sustained growth is that Americans are a long way from recovering the trillions of dollars of household wealth lost during the Great Recession.

U.S. household wealth fell by about $16.4 trillion of net worth from its peak in spring 2007, about six months before the start of the recession, to when things hit bottom in the first quarter of 2009, according to figures from the Federal Reserve.

While a rebound in the stock market, an improved savings rate and consumer steps to reduce debt resulted in net worth gains since 2009, only a little more than half of that lost wealth - $8.7 trillion -- is back on household balance sheets.

That leaves American household wealth $7.7 trillion less than it was before the recession.

"The huge loss of consumption is due to loss of $8 trillion in bubble wealth," said Dean Baker, co-director of Center for Economic and Policy Research.

The gap that remains in household wealth is in stark contrast to the nation's gross national product, the broadest measure of economic activity, which has recovered all of the lost output of the recession. And the wealth gap helps to explain why consumers are still so reluctant to spend a full two years after the official end of the recession.

Much of the lost household wealth came from declines in the value of real estate, which dropped $6 trillion, or nearly 30% of its value, from the end of 2006 to the end of last year. And after posting modest gains in 2009 and the first half of 2010, the value of homes started to fall again in mid-2010.

Home prices double dip

The most recent figures from the Fed, released Thursday, showed real estate lost another $339 billion in value in the first quarter. That was partly offset by a $68 billion decline in the total owed on mortgages, the main driver of a $74 billion reduction in overall liabilities.

The stock market, which has come off its peaks recently, helped households by adding $885 billion in the value of stocks and mutual funds during the quarter. Overall net worth increased by $943 billion in the quarter.

Experts say the loss of wealth has been a transformative event for most Americans, changing their attitudes on spending, saving and the value of owning a home rather than renting.

"I think the absolute decline in household wealth resulted in a decline in confidence about the future," said Barbara Whitehead, director of the Templeton Center for Thrift and Generosity. "Most experts agree (that), over the long term, Americans are going to save more." She said that while she wants to see savings increase, in the near term it doesn't help get the economy going again.

During the bubble years, home values were an important source of income in many household budgets, as homeowners used home equity lines to supplement their stagnant wages. That activity resulted in the savings rate falling to nearly zero, as many Americans spent more than they brought home in after-tax income." CNNMoney

In the recent election, Obama reached these people and added them to his natural Democrat voting groups, while other, dispirited voters stayed home. Republicans had better recognize the disparities and the call for higher taxes, and come up with policies that people believe will help them get back on the track to a better future, where hard work, sacrifice and savings pay off, or forget about ever achieving majority status again.

In Defense of John Boehner

It becomes clearer every day that Grover Norquist, not Barack Obama, defeated Mitt Romney in the last election.

Never before has such an incompetent and clueless president prevailed against such a successful leader and businessman, but Republicans are seen as a party locked into never raising taxes on anyone ever, regardless of circumstances.

Every poll shows that most voters, even the mostly uninformed, believe that we have reached the point where taxes should increase on the wealthiest among us, not only to raise revenue, but as a matter of fairness. (I have already pointed out that the upper 1% earn 20 % of total income and pay less taxes than the next lower income group.)

It has also become very clear that President Obama does not want to make any concessions on spending cuts and entitlement overhauls, and that only a grand bargain might achieve needed cuts. That’s what Boehner was attempting when the Tea Party adherents undermined and undercut his efforts. They pulled the rug out from under their leader. I was one of the Tea Party founders, and I support their efforts to rein-in government, but they have forgotten three things: 1. they are on the wrong side of the tax question, 2. in a democracy compromise is necessary, and, 3. we lost the election.

Tea Party Republicans are being blinded by ideology and are not facing facts as Speaker Boehner is attempting to do for the good of the country and for the good of the party.

Republicans Deemed Too Pro-Rich, 57% in Poll Want Change

By John McCormick - Dec 12, 2012 Bloomberg (excerpt)

"A majority of Americans say the Republican Party needs a major overhaul after electoral losses revealed demographic, messaging and technological shortfalls compared with Democrats, a Bloomberg National Poll shows.

Even among Republicans, just 16 percent say their party is fine and doesn’t need to change. The survey also shows the party is viewed as too protective of the wealthy and that New Jersey Governor Chris Christie has a slight edge among high-profile Republicans who may lead the party.

The party is reassessing its positions and tactics after losing the presidential race, failing to make gains in the U.S. Senate and seeing their House majority shrink after the 2012 elections. The Republican National Committee this week created a study group to examine how it can improve the party’s performance ahead of the 2014 congressional elections and 2016 race for the White House.

