Who is Getting the Income and Security in the U.S.?

I am not against the rich, but in a democratic country, it looks like it is getting more difficult to be impartial when it comes to viewing the benefits of taxes, legislation and government spending. The three greatly influence the distribution of available income and resources.

Take a look at two current examples. The Obama administration had considered not extending the tax cuts for the wealthy. The Republicans then said if you want to extend unemployment benefits you had better extend tax cuts for the wealthy.

A one time payment of $250 for social security benefactors in return for not raising their income for a second year in a row was blocked by Republicans.

In light of Republican Tea Partiers wanting fiscal responsibility, does everything in the Republican Party go out the window when compared to how income is distributed in the United States? It is not too difficult to understand their platform and how the class wars are alive in the U.S.

There is a depression for non large corporate America. High unemployment, no bank financing, and anemic economic growth have choked off most Americans to sources of capital.

Whereas large corporations have income and need to reduce expenses and maintain competitiveness to ensure continuity, the bottom rungs have fewer viable sources for increasing income.

One of the reasons that there is no capital for small business and individuals is that banks over the last 20 years have been laying their consumer debt off to global private investors. The melt down eliminated private investors who were wiped out buying the securitized debt and banks no longer want to hold the paper.

The $600 billion the Fed is going to spend to keep interest rates low does not stimulate the economy. When banks were keeping loans they were responsible for about 70% of loan activity. Since they started laying off paper they became responsible for about 35% of paper. Therefore, Federal Bank policies do not have the affect they had in the Greenspan era.

We are seeing more civil unrest in Europe as the results of fiscal government austerity kick in. Eventually, governments have to cut expenses to maintain lower bond prices for financing their debt. Who bears the brunt of government austerity programs?

In response to a NY Times article on the shrinking self employment factor, one reader has a good summary:

“It is no longer possible for small companies to survive, unless they are in the financial industry or something similar where money is no object to their clients. The death of small business in America is not an accident. It is the result of legislation and fiscal policy which has consistently favored off-shoring and corporate business. The trend will not reverse. The unemployment which results when it is simply too expensive to start a new business has become a permanent feature of our economy.”

What is the solution?

Is there anyone not taking personal downsizing seriously?

Savings will be the best source of capital in the near future. Then how to increase income will be the best next question. It appears more likely that employment or contracting with a viable industry or business is important.

A few industries seem to be rising in the tide and alliance as a supplier or affiliate or employee is a good guarantor of income. What types of services are needed in the new economy?

Either great technical skills or innovative skills to see new processes and opportunities are key to continued employment or future employment. Corporations also seem to be stuck to hiring traditionally good corporate skills. If you were valuable before, you have a better chance of being valuable now.

Learning how to think laterally and how to incorporate whole brain skills for creativity and innovation would be important in creating personal value. As corporations spend more on gathering Collective Intelligence, your ability to prove you are a team player and think creatively could help.

Learning how to think more productively and perhaps escape narrow habitual patterns would also help in evaluating your own alternative scenarios and next step strategies.

For a great long article on our economy, how we got here and the hoops we have to jump through in the next few years to stay afloat read:

http://www.ritholtz.com/blog/category/thinktank/

For a an introduction on creative and innovative thinking visit Edward de Bono’s book on “Lateral Thinking”

And

Jacquelyn Wonder’s book on “Whole Brain Thinking”.

To  develop your personal skills and discipline for improving your value visit the free download “Getting to Peak Performance”