I have always thought about upper middle class precarity in terms of the way a string of bad luck really can throw you out of the upper middle class entirely. It is just much easier, in America, to go from riches to rags, compared to the way things work in actually-civilized countries. Say one member of a couple has an expensive medical crisis (and oops, you have one of those High Deductible plans so you really are personally responsible for five figures!) at the same time as the other member has been laid off. You can end up rapidly losing your home and vehicle, which then makes it extremely difficult to claw your way back into the ranks of normal middle class life. We have increasingly leveraged our middle class -- housing and education and so on have higher sticker prices, but incomes are high and interest rates are low, so the banks come along and say, "Not to worry, you can finance everything and your rising income will keep up with the payments." And that's all fine and dandy until your income happens to take a hit, and you discover that leveraging up a family carries the same kind of risk as leveraging up a business in a buy-out. (See the recent Instant Pot story.)
This is also tied up with the "401(k) revolution". We have systematically moved risk off of companies, onto families. We really should shift from these individualized private accounts (which seem to mainly exist to allow the custodians to harvest exorbitant fees), to having the main nexus of retirement funds be target-date tranches of a Sovereign Wealth Fund. Administer access through postal banking (along with a basic checking account), and get people started on their savings through Cory Booker's Baby Bonds / Universal Basic Wealth concept, with bonus funds going to low-income / low-wealth parents.
I lived the first half of my life in civilized Britain. That precarity really started in the 1970s, and seems to have just got worse. The "nanny state" did not offer that much effective nannying, and only became more brutal starting with the Thatcher years, and really has fallen apart with the post 2010 Tory austerity years. The NHS post-WWII gem has become barely functional in recent years, making even the US H/C system seem to work better [if you have insurance, as the upper middle class surely do. But we sorely need a universal H/C system for most people and as a fallback option for those losing their gold-plated plans.]
[I agree about the 401K plans. They perform more poorly than no-load index tracking funds, buy companies only offer the options of various managed funds that benefit the provider.]
I think maybe you are missing most of the story because it’s not about income or wages but about things which are much more nebulous about the life you get to live…things like 1) the subjective feeling of uncertainty—hard to measure but real, and caused by the 2008 crash and various other events and 2) the inability of some to buy or rent. So professionals where I live would have to part with 40-50% of take-home pay to rent even a crappy one bedroom apartment. Plus, it’s EXTREMELY hard to break into professions and find lasting security. Maybe 1-3 is supposed to measure that but I don’t think it’s relative or comparative with those above or below you so much as relative or comparative with the previous generations. E.g., my grandparents had a sweet little house and nice little vacations and a nice little car and sent their kids to college on one income, etc. And got to retire at a normal age ALL WITHOUT GOING TO COLLEGE. Then my parents had the same but both parents went to college and had two income earners…but now here are we…we cannot get a house, we went to grad school, we can barely afford groceries. (I am not speaking of myself but people I know.)
One factor that is absolutely different from even 15 years ago (2000-2005ish) is the percentage of the housing stock under corporate ownership/control. While there have always been large-scale city apartment buildings controlled by investors and from 1970 sprawling suburban commercial apartment complexes there had up to 2010 always been a stock of family-owned 3-flats, 6-flats, and rental houses that were available for more reasonable rents and to people without 700+ credit scores [1], so that it if one had a job of any kind or any amount of savings it was possible to scrape by with a downgrade to a 3rd-rate rental of a 2-bedroom house in a less desirable neighborhood, with the landlord living next door or around the block. Now all these units are being snapped up by investment capital firms intent on performing a "rollup" of the entire North American housing market, and these entities can hold rental properties vacant to squeeze higher rents longer than the family with a laid-off breadwinner can stay alive. The United States is, as Sarah Kendzior says, being broken up and sold for parts to benefit that 0.1%.