“They need to take some time and listen to middle-class America,” said poll participant Lisa Lee, 43, an office manager from New Milford, Pennsylvania. “At one time, I would have said that I was proud to be a Republican. I’m not so much anymore.”

She isn’t alone. Republicans are assessing themselves less favorably than before the election. In this poll, 81 percent of them view their own party favorably, down from 89 percent in a Bloomberg poll in September.

Not Optimistic

Lee said she wants to see a “major overhaul” of the party, although she isn’t optimistic change can come in two or four years and reverse current electoral trends.

Exit polls of voters in the Nov. 6 election showed President Barack Obama dominated Republican challenger Mitt Romney among single women, Hispanics, blacks and younger voters as the president carried eight of nine states both camps viewed as the most competitive. Republicans have also acknowledged Obama’s campaign utilized superior technological tools for online fundraising and voter turnout.

“For the Republican Party to broaden its base, they will need to change either what they value, or how they talk about what they value,” said J. Ann Selzer, president of Des Moines, Iowa-based Selzer & Co., which conducted the Dec. 7-10 poll. “What they are doing now is not winning.”

Among all Americans, 57 percent say the Republican Party needs a major overhaul, while 30 percent say modest modifications are needed and eight percent say no changes are necessary. The survey of 1,000 adults has a margin of error of plus or minus 3.1 percentage points on the full sample.

Independents’ Voices

Independents, a critical voting bloc in presidential elections, also see a need for significant renovation of the Republican Party, with six in 10 taking that view. Among Republicans, a third say the party needs major change and nearly half say modest changes are needed.

Six in 10 Americans say Republicans have placed too much emphasis on protecting the wealthy from tax rate increases at the expense of pursuing the interests of those of more modest means, the poll shows. More than half of independents -- 58 percent -- hold that view.

Obama stoked that perception during his campaign this year against Romney. He continues to use the line of attack against congressional Republicans as he negotiates an agreement to avoid automatic tax increases and spending cuts set to take effect in January, the so-called fiscal cliff.

Poll participant Roy Vap, 61, a Republican corn and soybean farmer from Red Cloud, Nebraska, said he’s become disillusioned with his party in part because of the fiscal debate.

Compromises Required

“They are on the wrong path,” he said of Republicans. “The stonewalling on the budget is silly. There has to be some give and take.”

Vap said his party doesn’t seem to do as good a job communicating with voters compared with Democrats.

“It just appears the Republicans are out of touch,” he said. “Somehow voters have come away with the idea that the Republicans are the party of the rich. Maybe it is repacking the message or moderating their message a bit.”

More than three-quarters of Americas say outside groups, such as those that spent more than $600 million to try to influence this year’s election, should be required to disclose their donors and that Congress should change the law.

One area of concern for Republicans has been primary contests that result in candidates with more extreme views than the general public because the nomination process is dominated by the most zealous partisans."

Terrible Incident Affirms NRA Position

Unfortunately, while liberal politicians and pundits were lambasting the recent speech by Wayne Lapierre of the NRA, a terrible incident in a small town in New York completely justified the positions that Lapierre took. An ex-con, possessing illegal weapons (ex-felons cannot legally own firearms) murdered firemen and policemen in a trap he set for them. Another policeman shot at him, and stopped the carnage.

Gun control? Useless

Mentally ill? Obviously

A bad man with a gun stopped by a good man with a gun. Absolutely, just as Lapierre said.

Instead of ridicule, perhaps the leftists should listen a little to some common sense.

Firefighters Ambushed

December 25, 2012 AP (Excerpt)

WEBSTER, N.Y. — "An ex-con set a car and a house ablaze in his lakeside neighborhood to lure firefighters, then opened fire on them, killing two, engaging in a shootout with police and committing suicide while several homes burned. Authorities used an armored vehicle to evacuate the area.

The gunman fired at the four firefighters when they arrived shortly after 5:30 a.m. at the blaze in Webster, a suburb of Rochester on Lake Ontario, town Police Chief Gerald Pickering said. The first police officer who arrived chased the suspect and exchanged gunfire, authorities said.

Police say he lay in wait outdoors for the firefighters’ arrival, then opened fire probably with a rifle and from atop an earthen berm, Pickering said.

“It does appear it was a trap,” he said.

The gunman, William Spengler, had served more than 17 years in prison for beating his 92-year-old grandmother to death with a hammer in 1980 at the house next to where Monday’s attack happened, Pickering said at an afternoon news conference. Spengler, 62, was paroled in 1998 and had led a quiet life since, authorities said. Convicted felons are not allowed to possess weapons.

