The Erosion of the Middle Class Time for Plan Bitcoin

Today, the Republicans, the party of the plutocrats, took control of the Senate away from the Democrats, the party of the plutocrats-lite.

All through this election cycle, I was getting emails from both sides of the political spectrum, from the Republicans because of my interest in libertarianism, and from the Democrats because of my interest in social justice. The emails invariably stoked fear, spewed hatred at the other side, and begged for money.

What was almost completely missing from all of this is any real, calm, substantive discussion about who we are as a country and how to fix the problems that we have. I have no idea about the authentic convictions of any of the people being elected to office.

Today, once again, America voted with its gut a gut filled with an over-riding sense of fear instilled by powerful, moneyed interests who know just how to keep the poor slobs terrified and voting against their own best interests. I can’t help but think that the next two years are going to bring more rigging of the system for the benefit of those who need it least.

At some point, though, there is going to be a breaking point. People already have the suspicion that they are being lied to they just don’t know what to do about it. They need a plan B.

And that’s where Bitcoin comes in.

In the meantime, though, I do think that it’s important to keep reminding ourselves what we’re fighting for. Below is an article from Common Cause on the continuing erosion of the middle class.

 


 

A recentpostingdetailed how upper middle class Americans are rapidly losing ground to the one-percenters whoaveraged $5 millionin wealth gains over justthree years. It also noted that the global 1% has increased their wealth from $100 trillion to $127 trillion in just three years.

The information came from theCredit Suisse2014 Global Wealth Databook (GWD), which goes on to reveal much more about the disappearing middle class.

1. Each Year Since the Recession, America’s Richest 1% Have Made More Than the Cost of All U.S. Social Programs

In effect, a reverse transfer from the poor to the rich. Even as conservatives blame Social Security for being too costly.

Much of the 1% wealth just sits there, accumulating more wealth. The numbers are nearly unfathomable. Depending on the estimate, the 1% took in anywhere from $2.3 trillion to $5.7 trillion per year. (All numeric analysis is detailedhere.)

Even the smaller estimate of $2.3 trillion per year is more than thebudgetfor Social Security ($860 billion), Medicare ($524 billion), Medicaid ($304 billion), and the entiresafety net($286 billion for SNAP, WIC [Women, Infants, Children], Child Nutrition, Earned Income Tax Credit, Supplemental Security Income, Temporary Assistance for Needy Families, and Housing).

2. Almost None of the New 1% Wealth Led To Innovation and Jobs

In 2005, for every $1 of financial wealth there was 66 cents of non-financial (home) wealth. Ten years later, for every $1 of financial wealth there was just43 centsof non-financial (home) wealth.

What happens to all this financial wealth?

Over 90% of the assetsowned by millionaires are held in low-risk investments (bonds and cash), the stock market, and real estate.Business startupcosts made up less than 1% of the investments of high net worth individuals in North America in 2011. A recentstudyfound that less than 1 percent of all entrepreneurs came from very rich or very poor backgrounds. They come from the middle class.

On the corporate side, stock buybacks are employed toenrichexecutives rather than to invest in new technologies.In 1981, major corporations were spending less than 3 percent of their combined net income on buybacks, but inrecentyearsthey’ve been spending up to 95 percent of their profits on buybacks and dividends.

3. Just 47 Wealthy Americans Own More Than Half of the U.S. Population

Oxfamreported that just 85 people own as much as half the world. Here in the U.S., with nearly a third of the world’s wealth, just 47 individuals own more than all 160 million people (about 60 million households) below the median wealth level of about $53,000.

4. The Upper Middle Class of America Owns a Smaller Percentage of Wealth Than the Corresponding Groups in All Major Nations Except Russia and Indonesia.

The upper middle class in the U.S., defined as everyone in the top half below the richest 20%, owns11.9 percentof the wealth. Indonesia at 10.5 percent and Russia at 7.5 percent are worse off, but in all other nations the corresponding upper middle classes own 12 to 27 percent of the wealth.

America’s bottom half compares even less favorably to the world: dead last, with just 1.3 percent of national wealth. Only Russia comes close to that dismal share, at 1.9 percent. The bottom half in all other nations own 2.6 to 10.2 percent of the wealth.

5. Ten Percent of the World’s Total Wealth Was Taken by the Global 1% in the Past Three Years

As in the U.S., the middle class is disappearing at the global level. An incredibleone of every ten dollarsofglobal wealthwas transferred to the elite 1% in just three years. A level of inequality deemed unsustainable three years ago has gotten even worse.

Solution: A Financial Transaction Tax (FTT)

More appropriately called aFinancial Speculation Tax, it would help tolimit the speculative tradingthat contributed to the financial meltdown in 2008.

The FTT has extraordinary revenue-generating potential, on a global scale. The Bank for International Settlements reported in 2008 that annual trading in derivatives had surpassed$1.14 quadrillion. Just one-tenth of one percent of that is a trillion dollars.

It’s also a fair tax. While average Americans pay up to a10% sales taxon shoes for the kids, millionaire investorspayazero sales taxon financial purchases. They pay just a.00002%SECfee(2 cents for every thousand dollars) for a financial instrument.

In addition, the FTT is easy to administer and difficult to evade. Clearing houses already review all trades, and serve as collection agencies for transaction fees.

And as evidence of its suitability, three of the top five countries on the Heritage Foundation’sIndex of Economic Freedomare Singapore, Hong Kong, and Switzerland, all of whom have FTTs.

People in the U.S. and around the world are being rapidly divided into two classes, the well-to-do and the lower-income majority. This severing of society will change only when progressive thinkers (anddoers) agree on a single, manageable solution that will stop the easy flow of wealth to the privileged few.

This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License


Paul Buchheit is a college teacher, an active member of US Uncut Chicago, founder and developer of social justice and educational websites (UsAgainstGreed.org, PayUpNow.org, RappingHistory.org), and the editor and main author of “American Wars: Illusions and Realities” (Clarity Press). He can be reached at[email protected].