The Death of the Middle Class Under the Democrats’ War on Poverty

Illustration on page 5 of the book Oliver Twist: Social Novel from 1898.

Illustration on page 5 of the book Oliver Twist: Social Novel from 1898.

The Left hates freedom. They despise the rights to opportunity, to choice, even to live. To choose to be free would provide no purpose for a political platform espousing the minimum wage as the standard the poorest of a given nation are identified, collectivized into public housing and furthermore, targeted for extermination through the present-Obamacare eugenics initiative which Jonathan Gruber, its “econumetric architect”, declared its casualties as “marginal children… for the public good”.

Any astute Fabian Society socialist, Marxist or Nazi will openly divulge their disregard for human life. Planned Parenthood is frequently caught participating in child slavery, rape, human trafficking and pedophilia — while Democrats support them unconditionally through backdoor amendments to legislation friendly to abortion rights. Admittedly, they take special care to ensure racial minorities — specifically blacks — are targeted to maintain healthy bottom lines. Leftists do not believe life is a natural right; in fact, no one possesses a natural right leftists are not willing to grant for a price, provided a civilian was legally permitted to be born. In echoing Hollywood darling, communist dictator of Cambodia Pol Pot, whose genocidal ideations led to the slaughter of nearly one-third of its population during his reign of terror (1976-78), “To destroy you is no loss, to preserve you is no gain.”

Democrats have waged a war on poverty since 1964 that has yielded no fruit other than the spoiled variety. Poverty is now at a fifty year high; the middle class is nearly extinct, now rated only twenty-sixth wealthiest globally after decades as the richest. Yet in their public zeal to declare the rich must be made less so, they are wealthier than ever. For instance the following statistics correlating the presence of the income tax and monetary policy by the Federal Reserve to income inequality portend the bottom ninety percent of wage earners will be controlled entirely by their rich masters and the federal government they own.

Wealth distribution since 1917.

Wealth distribution since 1917.

Trends in middle class wealth since 1969

Trends in middle class wealth since 1969.

The image at the top is the total popular distribution of wealth since 1917, the launch of World War I, just one year following the creation of Federal Reserve. The lie so pervasive is during conservative periods of dominance in America, shares in the distribution of wealth are at their most diametrically-divergent. America’s liberal political machine has convinced the general public the rich grow more so at a rate far accelerating the bottom ten percent under conservative governments — a lie indeed to bamboozle the general public to force themselves to be “free” by handing over the property they earned through direct taxation, to discourage thrift and simultaneously, the work ethic upon which America was founded. Finally, to do so while informing the general public they will be well-provided for by the rich while their wages will not be taxed at increased rates has never transpired — in fact, incomes remain stagnant and grow far less in total value with relationship to increased price indices and hidden inflation while the bottom rates become inflated as the minimum wage increases incrementally. As a result, payrolls are slashed, work hours are cut and stores closed or, if this is not a pervasive trend in the private sector, the poor are bumped into a higher tax rate bracket, paying more in taxes and in the end, keeping far less of their own earnings despite a higher annual income. Income tax revenue under Ronald Reagan increased, but they were indexed for inflation to prevent what is paid into the Internal Revenue Service (IRS) from soaring in total due to the hyperinflation that reached by 1982 higher than 13.5 percent while the rate for unemployment saw a post-Depression era 10.8 percent. The tax rate concept of Arthur Laffer (innovator of the Laffer Curve) correlated the trend that the less in rates Americans are taxed, the more they will pay due to naturally-increased take-home wages for the already affluent and those in the middle class growing rich for the first time. Employed by the Reagan administration, this economic expansion was conducive to the encouragement of opening new businesses and the expansion of others, creating nearly 20 million new jobs — and record numbers of taxpayers — between late 1982 and the end of Reagan’s presidency in January 1989.

The bulk of the rising inequality and poverty is traced to 1970 when President Richard Nixon ended the Gold Standard of the Bretton Woods exchange weight measures according to the Mises Institute. Due to predecessor Lyndon Johnson’s “Great Society” policies that included the war on poverty, the dollar grew too overvalued for standard gold to anchor the monetary supply’s weights and measures. Nixon thus decided to create an avenue for the free flow of fiat money, easily printed in abundance and monetized through fluctuating interest rates which inflate and deflate the coinage. 

The income and wealth divide that is now seen as a problem did start right around 1970 (depending on what type of data you want to look at to judge this, it started as early as 1968 or as late as 1973). The income divide is not fabricated, nor are these dates just pulled from thin air. The period of time right around 1970 was unique in recent history as it was the end of the Bretton Woods era and the start of a pure fiat standard by all the central banks of the Western world. It ushered in a period of unanchored central bank credit creation, and government deficit spending.

The Washington Times reported September 4, 2014 alarming figures in a study conducted by the Survey for Consumer Finances corroborating the conservative claims, now diffusing to what few center-left Democrats remain in politics. 

We will call in and question all of the candidates,” he said. “One of our biggest concerns is who is the candidate’s economic team, because if the present economic team doesn’t change, you are going get the same results.”

The following figures are conclusive and indisputable. Economic success is measured by Democrats in how many are placed on the federal welfare payroll rather than job and income growth. The happy days of FDR’s “soup lines” wrapping around city corners are indeed here again.             