Two firefighters, one of whom was also a town police lieutenant, died at the scene, and two others were hospitalized. A fifth man who was passing by was also injured. The police officer who exchanged gunfire with Spengler “in all likelihood saved many lives,” Pickering said."

Blame ACLU for Newtown Shootings

Hundreds of people are appearing on TV or writing articles trying to explain the cause(s) of the massacres at Newtown, Aurora, etc. Most of the causes that have been named as possibilities – i.e. availability of weapons of war, mishandling of mentally ill persons, breakdown of societal mores, etc. have one of two problems: either they can not really be changed, or, especially for gun control, will have no effect on the problem. However, if you want to point to one cause that can be attacked and eliminated, it is the ACLU. There is no organization that has done more to destroy societal mores, destroy Judeo/Christian symbols and support, destroy respect for authority, and led the way to the pandering and enabling of sex offenders and deinstitutionalization of mentally ill persons than the ACLU.

If the American people could wake up to the destruction caused by this organization to the extent that it loses its support and standing, over time we could perhaps regain some of the boundaries we used to observe, and decent people could regain some of the protections they used to enjoy.

Just one small example of the harm done by the ACLU:

Sex Offenders Say California Law Infringes Free Speech

By Karen Gullo - Dec 17, 2012 Bloomberg (Excerpt)

"California sex offenders shouldn’t have to turn over their Twitter, Facebook or e-mail account information to police because they have a right to anonymous online speech, privacy advocates are set to tell a judge.

American Civil Liberties Union lawyers are seeking to keep a voter-approved law targeting human trafficking and sex exploitation from taking effect while they proceed with a lawsuit aimed at overturning portions of it. California law enforcement officials say tracking Internet communications can prevent offenders from preying on children.

“Possession of this information may provide enough of a head start to save a victim’s life,” California Deputy Attorney General Robert Wilson said in a court filing in federal court in San Francisco. “Having Internet identifying information, however, does not permit access to, or monitoring of, private communications.”

Proposition 35, approved by more than 80 percent of California voters last month and backed by former Facebook Inc. (FB) executive Chris Kelly, was set to take effect next year. It was put on hold by U.S. District Judge Thelton Henderson when the ACLU sued the day after the measure passed. The ACLU is scheduled to ask Henderson today to keep an injunction in place while the case is being decided."

When you see reports in the newspaper every day of a child that was molested, it was the ACLU that put that person in your neighborhood.  When you see persons obviously with serious mental issues in your Dunkin Donuts, it was the ACLU that put them there.  When you lose the monument with the Ten Commandments that stood in the square for 100 years, and the creche that is also gone, it was the ACLU that removed them.  When the principal of your school refuses to let the word "Christmas" be used in any context, it is because he is afraid of a suit by the ACLU.  When a child is allowed to wear a tee shirt to school that says, "Fuck You Obama", it was the ACLU that made it happen.

Can Newtown start to put an end to this?

An Article Worth Reading After Newtown

As we senior citizens try to come to grips with another senseless atrocity, we ask, “What has gone wrong? – What has changed in our lifetime that has allowed troubled young men to commit such acts?”

Certainly, as a percentage of the population, we had as many mentally ill people and as many guns around when we were younger in the 50’s, 60’s and 70’s, but, except for the Texas Tower Massacre, we never had to confront acts such as happened in Newtown, Aurora, etc. We also didn’t have to worry about perverts accosting and abusing our children.

The most obvious portrayal of the changes in our society can be found by looking at any television schedule and noting the programs now being shown. Programs designed to shock and desensitize, such as Law and Order SVU, portraying sexual perversions; and many other programs filled with obscenities and glorifying violence and casual sex can be found everywhere, over the air as well as on cable.

These changes have been captured in the following article:

A Needless, Senseless, Tragedy

James Simpson December 16, 2012 American Thinker

Losing a child is the worst possible thing that can happen. Losing 20, as occurred today in Newtown, Connecticut is a monstrous, indescribable tragedy. My heart bleeds for those devastated families. Their Christmases, their lives, will never be the same.

Some have used this tragedy as an opportunity to vilify our "gun culture" and predictably, right up to the President, have said we need "meaningful action", by which of course he means more gun control. But guns are not the problem here.

Throughout the last century, up until the gun control act of 1968, there were few restrictions on gun ownership, save the heavy regulation of automatic weapons. A kid could order a rifle through the mail. There were no Columbines, no Virginia Techs', no Auroras, no Newtowns. There were many people with mental illnesses, ADD, Asperger's, autism and other problems, although perhaps they went by different names. But these kinds of things just did not happen.

