(Not) Keeping Up With Our Parents: Where Do We Go From Here?
Posted by Lynnae on June 23, 2008
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Though I didn’t agree much with Nan Mooney, I did find this book very thought provoking.
It’s hard to believe we’ve reached the end of the (Not) Keeping Up With Our Parents series. In this final chapter, Nan Mooney outlines the ways she thinks we should address the problems of the middle class.
Given my reaction to previous chapters, I really expected to hate this chapter. At first I was pleasantly surprised. The first part of the chapter had to do with one of my favorite subjects: Personal Responsibility.
Personal Responsibility
To launch her discussion on personal responsibility, Nan Mooney says in reference to making changes in society,
We can begin by refusing to believe that the options being handed to us truly are the only ones available.
I say AMEN! I’m proud to be someone who’s bucking the debt trend. You don’t have to be in debt. We don’t need credit cards, no matter what others say. If not having a credit card damages my credit score, so be it. If I’m not planning to take on more debt, my credit score isn’t really important to me.
I’m proud to be bucking the trend of over-consumption in America. I’m doing my best to promote the concept of living within my means. I’ve been on the other side of the fence, and quite frankly, I felt more in bondage when I was overspending than I do now, when I have to admit something isn’t in my budget.
Exploring new options is one of the driving forces behind Being Frugal. I’ve found that life doesn’t have to be the way the media tells you it should be. You don’t need two incomes to be successful. You can follow your dreams, if you plan well. And if you screw up your finances, as I have, it’s not hopeless. It’s possible to change. I loved the part of the chapter that was focused on personal responsibility.
But as I reached the end of that section, I realized my agreement with Mooney came to an abrupt end. It shouldn’t have surprised me. Mooney and I seem to be on opposite ends of the political spectrum. The next section of the chapter covered my least favorite subject: government intervention.
Government Intervention
Mooney makes a lot of great-sounding propositions here. She implies that the cure for all our woes would be government mandated programs. She gives several examples of programs in different countries. She proposes,
- Federally funded college education, such as in Finland.
- Family leave, like Sweden has, where parents get a combined 480 days in parental leave, most of that which is paid at 80 percent of a person’s salary.
- Universal health care, as in Canada.
- Federally funded daycare and preschool, such as in France.
I’ll admit on first glance, all of those programs sound good. However, there’s always a downside, and that downside is funding. Where is the government going to get the money to fund all of these programs?*
Mooney’s suggestion is, and I quote,
One of the most effective moves the educated professional middle class could make would be to push hard for more progressive tax laws, milking an increased percentage out of the wealthy, so there’s more to go into the discretionary spending pot. (italics mine)
That statement makes me think Mooney has something against the wealthy. However, as we read on, we find out (according to Mooney) that today the richest .01 percent (that’s 1/100 of a percent) pays “just” 34 percent of taxes, as opposed to the 60 percent they paid as recently as 1980.
Does anyone besides me find anything wrong with that? 1/100 of a percent of the people are already footing the bill for 34 percent of our nation’s budget, and Mooney wants to raise their taxes? So the rest of us can get handouts?
These are the people who provide the jobs in this country. I’d love to provide jobs for my fellow Americans, but the fact of the matter is, I just can’t afford it. I want the wealthy to be able to use their money to continue to create jobs for us. And I don’t believe in income redistribution. I don’t feel the wealthy owe me anything, just because they’re wealthy and I’m not.
If the wealthy want to give back to society out of their own free will, such as Bill and Melinda Gates do, I’m all for it. But I’m not for the government stepping in and telling people that because they’re successful in business, the government has a right to take their money and redistribute it as the government sees fit.
What Mooney and I can agree on is tax breaks for businesses that provide health insurance and other good benefits to their employees. To require businesses to pay for benefits such as long paid family leaves would send many small businesses right into bankruptcy. But providing tax breaks would encourage those businesses that can afford to provide benefits to provide them.
One last point I’d like to make about comparing the United States to other countries. To my knowledge, none of the other countries Mooney cited have a military that’s active in the greater world. Iraq aside, the United States needs a strong military. 9/11 made that very clear. Even if we were not at war in Iraq, we would need military funding for the war in Afghanistan. And we need funding to protect our country from terrorists, since 9/11 made it clear that the United States is a target for terrorism. So to equally compare countries such as Sweden and Finland with the United States isn’t possible.
