Monday, August 25, 2014

The Decline Of The Middle Class In America

The poor in America are cared for by government.  There are 50 million Americans on Welfare and Food Stamps, up 20 million since Obama was elected.  There are more than 10 million Americans collecting Disability Benefits, up 2 million since Obama was elected.   These numbers are what they are because of Obama's job killing Socialist Schemes, high taxes and more regulations.  The rich get richer, or poorer, with the up's and downs of the stock market, the real estate market and higher or lower taxes, impacting their ability to buy things, or make investments; but they are still rich.  Most important, the rich are not rich because the poor are poor.  That is a bunch of baloney.  The rich are rich because they are smart, work harder and know how to work the system.  It is what it is. 

However, this Blogger has seen first hand in the last 35 years in business the reasons why the Middle Class in America has been going backwards for more than three decades.   It has nothing to do with income inequality.  In fact, artificially raising wages in the private sector through collective bargaining and or raising the minimum wage makes matters worse, not better, because it causes companies to off shore more jobs, or eliminate them altogether through technology. 

With the exception of the public sector, which has made huge gains in the last 30 years because of the lack of competition and collective bargaining gaining public employees about 40% more than what is common for like work in the private sector, Middle Class Americans are worse off today, especially under Obama, than 30 years ago.  And, what is interesting is that when government faces competition as is the case for the Post Office or Amtrac, government can't compete because of higher than necessary cost in compensation and benefits, general inefficiency, work rules etc.  That is the reason the Post Office and Amtrac are essentially bankrupt.  Government is never the most productive, or efficient user of resources and that has been proven time and again. 

No matter what you may hear, the reality concerning Middle Class decline relates to global competition, technology requiring fewer people to do work, mergers and acquisitions that always result in fewer employees in the combined companies with usually less employee benefits, procurement processes at big companies that continue to squeeze the revenues and profits of small and mid sized companies, Americans that are often poorly educated with little marketable job skills and finally and perhaps most important, state and federal government tax and regulatory policies that are job killers.   Unless and until all of these issues are addressed, the Middle Class in America will continue to decline. 

Socialists focusing on Class Warfare to win elections will do nothing to help the Middle Class in America.   We need to create more good paying white collar and manufacturing jobs that are being killed everyday by government taxes and regulations, especially during the Obama Presidency.   The United States cannot maintain the highest corporate income tax rate in the world and expect job creation within our country.  And, we cannot continue subsidizing big government and a failed public education system for the benefit of teacher unions, rather than the children they are supposed to educate.   We need pro-growth policies that include limited government, less regulation and lower taxes in general to grow the private sector to create good jobs.  It will not happen any other way.  This is Economics 101.

This is not trickle down economics; just common sense.  The bigger government gets, now at about 40% of GDP, the smaller the private sector because government is using resources, through confiscation of hard earned monies in taxes, often poorly administered, or wasted, that would otherwise be available for more productive private investment, or personal use.  That is the real story no matter what you hear from Socialists, RINO's, paid Lobbyists and Crony Capitalists all feeding at the trough.   

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