1. and of course credit scores were something known only to credit card and mortgage loan companies prior to 2000; not used to make judgements about people throughout the economy
One question. Is the inflation the same for all class/earning deciles? I recall with amusement that some wealthy Manhattanite a decade or so ago complained that high-end properties were becoming very expensive. The casual observer would say that many luxury and unique goods, like artworks, have seen extraordinarily high inflation as the wealthy have few domains to spend their wealth. We saw a similar problem with highly paid tech workers in Silicon Valley bidding up the price of homes to spend their newly vested stock options. They were simply chasing the rising prices their excess wealth was generating. Meantime, while air travel for the masses is getting ever more uncomfortable, the wealthy are using private jets to avoid the masses. This must be a costly maneuver eating into their excess earnings above what a business or first class seat would cost. This isn't to suggest that real income after expenses is not climbing rapidly for the top 1% but maybe it is not climbing quite so fast as the raw data suggests?
I agree this is an interesting question. I know I saw some attempt, a year or two ago, at decomposing the official CPI-U data, and then re-composing it using baskets of goods that were estimated for urban consumers at the 25th, 50th, 75th, and 99th percentiles. (So, for instance, shelter makes up a much bigger fraction of expenditure at the lower income percentile.) I don't know whether there's an "official" version of this, though. There surely should be.
The graph of how inflation has played out in different markets that MattY included in this post ( https://www.slowboring.com/p/inflation-contrarians ) is IMHO one of the most important things to understand, to see why middle class consumers are mad about the economy. The essentials of the good life have gotten more expensive, while toys for the rich have gotten cheaper. Even if at the 50th percentile overall costs are roughly even, it's quite likely things have gotten worse for anyone below that.
If you don't have access to that post, here's a chunk that makes the key point:
<blockquote>
If the price of fruit and vegetables started rising by double digits per year, offset by falling prices for sugar, wheat, and other staple commodities, that would have serious implications for people’s diet and health.
To just shrug and say “well the price of food is stable” would be pretty unresponsive to the actual situation, which is that a normal person is either going to see the quality of their diet erode or else the share of their income going to food rise.
Critically, this is not inflation.
I am a stickler here just like I’m a stickler about immigration and wages, because it’s really important for policymakers not to lose the plot on the need for aggressive monetary policy to generate full employment.
That being said, these relative price shifts are also bad.
I live in Central CA. We should have access to lots of fruit and vegetables. It seems to me that prices have skyrocketed since around the pandemic. It reminds me of the prices charged for mediocre produce on Bermuda back in the 1980s and a colleague telling me to pretend the BDA dollar was monopoly money. Food substitutions can only only partly be done. When vegetables and fruit are as expensive as meat, prices are getting out of control.
The other issue is shelter. I was lucky to buy my house outright. The rental market went crazy partly due to the lack of student housing as the new UC campus increased in size and student body. The usual problem of very slow house building meant that seniors on fixed incomes were being priced out of the rental market and having to move. This lack of housing is a CA problem in general, but it seemed particularly acute locally. There are no substitutions possible for shelter. It is a problem of musical chairs with rising prices.
With regards to the statistics on inequality, the disparity in wages certainly makes the case; but, in addition, if one had investable capital in 1980 to invest in the S&P 500 index of stocks, one would have generated a nominal return of over eight percent, and a real return of say five to six percent, per annum, through the end of 2022.
I don't think Stewart is correct, but I do believe she is tapping into a broad phenomenon that I have personally experienced and seen form around higher society products and services. I think it is broadly true that this "upper-middle" she's talking about has prospered quite a bit in the past 40 years.
It's not precisely inflation, but I do believe it feels more salient now as the broader conversation gives space for "cost of living" concerns. It's a stratification of goods and services, a deluge of being asked to tip everywhere, the "sharing" of servants (this is basically gig apps). At every level, people in that upper-middle range are being asked to give more as part of their life, and in recent years the industries that provide the salaries and contracts that provide these lifestyles have pulled back on compensation.