For me, the bottom line is that I don’t feel the wealthy are beholden to me in any way. They are not responsible to provide me with a comfortable lifestyle. Do we need health care reform? Absolutely. Are the wealthy responsible to pay for my health care? I don’t think so. Nor are they responsible to provide daycare for my children, paid leave so I can stay home with my kids for a year, or a college education for all of my children.
I believe the wealthy should pay their share of taxes…everyone should. But to require the wealthy to give up to 60% of their income* to provide social services doesn’t sit well with me.
*Compare the tax rates of various countries. Be sure to check out Sweden.
Thanks for joining me in discussing (Not) Keeping Up With Our Parents. I really enjoyed the great discussion, even from those who do not agree with me. It’s always thought provoking to consider different ideas about how to fix the world.
Next week we’ll be starting our second book, Live Well on Less Than You Think. Don’t forget I’ll be moving the book reviews over to Lynnae’s Bookshelf, so you might want to subscribe, if you don’t want to miss a post. I’ll post a reminder over here as well.
Finally, everyone who comments today will be entered to win my copy of (Not) Keeping Up With Our Parents, so you can read it yourself! I’ll close the contest next Sunday at noon and draw a winner using a random number generator. I’ll announce the winner Monday.
What do you think is the solution for the problems of the educated professional middle class?
The rest of the series:
- (Not) Keeping Up With Our Parents
- The Rise and Fall of the Middle Class
- The Cost of a College Education
- Career Struggles
- Marriage
- The Decision to Have Children
- Health Care
- Credit Card Debt
- What to do about housing?
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- (Not) Keeping Up With Our Parents: Marriage
- (Not) Keeping Up With Our Parents - The Rise and Fall of the Middle Class
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22 Responses to “(Not) Keeping Up With Our Parents: Where Do We Go From Here?”
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I am not a financial expert. I'm just a wife and mom doing the best I can to live a frugal life and get out of debt. Like any human, I make mistakes. I write this blog out of my own experiences, and nothing I write should be taken as expert advice. If you need financial advice, please consult a professional.
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Amen!
I think that personal responsibility and increased government programs just don’t go together. If you have increased responsibility than you try to fix your own problems. . .
The US needs a large military? 9/11 proves that?
That’s it, I’m outta here. I use to think that perhaps this blog had a modicum of intelligence. This post proves otherwise. Delete RSS now.
Thank you! I’m struggling with that right now. I feel the call to tithe. In fact, I’ll be sitting in church and I feel as if God is like, “now get out your checkbook…” ha. I am going to have to rework my budget now that I have to work that into it. It will be a challenge for sure!
Personally, I think you spend way too much on the military. We’ve been battling terrorism for the last 40 years, and we’ve done so despite having universal healthcare and until recently state-funded higher education. But then I live in a different country, with different priorities and responsibilities.
Personal Responsibility… Ah, gotta love that whole concept.
I sure hope they don’t put some large tax on the wealthy, but sounds like something the majority of Americans would back. Jealousy tends to make people feel like they’re on a crusade for the greater good. (And we all know how well the crusades didn’t turn out…)
You don’t really want me to get started on the whole Iraq situation, since I find it complete BS. The government keeps sending our guys over there for absolutely nothing, while the people getting wealthy off the war keep getting wealthier and the rest of us are left wanting a GOOD reason why they’re there. Most of the higher up terrorists have been caught. No weapons of mass destruction have ever been found, nor can anyone prove they ever existed. The Iraqi people have no idea why we’re there, and they want us gone so they can get back to running their own lives, as they’re entitled to do as fellow humans. I’d really love to have someone explain to me why my hubby has to go spend four months in Bush’s sandbox… With reasons that actually make sense.(/endrant.)
I disagree. Public tax dollars for infrastructure such as sewers, roads, bridges, sidewalks, and other public programs such as education, fire departments, police departments- that makes is possible for busineses and the wealthy to accumulate their wealth. However, they do not pay their fair share for these services. So I do think that the wealthy multimillionaires and billionaires can afford to pay 50 or 60% of their income (individuals and corporations alike) into the public pot. Heck, if you are worth $50 billion like the Gates family, and your annual income is, say, $2 billion, I think you can live JUST FINE off $1 billion instead.
@Jessica - I agree with all the programs that you mentioned. And everyone should pay their fair share for roads, fire departments, etc. What I don’t agree with is the wealthy having to give up over half their income, so they can pay for me to personally have a higher standard of living.
