Why does the middle class ALWAYS get left out of government programs

disagree with the program. the less subsidies, the lower the prices, the higher the affordability. nobody should qualify, not only you. subsidies end up being a hand out for current owners and builders to the detriment of future buyers, they just increase prices.

Disagree with your ranting.

First, the purpose of these programs is to prop up prices and slow down the fall. The slower the fall, the more likely owners will pay off their losses over the years rather than walk away. Providing this incentive to existing owners is much less effective as that does not reduce the housing supply.

Second, the income maximum for the program is $92K for a single person. If you make significantly more than $92K, you are NOT middle class.

.

Interesting how I'm hearing two conflicting policies "propping up prices" and home affordability...especially since keeping prices high does not make homes affordable. And if society were truly looking to put people in homes and the lowest cost to the family in the home, then this makes even less sense considering the rental alternative.

I think this is really about politicians pandering to their political base and/or lobby group.

One can make signficantly more than 92K in the NY metro area and be consider safely middle class.

NYCROBOT, with all due respect, I think you need some perspective. In your book, where does middle class end and upper-middle class begin? In my book, for a single person, $100K is a pretty good line.

http://www.drummajorinstitute.org/library/report.php?ID=44

MIDDLE CLASS INCOME

∑ While New York City’s median family income is $49,374 a year, the New York City leaders surveyed think that it actually takes $75,000-$135,000 annually for a family of four to have a middle-class standard of living in New York. For a single individual, the middle class range is $45,000 - $90,000.

Iam 30 years old I have a master's degree, I earned $80,000 a year of which 30% goes in taxes and I still need to live with my parents because I find it ridiculous that as a professional I can not afford to own my own apartment in NY and I do not believe in paying somebody's else mortgage by renting. And yes, I could make 100K if I wanted to, but that would mean that I would spend more time working than enjoying the apartment so what standard of living our we talking about?

what is your point other than whining? and by the way, you are probably paying more than 30% in taxes.

p.s. how much rent do you pay your parents?

" If you make significantly more than $92K, you are NOT middle class. "

LOL. I think middle class in NYC goes up to about $500K...

http://www.cartoonstock.com/newscartoons/cartoonists/mba/lowres/mban2189l.jpg

Thanks, Riversider, for the stats.

Papurry, I think the fact that you cannot afford to own an apt in NY is just a reflection of the bubble that is being dealt with by the market. All will be fixed in due time (assuming you're expecting no more than a nice studio or a very basic 1BR). I find the idea of not "believing" in paying somebody else's mortgage intriguing. What if the apt is owned outright? Would you rent it? Do you "believe" in paying for the enjoyment / usage of someone else's property? Does your "belief" in paying for hotel rooms depend on the presence of debt on the hotel?

I'm middle-class, so I think the government should stick it to the lower-middle class instead of the middle-class.

pappury, contact a lawyer to see about getting a buyout from your parents. They pay you to move out, you have a larger downpayment to buy a place, you wind up with lower mortgage payments, everybody props up real estate prices (for awhile) -- everyone's happy!!!

Great cartoon, Riversider. Dwayne_Pipe, if you really think that, you really need some perspective. Does the word "avaricious" mean anything to you?

Alanhart, why not stick it to the upper-class?

however you want to measure it, the bottom line remains: the government should give it all to me and not to you.

inonada: because the government's already taken everything from us already - there's nothing more to steal.

I heard that there is soon going to be a $15,000 home buyer credit with no income restrictions.

columbiancounty, obviously you do not have this problem which means that either you belong to those that qualify for all type of government assistance or to that 1% of americans that control most of the financial resources of this country. It is not about whining as much as to make a point that you need to be more than a good professional to own a piece of new york with a good quality of life.

inonada, what I was refering to is that I would rather pay for something I will eventually own as oppose to something I know eventually I am gonna have to return, just like owning or leasing a vehicle. I guess it all depends on how you look at things, in which case, your point may be valid as well.

Let's get real here. In NYC, if you are single and making $150,000, you are still very much middle class. I don't know what income in NYC qualifies a single person to be considered "rich", but my guess would be something upwards of $300,000 a year.

We are forgetting how difficult it is to live here AND save money. How many of us have a very slim nest egg simply because we can't afford to put much away? Why do you think people scram from this whole area when they lose their jobs? There is no cushion for most people.

Continued: this is why the middle class always gets screwed-. The rich can simply move away without giving it a second thought and the poor have nothing more to give. The middle class is desperate to stay put and has a little extra to give so they will always take in the keester to continue their way of life.

still don't get the point. all of this is known.

pappurry: what is it that you want to change?

and you still haven't told us how much you pay your parents for the privelege of living with them.