What changed? What changed is that our society became unhinged from its bedrock belief in God. In earlier times, churches were filled on Sundays and people generally conformed to a code of decency and behavior accepted throughout society. We swore less, raged less, dressed more modestly, frowned upon braggarts and liars, respected authority and approached life with a modesty and humility borne both of hard experience and religious training.

Of course there were exceptions, but for all our collective failings as human beings, we took our religions and our religious beliefs seriously. Organized religion, especially Christianity, demands a level of decency, modesty and humility that is largely missing in today's distracted, self-absorbed, ego-driven, anything-goes culture. And we are reaping the rewards.

Back in the 1920s, a group of German Communists started the Institute for Social Research in Frankfurt, Germany. It would become known as simply the Frankfurt School. Its goal was to implement communism in the West quietly by gradually subverting popular culture -- a movement known as Cultural Marxism.

Early on, these people recognized that Christianity was the single greatest impediment to the advancement of communism in the West and they set out to destroy it by every means possible. Soviet propagandist and organizer Willi Munzenberg articulated the school's goals:

We will make the West so corrupt it stinks... [We will] organise the intellectuals and use them to make Western civilisation stink [sic]. Only then, after they have corrupted all its values and made life impossible, can we impose the dictatorship of the proletariat.

Today their goal has been largely accomplished. We have been lured away from the moral anchors of our Judeo/Christian heritage, and the result is visible all around us: broken homes, endemic divorce, unwed mothers, convenience abortions, crime, drug and alcohol abuse, increasingly toxic sexual licentiousness - which brought us AIDS, among other things - and an increasingly ignorant class of people, so self-absorbed and unaware, they can't even name our Capital.

Our culture is indeed becoming so corrupt it stinks, and it is not surprising that evil now finds such an easy home here. Gun control will not cure this. Stricter laws will not cure this. Stricter enforcement may not even cure this. The only cure is a healthy society, a humble society; a society whose strong Christian heritage used to make it uncool to feed off others, uncool to boast, uncool to have a self-serving attitude; uncool to ignore the Golden Rule.

This is nothing new. The pattern has been repeated since the days of antiquity. When a society finds and abides in God, health, peace and affluence follow; when it forgets God, disaster is not far behind.

We as a nation have forgotten God.

Our modern liberals or progressives, who are responsible for the collapse of a decent and civil society, will never acknowledge their role, nor will they ever recognize the truth of the above presentation. They will only focus on some sort of gun control as the answer to society’s ills, while the war on religion and on personal responsibility continues, and the breakdown of our society – and the killings will continue.

Let Them Have the AR 15

The horrendous shootings of so many children at Newtown, Connecticut will certainly give fresh ammunition to the gun control movement, and no logical and factual argument may be able to contend with the tremendous outrage this incident has rightfully caused.

Compare Rate of Gun Homicide per 100,000 People

In the United States, the annual rate of firearm homicide per 100,000 population is

2009: 2.985
2008: 3.12
2007: 3.36
2006: 3.42
2005: 3.43
2004: 3.20
2003: 3.37
2002: 3.2511
2001: 3.12
1999: 2.976
1998: 3.37
1993: 7.071
Alpers, Philip and Marcus Wilson. 2012. Guns in the United States: Facts, Figures and Firearm Law. Sydney School of Public Health, The University of Sydney.

The spurt in 1993 reflects a sharp rise in gang violence in the 1990’s, which has since diminished greatly.

It will be no use to point out that gun deaths in the US actually appear to be diminishing since the gang wars of the 1990’s calmed down.

It will also be no use to point out that the Aurora, Tucson, Virginia Tech and, now, this latest atrocity were committed by crazed individuals, and that no gun control laws will have any effect on the supply of millions of firearms that are out there in America. It will also have no effect to point out that states that passed concealed-carry laws have all seen a decrease in violent crime since their passing.

Typical comments after Newtown are shown below:

“Friday’s horrific scenes and reports hit especially hard because the victims reportedly included 20 children between the ages of 5 and 10, innocent kids gunned during during a shooter’s cold-blooded rampage at Sandy Hook Elementary School in the normally quiet town of Newtown, Conn.

But aspects of the latest massacre seemed to fit into a nightmarish pattern, a scenario that has shocked Americans again and again. A mentally disturbed young man gains access to an arsenal of guns, walks into a public place and proceeds to shoot multiple people. Perhaps he has a twisted reason for lashing out but most, if not all, of the victims are blameless bystanders.

