Bush tax cuts have done wonders to stimulate the economy and bring EVEN MORE revenue into the Treasury than when tax rates were higher!!!!!

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Bush Tax Cuts Drop Deficit to $296 Billion

Tuesday, July 11, 2006

WASHINGTON -- President Bush touted new deficit figures Tuesday showing considerable improvement upon earlier administration predictions, trumpeting it as validation of his tax cuts.


Bush himself announced the deficit - a task that has in the past been left to lower-ranking administration officials. The figures show that the deficit for the budget year ending Sept. 30 will be $296 billion - much better than the $423 billion that Bush predicted in February and a slight improvement over 2005.


Bush said the improvement is due to tax cuts he pushed in 2001 and 2003 and his clampdown on domestic agencies funded by Congress.


"These tax cuts left nearly $1.1 trillion in the hands of American workers and families and small business owners. And they used this money to help fuel an economic resurgence that's now in its 18th quarter," Bush said. "Economic growth fueled by tax relief has sent our tax revenues soaring."


Impressive profits and big income gains by the wealthy are largely responsible for the surge in revenues and, in turn, the deficit drop.


However, the results are less impressive when compared to the $318 billion deficit posted last fall for fiscal 2005. Despite strong revenues, the high costs of the Iraq war and Gulf Coast hurricane relief have weighed on the deficit - as have higher interest payments paid on the national debt.


"The 2006 deficit may be a bit lower, but it represents a $600 billion swing from the surplus projected in 2001. And a deficit of $296 billion is still a large deficit. In nominal terms, its one of the four largest in history," said Rep. John Spratt Jr. of South Carolina, top Democrat on the Budget Committee.


Revenues are running $115 billion greater than expected earlier this year, the White House said, reflecting particularly strong growth in taxes paid on corporate profits and income taxes paid by wealthier people and small businessmen who pay taxes quarterly instead of having them withheld by employers.


"With the help of the president's successful pro-growth policies, the 2006 deficit is 30 percent lower than originally expected," said the White House report.


Taxes paid by individuals are growing at an 11 percent rate, the White House says, while corporate taxes are rising at a 19 percent rate.


The economy is estimated to grow at a 3.5 percent rate in real terms, a slight slowdown from the 5.6 percent rate of the first quarter of the year.


"We've had extraordinarily good profit growth, and when you have better profit growth than wage growth you tend to have windfall tax revenues because taxes on profits are higher than taxes on wages," said Diane Swonk, chief economist for Mesirow Financial, a Chicago-based financial services firm.


Swonk predicted that the unexpected revenue surge would ease around the end of the year as profits peak.


Bush has had few opportunities to boast about the deficit over the course of his time in office. He inherited in 2001 a surplus estimated by both White House and congressional forecasters at $5.6 trillion over the subsequent decade, and it quickly dwindled.


Those faulty estimates assumed the late-1990s revenue boom - fueled by the stock market and dot.com booms - would continue. But that bubble burst, and a recession and the Sept. 11, 2001, terrorist attacks started a flow of red ink. Several rounds of tax cuts, including Bush's signature $1.35 trillion tax cut in 2001, also contributed to the return to deficits four years ago after four years of budget surpluses.


Even before the release of the figures, critics poked at the White House figures, citing, for example, how they are at odds from Bush's original budget released in 2001, which predicted a $305 billion surplus for the current year, even after accounting for tax cuts.


Some budget experts say the steep rise in tax receipts looks more impressive than it really is since revenues are bouncing back from a three-year decline during Bush's first term, drops not seen since the Great Depression.


"The current so-called revenue surge is merely restoring revenues to where they were half a decade ago," said Robert Greenstein, executive director of the liberal-leaning Center on Budget and Policy Priorities think tank. That's after accounting for inflation and population growth.


Still, the new figures should allow Bush to claim credibly that he will meet his promise, made in early 2004, that he will cut the deficit in half by the end of his second term. Then, the White House forecast the deficit to be $521 billion for the 2004 budget year, setting the goal of $260 billion by 2009.