Thanks for the interest on my postings, columbiacounty 

Hey, The President, I co-worker of mine keeps talking about that $15,000 tax credit and he is banking on that. I think it all depends on how the economy fairs going forward; if there are signs of recovery they may hold out on that. What I think they should do is let the markets balance themselves out; the only problem with that is that at lot of foreign capital is pouring in not allowing the market to bottom out.

Yikes, NYCROBOT. At $150K, you put $15K into your 401k and $10K is "invested" social security. About 1/3rd of the remaining $125K gets taxed, so you are left with $83K after-tax, or about $7K per month. You can rent a place for $3K/month, which these days translates to a property just shy of $1M? In Manhattan, that gets you a 800-1000 square feet, in the burbs something like 3000 square feet? You get to fritter away $3K/month on food/clothes/iPhones/trips/whatever and still save $1K/month. So between it all, you are saving $37K/year, or $27K/year if you don't want to count social security, which is a pretty healthy amount clip.

What do you call the guy driving the subway car making $65K/year? What about the gal working the counter behind McDonald's making $30K/year?

Frank and Tawanda?

I just wish Congress would extend Social Security and Medicare to the middle class, since those are by far the biggest federal entitlement programs. Oh, wait...

Inonada: yep, the way you break it down, $150,000 puts you squarely in the middle class. What do I call the $65K subway driver? Lower middle class (after all, he probably lives in queens or brooklyn at a lower monthly clip). What about Ms. $30K McDonald's girl? Lower class/working poor. She probably lives up in Harlem in the projects. My point is that in very very few places in this country would $150K give you only a middle class existence.

Home buyer credit to support prices? No.

It's more about keeping the subprime market going, or restarting it. Since the disappearence of 100% loans, and that first time buyer have not had the time, since the Credit Crunch to save enough for a deposit. The $8000-15,000 is the government giving people the deposit they need to buy.

Simple, keeping subprime wheels turning (and they blame the banks).

Fair enough NYCROBOT, you think what you think.

But a 2.3x increase in income from $65K to $150K only moves you up only 1 notch on the economic ladder? To me, that's a move from lower middle class to upper middle class, not to middle middle class. I'd imagine that to the person making $65K, an extra $35K would mean a tremendous amount in terms of quality of life.

If by middle class, you mean "squarely in the middle of your peers", well sure. But I'm guessing the person making $150K has peers that are not at all representative of NYC. The main thing particularly expensive in NYC is property, in my opinion, and people pay up as a matter of lifestyle choice. Sure, it's a shock compared to anywhere else, but just to put things in perspective, Bernie Madoff's place was quite modest by suburban standards: a mere 4000 sq ft. So yeah, when the guy who has shuffled $65B in real/fake money while skimming whatever he wants ends up with "just" a 4000 sq ft place in NYC at the corner of Lex, then maybe, just maybe, living in a 1000 sq ft place on that same corner is indeed upper middle class.

Dear lord, what have I come to -- using Bernie Madoff as an example of modest living???

Screw the middle class, West81st. I wish Congress would extend Social Security and Medicare to the upper class. Oh crap, double wait...

Mjh1962 you say "I think its so unfair" - classic American think right now - you think it's "unfair" that you don't get a tax break so you want the rules to change in such a way that you do get the tax break - but what about people who already bought or people who rent - what's fair about them having to subsidize your purchase. The American way of thinking is now - who cares what's fair I just want to make sure the tax breaks include me and my lifestyle. If you really cared about what is fair, then you should be asking for all tax breaks to go away, not new ones that fit your purchases.

These tax breaks ($8K to but a house, $4,500 to buy a car) are a joke. It's taking from one person and giving to another - it's just income distribution - nothing more nothing less - taking from one citizen and giving to another. All of these subsidies need to stop - governments should not pick favorites.

Along these lines Jazzman, take a look at the following:

http://www.taxfoundation.org/news/show/1410.html

About 1/3rd of tax filers pay zero or negative federal income tax. I think I recently read that if they made things so that there was no negative income tax and we just widened the zero tax both lower and higher without taking in any more taxes, something like either 40% or 60% of people would owe taxes. Does anyone remember reading this?

Not saying all this is right or wrong, just interesting.

inonada - exactly!! How can it be "fair" that 40% of Americans pay zero tax dollars? I bet 50% of Americans pay less than $1,000 of tax per year.

If people were concerned about what's fair then each person in the US would be responsible for a tax based on their consumption of government goods. And I don't mean a flat tax rate, I mean a flat tax in dollar amounts.