“As a country, we have been through this too many times,” an emotional President Barack Obama said Friday. “Whether it’s an elementary school in Newtown, or a shopping mall in Oregon, or a temple in Wisconsin, or a movie theater in Aurora, or a street corner in Chicago -- these neighborhoods are our neighborhoods, and these children are our children……

Will Friday’s mass murder of children at a Connecticut school end up following the past pattern and result in zero action? There were early signs that the atrocity might at least shock some officials into trying to do something.

“As a country, we don’t need more debate, no more excuses. The time for action is now,” said Philadelphia Mayor Michael Nutter, president of the U.S. Conference of Mayors, in a statement after Friday’s shootings……

In his emotional statement Friday, Obama said, “We're going to have to come together and take meaningful action to prevent more tragedies like this, regardless of the politics.” The president cancelled a scheduled appearance Saturday in Maine, and some administration officials that he might at least propose steps that aim to avert such massacres in the future.

David Chipman, who spent 25 years as a special agent at the Bureau of Alcohol, Tobacco and Firearms, told the New York Times that the shooting may prove to be “a game changer.”” St Louis Beacon

Above excerpts from St Louis Beacon

In my opinion, as a gun owner and long-time NRA member, we would be foolish to assume that this time will be like the others, and that the push for some gun control laws will again fade away. I believe that gun owners need to do three things: 1. we need to increase our support for the NRA financially and by recruiting more members, since that organization will come under tremendous pressure to back off from opposing new measures, 2. we should support banning the AR 15 and any firearm that can be converted to full automatic fire fairly easily. Even though these weapons were not used, there is no good argument for their availability, and 3. we should support banning high capacity magazines, which have been a factor in some of these mass shootings.

If we do not support reasonable measures, we may get some very unreasonable ones from the politicians now in power.

If We Lose the House in 2014

Email your Congressmen now. If we Republicans lose the House and/or go below 40 Senators in 2014, Obama will have free rein to carry out his policies, and the United States will become, not just like Greece, but more like Venezuela.

Every major poll shows two things:

1. Most voting groups favor tax increases on the rich. This includes Latinos, African-Americans, women, and even the 7 million white males who stayed home. This is why Obama won re-election even with his dismal performance as President. At current rates, a case simply can not be made for lowering taxes.

2. If a budget deal fails, Republicans will be blamed. This is completely unfair, but it is a perception orchestrated by Obama and fed by the mainstream press. If you are watching Fox News and its reporting of the actual negotiations, you are not seeing what the rest of the country is seeing (or rather not seeing).

Samples of these polls are shown below:

By EMILY DERUY Dec. 10, 2012 ABC News (Excerpt)

“Latino voters overwhelmingly support tax increases on the wealthiest Americans as a way to reduce the deficit and deal with the looming fiscal cliff.

According to a new impreMedia/Latino Decisions survey of more than 5,600 Latino voters, a whopping 77 percent favor increasing taxes on the wealthy. While the vast majority of Democratic Latino voters -- 86 percent -- fall into that category, so do 51 percent of Republican Latino voters.

Only 12 percent say they favor a spending cuts-only approach, according to the survey.”

**********

Wall St. Journal December 10, 2012 (Excerpts)

A Politico/George Washington University Battleground Poll out Monday morning finds that 60% of likely American voters favor raising taxes on households making more than $250,000 a year. The poll found that only 38% believe the Republicans’ argument that raising taxes on households earning more than $250,000 would hurt the economy, whereas 58% don’t buy it.

The poll is the latest to show a majority of Americans support raising taxes on high-income households.

A Quinnipiac university poll last week found 65% of voters support higher taxes on households making more than $250,000 per year.

I urge my readers (especially conservatives like me) to save the Republican House and Republican Senators by emailing your Republican Congressmen to come out for income and investment tax increases on high income earners (at least $500,000) and high estate tax rates on the upper 20%. This is primarily an issue of fairness, not to balance the budget.

Don't Let Ideology Blind You

Left-click to enlarge

One feature that jumps out at you is how relatively flat mean income has been for the bottom 80% over the last 45 years and how much it has grown for the top 20%, from an already high baseline.  From 2011 census data.

Left-click to enlarge

Top 1% paid less taxes than lower group

Some people have their facts wrong, while others have no facts. Due to my call for the Republican Party to support higher income, investment and estate taxes on the very wealthy and the upper 20% of income earners, I am getting many angry (and often obscene) e-mails from people who just don’t get it. They complain that I have turned Marxist; they complain about the so-called 47% who pay no income taxes; they complain that you have to cut taxes to promote growth.