© 2006 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

Tuesday, July 11, 2006

In Case You Missed It: Good Jobs At Good Wages

From The Wall Street Journal


July 11, 2006


It's been 26 months since we first referred to the "Dangerfield economy," or the current economic boom that gets no respect. ...


[T]he labor report shows remarkable strength. The unemployment rate stayed at a very low 4.6%, despite the addition of 330,000 new entrants into the labor market. ...


Meanwhile, the increase in total hours worked in June was itself the equivalent of a half-million new jobs. And the number of Americans who have been without a job for more than six months sank by 217,000 in June to its lowest level in more than five years. ...


The major worry of most workers today is, of course, that their take-home pay isn't keeping pace with the cost of college tuition, health care or filling up the gas tank. However, even here there is some good news. Wages rose 4.6% in this year's second quarter, the fastest quarterly pace since 1997. ...


[W]ages after inflation rose by 0.7% in the 62 months from the peak of the last business expansion in March 2001 through this May. ...


The same analysis finds a 7.4% gain in total worker compensation (wages and benefits) after inflation in the current expansion, much higher than the 2% gain over the same stage of the business cycle in the 1990s. Gains in median household net worth have also been higher, largely because of increased housing values. ...


In most parts of the U.S. today, the biggest labor-market problem isn't the lack of jobs but a shortage of willing workers with the proper skills. That's a problem that much of the rest of the industrial world, with jobless rates nearly twice as high, would love to have.


To View Entire Article Please Visit:

http://online.wsj.com/article/SB115258405475803021.html?mod=todays_us_opinion

"Bush Tax Cuts Drop Deficit to $296 Billion "

Rory
Your the true definition of a tool

Krusty, you really need to pick up "Econ for Dummies".

...and $296 Billion is the fourth worse deficit EVER.

Excellent.

Fish on...

Todd

Bush is Good, Bush is Great.
Bush fixes everything do not question the infinite wisdom of our supreme lord and mast--um--I mean duly appointed Commander in Chief.
If it wasn't for Bush, The Islamosexuals would have taken over years ago and we'd all be worshipping aborted fetuses and sodomizing radioactive whales.

It's truly strange that the boom years of the Clinton administration - remember when we had a surplus - were apparently just good luck. When Bush light manages to pull off only the fourth largest deficit in our history its cause for praise, and it's all becasue of his good stewardship. I wonder if Rory ever heard about the natural economic cycles we have experienced for more than 150 years. Naw, its all becasue Bush is good Bush is great. Damn I bet if Bush eliminated all taxes revenues would soar.

So the deficit is the fourth largest ever, and the spend-o-whores had to raised the debt celing to 9 trillion.

Yay.

The economy may be rolling along OK, but the spending would have the GOP frothing at the mouth if a Democrat was in office.

Tax-n-spend? Nah. It's cut taxes-n-spend more.

What a perfect alternative.

http://www.usatoday.com/news/opinion/editorials/2006-07-11-deficit-edit_x.htm

Hold your applause: Deficit dip is but a drop in bucket
Posted 7/11/2006 8:30 PM ET


Great news! This year's budget deficit won't be $427 billion as forecast in February but $333 billion. President Bush touted ...
Oops, wait a minute. Those numbers are from last July's White House press release. Let's start again.

Great news! This year's budget deficit won't be $423 billion as forecast in February but $296 billion. President Bush touted this on Tuesday as evidence that his fiscal policies are working.

Forgive us if we don't break out the party hats. It is hard to get excited about an abysmally large deficit in the range of $300 billion that is somewhat less gargantuan than earlier predicted.

Even accepting the administration's assurances that it does not purposefully overestimate the numbers in a Wall Street-like game of beating expectations, this habitual mid-year crowing masks the seriousness of the nation's bleak fiscal outlook.

The government faces a severe financial crunch as the baby-boom generation prepares to retire. Runaway health costs and the swelling number of people collecting government benefits are the chief contributors to what the Government Accountability Office, the research arm of Congress, estimates to be a long-term government shortfall of $46 trillion.

In that light, the most urgent question is not whether this year's deficit is $400 billion or $300 billion, but what the administration and members of Congress are doing to head off the much larger deficits on the horizon.

