I can’t get no satisfaction.
Did you know the Metro Chicago’s median income rose 2.6% this year to $63,153?Why are people complaining about the economy? How much does a person need in order to be satisfied with a livable wage income?
Well you have to understand what this statistic means. For one, it is not an individual income amount. It is a ‘consumer unit amount’ which means a ‘household total income.’ It is not one salary based on one job for each working person in a household. It can be the total income from two jobs or workers, full or part time, and more than likely more than 40 hours a week with or without any medical, retirement, or medical benefits.
How many people in a household makes a big difference in what a household spends their income on. Start deducting taxes, local, state, federal, home rent, Obamacare, school, food, insurance, car payments, and the consumer unit take home or savings shrinks zero. More than 50 percent of working families live paycheck to paycheck.
However, many may also work side jobs and are paid in cash to supplement. The only working people who ever pay all reportable income are workers paid by checks with federal taxes first being deducted.
Some small businesses manage to avoid paying taxes by using inaccurate or unreported profits. There are probably a lot safe deposit boxes stashed with cash to avoid IRS detection.
As for unreported income, the Chicago area has millions of undocumented immigrants without social security numbers. I don’t know how they pay federal income taxes. Luckily the city and county has the highest sales taxes, and is increasing real estate, parking, water, police fines, etc. Then again, who knows how much of these type taxes are ever fully collected from small businesses.
What is My Point?
I realize I am writing as an activist to bring back manufacturing jobs to the USA so people can earn livable wages and pay taxes again. I explained why, fifty years of manufacturing experience, with reasons, and recommendations in a previous series of posts in Sources below.
In my opinion, the free but unfair trade negotiations that have exported millions of manufacturing wage jobs in exchange for minimum wage service economy jobs have failed American workers big time.
Politicians could have, and should have, done much better for US workers and families, in my opinion.
Social and Law Degrees vrs Business Experience
The USA chose to elect a President with a social science degree instead of a proven experienced business background. Most politicians have law degrees.
Perhaps the German history of experiencing hyper-inflation twice in the past century has provided them greater insight to plan long range economic policy. Whereas, USA politicians only look to a short term policy to help them be reelected. Or perhaps they just do not really understand business and bought the failed economic theory that all US dollars paid in trade would someday be returned to the USA to buy US products and services?
Instead the US dollars are loaned back to the USA to profit from US interest payments on debt that now exceed one half trillion dollars a year. Accountants would categorize this ‘as interest expense’ in their liability statement.
Interest or Lost Opportunity?
However, it can also be categorized as ‘lost opportunity.’ if an accountant viewed what additional products or equipment could have been made and sold if they did not have to pay interest. Or in our nation, what our country could be using the interest money instead to rebuild aging infrastructure, improve education, medical care, etc. instead of paying interest.
So what category should the USA National Debt of Twenty Trillion Dollars? Interest or lost opportunity?
It depends whether you ask a business manager or a politician. In a previous post, I explained President Obama’s bragging comment that the USA economy is performing better economically than most other nations. However, he does not say anything about the reason being because the US is borrowing and spending 2.5 billion dollars a day more than what is paid in taxes.
Sure, the US economy looks and seems better because more dollars are in circulation and more goods and services are being bought, both on credit or savings accounts, both national and personal.
Is this wisdom or folly? What are the long term consequences of borrow and spend? Three thousand years ago, King Solomon wrote this advice about borrowing.
Do not make a habit of striking hands, of going surety for debts. If you have no resources to settle them, why should your bed be taken from under you! (Proverbs 22:25, 26)
In My Next Post
I will explore if our USA beds are being taken and my opinion why President Obama may have decided to double the National Debt in his term.
King Solomon, Obama, Accolades or Folly HERE
King Solomon, Renegotiate for Fair Trade HERE