Here is what they don’t understand:

1. income tax rates have been cut drastically since 1981 when the top rate was 70%; it is now 35%
2. the 47% pay no taxes due mostly to low taxable income and to changes made in tax law by both Democrat and Republican administrations
3. most voters understand that income and wealth distributions have become obscenely skewed over the past few years.
4. if Republicans don’t lead the way in effecting changes in wealth and income distributions, the election of 2012 will look like a picnic
5. the current wealth and income distributions may even become dangerous to a civil society
6. cutting taxes to promote growth works when taxes are too high and in normal times; largely due to the housing crash, these are not normal times, and tax rates are way down.

We may despise President Obama’s class warfare and hateful, insulting language, but he is basically right about needed tax increases. Of course, at the same time, we need to press him for meaningful spending cuts.

From Bloomberg:

“The Republican presidential candidate’s comments that 47 percent of Americans don’t pay income taxes and see themselves as “victims” dependent on the government signifies a shift in the party’s thinking. Republicans backed refundable tax credits and expanded entitlement programs under George W. Bush. Now they want to curtail entitlements and express concern that not enough people are paying taxes.

“The working people who don’t pay income tax, that is by and large the result of Republican policies,” said Michael Linden, director of tax and budget policy at the Center for American Progress, a Washington group aligned with Democrats. He said he didn’t “understand why they’re not trumpeting this.”

From Factcheck.org:

“Romney is a bit out of date with his claim that 47 percent of Americans pay no federal income tax. That was true in 2009, but the number is lower now, and falling as the economy improves and more people are working and getting paychecks.

Figures come from the nonpartisan Tax Policy Center, and its most recent analysis in July 2011 put the figure for that year at 46.4 percent. That comes to about 76 million individuals or families who paid no federal income taxes in 2011. TPC projected that the percentage would fall to 46 percent this year, and to 44 percent in 2013, under current tax policies.

Let’s take a closer look at the 46.4 percenters.

According to the Tax Policy Center, about half of those who owe no federal income tax are people whose incomes are so low that when standard income tax provisions — personal exemptions for taxpayers and dependents and the standard deduction — are factored in, that simply leaves no income to be taxed. Those are people who earned less than about $27,000.

But that doesn’t mean those folks paid no taxes at all. Many of them paid payroll taxes, those taxes taken out of a paycheck by an employer to fund programs such as Social Security and Medicare. They also pay federal excise taxes, such as those on gasoline, and they may also pay state and local income taxes or property taxes.

So that’s half of Romney’s 46.4 percenters. The rest pay no federal income tax due to tax benefits and credits. Here’s the rest of the breakdown:

 22 percent receive senior tax benefits — the extra standard deduction for seniors, the exclusion of a portion of Social Security benefits, and the credit for seniors. Most of them are older people on Social Security whose adjusted gross income is less than $25,000.

 15.2 percent receive tax credits for children and the working poor. That includes the child tax credit and the earned income tax credit. The child tax credit was enacted under Democratic President Bill Clinton, but it doubled under Republican President George W. Bush. The earned income tax credit was enacted under Republican President Gerald Ford, and was expanded under presidents of both parties. Republican President Ronald Reagan once praised it as “one of the best antipoverty programs this country’s ever seen.” As a result of various tax expenditures, about two thirds of households with children making between $40,000 and $50,000 owed no federal income taxes.

 The rest ended up owing no federal income tax due to various tax expenditures such as education credits, itemized deductions or reduced rates on capital gains and dividends. Most of this group are in the middle to upper income brackets. In fact, the TPC estimates there are about 7,000 families and individuals who earn $1 million a year or more and still pay no federal income tax.”

The Future Hinges on Republican Changes

Someone once said that being lucky is better than being smart. Mitt Romney wasn’t lucky. In a campaign for the presidency when the man in the street believed that the structure of the US economy is stacked against the middle class, and that the wealthy pay too little in taxes, Romney gave us double-talk on his tax plan, and was shown to pay a small percentage in taxes.

The fact that the US distribution of wealth and income has become dangerously skewed toward the upper 1% should become apparent to anyone who looks at the data with an open mind, and yet Republican leaders kept saying they would never increase taxes on the wealthy. Good-bye Romney.

Now the Republican leadership seems to be accepting that all taxes on the very wealthy must be raised, but are constrained by the base to get out in front on this problem. WE NEED REPUBLICANS TO WAKE UP BECAUSE ONLY THE REPUBLICAN PARTY CAN SAVE THIS COUNTRY!