When you mix this with the fact that probably near half of professionals in this space are likely young enough to not have experienced the meteoric lifestyle improvements this class experienced in the 90s and early 00s, it can feel like many are finally "making it" only to be greeted by a world turning against them (even if only very slightly). That's probably only a few million US workers, a drop in the bucket of all earners, but I'd be willing to bet a large portion of Vox's target audience (younger, liberal professionals).
I don't have the data or expertise to be sure you are wrong, but I think that closing the deficit would require raising taxes on more that just the 0.1% of income earners.
The current national debt is about $32T which is roughly the cost of the tax cuts over the past 40+ years. They are usually "scored" at $1T-$3T over ten years, but they almost always cost a lot more, often 2X or even 3X, and they continue for longer than a decade. Worse, tax cuts have slowed economic growth by removing money from the goods and services economy. A much higher corporate tax rate would help too, not because it would collect more money, but because it would encourage companies to spend money on things like advanced research, worker salaries, product development and worker benefits. More money would go to the bottom 99.9% and, even at current tax rates, that would make it easier to reduce the deficit and pay down the debt.
P.S. I don't have the data or expertise, so you may be right, but I've heard that raising taxes on the 0.1% will not just fail to lower the deficit but will do just about every bad thing imaginable to the economy. Given the sources of these claims, I don't buy them. There's an entire industry arguing that taxing the wealthy is the most horrible thing imaginable, so I take any claims of this form as fundamentally bogus.
I am no friend of the Bush &Trump tax cuts or even the Regan cuts ands their accompanying deficits. As a first approximation, I consider the deficit as coming out of private investment. The sense in which debt is passed on to future generations is that they do not receive the income that the diverted investment would have produced. My doubt concerns only that the deficit closing probably cannot come exclusively from the very highest income earners.
As for business taxes, Ideally I'd just expense investment and impute business income to owners and tax the personal income.
It wouldn't just be the very highest income earners. Higher taxes at the high end and on corporations would have made for a more vibrant economy. Even without raising rates on the bulk of taxpayers, the government would have collected a lot more money. The tax cuts have slowed economic growth for decades. Wages have stagnated or fallen. If incomes had risen, more people would have paid more taxes.
Arguing that deficits trade off against benefits for future generations the lump of money fallacy. It assumes that there is only so much money available, so no one can borrow to fund the future. For rather obvious, tendentious reasons, no one ever says that private sector borrowing is bad in the same way, even if it is just to purchase and liquidate a viable firm and destroy thousands of livelihoods. It's called leverage and usually considered a good thing. When leverage explodes, the government is expected to deal with the damage, but for ideological reasons, it's only the government that can't borrow for the future.
The current political situation only favors government borrowing for tax cuts. Whenever a penny of the deficit goes anywhere else, there is an orchestrated hue and cry. The government should be able to borrow and leverage itself for the future, and just like private sector and personal borrowing, it can more than pay for itself. The difference is that everyone benefits rather than just a tiny handful. For example, if the government could have spent the money it borrowed on funding higher education, we wouldn't have a huge percentage of consumers constrained by student loan debt. It could have funded solar power more aggressively, and we wouldn't be playing catch up now trying to build an innovative industry. There's a long list of deferred maintenance items as well.
Most government debt is held by the wealthy. That money wasn't going to buy anything for future generations. Look at where it has been going for the last 40 years. So far, all it has done is driven up asset prices. If the borrowed money had been spent on goods and services, we would have had much faster growth and rising productivity. That would have meant allowing inflation to trickle down as opposed to confining it to the high end, low labor sector. There would still have been displacement, but wages would have risen to cover the rising inflation as they did during the 50s, 60s and early 70s.
You make more points than I can deal with, so let me concentrate on what I think is the most important that fiscal deficits mainly reduce private investment. [I'll assume the Fed has an inflation target.] An increase in the deficit, say by cutting corporate taxes and not making up the revenue loss with an increase in personal income taxes results in higher interest rates and I think investment expenditure is more sensitive to interest rate increase than is consumption. [the increase in interest rates also attracts foreign capital inflows and strengthens the dollar, raising the prices of non-traded goods in relation to importable and exportable, but that is a different story.] Less investment means less income in the future, hence the truth of the idea that future generations "pay" for current deficit financed consumption.