The answer is: Precious little. Members of both parties willfully ignore these problems and downplay their significance. The Bush administration, meanwhile, makes matters worse by overplaying the significance of its annual budget numbers.

A $296 billion deficit this year would be only slightly better than last year's deficit, which came in at $318 billion. It would, of course, be much worse than the surpluses Bush inherited. And its true size is masked by the $172 billion Social Security surplus. Take that away, and the deficit is $468 billion, or more than $4,000 per household.

There is, to be sure, some modestly good news in the budget numbers. So far, the new Medicare drug benefit hasn't been as costly as anticipated. And tax receipts from companies and wealthy individuals have surged.

But frankly we don't see much reason to gloat. That only diverts attention from the serious financial issues that the nation faces and its leaders duck.

The funniest thing about the deficit thingy is that the war costs aren't even included yet. Imagine what the true and actual deficit is when factoring in the emergency funds bush keeps getting for his folly--that's gotta get paid back sometime. We're not handing out "war grants". And that's not even considering the long term cost of taking care of wounded vets from bush's escapade...

Rather than just acting like overly emotional liberals who in their frustration of being shown that lowering taxes for ALL Americans benefitted our Nation's economy greatly (just like it did when Kennnedy, Reagan and now Bush 43 did it) and lashing out with personal attaks and childish name calling----Is it your thesis that raising taxes would actually have been better for the economy?

I didn't say anything in my personal opening statement of this thread about domestic spending --Bush' failure to veto some of that along with his position on illegal aliens and those who employ them are two of the biggest problems I have with his administration's policies.


However, given the fact that he (Bush 43) inheirited a recesion from Clinton, had war a major waged upon us by terrorists who murdered thousands of our innocent civillans and cost our economy thousands of jobs and billions of dollars and the fact that he had to deal with the biggest natural disaster in out Nation's history displacing hundreds of thousands of people from a major city and disrupting our refining capabilities it's actually AMAZING that the economy is doing as good as it is right now--the tax cuts have been an important aspect of making that an undeniable reality. Actually if Katrina hadn't happened and al Queda never attacked us we probably be running big surplus' right now.

Everone on this forum talks about how great things were while Clinton was in office--thae fact is we have a lower unemployment rate right now than we did during the average of the 70's, 80's OR 90's.

Bill Clinton didn't stimulate the economy (maybe just a few chubby interns :p ) He just happened to be sitting in the drivers seat when the DOT COM boom, fiber optics, tele-communication all went through the roof and took the estock market with it. The way you can illustate that it wasn't Clinton's policies that grew the economy is because after the DOT COM BUST happened we went into a recesion and treasury revenues fell of sharply. If it was Clinton and not sheer luck of beiong in the right place at the right time the economy would have continued on at the same pace.

The stock market is actually much more strong and realistically priced right now (not artificially over-inflated like it was under Clinton~not that that was his fault.

Americans who own their own home is now at an ALL time high and if the new Fed chairman quits di#kin' around with the funds rate soon you'll see investors go wild and the DOW go over 12,000!!!

I know a lot of you hate Bush 43 and that's your right--but this economy id doing good and that's undeniable.

Actually, the "war waged on us" by terrorists, while terrible and costly, didn't cost us much in the way of dollars.

Our corporate war in Iraq, however, is 100% G-dub's baby, and not only are we all paying for it through the nose (well, not all...Halliburton, Bechtel, Chevron, and Lockheed are making out like bandits), but we and the generations to follow will be paying for it for a long time...and not just economically.

There's also quite a few "Christians" in the Administration, and assuming that they are right about Christ, they, too will be paying for it for a long time...like eternity.

Fish on...

Todd

The smallest recession in modern history, by the way, that he's still using as a scapegoat.

And the econonmy is not doing "good", it's flat. Wages are behind cost of living and inflation, jobs growth is flat, unemployment rate does not acurately reflect what the real picture is because of the way the numbers are spun, number of people falling below poverty line has increased every year since 2000...

...and on and on and on...

But, but, but... Clinton! You guys kill me.

