The Perfect Storm Wiping Out the Middle Class

Two reports are worth reading to give you some idea how fast and total the collapse of the middle class has been in the country and how the fiscal policies of the Bush era virtually eradicated the government's ability to handle such a crisis. The first is the Fed's report on that the median worth of the average American fell by 40% from 2007 to 2010. The second is Bruce Bartlett's "The Fiscal Legacy of George W. Bush", which explains how the government's projected surpluses of trillions in 2000 turned around by $11.7 trillion by 2011.


The first report from the Fed should sober Americans up about the declining standards of living for Americans. The median net worth of an American went from $126,000 in 2007 to $77,300 in 2010. That is the net worth, which basically looks like equity in a house, the two cars and what little retirement money exists. The median income per family went from $49,600 to 45,800 in 2010. 


This isn't reading reports on the poor under Lyndon Johnson. This all affected the middle-class. The biggest drops were those in the 60-79.9 percentile and the 20-39.9 percentile--which lost 40.4% and 35%. The income divide widen so that the 10%, who were worth $1.19 million had 138% as much as median income people. 


To make it plain, in 2012 the American people have the same standard of living they had literally 20 years ago in 1992.


Now if you factor in health care costs, even if you still had a job, you are looking at a financial wipeout, which was reflected in the millions of new bankruptcies.


Now a recent poll shows that 49% of Americans believe Republicans are purposely slowing the economic recovery to beat President Obama. Of course they are. Bruce Bartlett in his article notes that 43% of Americans hold Bush responsible for today's government deficits and 14% blame Obama. 


Now liberals criticize President Obama for not going the whole FDR in combating the Recession. Bruce Bartlett's article points out the fiscal policies that ruined the government's ability to respond. 


By the year 2000 the government had a surplus and was projected to accrue some $5 trillion by the year 2000, which would have paid off the entire national debt. 


The CBO estimated that tax cuts and slower than expected growth led to reduced revenues of $6.1 trillion and spending was $5.6 trillion higher. That is a turnaround of $11.7 trillion since 2000. 


72% of the debt was attributed to tax cuts and spending increases and 27% because of economic and technical  reasons. 56% of the new debt was acquired in 2009 and 2010 because of the effect of the past policies in place.


Just to give you some idea of how off the Bush people were--the CBO projected deficit caused by tax cuts was $3.5 trillion from 2001-2008. The reality was $5.5 trillion.  It is like Paul Wolfowitz' projection of the cost of the Iraq War--$86 billion and the cost is at least $1.3 trillion and with the accumulation of medical costs,etc. will be closer to $3 trillion.


So if you want a repeat of all this, please vote for Romney.  He is surrounded by all the Bush people who brought you the original calamity. And the economy is just fine for him. He made millions off his fellow countrymen.


Strangely enough the economy is fine. We are no longer in any financial bubbles--at least here in the United States. Moody's projects the unemployment rate at election day as 7.9%. In other words, President Obama will have brought it to a safe landing. But the challenge is where to go beyond there.