I don’t know. It seems like some government intervention may help even the playing field. I hate that I work my butt of as a middle class citizen to fund some government programs that CAN (not in every circumstance, but sometimes) be abused. If the government is going to help those who do nothing to help themselves, then I feel like maybe they should help out those that actually make an effort!
I’m really not sure that I get the military argument- Finnish, Swedish and Canadian forces are all in Afghanistan too.
And surely the source of military funding is the taxes? So you want to keep high levels of military funding and not increase taxes?
There is a table in Wikipedia which shows the number of active troops per 1000 population- for the countries listed it ranges from 2.96 (Canada) to 5.17 (Finland) with the US at 4.76. Which seems reasonably comparable to me, especially if you want to discount Iraq.
I think Plonkee said it really well. The UK has been dealing with terrorism for a long time still providing universal healthcare, family leave, and partially funded higher education.
I agree with you more with every post I read! Keep up the good work!
Wealthy is considered now to be anyone with over $100,000 in net worth… so if you are debt free, and own your own home, you’d probably be considered in that ‘wealthy class’…. Hard to believe!
The ‘wealthy’ don’t receive as much in ‘benefits’ as the unwealthy, so why should they be paying anymore in taxes? The wealthy and the unwealthy living in the same area, both get the same police, fire, 911, roads, infrastructures…. and then the unwealthy get medical and food and housing and all those types of services that the wealthy do not. But yet the wealthy have to pay more? Not hardly equitable. Why should they pay more? Just because they have made something of themselves they should be punished by paying more??? Everyone should be taking care of themselves - as much as possible (I realize there are those who physically or mentally cannot- or those going thru a temporary crisis - Those are the ones the system is set up for - not the habitual freeloaders/abusers of the system.)
I think personal pride goes with personal responsibility - and without both you get those who will not help themselves (if able) but wait on the freebie handouts. (Again, disregard those handicapped and in temporary crisis) Government handouts have gotten way out of hand, in my opinion. Too much abuse of the system.
I believe in “Giving a Hand UP, not a Hand out”..’
And while I do not agree with everything that goes on, yes, we need a strong military. That’s how this country was founded. That’s how our freedom has been kept. It’s our only hope of staying free.
Personally, I think they should take the SPACE budget and use it for universal health care, (or education) as health care costs seems to be the one thing (prices out of line) that can cripple any family. Why do we need to see Pluto’s photos? Or Neptune’s? I just don’t get this at all. If there’s money to be made in this venture, or a mass exodus to occur, then put this in the hands of private enterprise. If it were profitable, or had a need, it would be sought after by private enterprises - but it’s not - so what’s that tell you? A big unprofitable money drain.
Actually - the more I make, the more I am taxed on my efforts… therefore, by choice, I am frugal. If I can keep my income under $18,000/yr, I can stay in the 20% or under tax bracket (single) - and I like that
Plus, I have more Time - and my time is more precious than Money. 
Spending money on preschool for children of English Language Learners/Low Income parents is one way to reduce money spent on them in the future (through means of welfare, incarceration, etc.).
I don’t see this as help out the parents–I see this as helping out our own future! We’re raising kids in a world where a Bachelor’s Degree hardly cuts it for making our kids the shoe-in for a job! And with the subset that I mentioned earlier (ELL + low SES), the chances to get that BA and job are even worse!
And while there is possibility for governmental ECE (early childhood education) to go awry, I don’t think we should let that stop us from developing, instating, and funding something that will give children a much-needed boost to keep up with their future.
I have enjoyed, from what I have read on your blog, the discussions about (Not) Keeping Up With Our Parents. I am of the generation that has less that my parents had and I am fine with this. I would love to see universal health care, subsidized day care and the such but sadly I feel it will never happen. The average citizen doesnt want to pay more in taxes. I feel that if someone overhauled the governments finances, like we do on our personnal ones, there would be enough money for everything we feel we need.
I am a relatively need reader of your blog but have been enjoying it for a few weeks. Gives me lots of info and a lot to think about. I have two kids heading to college soon and am very concerned about what their future will hold. Thanks for the information.
How many people do you know who are the top 1%? I know quite a few, most of them don’t contribute anything to create jobs for other people, any more than the average non 1% citizen does.
An educated and healthy workforce is paramount to America’s success.
America’s wealthy are not making the contributions that they did in the past. Every time you go to the library and pick up a book, remember that Andrew Carnegie, essentially built the original infrastructure for our modern library system. I still visit a Carnegie built library every month in Santa Monica. Today’s super wealthy are not necessarily super wealthy because they built railroads, and other infrastructure that employed people. Many of America’s most wealthy today because of paper trades. Either selling real estate, or trading on the stock market. They have very little connection to labor and most could care less if your library or school has any books or your children have health care.