So the White House miscalculated by 30% the size of the 2006 deficit? Pretty poor job to miss by 30%. Should we consider ALL their numbers to be plus or minus 30%?

Or maybe they used "counter-intelligence" (intentional mis-information) on us, ie, put out an estimate 30% HIGHER so when the real numbers come out they can claim "LOOK HOW THE PRESIDENT'S PROGRAMS HAVE LOWERED THE DEFICIT" !

Just like when they intentionally float some controversial policy and then the President can step up and say "NO, NOT ON MY WATCH".

It's a bunch of BS, and one of Karl Rove's favorite tools to manipulate the ignorant masses.

Trust this administration if you want, but don't ask me to because I won't. History will prove me correct, wait and see!

Cheerleader for the cheerleader.

Good work Rory.

Bush couldn't stimulate a .........ehh, forget it.

Speaking of the booming economy, how's that stock market working for ya, Krusty?

Dammit, Harley...it's Clinton's fault!

Fish on...

Todd

...'bout as sharp as a spoon in a knife drawer.

Start beating the drum KK. I love it. Oh,and by the way you are one of the few guys I do remember meeting at Tim's. Could have something to do with you staking a claim to my sleeping bag.

Sounds funny, but I don't even truely believe there was a real recession at the end of the Clinton years to start with. Think about it. you are coming into office after 8 years of continued growth. If you claim that a recession is inevitable, then you can't lose. If the economy stays the same you are great, if it gets better you are a genius, if it gets worse, you couldn't have prevented it.

One reason for the good economy we have had is from the lower interest rate that has been allowing people to borrow more and more money and then spend it on consumer goods while going into deeper debt. With the increase in the interest rate, we finally could see a real slow down of the economy. Who benefits from higher interest rates? Not me. Only those with big cash reserves. Who gets hurt by inflation? Not me? My home goes up and my debt costs me less. Who does get hurt? Banks or others holding debt and people with large cash reserves.

Also, think about it, if you borrow huge amounts of money and then spend it, shouldn't the economy grow as a result. Think of the new deal. The only real problem is that like under Reagan, this president is blowing the money on social programs and the like, rather than infrastucture like FDR.
Rory is right that Clinton was lucky with all the growth during his years, but at least he didn't do anything to stifle it. Do we really want a president that is responsible for everything, or one that allows things to happen as naturally as possible and only steps in when truely needed.
As a true conservative, I can't think of one effect that the Clinton administration had that truely affected my life in a negative way. He was a great politican in that he sounded like he was doing something, and actually doing nothing. Take Gays in the Military, we went from outlawing it outright to saying if we know about it, then we will kick you out. Any difference, I don't see one. He tried to socialize medicine and nothing changed. He did, however, reform welfare.
The republicans will talk about his immorality destroyed America, but fail to explain how drug use, teen sex/pregnancy, abortion and other vices all fell, while college rates went up.
I feel all of these can be tied to the good economy that gave Americans something to look forward to. With gas prices and inflation and war, watch for our young people to start disbelieving in the American dream again and for gang violence and all the gains to start slipping away.
Always look to the reality, rather than the perceptions. Thats my 2cents.

Solid post, Krijack.

Oh what a beautiful morning, The mountain is alight with alpenglow, the air is cool and clear, and the brown nitrous oxide miasma seemingly generated by my monitor is being dissapated by the fan.
Count your blessings. The origiastic verbal bashing of Rory give many of you a means of offloading and outgassing that would probably become self-abuse if not vented. I cannot help believe that most of you are normally polite folk. However, Rory seems to catalyze a mean streak in the librocrat sectors. Why is that?
You bemoan his cut and pastes and yet you all do it from time to time. You call names, insult in every possible facet of behaviour and just generally act like a bunch of vandalistic juveniles.
Ah well. 'tis too beautiful a day to continue in this vein. Shalom and Aleikum Salaam.

---------------------------------------------------------------------------


<b>It's working great!!!!

If you buy now you'll be wasting your money...it's not "bargain basement" at all yet...I'd give the ME crap a bit of time to play out, and see what happens.