We are still suffering from the unintended consequences of the presidency of Lyndon Johnson, who gave us the Vietnam War and the Great Society, which then gave us programs that resulted in hordes of fatherless children and a society that is falling apart. Carter and Clinton gave us a program that forced banks to give mortgages to deadbeats, and that, in turn, led to the collapse of housing values and middle-class wealth. This same mentality has now resulted in carbon taxes and strangling regulations and in a government run healthcare program (Obamacare) that places such cost burdens on businesses, that they are engaged in a mass effort to cut hours and employees to avoid them.

Republicans must again become the majority party and again embrace limited spending, limited government and states’ rights. They can only do so by throwing Grover Norquist in a ditch and face facts about the needed changes in income and estate taxes so that the man in the street sees some fairness as existed from the 1950’s to the 1980’s. The Republican Party must not be seen as the protector of the very rich, but as the protector of a system where anyone who wants to work hard can make it.

A continuation of government by modern liberals will change America for the worse for all time.

Republicans Have Really Stepped In It

As one of my favorite people, Ben Stein, says below, how did the Republican Party ever get itself in the "can't win" position it now finds itself? I know why, 1. by subscribing to the insane position personified by Grover Norquist NEVER to raise any taxes, and 2. by having leaders like Boehner and McConnell saying over and over that we will never raise taxes on the wealthy.

Hot Air offers the only sane solution. Republican congressional leaders have to embrace the Simpson-Bowles plan ($3 of cuts for ever $1 of tax increases) and come out for increased taxes on the very wealthy. How can Obama refuse? He appointed the Simpson-Bowles blue-ribbon committee.

Ben Stein December 5, 2012 American Spectator (excerpt)

"I wandered back to my room, which is cheery and airy. I felt happy until I started to think about my Grand Old Party.

How did we ever get into the position of fighting like madmen to keep taxes low on billionaires? How can we possibly win if our position is to sacrifice the welfare of poor and lower middle class people to make sure we keep the taxes of very wealthy people low? Let's see: Obama is for keeping almost all entitlements and raising taxes on the rich (his definition of rich is insane but that's another story). Our GOP position is low taxes on the rich and cut entitlements and medical care for the poor. Hmmm, which is a winning position?

My old boss, Mr. Nixon, used to say, "Honesty may not be the best policy but it's worth trying once in a while."

So, Let's be honest: the ultra-rich do not need ultra-low taxes. The poor have a moral claim on the generosity of the nation if they are genuinely in need. Might we just try to align ourselves with the morally right position for fiscal policy?

Yes, government spends insanely too much. Yes, government is criminally wasteful. But the nation is racing towards bankruptcy. Do we right the course by taking from the very rich -- while searching like Sherlock Holmes for waste to cut? Why not? I'd like to see the party win the next election and being the party of the billionaires does not help us." American Spectator

This Is Really Serious

It appears that others, including conservatives like me, have also noted the appalling statistics on income and wealth distribution in our country over recent years – one explanation for Obama’s win. The reasons seem to have to do with globalization, lower income and investment tax rates, and the huge decline in private sector unions. Our middle class, the bedrock of a stable society, is disappearing.  The two recent articles below affirm what I have been saying:

Net worth of American households at 43-year old low

Rick Moran December 2, 2012 American Thinker (excerpt)

“Yes, but we've got 4 more years to get it right...or something.

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.

According to Wolff, between 1983 and 2010, the percentage of households with less than $10,000 in assets (using constant 1995 dollars) rose from 29.7 percent to 37.1 percent. The "less than $10,000″ figure includes the numerous households that have no assets at all, or "negative assets," which is otherwise known as "debt."

Over that same period of time, the wealthiest 1 percent of American households increased their average wealth by 71 percent.” American Thinker

Last week the House passed a bill making it easier for high-skilled workers to become legal immigrants.  The following article explains why this is important:

Why Conservatives Must Surrender on 'Redistribution'

By Josh Barro - Nov 29, 2012 Bloomberg

Liberals talk about booming incomes at the top while lower-income households barely see benefits from economic growth. Conservatives talk about a rising share of the population that depends on government benefits and a shrinking share that pays income tax.

Though the frames are different, these are descriptions of the same economic phenomenon: rising inequality of pre-tax incomes. But only liberals are advancing a semblance of an agenda to address it.

The main liberal reaction to this phenomenon is to call for more progressive fiscal policy: higher taxes on the rich people who have benefited most from the last 30 years' gains in gross domestic product to pay for programs that raise low- and middle-income people's after-tax incomes. Obamacare, which raised taxes on the rich to fund a new health-care entitlement for the poor and middle class, is a key example of this agenda.