Now I only claim this contingently. If government only ran deficits to finance investments in activities that generate future income/avoid future costs according to an NPV rule, I'd have less objection to deficits.
You also seem to oppose reducing corporate taxes even if they were offset and did not lead to less private investment, right? On that point my objections are weaker, involving a) interpersonal fairness (the corporate tax falls on owners and so taxes some people at greater or lesser rather than their personal marginal income tax schedule) and b) income recognition rules of the corporate tax distort rates of return to investment among different activities lowering the aggregate return on investment by corporations.
After thinking about this for five days: this a very thoughtful and deep essay. It is the kind of thing our reality-based political leadership really needs to think about, but doesn't. Or at least if any of them think about it (Warren, Obama maybe) they don't or can't act on whatever results from those thoughts. But it is a critically important topic. Perhaps it could be summarized a bit and submitted to some news outlet editorial pages? The regional ones might print it as a relief from the usual WaPo and NYT news service reheats.
Years go, a cousin asked for the definition of middle class. I did some sociological research and found that there is no definite sociological definition of middle class, a key sociological concept.
As far as precariousness , leaving school and getting the first career job is always fraught.
My grandparents owned their first house at age 70; my mother ,at 50, me at 40; and my daughters at 30. There is a an assumption now that one should be able to buy a house at 25.
WE live in Oak Park, Ill., a middle class community, Far from being anxious, Oak Parkers are smug.
I have always thought about upper middle class precarity in terms of the way a string of bad luck really can throw you out of the upper middle class entirely. It is just much easier, in America, to go from riches to rags, compared to the way things work in actually-civilized countries. Say one member of a couple has an expensive medical crisis (and oops, you have one of those High Deductible plans so you really are personally responsible for five figures!) at the same time as the other member has been laid off. You can end up rapidly losing your home and vehicle, which then makes it extremely difficult to claw your way back into the ranks of normal middle class life. We have increasingly leveraged our middle class -- housing and education and so on have higher sticker prices, but incomes are high and interest rates are low, so the banks come along and say, "Not to worry, you can finance everything and your rising income will keep up with the payments." And that's all fine and dandy until your income happens to take a hit, and you discover that leveraging up a family carries the same kind of risk as leveraging up a business in a buy-out. (See the recent Instant Pot story.)
You can see the effects of this in the rates of business formation. In a country where _failing_ is unpleasant, but doesn't mean your children starve in the streets, a lot more middle-class people are willing to take a flyer on an idea: https://www.inc.com/magazine/20110201/in-norway-start-ups-say-ja-to-socialism.html
This is also tied up with the "401(k) revolution". We have systematically moved risk off of companies, onto families. We really should shift from these individualized private accounts (which seem to mainly exist to allow the custodians to harvest exorbitant fees), to having the main nexus of retirement funds be target-date tranches of a Sovereign Wealth Fund. Administer access through postal banking (along with a basic checking account), and get people started on their savings through Cory Booker's Baby Bonds / Universal Basic Wealth concept, with bonus funds going to low-income / low-wealth parents.
I lived the first half of my life in civilized Britain. That precarity really started in the 1970s, and seems to have just got worse. The "nanny state" did not offer that much effective nannying, and only became more brutal starting with the Thatcher years, and really has fallen apart with the post 2010 Tory austerity years. The NHS post-WWII gem has become barely functional in recent years, making even the US H/C system seem to work better [if you have insurance, as the upper middle class surely do. But we sorely need a universal H/C system for most people and as a fallback option for those losing their gold-plated plans.]
[I agree about the 401K plans. They perform more poorly than no-load index tracking funds, buy companies only offer the options of various managed funds that benefit the provider.]
