Economics

At $15.62 an hour you are in the top 1% of earners

Admit It: You’re Rich is a discussion from Megan McArdle.

If you are making more than about $16 an hour, you are in the top 1% of income earners in the world. If your time horizon is the last few thousand years of history, sitting in the lower end of middle class or perhaps working poor, you would be in the very tip-top of the 1% for all of history.

(Cross-posted from my other blog, Outrun Change, because this discussion has so much to say about the radical economic progress that has taken place over the last 100 and 250 year timeframes.)

She is on the story of why people living on either coast are complaining they can barely get by on $350,000 a year.

I’m on it. So is David Sirota. And if your personal income is higher than $32,500, so are you. The global elite to which you and I belong enjoys fantastic wealth compared to the rest of the world: We have more food, clothes, comfortable housing, electronic gadgets, health care, travel and leisure than almost every other living person, not to mention virtually every human being who has ever lived. We are also mostly privileged to live in societies that offer quite a lot in the way of public amenities, from well-policed streets and clean water, to museums and libraries, to public officials who do their jobs without requiring a hefty bribe. And I haven’t even mentioned the social safety nets our governments provide.

So how is it that everyone who is making more than $33K a year doesn’t feel like they are incredibly, wonderfully, amazingly blessed to live a live of such luxury and comfort and ease?

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By Jim Ulvog, ago

In addition to gracious help from Indians, what moved the Pilgrims from starving to thriving?

The first winter for the Pilgrims was terrible. Between starvation, pneumonia, and tuberculosis, about half died.

The second winter was terrible, again with little food. Those who survived the first two winters only did so by the goodness of the Native Americans who graciously shared their food.

The third winter was far better, with plenty of food. In a few years, there was enough abundance that the Pilgrims had paid off their debt to those who financed their trip. They were alive, thriving, and free of debt.

Those are a few highlights of the Pilgrims’ story told by Karl Denninger in his article from 2006, which is reposted at Market-Ticker:  The Truth About Thanksgiving.

What caused the change from starving to thriving is the part of the story I never heard growing up.

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By Jim Ulvog, ago

Would you rather be in the middle class today or the richest man in the world in 1836?

If it was possible to choose, would you prefer to live life in the middle class, struggling to get by in a lousy economy with an uncertain retirement, or would you rather live the life of Nathan Rothschild, who was the richest man on the planet when he departed this life in 1836?

(Cross-posted from my other blog, Outrun Change.)

John Kay discusses this idea in his article, Precise inflation figures ignore evolutions in product quality and consumer choice.

Mr. Kay points out that Mr. Rothschild was richer than either John D Rockefeller or Bill Gates. He was the second richest man in all of history.

Before you say you’d rather live his life than yours, consider this:

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By Jim Ulvog, ago

“The rich” don’t pay just their fair share – When you consider transfer payments received, the top 20% pay over 98% of federal taxes

When you combine income, payroll, & excise taxes paid and then back out the transfer payments received, the top 20% of households paid an average of $46,500 in 2011. The second 20% paid a net of merely $700. The bottom 60% didn’t pay anything on net, but actually received back between $8,600 and $12,500.

That means the top quintile paid essentially all of the federal payroll and income tax net of transfer payments.

First the chart that illustrates this data and then the raw data. Finally, I will suggest you really don’t want to ask about the 1%.

He calculated this graph, which I use with his permission:

graph of net taxes paid by quintile

 

Mark Perry explained this phenomenon and discussed it in his post, New CBO study shows that ‘the rick’ don’t just pay their ‘fair share,’ they pay almost everybody’s share.

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By Jim Ulvog, ago

What ended the Great Depression? #1

It was neither massive federal spending during the Depression nor even more massive federal spending during World War II that ended the Great Depression.

That’s what I was taught in school and what most people believe today.

Stephen Moore explains the WWII part of the falsehood in his article How did the Gret Depression actually run its course?

FDR and his whiz kids were totally convinced that the economy would completely collapse after the end of the war. They planned but fortunately did not implement a New Deal II. Doing so would have strangled the economy, perhaps for yet another decade.

Here is the conclusion to the article: (more…)

By Jim Ulvog, ago