  • Families in the middle income bracket (40th to 90th percentiles) saw “very little change in average real incomes and have not recovered losses from 2010 and 2007. Families at the bottom of the income distribution continued to see “substantial declines” in average real incomes, a continuing trend from the previous two survey.
  • The top percentile of Americans also increased their wealth share since 2010, corresponding to a loss in wealth for the bottom ninety percent of Americans. The share controlled by the top three percent climbed from 44.8 percent in 1989 to 51.8 percent in 2007 and 54.4 percent in 2013, while the share of the wealth held by the bottom 90 percent declined precipitously from 33.2 percent in 1989 to 24.7 percent in 2013.
U.S. debt to GDP ratio graph, 1940 to 2013.

U.S. debt to GDP ratio graph, 1940 to 2013.

President Obama’s two immediate predecessors — Bill Clinton and George W. Bush — were able to sing different tunes and in the case of Clinton, quite to the contrary, even as it was a lie when declared all levels of income increased “for the first time in decades”, which they did more so under Reagan. Bush declared “some policies lift people up” while others “tear others down”. And yet neither employed Keynesian economic policies, long since discredited, until Obama rammed through his $800 billion economic stimulus package while signing into law the first of many massive tax increases with the Affordable Care Act in January 2010, signifying again Washington was committed to returning to the failed “tax and spend” policies, constant debt ceiling hikes and worse still, quantitative easing (QE) while simultaneously driving down interest rate to where today, federal debt is estimated at over $18 trillion while the rate of inflation is deflated to -0.1 percent. The value of the coinage has been debased to where less will only pay a minute fraction of the debt having accumulated in terms of the principle as there is less accrued at present at 0.25 percent. Federal Reserve chairwoman Janet Yellen is considering increasing interest rates as jobs reports are in rapid decline and debt rises at a divergently-asynchronous rate at the risk of returning to an official recessionary period — and perhaps a return to a once-thought impossible economic phenomenon ever to be witnessed again should the fear of hyperinflationary trends translate into 1970’s-era stagflation. Debt may soar at a rate never witnessed both in real terms and through interest rates into one far worse than with Japan, Spain and Greece, each of which are fending off a 200 percent debt-to-GDP ratio.

Value and supply of the U.S. dollar.

Value and supply of the U.S. dollar. (DollarDaze)

Value of a Dollar Since 1913

Value of a Dollar Since 1913. (Minyanville)

The value of the dollar is barely a fraction of its 1913 level. The year 1913 is significant as the Sixteenth Amendment legally providing a progressive federal income tax was passed, three years prior to the creation of the Federal Reserve. The above graph details the declination over a century, in which in 2013, a dollar is worth just $0.05 of its 1913 value.

Alterations in inflationary numbers contributed to the enormous decline in the value of the dollar over the past century. At best under $10 billion is equivalent to paying down a deficit equal to $800 billion due to damaging monetarism by the Federal Reserve by debasing the coinage. Where debt never deflates, the currency is continually debased. Like taking out mortgages or a loan, the debt must be repaid, and always with interest. Central banking, indeed, is far more pernicious to the economic well-being of any nation — America included — than even the most repressive of tax codes to the working classes as debt rises higher and still more so asynchronously than the income one earns whose purchasing power decreases as a result. And as government confiscates more of the people’s earnings, the less their remaining income will purchase and poorer the majority of the country grows, adjusted for inflation. Throughout this period, business and capital gains taxes have not been cut since the Reagan years. America is now the third-least competitive among developed nations due to repressive regulations, while the wealthy, according to Dylan Matthews when still with the Washington Post, pay the most progressive figure in terms of income taxes, yet contribute to growing inequality in America when compared to Europe.

Income and taxes for the top ten percent around the world.

Reductions in inequality due to taxes and transfers.

Yet President Obama is as tone-deaf with respect to income inequality and rising poverty as he is all other issues not involving black power supremacy and his unapologetic support for Islamic terrorists, including Al-Qaeda and ISIS, as a practicing expert of “Islam”. His rather windy rhetoric from his 2012 State of the Union Address is demonstrative as to how out of touch he is with Main Street, U.S.A. when his policies aid Wall Street are contrarian to the vitriol directed at the industrious.

“The defining issue of our time is how to keep that promise alive. No challenge is more urgent. No debate is more important. We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by, or we can restore an economy where everyone gets a fair shot, and  everyone does their fair share, and everyone plays by the same set of rules.”

Nor how he damaged no demographic worse than his “people” — the black community — who were wealthier than at any time in their history during the Reagan Revolution of the 1980’s which according to the New York Times from August 10, 1991, were dramatic.

  • The proportion of upper middle class black Americans earning $50,000 or higher doubled by 1989 from its 1967 level.
  • In 1989, one in seven black families earned an income of $50,000 or higher, compared to just one in 17 with similar incomes when adjusted for inflation in 1967.
  • The increase in the number of affluent black families doubled during the 1980’s, quadrupling since 1967. The number in 1967 was 266,000; more than a million were wealthy by 1989.
  • By the same measure, one in three white families was affluent in 1989, an increase of one in six in 1967.

In other words, the black community, which saw a rise in affluence of 69 percent under Reagan, increased in total income by a considerably higher rate than white families, which saw a rise in upward mobility of “just” 50 percent, while in 2012 the Brookings Institute reported the inner city poor dominated by the black demographics suffered the worse of the Obama indignities of increased poverty. But that was the difference between Reagan’s “morning in America” and Obama’s declaring no one earned their keep. And after all, no one is genetically-prohibited from earning a healthy wage given the opportunity and proper launch point. Social Darwinism, therefore, must be rejected, the poor and unwashed’s lives and their future generations’ eradication through eugenics ended in favor of a truly humanitarian audacity of hope we can all believe rather than his new “defining issue” to “climate change”, expediting population decline initiatives through declining living standards for the middle class into the ghettos of the Democrat plantations.

 

 

 

Comments are closed.