Liberals also advocate policies that are aimed at reducing pre-tax inequality: more subsidies for education, trade protection, industrial policy to support medium-skill jobs in manufacturing, easier unionization, minimum-wage increases, rent control.

All of these policies have a trade-off: in exchange for reducing income inequality, they are likely to reduce GDP growth. But some are better than others. Minimum-wage increases in the range being discussed in today's political debates don't seem to have significant negative impacts on employment or output. There is room for a significant increase in tax progressivity without (much of) a negative impact on GDP growth, especially if the reform is well-designed.

But the key problem in this debate isn't that liberals' ideas are bad, though many of them (especially on trade) are. It's that conservatives have no serious proposals of their own on rising inequality.

One conservative message on inequality is to say that it doesn't matter, and we should accept rises in both pre-tax and post-tax inequality. This is the implication of studies periodically put out by the Heritage Foundation, arguing that poor people aren't really poor if they have microwave ovens.

This isn't an appealing argument. The problem with rising inequality is not that lower-income families can't afford ever-cheaper electronics; it's that they can't keep pace with the rising costs of health care, education and (in certain parts of the country) housing. There's also no reason to think that, whatever standard of living we start from, an economy where nearly all the improvements accrue to a small fraction of families is either politically sustainable or morally acceptable.

Then there is the argument that government benefits reduce the productivity of people at the bottom, who would go out and earn more money if we made their entitlements less generous. When Mitt Romney says this he ends up more or less calling the bottom half of the income distribution moochers; people such as Paul Ryan manage to say the same thing more artfully.

The main problem with this position is the lack of evidence to support it: Lower taxes and a smaller government might raise GDP growth, but there's no particular reason to assume that growth would accrue in a more equal manner than we have experienced recently. The main effect of Ryan-style fiscal policy, which makes taxes both lower and less progressive and while shrinking benefits, would be a rise in after-tax inequality.

This is an example of what I said two weeks ago: Conservatives do not have economic ideas that are good for the middle class. Since the 1970s, wage gains have decoupled from productivity gains and the median family has therefore reaped a disproportionately small share of the benefits of growth. Conservatives are left without anything to say about this problem.

What can they say about it? I have a few ideas, though I don't think conservatives are likely to like any of them too much.

One, as I discuss at greater length here, is that they can take up the cause of cost control in health care and higher education, the effect of which would be to raise real incomes for the middle class. The rising cost of health benefits has been a key driver of middle-class wage stagnation. Unfortunately, many of the policies actually likely to control costs in these sectors are interventionist in a way that makes conservatives recoil.

Another possibility is greater high-skill immigration. Globalization has been disproportionately beneficial to high-skill workers in developed nations: they have seen the prices of products fall as manufacturing shifts to low-wage countries, but their own jobs are insulated from foreign competition. Letting in more foreign doctors and engineers should drive down wages in skilled professions and the cost of the services those professionals provide, raising real incomes for lower-income workers who already face wage competition from other countries. Reducing occupational licensing requirements would similarly raise real incomes.

But the big problem for conservatives is that these policies cannot fully substitute for progressive fiscal policy. The dirty secret about the last 30 years' rise in pre-tax income inequality is that we probably can't reverse it. Instead, we will have to rely on policies that ameliorate it on an after-tax basis -- that is, the dreaded redistribution of income, or "spreading the wealth around."

Some redistributive policies are more economically damaging than others. If conservatives made peace with the need for more redistributive economic policy, they could fight to make sure it is pro-growth. For example, they could focus on minimizing poverty traps created by means-tested entitlements, and making sure the tax base is broad so progressivity can be achieved with relatively low tax rates.

Roughly, this is what right-of-center political parties in Europe do.

Obviously, it's not something conservatives in the U.S. are interested in doing. Instead of trying to make Obamacare less costly and less economically distorting, conservatives fought as hard as they could to stop it, rejecting the whole idea of a more progressive fiscal policy. (If you think conservatives' objection is to spending rather than spending specifically on poor people, note how protective Republicans are of Medicare, a relatively non-progressive entitlement program.)

And they lost, because the rise in pre-tax inequality (and the related rise in health care costs) is making the electorate's demand for progressive fiscal policy stronger and stronger.

Eventually, if conservatives want to keep putting their stamp on American economic policy, they will have to give in to that reality that government must become more redistributive. Otherwise, the Republican Party will be left with an economic appeal to an affluent minority of the population and an ethnic appeal to a shrinking older white-voter base -- and that will win them fewer and fewer elections.