Wednesday, November 23, 2011

Where Is All the Money Going?

The idea that the richest country in the world cannot afford a decent living for working people, the elderly, or the infirm, and provide easy access to higher education, or even to maintain the past level of public schools and public safety, is preposterous. But governments at every level are strapped for cash. Where is all the money going?

In the late ‘70s, the top 1% were able to afford their mansions and yachts on less than 10% of all incomes. Now they are taking almost 25%. The 15% increase in their share amounts to about $2 trillion per year, or $20 trillion over the next decade.
The US spends about 17% of its GDP on health care, and rising. Other countries have government-run systems that cost less than half of what we spend, cover all of their citizens, and produce better results. If we had a system as cost-effective as those countries, we would save well over $1 trillion per year.

Cutting military expenditures by $500 billion annually would still leave us spending more than twice what any other country spends and completely safe from invasion from any quarter.

That’s where over $3.5 trillion is going. That’s over $10,000 per year for every U.S. resident, or over $40,000 for a family of 4. The power elite like it that way, and are working to decrease taxes on the super-rich and emasculate Medicare and Social Security. The rest are struggling just to get by, and poverty is increasing in the richest country in the world. But the way we are headed, we won't be for long!
Redistribution of wealth is what has been happening for last several decades, with the super-rich taking from the middle class. They appear to have enough political power, aided by an effective propaganda machine, to continue to take even more and expand the numbers of idle rich until it is impossible for the workers to support so many. The head of a large hedge fund (which produces nothing people can consume) had income after taxes (at the capital gains rate) of 35,000 productive workers last year. It's like the pharaohs who produced nothing having thousands of workers build pyramids for them.
With the much more progressive income tax schedule that existed in the decades after WW II, the economy was healthy. It was fueled by the spending of the growing middle class, which had money to spend. Now, with so much going to the super-rich who can't possibly spend it all, the economy is sick. The layoffs of so many government workers and spending cuts are adding to the problem and driving the economy into another recession. That’s where even more money will be going.

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