Sunday, October 16, 2011

Occupy Wall Street?

I do not follow the news.  I do not listen to the radio, watch TV or read news related internet articles.  I do not follow politics when I can help it.  I am NOT a financial guru. 

Now that my official disclaimer is stated:  I decided that maybe since this Occupy Wall Street thing seemed to still be happening, I should read up on it.  So I did.  I went to their (whoever they are) site and read some of the, admittedly heartbreaking, stories.  I read some "news" sources reports on the "occupation" or "movement".  Yep, I'm still confused.  But at least I know a thing or two and believe a few other things.  Maybe what I know could be helpful.  Maybe it will just make them angry.  Maybe what I think will just make you angry.  Who knows.  But here goes.

First what I think:  I was tempted to think at first that this was a group of lazy people unwilling to work and upset at the people who did work and made their fortunes.  Now I think it's a group of people who have so bought the lies we've been told by the people "selling" that now they somehow think the government is supposed to fix their problems.  What lies?  Mostly about debt.  We've been told lies about debt for years. According to most of the stories I read, it is largely student loan debt (possibly because credit card debt doesn't make people as sympathetic?).  I have student loans, too.  Not as many as some people, but still more than I really have the extra cash to pay for.  Yet, somehow people have decided that the government is to blame because I took out student loans?  You know why I only have a comparatively small amount of student loans?  Because I was poor growing up and got good grades in high school and got a lot of scholarships. 

Did you read that right?  Yes, I said I was poor growing up and so I got scholarships.   Wait?  We are being sold the lie that the lower class are the kids who need loans for college.  Not true.  ALL of my loans paid for my summer abroad studying education in England (which was totally awesome and totally worth my husband having to pay for now). Yep, my trip to Europe is what we are paying for.  I didn't have to go.  I would have gotten a great degree (with Honors) from a reputable (state) college resulting in a decent paying job in education even without the trip to Europe. 

My hubby has as much student loans to pay as I do (maybe slightly more).  He wasn't poor growing up.  Nope.  He was middle class all the way.  His parents made decent money, a 2 income family.  They weren't super wealthy, but they were not thousands of dollars below the poverty line like mine.  So, why did he get loans?  Simply because his parents had not saved enough to pay for his education (at state schools mind you).  And because he was not a good student and received no scholarships. 

Here is another difference in our two stories.  I graduated in 4 years with honors, high GPA, latin words, the whole nine yards and got a teaching job making decent (for fresh out of college) money.  He attended for 6 years, finally stopped and got a job in IT making the same money I was making.  In 10 years of learning on the job and being a generally dedicated learner and worker, he has more than doubled what he started at (not really a huge stretch, but better than 10 years at minimum wage).  I have left the job that was earned by my degree and am staying home with my kids.

My point?  Glad you asked.  My point is student loans alone are not the problem and the government isn't the answer.  Our combined student loans are less than many of these "middle class" college kids' loans were for one year of school.  I agree they were lied to and convinced student loans were the answer, but where is the accountability for making stupid choices?  Everyone likes to promote the "'poor' kids can't pay for college and need student loans, then get stuck with the bad economy" story.  I beg to differ.  I would have gone to college scott free if it weren't for my summer abroad.  Hardly a necessity and I take full responsibility for that decision.

So I've digressed a bit.  Ok, a lot.  Next, I believe these "kids" have been lied to by the "You have to have everything" advertisers so that they felt that going to a private college, buying fancy computers and living in apartments were great expenditures of their student loan money.  We bought a computer with student loan money.  It was stupid.  We are still paying for a computer that no longer exists.  OUR dumb decision.

They were lied to growing up thinking that when they left their (parents') nice little middle income home they would enter their own little middle income home with all the amenities their parents worked 20 years to afford.  Gee, we did that, too.  Yup, credit cards!  That took a long time to get out from under.  Buying nice things because he (the hubby) was used to them and I liked being spoiled.  OUR dumb decision.

But mostly, I think, they were lied to in the idea that they somehow have gotten that 1) the government is supposed to fix their lives and 2) anyone who has managed to make money should be punished because they (the 99percenters) couldn't.

I think if the government would stay out of business more, not interfere more, we just might see a few things about this capitalism that make sense.

So now, for what I know:  It's precious little.

I know that you have basically 2 real economic choices, capitalism and socialism.  I know that socialism has not worked in many, many countries around the world.  I know that governments don't actually make money, they acquire it from the people who have it and spend it doing things, some good, some bad. 

I know that the government gets its money from people that have it.  Yes, I know I said that, but I wanted to make that clear.  There is all this talk about the rich should pay more percentage-wise than the middle class because somehow we need to punish them for being rich.  Here's what I know about math:  10% of $50,000 is $500.  10% of  $5,000,000 is $50,000.  So if, hypothetically speaking, I make $50,000 and we have flat tax rate of 10% I pay the govnerment $500.  If you make $5,000,000 you pay, on the same flat rate scale, $50,000 or about what I make in a year you pay in taxes in a year.  So now, why would I want you to pay say 20% or $100,000?  (I'm not lobbying flat tax, just removing variables for discussion purposes). 

I can hear it now "But the loopholes, the tax write offs, the incentives...." Okay, again with made up figures to make a point.  Let's say that you own a company and your annual income, you yourself not your company, is $5,000,000.  Now that's pretty nice and in our scenario you owe $50,000 in taxes.  Your wise tax accountant (who you pay a lot of money to and provide with an income so that he can pay taxes) finds a loophole and saves you $25,000 of that. Great!  Now, since you are stinking rich, not only do you pay an accountant a great deal of money, but you have a nice house.  And nice cars.  So with the saved $25,000 you hire a housekeeper.  Now the government doesn't have your income, but this girl does and the government doesn't support her.  Now you also have a cook, a pool boy, a chauffeur, a butler, a guy who brings you the paper, whatever your little heart desires.  All these people would much rather work for you than not have a job, obviously because that is the choice they have made, so you are employing maybe 10 full time staff.  Hmmm, you save $25,000 of the $50,000 you should have paid, but pay salaries on 10 people who may, or may not, pay taxes on that money but are not being supported by the government. 

Pretend for a moment that the government decides this is unfair, takes away your fortunes, gives you the same amount of money as the guy who brings you your paper and gives you a nice little job to do to earn that mediocre salary.  Do you suddenly feel compelled to work your best?  Work as hard as you can?  Improve your standing and help others?  Or do you do the bare minimum and come home each night to watch the government programs on TV like everyone else?  Now the government is paying you to do no more than anyone else and your hard work and determination that built you up to a billionaire to start with get you no better off than the guy who wasn't interested in working in the first place. 

Oh, wait.  Do you remember what I said?  The government doesn't make money, they get it from the people who have it?  Well, now, once all the nation's wealth has been redistributed, who has money to give to the government to pay their own salary?  It's like trying to pick yourself up off the ground.  Try it, I'll wait.  Did it work? 

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