I think maybe you are missing most of the story because it’s not about income or wages but about things which are much more nebulous about the life you get to live…things like 1) the subjective feeling of uncertainty—hard to measure but real, and caused by the 2008 crash and various other events and 2) the inability of some to buy or rent. So professionals where I live would have to part with 40-50% of take-home pay to rent even a crappy one bedroom apartment. Plus, it’s EXTREMELY hard to break into professions and find lasting security. Maybe 1-3 is supposed to measure that but I don’t think it’s relative or comparative with those above or below you so much as relative or comparative with the previous generations. E.g., my grandparents had a sweet little house and nice little vacations and a nice little car and sent their kids to college on one income, etc. And got to retire at a normal age ALL WITHOUT GOING TO COLLEGE. Then my parents had the same but both parents went to college and had two income earners…but now here are we…we cannot get a house, we went to grad school, we can barely afford groceries. (I am not speaking of myself but people I know.)
One factor that is absolutely different from even 15 years ago (2000-2005ish) is the percentage of the housing stock under corporate ownership/control. While there have always been large-scale city apartment buildings controlled by investors and from 1970 sprawling suburban commercial apartment complexes there had up to 2010 always been a stock of family-owned 3-flats, 6-flats, and rental houses that were available for more reasonable rents and to people without 700+ credit scores [1], so that it if one had a job of any kind or any amount of savings it was possible to scrape by with a downgrade to a 3rd-rate rental of a 2-bedroom house in a less desirable neighborhood, with the landlord living next door or around the block. Now all these units are being snapped up by investment capital firms intent on performing a "rollup" of the entire North American housing market, and these entities can hold rental properties vacant to squeeze higher rents longer than the family with a laid-off breadwinner can stay alive. The United States is, as Sarah Kendzior says, being broken up and sold for parts to benefit that 0.1%.
1. and of course credit scores were something known only to credit card and mortgage loan companies prior to 2000; not used to make judgements about people throughout the economy
One question. Is the inflation the same for all class/earning deciles? I recall with amusement that some wealthy Manhattanite a decade or so ago complained that high-end properties were becoming very expensive. The casual observer would say that many luxury and unique goods, like artworks, have seen extraordinarily high inflation as the wealthy have few domains to spend their wealth. We saw a similar problem with highly paid tech workers in Silicon Valley bidding up the price of homes to spend their newly vested stock options. They were simply chasing the rising prices their excess wealth was generating. Meantime, while air travel for the masses is getting ever more uncomfortable, the wealthy are using private jets to avoid the masses. This must be a costly maneuver eating into their excess earnings above what a business or first class seat would cost. This isn't to suggest that real income after expenses is not climbing rapidly for the top 1% but maybe it is not climbing quite so fast as the raw data suggests?
I agree this is an interesting question. I know I saw some attempt, a year or two ago, at decomposing the official CPI-U data, and then re-composing it using baskets of goods that were estimated for urban consumers at the 25th, 50th, 75th, and 99th percentiles. (So, for instance, shelter makes up a much bigger fraction of expenditure at the lower income percentile.) I don't know whether there's an "official" version of this, though. There surely should be.
The graph of how inflation has played out in different markets that MattY included in this post ( https://www.slowboring.com/p/inflation-contrarians ) is IMHO one of the most important things to understand, to see why middle class consumers are mad about the economy. The essentials of the good life have gotten more expensive, while toys for the rich have gotten cheaper. Even if at the 50th percentile overall costs are roughly even, it's quite likely things have gotten worse for anyone below that.
If you don't have access to that post, here's a chunk that makes the key point:
<blockquote>
If the price of fruit and vegetables started rising by double digits per year, offset by falling prices for sugar, wheat, and other staple commodities, that would have serious implications for people’s diet and health.
To just shrug and say “well the price of food is stable” would be pretty unresponsive to the actual situation, which is that a normal person is either going to see the quality of their diet erode or else the share of their income going to food rise.