I have a feeling things are going to drop quite a bit more in the next week at least, the next several weeks if tensions ramp up over there.

Fish on...

Todd

Made round to go round. KK Go make some of that round stuff. Enjoyed your post. I have been reading the mail for some time. And you are not quite so into the vile rejoinder as some. I just get a chivalrous streak now and then and stick one for the underdog deserving or not.
What line of pecunary endeavor do you challenge?
Ciao TK, oops I mean KK. lol

Yeah, those recently retired boomers whose retirement funds are dependent upon the market are loving this.

Neocons are devoid of empathy.

As you know the Tk was in jest. Seemed appropriate somehow. I bet Wenatchee is more fun, probably more challenging too.

one thing people need to understand is that economic "growth" isnt all that it is cracked up to be... you can have a growing economy where all of the growth is benefitting a small portion of the population at the expense of the rest.....

economic strength is far more important, the earth is like a spaceship with limited resources. GDP is basically the speed in which we are turning those resources into garbage. yet it doesnt take into account any of the costs of cleaning up the mess....take superfund cleanup sites required to clean up after a corporation makes huge profits and leaves a huge problem behind when they leave- the profits go to increase GDP but the billions in taxes required to clean up the mess dont subtract anything from GDP and often actually are calculated as an increase in GDP-
we are basically defining economy with terms that have nothing to do with the bottom line for the working man

70% of economic growth is from getting more work out of the same amount of employees or less employees- take the computer for example: it makes everything way easier but are you able to work less because of it, of course not, you just get more done in the same time.... only a very small portion of economic growth benefits the working man......

we need to protect familly values thru the familly economy- we need to work towards making it possible again for one working parent to support a familly financially. for parents to be able to spend more time with their kids and raise healthier kids and communities that require less in social services.... it isnt materialism necessarilly that is forcing two parents to need to work to support the familly budget, it is that it costs us so much more to have the basics than ever before. homes are increasing in price so fast that it is impossible for most to afford to buy in the areas where they grew up- but salaries are not going up in any way that makes up for it.... we are needing to work harder and harder to have the same as the generation before us- and this is all happening under a growing economy. what we need is a strong economy, one that can weather storms and protect the entire population and not just mean more plastic trickets are being produced......

U.S. stocks rise as Dow hits another record
Fri Oct 13, 2006 4:57pm ET

Wall St Week Ahead: Dow nears 12,000 before

NEW YORK (Reuters) - U.S. stocks rose on Friday, driving the Dow to another all-time high as positive retail sales data helped the broader market.

The Dow Jones industrial average <.DJI> was up 12.81 points, or 0.11 percent, to end at a record 11,960.51, which also marked a fresh intraday all-time high. --Now's a GREAT time to buy and take advantage of some bargin basement stock pricing!!</b>

This whole dip in the DJIA is predicated on what's going on in the Middle East with Iran and Syria backing the Hezzbollah terrorists.

It will probably get worse before it gets better, but once the dust settles investors will mellow out--only idiots are selling off right now--the smart thing is to buy the right stock aggressively now at temperarily low pricing.

Another place people will hide their money is in the Bond market which cause interest rates to go back down again and a lot of people feeling uneasy in adjustables will be able to comfortably and beneficially secure fixed products and many more homebuyers will be able to lock and load and it will be yet ANOTHER BOOM to the Housing market which benefits all aspect of society and our economy expedentially.

Then if Bernanke signals that the Fed. is done raising the funds rate next time they meet or perhaps the time after that then you'll see Wall Street and investors take off like gangbusters!!! </font><hr /></blockquote><font size="2" face="Tahoma,verdana,arial,helv">

Thanks for the stock tips Rory. Hell... you could just be the next Jim Kramer! :p

I just gotta remember to sell BEFORE the market tanks this time!

Hey, not bad. Only took this administration 6 years to get back to where Clinton left them. Weakest recession in history, and it only took them 6 years to recover. No one applauds mediocrity like God's Own Pedophiles (GOP).

Now if the middle class wages could just catch up with inflation...

