by Frank Thomas
I may also go for Michael Bloomberg if he gets a high poll rating by October 2020.
Otherwise, I’ll being choosing between Warren and Sanders. Like many people, I'm getting more taken in by the urgent priority to defeat Trump. Besides climate change, there are also other extremely significant societal problems noted below that for some time have been tearing our country apart socially and economically. If these aren’t addressed convincingly by Bloomberg, I don't think Democrats will go for him in the nomination process. Things don't have to be revolutionarily ‘torn down,’ but major constructive changes are a necessity. Such an approach calls for a timely phasing in of well-targeted structural improvements in following areas: healthcare, income/wealth gap, infrastructure, poor quality pre-college education and burdensome college tuition costs that are adding to impoverishment millions of families caused by decades of stagnant wages.
Right now, it's obvious the general public doesn't have a clue what Bloomberg's constituency is beyond the well-to-do, socially liberal and fiscally conservative types.
On the positive side, he doesn't need their money. Past issues he has focused most on are climate change, gun control and fighting the fiscal policies of the more liberal wing of the Democratic Party. But I doubt Bloomberg can win the nomination if he fails to address clearly his approach and solutions to following severely ingrained societal problems areas. They will only get much worse and complex, perhaps even become unsolvable, as a result of years of government reliance on incremental band aid improvements to Big structural problems. Political polarization and money interests have caused an absolutely deplorable ineffectiveness in bottom-up and top-down governance that meets societal wants, needs fairly and pragmatically for all.
- HEALTHCARE: Quality healthcare for the average family has reached the insane cost level of $16,000-$19,000 annually in premiums, deductibles, copays for mediocre medical coverage. Extremely high healthcare and college costs combined with almost stagnant wage growth the past 40 years for over 80% of U.S. households is an 'economic high risk recipe' for an eventual societal implosion. If EU countries can deliver universal healthcare plans for 10 to 80 million populations at half the household cost with better medical coverage, why can't we do the same - say, by developing a Medicare Plan For ALL Option (that incorporates Obamacare) for +-120 million households that are currently self-insured? Prove its superior benefits first with a smaller step that will eventually attract others.
- INCOME/WEALTH GAP: Since 1979, an incredibly huge income/wealth Gap has been taking place between the top 10% and bottom 90%. (see reference). The average yearly wage of the Bottom 90% was $29,608 in 1979 vs. $36,182 in 2017, a rise of 22.2%. The average yearly wage incomes of the Top 9% and 1% were $152,476 and $718,766 in 2017, an increase since 1979 of 57.4% and 157.3%, respectively. And the wage of the Top 0.1% since 1979 has been out of sight increasing from $622,018 to $2,756,865 in 2017, an increase of 343.2%. These wage figures exclude income from stocks, bonds, other investments. They reflect fact we have the lowest progressive tax rates and highest income (wealth) disparities of all world countries except perhaps China and India. U.S. highest progressive tax rate is 37% on incomes above $500,000 per year versus 51.75% in the Netherlands on incomes above $75,000 (euro 68,500).
Here’s a stark summary of U.S. average wage thresholds of the Top 10% and Bottom 90% wage earner groups.
WAGE GROUP SHARES Of TOTAL WAGES – 1979-2017
| EARNER GROUP | WAGE THRESHOLD | % Of TOTAL WAGES |
| Top 0.1% | $2,756,900 | 5.2% |
| Top 1% | $718,766 | 13.4% |
| Top 5% | $299,810 | 28.0% |
| Top 10% | $118,400 |
39.1% |
| Bottom 90% | $ 36,182 |
60.9% |
The Economic Policy Institute reports: “The Bottom 90% earned 69.8% of all wages in 1979 but just 60.9% in 2017. In contrast, the Top 1% increased its share of wages from 7.3% to 13.4% in 2017, a near doubling. The growth of wages for the Top 0.1% drives the Top 1`% share of wages which tripled Top 0.1%’s share of total wages from 1.6% in 1979 to 5.2% in 2017.”
Around 140 million of 168 million U.S. workers have been living on a near survival wage growth trend for a long time. A wage of less than $25,000 is earned by 42% of U.S. workers or ±70 million workers. The Top 1% of Americans own 40% of our nation's wealth. Several billionaires including JP Morgan Chase CEO Jamie Dimon, Bridgewater Associates, founder Ray Dalio, Warren Buffet of Berkshire Hathaway have said that current levels of income and wealth inequality are unsustainable.
It is well proven that savings and investments of ultra-wealthy Americans do not necessarily "trickle down" in ways that grow the economy or benefit most Americans. Investments of the wealthy including billionaires are planted all over the world in exotic tax shelters, real estate, stocks, bonds, yachts and works of art.
INFRASTRUCTURE & SCHOOLS: According to the American Society of Civil Engineers (ASCE), it will cost $4.6 trillion to bring America’s infrastructure to a good state of repair. But only 55% has been committed leaving a $2.1 funding gap. Improving roads and bridges alone would require $1.1 trillion more than the states, localities, and federal government have allocated. Schools need another $380 billion beyond what's invested. Waterways, ports, levees, dams need another $150 billion. (see reference). Other studies show that another $473 billion of investments is needed in drinking water treatment and distributions. These needs vary sharply by state due to differences in size, congestion, condition, and age of existing infrastructure.
- State dollars and borrowing pay for 72% of Infrastructure projects; the federal government pays just 28% for a very low 0.5% of GDP. State and local spending is now way down from 2.4% of GDP in the early 2000s to 1.87% in 2017 and now is at its lowest level since 1950. Investments in Public Infrastructure stirs economic growth, private productivity, jobs, and can improve a state's quality of life, opportunity, and the environment. Why aren't the private sector investments being made is the BIG question? Is it lack of federal funding because of massive federal deficits, debt and interest cost? Trump's tax cuts went largely to the Top 10% and corporations. These cuts are now contributing to our annual $1 trillion federal deficits.
- BUT, if our nation can raise ± $9 trillion in federal funds as we did to save our economy from collapsing during the Great Recession, why can't we come up with ± $3 trillion for critically needed infrastructure/education improvements? These and other societal investments needed can be funded in a major part by raising current maximum federal tax rate of 37% on incomes above $500,000 to 40% on incomes above $1 million – plus eliminating tax avoidance, tax deductions or special tax structures for real estate, loss carry forwards provisions, corporate earnings held abroad in tax havens. The aim should be to introduce fiscally economically constructive tax funding changes that are relatively easy to calculate and oversee, and deter steep rises in federal/state debt levels and interest cost
Frank Thomas The Netherlands November 30, 2019
References :
(1) Economic Policy Institute - Top 1.0% Reaches Highest Wages Ever - Up 157% Since 1979, Oct. 18, 2018
(2) https://www.cbpp.org/research/state-budget-and-tax/its-time-for-states-to-invest-in-infrastructure