But let's face it life isn't fair and the wealthy should pay more - the question is how much more. I will say though, that I think it's disingenuous/stupid/criminal that politicians expect the wealthy to take on even more of the cost of bloated government spending (BTW, I don't fit into those top tax brackets).

so how much do you think someone making $7.25 per hour ($15,080 per year) should pay? that's $290 per week.

At a minimum, Constitution should be amended to state, If you don't pay taxes, then you can't vote. Why should the takers of a society be allowed to tell the providers of a society how much they should pay in taxes. Makes no sense.

just wait until Social Security goes in red (a few years left in black only! now it's expected to be 2013-2016). then it will come apparent even for the lower IQ ones that's a ponzi (same with this housing bubble) and that surpluses spent were artificially lowering tax rates at the time as a trade off for higher tax rates in the future.

call it kicking the can, screwing the young that cannot defend themselves... call it unfair, but 45% depend on SS as a main source of income. either we pay them by printing money (indirect tax on savers, that also punishes a lot those that have SS as only source of income) or raise taxes or cut benefits through mean testing.

which one is gonna be? getting that one right will be the key to get the right protection.

p09, how retro of you. you can only vote if you make enough to pay taxes? plenty of people work and pay no taxes. what about the almost 10% of the population that is unemployed? do they not get to vote until they can again pay taxes? i guess that will show the elected officials the power of the disenfranchised, it will go from next to zero to zero.

once again i recommend the book The Working Poor.

"If you don't pay taxes, then you can't vote."

that's gonna be to come back to when you didn't vote unless you own property... and you didn't own property if you weren't white... scary stuff.

the unemployed can only vote if I like them. The scariest and most unstable prospect of all is where we are currently headed. Every year the percentage of the population that pays no taxes grows. This will reach a breaking point with dire consequences. Remember Thatcher's great quote about Socialism...."eventually you run out of other peoples money"

"eventually you run out of other peoples money"

or "eventually people with money run away".

P09, I hope you meant it as a joke, but I might be having too high expectations. Let's see, we could assume, for example, that you were born in an ugly part of the Bronx and half of the males ages 18-45 in your family were in jail at some point while you were growing up, you somehow finished high school and didn't go to juvie but since only 30% in your HS pass regents didn't have much options except cashier at McDonald's or hot dog cart or something like that. You make $300 per week and when you mention the word "benefits" somebody laughs really hard. Of course, your girlfriend is pregnant. And you're a good guy, you're not trying to get extra money by committing crimes. And you can't fucking vote? Actually, voting is kind of an empty consolation prize, but hey, at least that's what keeps the peace in this uncivilized rich country, instead of having you go in a rampage. So, please P09, I beg you, let him vote!

Good Will Hunting???

Will: Why shouldn't I work for the N.S.A.? That's a tough one, but I'll take a shot. Say I'm working at N.S.A. Somebody puts a code on my desk, something nobody else can break. Maybe I take a shot at it and maybe I break it. And I'm real happy with myself, 'cause I did my job well. But maybe that code was the location of some rebel army in North Africa or the Middle East. Once they have that location, they bomb the village where the rebels were hiding and fifteen hundred people I never met, never had no problem with, get killed. Now the politicians are sayin', "Oh, send in the Marines to secure the area" 'cause they don't give a shit. It won't be their kid over there, gettin' shot. Just like it wasn't them when their number got called, 'cause they were pullin' a tour in the National Guard. It'll be some kid from Southie takin' shrapnel in the ass. And he comes back to find that the plant he used to work at got exported to the country he just got back from. And the guy who put the shrapnel in his ass got his old job, 'cause he'll work for fifteen cents a day and no bathroom breaks. Meanwhile, he realizes the only reason he was over there in the first place was so we could install a government that would sell us oil at a good price. And, of course, the oil companies used the skirmish over there to scare up domestic oil prices. A cute little ancillary benefit for them, but it ain't helping my buddy at two-fifty a gallon. And they're takin' their sweet time bringin' the oil back, of course, and maybe even took the liberty of hiring an alcoholic skipper who likes to drink martinis and fuckin' play slalom with the icebergs, and it ain't too long 'til he hits one, spills the oil and kills all the sea life in the North Atlantic. So now my buddy's out of work and he can't afford to drive, so he's got to walk to the fuckin' job interviews, which sucks 'cause the shrapnel in his ass is givin' him chronic hemorrhoids. And meanwhile he's starvin', 'cause every time he tries to get a bite to eat, the only blue plate special they're servin' is North Atlantic scrod with Quaker State. So what did I think? I'm holdin' out for somethin' better. I figure fuck it, while I'm at it why not just shoot my buddy, take his job, give it to his sworn enemy, hike up gas prices, bomb a village, club a baby seal, hit the hash pipe and join the National Guard? I could be elected president.

p09, as the middle class shrinks and the money is distributed upward, what would you expect to happen? i guess all those poor shiftless bastards enjoy not paying taxes.