Who wants to bet the DJIA doesn't hit an ALL TIME record high of 12,000+ tomorrow?
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More mainscream media bias

by Larry Elder
Posted: October 12, 2006

Can the Bush administration get just a little bit of credit?

The unemployment rate just dropped from 4.7 percent to 4.6 percent. The Washington Post, not exactly a Bush administration cheerleader, recently wrote "that just about every worker with the skills and desire to work can find a job." Yet the same article cited its own poll that shows only 39 percent of Americans approve of Bush's handling of the economy, with 59 percent disapproving.

The tax cuts, as tax-cutting former President John F. Kennedy predicted, sparked the economy. Kennedy once said that it may sound "paradoxical," but in order to increase tax revenues, we must decrease tax rates. Under Bush, "tax collections have increased by $521 billion in the last two fiscal years," reports The Wall Street Journal, "the largest two-year revenue increase – even after adjusting for inflation – in American history." Even with the irresponsible spending, this puts the deficit at 2 percent of GDP, well below the recent 40-year average of 2.7 percent. Inflation and interest rates remain low. And labor analysts just revised upward the figures on job creation, adding an additional 810,000 jobs!

But what about giving Bush credit?

Nonsense, the Los Angeles Times now editorializes, credit our Energizer-bunny economy. You know, it just goes, and goes, and goes, irrespective of the president behind the wheel. After calling unemployment and inflation "reassuringly low"; after noting that "growth is steady"; after calling the recent record Dow Jones averages a "tribute to the resilience of the U.S. economy"; and after pointing out that "hourly wages in September were up 4 percent from a year earlier" – the Times editorial gave the Bush administration no credit.

But, take a look at quotes from past editorials from the Times:

July 17, 2003: The White House's deficit of 2003, as well the one projected for the next year, "isn't as bad is it seems. It's worse."

Sept. 20, 2003: As Bush's unfulfilled spending promises continue, "Bush risks not just his personal credibility but the nation's security, economic future and natural resources."

Oct. 6, 2003: "The administration's tax cuts are the economic equivalent of steroids; they may quickly pump up economy, but the long-term effect on fiscal health will be dire."

Jan. 29, 2004: "The unreal quality of the Bush administration's economic program reached new heights last week."

June 2, 2004: " ... President Bush risks fiscal meltdown by addressing the federal budget deficit as if there's no day after tomorrow," and criticized Bush policies "that would further inflate the deficit. ..."

Now let's talk ethics. A recent poll, in the wake of the Rep. Mark Foley, R-Fla., scandal, gives Democrats higher marks for "ethics" than Republicans.

Consider the last 30 years, when the House instituted post-Watergate ethics guidelines. The tally, as of late 2004, over the same period, comes to 70 House members who faced investigations for ethical misconduct: 55 Democrats and 15 Republicans.

Recall how Democrats defended former President Clinton against accusation after accusation. The president's defenders dismissed allegations by former Arkansas state staffer Paula Jones, who accused then-Gov. Bill Clinton of sexual misconduct. Clinton defender-in-chief James Carville said, "If you drag a hundred dollar bill through a trailer park, you never know what you'll find." But after pleading guilty to lying under oath and becoming the first sitting president to be found in contempt of court, Clinton settled Jones' "non-meritorious" civil sexual harassment case out-of-court for $850,000.

Kathleen Willey, a former Democratic contributor, claimed on "60 Minutes" that the former president took her hand and placed it on his genitalia. Incredibly, feminist Gloria Steinem wrote that it was not sexual harassment because when Willey asked him to stop, he did. Call this the "one grope rule."

Juanita Broaddrick, a volunteer for Arkansas Attorney General Bill Clinton's gubernatorial campaign, accused him of rape. Yet Clinton defenders simply dismissed her as a liar, just as they dismissed, minimized or attacked others claiming to have had affairs with the married Clinton. Mistresses include Arkansas "saloon singer" Gennifer Flowers. Clinton initially denied having an affair with her, but later admitted, under oath, to one sexual encounter. The president, of course, famously wagged his finger and denied intern Monica Lewinsky's claim of a sexual relationship. Meanwhile, Clinton defenders played hear-no-evil, see-no-evil, speak-no-evil.

