We bought a tax cut for trillions in future debt so the middle class can almost cover the cost of living.

https://www.businessinsider.com/america-middle-class-living-expenses-family-of-four-2020-2

Now I know we’ve heard that someone’s granddad put 8 kids through medical school, lived on homegrown veggies and caught fish while working as a shoelace tester on the night shift.

Yet, with this roaring economy where did all the money go? Or the 4%+ growth we were promised? Or the “beautiful” and inexpensive healthcare?

It’s great that the DOW was, and kind of still is, breaking records. And that some decent wage increases near the bottom are taking place (minimum wage bumps do help, but don’t tell Republicans).

The middle class were apparently on a bathroom break at work when all the trickle down bennies were swept up.

8 thoughts on “We bought a tax cut for trillions in future debt so the middle class can almost cover the cost of living.

  1. Not surprisingly, other economists have questioned both the methodology and the conclusions of Oren Cass’s “Cost of Thriving Index.” Here’s one which claims that Cass overstates healthcare costs by a factor of four and education costs by a factor of seven:

    https://www.aei.org/carpe-diem/an-alternative-analysis-to-oren-casss-cost-of-not-thriving-index-using-bls-data/

    What fascinates me is that there is no objective, empirical way to measure the “cost of living” at different points in history, whether the time period is short or long. You’d think that calories or BTUs might work, or some sort of happiness unit. But no such standard seems to exist.

    Like

    1. A couple of things I disagree with.

      Cass does stipulate that he is not talking about total household income. He is taking about the wages of one male worker. So if it now takes multiple income to achieve better results via Perry’s analysis, that is not a refutation, but rather a support of the contention that the middle class is losing.

      He says that the cost of healthcare is not $20,000 because the employer picks up the rest. He is overlooking the fact that the cost for health insurance is still $20,000 no matter who pays for it.

      More importantly, if the workers paycheck does include healthcare, he still has to work x number of weeks to receive that benefit. He just doesn’t see the “takehome” of the premiums covered by the employer.

      And from the reverse angle, it costs the employer $15,000 more to hire a median income worker than the stated salary. This has to be taken into consideration by the employer since that worker has to produce more for the stated wage to cover the company expenses.

      Liked by 3 people

      1. E: “So if it now takes multiple income to achieve better results via Perry’s analysis, that is not a refutation, but rather a support of the contention that the middle class is losing.”

        The refutation is of Cass’s approach. Cass assumes a theoretical and unnecessary “consumer unit” when real life data for an actual and comparable “consumer unit” exists for the same period. Also, since the topic under analysis is that “consumer unit’s” cost of living, the number of wage earners involved is irrelevant.

        RE: “He says that the cost of healthcare is not $20,000 because the employer picks up the rest. He is overlooking the fact that the cost for health insurance is still $20,000 no matter who pays for it.”

        If the employer pays for it, it doesn’t make sense to pretend that the employee does. There are lots of employer expenses we don’t count as employee compensation for the same reason — e.g., plant, equipment, supplies, utilities, etc.

        Cass’s index seems to show that life is getting worse for Americans, but it is not a very convincing analysis.

        Like

        1. “… the number of wage earners involved is irrelevant.”

          So a family with 3 minimum wage jobs, who have to farm out child care, begone night and weekends, and perhaps no health insurance because of the low wage jobs is just as healthy and well off as the more traditional of decades back.

          Or, another way is that the consumer unit decades back was sustainable with the wages of one male earner. Allowing the family dynamics of raising children to be more “hands on”. Today it might take two or more earners.

          On paper, it adds up. In real life that is a joke.

          On health insurance, the employee’s hours pay for his healthcare. So he is still covering the entire $20,000. If he didn’t work there, that “cost” to the employer would be gone. The other expenses would still be ongoing, however.

          Admittedly, it would be more equitable to pay the whole $15,000 to the employee, but the company would lose the tax deduction for insurance, so the amount might be more like $10,000, which would not be enough for the wage earner to cover his healthcare with his promised compensation.

          Liked by 1 person

    1. The argument against cutting rates in a robust economy will now be demonstrated to our Country’s detriment.

      We emptied the gun at squirrels taking birdseed and now have nothing for the bear….

      Liked by 1 person

    2. Captain Oblivious and his band of “accountants” are feeding us empty MRE’s with those low interest rates to keep the Trump Bump alive long past it’s “use by date”.

      Now with the expected from trade wars and the unexpected, but should have been anticipated like Obama did,, from virus town, the interest rates are no longer a 50 caliber bullet, but rather a BB.

      But that is the view through my Canon. You are the numbers man.

      Liked by 2 people

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s