Critically, this is not inflation.
I am a stickler here just like I’m a stickler about immigration and wages, because it’s really important for policymakers not to lose the plot on the need for aggressive monetary policy to generate full employment.
That being said, these relative price shifts are also bad.
</blockquote>
I live in Central CA. We should have access to lots of fruit and vegetables. It seems to me that prices have skyrocketed since around the pandemic. It reminds me of the prices charged for mediocre produce on Bermuda back in the 1980s and a colleague telling me to pretend the BDA dollar was monopoly money. Food substitutions can only only partly be done. When vegetables and fruit are as expensive as meat, prices are getting out of control.
The other issue is shelter. I was lucky to buy my house outright. The rental market went crazy partly due to the lack of student housing as the new UC campus increased in size and student body. The usual problem of very slow house building meant that seniors on fixed incomes were being priced out of the rental market and having to move. This lack of housing is a CA problem in general, but it seemed particularly acute locally. There are no substitutions possible for shelter. It is a problem of musical chairs with rising prices.
With regards to the statistics on inequality, the disparity in wages certainly makes the case; but, in addition, if one had investable capital in 1980 to invest in the S&P 500 index of stocks, one would have generated a nominal return of over eight percent, and a real return of say five to six percent, per annum, through the end of 2022.
I don't think Stewart is correct, but I do believe she is tapping into a broad phenomenon that I have personally experienced and seen form around higher society products and services. I think it is broadly true that this "upper-middle" she's talking about has prospered quite a bit in the past 40 years.
It's not precisely inflation, but I do believe it feels more salient now as the broader conversation gives space for "cost of living" concerns. It's a stratification of goods and services, a deluge of being asked to tip everywhere, the "sharing" of servants (this is basically gig apps). At every level, people in that upper-middle range are being asked to give more as part of their life, and in recent years the industries that provide the salaries and contracts that provide these lifestyles have pulled back on compensation.
When you mix this with the fact that probably near half of professionals in this space are likely young enough to not have experienced the meteoric lifestyle improvements this class experienced in the 90s and early 00s, it can feel like many are finally "making it" only to be greeted by a world turning against them (even if only very slightly). That's probably only a few million US workers, a drop in the bucket of all earners, but I'd be willing to bet a large portion of Vox's target audience (younger, liberal professionals).
My gripe is that so much inequality exists when there is a growth-constraining fiscal deficit and progression in average tax collection is so low.
The fiscal deficit is all tax cuts for the top 0.1%.
I don't have the data or expertise to be sure you are wrong, but I think that closing the deficit would require raising taxes on more that just the 0.1% of income earners.
The current national debt is about $32T which is roughly the cost of the tax cuts over the past 40+ years. They are usually "scored" at $1T-$3T over ten years, but they almost always cost a lot more, often 2X or even 3X, and they continue for longer than a decade. Worse, tax cuts have slowed economic growth by removing money from the goods and services economy. A much higher corporate tax rate would help too, not because it would collect more money, but because it would encourage companies to spend money on things like advanced research, worker salaries, product development and worker benefits. More money would go to the bottom 99.9% and, even at current tax rates, that would make it easier to reduce the deficit and pay down the debt.
P.S. I don't have the data or expertise, so you may be right, but I've heard that raising taxes on the 0.1% will not just fail to lower the deficit but will do just about every bad thing imaginable to the economy. Given the sources of these claims, I don't buy them. There's an entire industry arguing that taxing the wealthy is the most horrible thing imaginable, so I take any claims of this form as fundamentally bogus.
I am no friend of the Bush &Trump tax cuts or even the Regan cuts ands their accompanying deficits. As a first approximation, I consider the deficit as coming out of private investment. The sense in which debt is passed on to future generations is that they do not receive the income that the diverted investment would have produced. My doubt concerns only that the deficit closing probably cannot come exclusively from the very highest income earners.