In the case of former Republican Rep. Foley, he promptly resigned after the revelation of sexually explicit messages to a former page. Despicable? Yes. Rape? No. In any case, the Republican Party dumped him faster than you can say "Ken Starr."

An old trial lawyer once told me, "Juries don't decide cases based solely on fact, evidence and law. They reach their verdicts based on 'impressions.'" In the battle for "impressions" over the economy and ethics, Democrats – with the complicity of the liberal mainscream media – think they're winning. Let's wait until the jury returns with its verdict.

"Real incomes for the middle class are not rising at the same rate under Bush, as under previous presidents.
Must be the tax policy, or else"

Which incomes are you using there Mr I Talk Tuff and "I Am really good at research"

Would those incomes be the ones adjusted for inflation only on the take home. The incomes that leave out benefits,perks etc. when calculating total compensation. Imagine that the smart guy using number sto tell a lie. Are you a liar KK?

KK,

Here you go tough guy. I should not have to spoon feed you if you are the self proclaimed blue intellectual you claim.

Enjoy dipwad!

http://www.forbes.com/home/economy/2006/...1017median.html

Demographics
The Average American: 1967 And Today
Tom Van Riper, 10.17.06, 6:00 AM ET

As the U.S. population crossed the 300 million mark sometime around 7:46 a.m. Tuesday (according to the U.S. Census Bureau), the typical family is doing a whole lot better than their grandparents were in 1967, the year the population first surpassed 200 million.

Mr. and Mrs. Median's $46,326 in annual income is 32% more than their mid-'60s counterparts, even when adjusted for inflation, and 13% more than those at the median in the economic boom year of 1985. And thanks to ballooning real estate values, average household net worth has increased even faster. The typical American household has a net worth of $465,970, up 83% from 1965, 60% from 1985 and 35% from 1995.


Throw in the low inflation of the past 20 years, a deregulated airline industry that's made travel much cheaper, plus technological progress that's provided the middle class with not only better cars and televisions, but every gadget from DVD players to iPods, all at lower and lower prices, and it's obvious that Mr. and Mrs. Median are living the life of Riley compared to their parents and grandparents.

So why are they so unhappy?

Yes, despite their material prosperity, the Medians are a grumpy lot. A Parade Magazine survey (a good source for all things median) performed by Mark Clements Research in April showed that 48% of Americans believe they're worse off than their parents were. A June 2006 study by GFK-Roper group showed that 66% of Americans said that their personal situations in the "Good Old Days"--defined by the bulk of respondents as anywhere between the 1950s and the 1980s--were better than they are today. And in May, a Pew Research Center poll showed that half of U.S. adults believe the current trends point toward their children's future being worse than their own present.

Attribute some of the dissatisfaction to what economist Milton Friedman dubbed "Permanent Income Theory," which assumes that people measure where they are relative to where they expected to be a few years ago. They don't care a bit what the average income was four decades ago.

"If you expect a 3% rise in income and you get 2.5%, you're disappointed," says Ken Goldstein, an economist at the Conference Board, a private research group in New York.

And because people generally judge their fortunes not in absolute terms, but by comparing themselves to others, the super-success of the top 1% can make Mr. and Mrs. Median feel relatively poorer. Take CEOs--the $19 million that Wal-Mart Chief Lee Scott raked in last year was 410 times what Mr. and Mrs. Median made, as opposed to the $469,000 a year earned by Exxon's Ken Jamieson in 1975, which was a mere 40 times more.

It's the same with celebrity athletes. Those who worshipped Joe Namath in the 1960s could at least identify with the $142,000 a year he made ($848,000 in today's dollars). But how many can identify with the $87 million Tiger Woods took in last year? And not only are the elite making much more today, relatively, than the Medians, the rise of cable television and the Internet assures that they know all about it.

"It's now easy for us to see how other people around the world live, not just how our neighbors live," says Barry Schwartz, a professor of psychology at Swarthmore College. Schwartz also argues that the plethora of consumer choices today, while generally a good thing, can be a catalyst for bringing people down. Not everyone can have a new flat screen television with both a 60 inch screen and premium sound.

