How things are better now.

Today’s interesting fact: the average American paid half the taxes, about $10,000.00 in federal taxes in 1965 that he/she pays now in inflation adjusted terms, which is now about $22,000.00. In 1941, 8% of the economy in the US went to federal taxes or collections. It’s now 18%.
The reality is that since 1965, they’ve brought in Medicare, Medicaid, pharmacare and the expansion of social security and that’s where the extra burden is coming from because tax rates actually fell for most Americans after that, especially for those people at the high end.
Under the old high tax rates that the rich had, the actual tax rate was far lower because there were far more deductions. Trump said he didn’t mind the 90% tax rate along with the old deductions. Nihilistic on his part, but a telling point.
Then there’s this unwillingness of politicians to confront the real problem of entitlements. These are unsecured liabilities. All the debt the US has incurred operating is secured by bonds and other financial instruments, but these programs are not. Until the US confronts that, its fiscal sanity may be in far more jeopardy. These programs will have to be deregulated and/or privatized so that most people who pay into them will not really get the defined public benefit from them. If they are going to get a benefit at all, it will be through their own private investment and effort. It is not only fiscally insane but also morally unjust and wrong to expect everyone to get the same benefit no matter what their means are.
They will have to de-universalize these programs. If a life insurance policy was set up for everyone who got the life insurance benefit no matter whether they died or not, that company who offered it would be bankrupted and would be charged with fraud and be unable to get market investment. Similarly, one should not get social insurance regardless of what your outcome is in life. If you retire rich and affluent, you should not get a social security payment or old age benefit. That should go to people who retire indolent and poor and genuinely asset-starved.
A sophisticated means test should be used to ensure that a person who has assets from other sources, such as real estate and the like, is not allowed to collect a benefit because of paper poverty. These are steps that have to be taken. Is there a sufficient supply of politicians brave enough to call for these changes before it is too late?
This third rail in politics stymies even popular politicians in both houses of Congress, like George Bush. If you propose something, it never goes anywhere or you get fried politically if you’re vulnerable. Those who don’t make proposals, are intimidated to find it in their interests not to change the status quo.
That’s why it was particularly disgusting when someone like Paul Tsongas was told by Democrats like Schlessinger that he was in the wrong party for proposing efforts to preserve the fiscal soundness and probity of these programs. How could it be in the interests of social justice not to?
The comment was that our median income on average in Canada had not gone up since 1980, when it was $43-44,000.00 in real adjusted inflationary terms. This is what simplified dodo economics works like. All it sees is the cold statistical figure.
I’m not one of those who says statistics, damned lies and statistics. I certainly believe statistics are very instructive and useful. But you can’t tell me that $40,000.00 odd in 1980 could buy the same things it buys now.
For instances, how many computers did people own in 1980? Oh, wait, there were no home computers in 1980. The only ones who had them were governments, large public agencies or major corporations.
How can you measure the quality of life, standards of living and enjoyment of people in 1980 who, with that $40,000.00, couldn’t buy a computer as compared to someone today who can. Most people use part of their income for a computer or some part of computing technology in everyday living. That’s just one example.
How about kidney medicine? It’s doesn’t affect everyone, but in 1980 there was nothing you could do with that $40,000.00 to buy better kidney medicine. In those days, a problem with a kidney was practically a death sentence or it meant that you were going to have no functional life at all. Now, you can extrapolate this to all sorts of diseases, but this is a simple example of the change in medical technology. With that $40,000.00 today, a Canadian citizen has the power to change the dynamics of life with kidney disease, and this after having spent very little or nothing on the technology which was almost entirely developed in the US.
How about video games? That’s also related to computers, but how many were purchased in 1980? Quite a lot. There were Atari and Pong. But who thinks the TV video games we had then were anything like we have now. In fact, most kids didn’t have video games then. Having an Atari video system was a sign of wealth and prosperity. It meant you were affluent or rich. Today, you’d be laughed out of school if you said you had one of those. After all, everyone from Conrad Black’s grandkids to mine has a system and the games are far better than they were then. There was no amount of money even the richest kids could spend in 1980 to get a game like those we have now. How do you measure that in money?
Because the service sector is dominant in our economy now, one can’t suggest we all have Wal-Mart jobs. Does that include computer programming? That’s a service job too.
How about pools? When I was a kid, if you had a pool, you were rich and affluent. No one could spend part of their $40,000.00 in 1980 on a pool. There would have been no money left for food.
The government delivers far more for the lesser taxes we pay too. People are coming here from around the world because they want less money than others? It’s hard to start over for everyone, but it does get better over time. Look at our Vietnamese or Chinese families now.