As for business taxes, Ideally I'd just expense investment and impute business income to owners and tax the personal income.
It wouldn't just be the very highest income earners. Higher taxes at the high end and on corporations would have made for a more vibrant economy. Even without raising rates on the bulk of taxpayers, the government would have collected a lot more money. The tax cuts have slowed economic growth for decades. Wages have stagnated or fallen. If incomes had risen, more people would have paid more taxes.
Arguing that deficits trade off against benefits for future generations the lump of money fallacy. It assumes that there is only so much money available, so no one can borrow to fund the future. For rather obvious, tendentious reasons, no one ever says that private sector borrowing is bad in the same way, even if it is just to purchase and liquidate a viable firm and destroy thousands of livelihoods. It's called leverage and usually considered a good thing. When leverage explodes, the government is expected to deal with the damage, but for ideological reasons, it's only the government that can't borrow for the future.
The current political situation only favors government borrowing for tax cuts. Whenever a penny of the deficit goes anywhere else, there is an orchestrated hue and cry. The government should be able to borrow and leverage itself for the future, and just like private sector and personal borrowing, it can more than pay for itself. The difference is that everyone benefits rather than just a tiny handful. For example, if the government could have spent the money it borrowed on funding higher education, we wouldn't have a huge percentage of consumers constrained by student loan debt. It could have funded solar power more aggressively, and we wouldn't be playing catch up now trying to build an innovative industry. There's a long list of deferred maintenance items as well.
Most government debt is held by the wealthy. That money wasn't going to buy anything for future generations. Look at where it has been going for the last 40 years. So far, all it has done is driven up asset prices. If the borrowed money had been spent on goods and services, we would have had much faster growth and rising productivity. That would have meant allowing inflation to trickle down as opposed to confining it to the high end, low labor sector. There would still have been displacement, but wages would have risen to cover the rising inflation as they did during the 50s, 60s and early 70s.
You make more points than I can deal with, so let me concentrate on what I think is the most important that fiscal deficits mainly reduce private investment. [I'll assume the Fed has an inflation target.] An increase in the deficit, say by cutting corporate taxes and not making up the revenue loss with an increase in personal income taxes results in higher interest rates and I think investment expenditure is more sensitive to interest rate increase than is consumption. [the increase in interest rates also attracts foreign capital inflows and strengthens the dollar, raising the prices of non-traded goods in relation to importable and exportable, but that is a different story.] Less investment means less income in the future, hence the truth of the idea that future generations "pay" for current deficit financed consumption.
Now I only claim this contingently. If government only ran deficits to finance investments in activities that generate future income/avoid future costs according to an NPV rule, I'd have less objection to deficits.
You also seem to oppose reducing corporate taxes even if they were offset and did not lead to less private investment, right? On that point my objections are weaker, involving a) interpersonal fairness (the corporate tax falls on owners and so taxes some people at greater or lesser rather than their personal marginal income tax schedule) and b) income recognition rules of the corporate tax distort rates of return to investment among different activities lowering the aggregate return on investment by corporations.
After thinking about this for five days: this a very thoughtful and deep essay. It is the kind of thing our reality-based political leadership really needs to think about, but doesn't. Or at least if any of them think about it (Warren, Obama maybe) they don't or can't act on whatever results from those thoughts. But it is a critically important topic. Perhaps it could be summarized a bit and submitted to some news outlet editorial pages? The regional ones might print it as a relief from the usual WaPo and NYT news service reheats.
Years go, a cousin asked for the definition of middle class. I did some sociological research and found that there is no definite sociological definition of middle class, a key sociological concept.
As far as precariousness , leaving school and getting the first career job is always fraught.
My grandparents owned their first house at age 70; my mother ,at 50, me at 40; and my daughters at 30. There is a an assumption now that one should be able to buy a house at 25.
WE live in Oak Park, Ill., a middle class community, Far from being anxious, Oak Parkers are smug.
Allen Kamp, Oak Park, Il.