"The more options you look at, the more you have to give up," he says.

It's true that the wealthy have grabbed up a larger share of the growing economic pie over the past 40 years. Census Bureau stats show that the percentage of pay collected by the middle 60% of wage earners dipped to 46% in 2005 from 52% in both 1965 and 1975. That figure doesn't include income from investments, which would make the gap even larger.

But the overall pie is much larger too. A near quadrupling of the Gross Domestic Product since 1967 means that today's Americans share $12.5 trillion in wealth, or $41,579 per capita, compared to the $3.8 trillion, or $18,951 per capita, enjoyed by 200 million people back then.

Of course, the super-rich have done even better. When the first edition of the Forbes 400 hit newsstands in 1982, the top-ranked person was shipping magnate Daniel Ludwig, with an estimated net worth of $2 billion. That was about 20,000 times the net worth of Mr. and Mrs. Median at the time. There were only 12 billionaires on the list that year.

The top person on the 2006 edition of the Forbes 400, Microsoft (nasdaq: MSFT - news - people ) Co-Founder Bill Gates, had a net worth of $53 billion, or 133,741 times the Medians. That means that while Mr. and Mrs. Median have seen their net worth rise 130% percent since the first Forbes 400, the richest man in the country is worth 1,225% more. Oh, and every member of the list is now a billionaire.

But what does the pay of celebrities and CEOs have to do with the average American, other than provide fodder for jealousy? It would be one thing if growing incomes at the top stretched prices of goods and services so much as to dramatically push inflation ahead for everyone else. But inflation has been tame for over two decades.

The fact is that in real terms, the Medians are doing great. Mr. Median makes 25% more than his father did 30 years ago, even after holding for inflation. Mrs. Median is a lot more likely to work in the professional ranks than her mom was, and to be paid about three times as much doing so. And though she still makes only 77% of what her male counterparts earn, this is up from 33% in 1965. They dote on the same number of children (two), but waited longer to have them, until both careers are well under way. They also pay less tax to the federal government and have 8% more purchasing power than they did 20 years ago, including 5.7% more than they had just ten years ago.

But, if despite their prosperity, the Medians need some cheering up, there is one powerful person whose wage growth they have outpaced nicely over the last two generations.

When Lyndon Johnson occupied the White House in 1965, he earned $100,000 a year, or 14 times what the Medians earned. This year, George W. Bush will earn $400,000, or just eight times the Medians.

KK,

So if you are of the opinion that the Bush tax cuts have NOT been beneficial to the economy and the Treasury revenue receipts--Are you suggesting (like liberal Democrat Darcy Burner ) that RAISING TAXES would be a better way to stimulate the economy?

Mr. Internet tuff guy top of the line researcher know it all never wrong,

A little refresher

You made this statement

"Real incomes for the middle class are not rising at the same rate under Bush, as under previous presidents."

I asked this ?

"Would those incomes be the ones adjusted for inflation only on the take home. The incomes that leave out benefits,perks etc. when calculating total compensation. Imagine that the smart guy using numbers to tell a lie. Are you a liar KK?"

You still have not answered on what your statement is based. A requirement in a debate.
In fact you refused to answer it because you cannot support it.

The 30 years is just a little salt in the wound for a liar.

Answer the question liar or continue to squat to pee as you usually do.

The Kommunist Kid the all seeing all knowing cannot even get that one right. Seems that when he gets a taste of the dish he serves he tucks tail and runs. Wait that sounds very familiar! and it all makes so much sense.

The Bush recession was taking its toll on the company. Downsizing was necessary.

The boss, Rory, was in quandary. He had to let somebody go. He had it narrowed down to one of two people, Debra or Jack. It was an impossible decision; they were both super workers. Rather than flip a coin, he decided he would fire the first one who used the water cooler the next morning.

Debra came in the next morning with a horrible hangover after partying all night. She went to the cooler to take an aspirin. Rory approached her and said: "Debra, I've never done this before, but I have to lay you or Jack off." "Could you jack off?" she said, "I feel like h3ll."