We have never had a problem with the income side of the ledger. Even during the dreaded Reagan and Bush 1 &2 years, it has ALWAYS been the expense side.

AR, what defines "middle class" for you for a family of 4? it's the income or the lifestyle they lead?

admin, what do you mean? Without a certain income you cannot have a certain lifestyle unless you decide to leave long term the way the country seem to have been living lately, like, 30% above budget.

exactly Trompiloco, i've seen all this talk about what income you need to be considered "middle class".

but then if with that middle class income you proceed to rent, own no vehicles, own no vacation home and stalk the spare cash away for college of kids, or retirement, or whatever ... you are not gonna be looked by society as somebody "solidly middle class".

now, take an average joe with a blue collar income with more credit cards, mtg, 2nd, heloc, ... a 4 bedroom home people believe he "owns", 2 or 3 cars that again, people think he "owns", ... so he will be looked upon as a solidly middle class type of consumer.

my point is that with credit, what do you look for to classify somebody as middle class or not? lifestyle or income? i've noticed that even when most people don't pay cash even for groceries, society still thinks and classifies using consumption, cause it's the more visible thing.

admin, difficult to define in so many words. by just about anyone's definition it has been shrinking. but i'd say it's the ability to live within one's income with reasonable food, shelter, education, clothing, transportation and health care, enough for a family vacation every couple of years (and no, not at the Ritz), not having to watch every cent while living reasonably modestly, and still having enough money to save. so of course it's not the income per se, because the cost of living greatly affects quality of life.

i don't know if p09 is speaking personally, or more generally, but if one has a problem on the expense side, then one also by definition has a problem on the income side. they go together, income is not high or adequate unless it has the purchasing power that is high or adequate. that was what blew my mind for so many years, that our income could seem so high and yet do so little, and of course, that was due to that viscious credit availability cycle that kept driving prices, for both long-term assets and daily expenses, higher much faster than the rate of the income increases.

"not having to watch every cent (...), and still having enough money to save"

that's what it is to me at least.

"that was what blew my mind for so many years, that our income could seem so high and yet do so little"

no kidding. but then tell what your salary is to somebody in texas and he'll think you are a millionaire or will be soon enough. hear this all the time. a lawyer friend of mine complaining that wall streeters complain that half a million is not enough for them...

after running the numbers my friend sees that's not enough for what they consider the basics, still. it's more than what he gets as a lawyer. so there's this blend of envy, disdain for tackiness of the whiners and "if only i could make that much" gone sour as it seems it's not gonna be enough.

admin, part of the problem is simply history. when a lawyer looks at what another lawyer has "accomplished" in terms of their purchasing (largely housing) and that lawyer started a mere five to ten years earlier, it seems as though a similar level of purchasing isn't an unreasonable goal. of course during the largest real estate bubble in recent history it's a very unreasonable goal. but it's one of the many things that kept people stretching, because it felt as thought they "ought" to be able to obtain something given their income and achievements, and others seemed to be obtaining these milestones at the time. nasty psychological cycle.

hundreds of billions were/are spent each year to sell us the concept of more, more, more. is it any wonder that no one except those very few in the financial stratosphere believe that they have enough?

i challenge anyone (including myself) to evaluate how you've spent more money in the last few years and how much of the stuff or experiences you bought were necessary or worth it.

"nasty psychological cycle."

very interesting ego based consumption. seems some people chose a profession not for affinity with the tasks it requires but for buying the whole lifestyle package it seems to bring. but people confuse biz cycle-wealth with the wealth their own performance brings.

same thing happens to the old, when they tell the young "just work hard! keep your job! finish high school". lol, they don't realize that a huge part of what they got was not due to their own performance, but of the performance of the econ back in the day (demographics and labor productivity being a huge part of it).

like shiller says, people don't want to assign luck the huge role it has in their lives. they prefer to believe it's their "hard work". very moralistic and funny imho.

NYCROBOT, I think I have found proof that $150K/year is not "middle class" but rather "millionaire". ;)

http://www.millionairematch.com/faqm

Q. Who is a millionaire?

A. Anyone who earns $150,000 and above annually. You do not need to have assets that total a million dollars or more per year.

https://www.dnainfo.com/new-york/20151222/civic-center/de-blasio-deserves-raise-mayor-appointed-board-says

http://www.nytimes.com/2015/12/30/business/economy/for-the-wealthiest-private-tax-system-saves-them-billions.html