America A Plutonomy– economy dependent on spending and investing of the wealthy

[Edward]

According to new research from Moody's Analytics, the top 5% of Americans by income account for 37% of all consumer outlays. Outlays include consumer spending, interest payments on installment debt and transfer payments.

[See Ways to Save on Restaurants, Travel, and More]

By contrast, the bottom 80% by income account for 39.5% of all consumer outlays.

It is no surprise, of course, that the rich spend so much, since they earn a disproportionate share of income. According to economists Emmanuel Saez and Thomas Piketty, the top 10% of earners captured about half of all income as of 2007.

What is surprising is just how much or our consumer economy is now dependent on the rich, and how that share has increased as the U.S. emerges from recession. In the third quarter of 1990, the top 5% accounted for 25% of consumer outlays. That held relatively steady until the mid-1990s, when it started inching up past 30%. It dipped in 2003 and again in 2008, but started surging in 2009 amid the greatest bull market rally in history, with the Dow Jones Industry Average rising nearly 50% in the last nine months of the year.

Mark Zandi, chief economist for Moody's Analytics, cites two main reasons for the increase. First, the wealthy panicked during the financial crisis and stopped spending. When markets rebounded, they came out of their shells and started spending again. "I think that pent-up demand was unleashed," he said. "It was an unusually high rate of spending."
 
Read more here..
http://finance.yahoo.com/family-home/article/110258/us-economy-is-increasingly-tied-to-the-rich

[Edward]

HISTORY

1913: The last and current central bank in America, the Federal Reserve, is set up during the presidency of Woodrow Wilson. By signing the Federal Reserve Act, Woodrow Wilson was a tool of big money. Yet he belatedly expressed regret, said “I have unwittingly ruined my country,” and called America “one of the worst ruled...most completely controlled governments in the civilized world (run by) a small group of dominant men.”


"Some people think that the Federal Reserve Banks are United States Government institutions. They are private monopolies which prey upon the people of these United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lenders."


– The Honorable Louis McFadden, Chairman of the House Banking and Currency Committee in the 1930s

http://www.globalresearch.ca/index.php?context=va&aid=10489


The enity "I.R.S." is the strong arm money collectors for the Federal Reserve, a privately held institution.

[WhiskeyGirl]

Can government spending and taxing make up the difference?  Who's paying back all that debt?

Obama's daughter wonders when dad is going to plug the hole in the Gulf, as oil gushed out this past summer.

Why doesn't Obama make plugging the holes in the border a priority?  All the forced spending on illegal aliens, the money has to go somewhere.

What about all the stimulus?  Does it line the pockets of Americans?  Or wealthy businesses in China?

Any innovation out of that stimulus package?