All the growth in my retirement fund, comes from good trades I make. I employee no one with that wealth I am building. Do the companies I buy stock in employ people, yes, of course. But not more or less because I bought 10,000 shares. And if I made money selling short, then they definitely didn’t hire anyone because I made money off that trade.
Your naiveté about why the wealthy are wealthy reflects populist conservative media talk meant to keep the bottom of the middle class from demanding a tax system that does not allow people at the top to profit from the people at the bottom in a system that is rigged.
Bottom line, I keep more of what I earn, because I have money, and can afford to pursue all kinds of tax loopholes. And my government rewards me for this because it’s a system designed by my financial peers not yours. I can say without having any idea of what you and your husband make, that I definitely pay less of a percentage of my earnings in taxes than you do.
Read what Warren Buffett has to say about why he thinks he and other wealthy people should pay more for the good of America.
http://business.timesonline.co.....996735.ece
and read this college professor and author’s analysis of Buffet’s experiment
http://freakonomics.blogs.nyti.....amp;st=nyt
I make more money than you do. Our household income is over $150,000 a year and has been over $250,000 in other years. I want to pay my fair share so that all America’s children can get a good education. That should not be a benefit of only the wealthy or those who are able to home school, or augment with tutors. You live non-metropolitan area, so your challenges with schooling while there, pale in comparison to what poor city kids have to put up with just to try to educate themselves, while their parents work 3 and 4 jobs, just to pay the bills. All the while praying that their kids won’t get sick, because if they have to take a day off work to sit at county hospital with their child they might get fired, or they won’t be able to put food on the table for all the others because they didn’t earn pay that day.
I volunteer, I donate money, but it’s not enough, and my government needs to tax my peers to provide school buildings free from asbestos, and stifling heat rising to 110 degrees. And well equipped with books and technology that are going to produce graduates who can read and write proficiently in English and who have the opportunity to become more than just the next wave of people only skilled enough to clean the toilets at McDonald’s.
Its interesting that both sides of the argument pretend to know what the Iraqi people want. Even in their country, there is differing opinions on what they want.
The same with this discussion. In both my current position and a former job had me in the path of those who are being supported by the system. They are not acheiving a better life because of our handouts. In fact, it appears to be the opposite and they are contirbuting to the cycle of poverty and waste.
One expample, anyone who presents themselves to an emergency room for medical care has to be seen. It doesn’t matter what their medical complaint, its the law. We are flooded with complaints from a rash, common cold, pink eye, ringworm and a list of things that most people wouldn’t even see their primary care physician to address. These same folks seem to know what show is on cable or sattelite at any given time. The taxpayers are paying for food and medical care so these individuals can pay for cable and DVDs.
I dream of the days where faith based or private organizations help out the truly needy. I thinnk they wer emore effecient and focused more on the whole person rather than how many folks they can sign up to their programs. Those few who are truly helped seem to make the choice to better themselves, their children and their community. You can’t tell me that the majority of folks being supported by the system are truly having a better life because of it.
Thanks for your wise words and well thought out opinions!
We only need to look at Social Security, Medicare, and other government run agencies to see that the government does not know how to efficiently run these agencies. Robbing from the rich and giving to the poor is also a program that won’t work.
A few points: while various European income tax rates might look favorable to some, also look at the VAT (aka sales tax) they pay. It’s a huge amount. The French, for example, pay up to 60% in combination income and VAT. 60%! That is the price of socializing. Are Americans willing to pay that for universal health care, extended maternity leaves and free daycare? I’m not. I’d rather have the right and option to choose for myself, instead of having the government dictate these things to me. Having these things socialized makes everyone pay for what not everyone is using. Would I, as a woman who does not plan to have children, get a tax credit for not using those programs? Parents currently get tax credits because of their cost to raise children. What about a credit for me *not* bringing someone into an overpopulated world and further draining world resources? Sure, it costs money to raise a child — and people have a choice about whether or not they have children. If they can’t afford children, they shouldn’t have them. Period.
Regarding universal health care: I’ve heard too many stories of people having to wait and wait to get surgeries, and of others just buying private insurance so they don’t have to wait. My impression is that public hospitals dealing in socialized medicine are underfunded and overworked. When I was travelling, I went to a hospital in Scotland because I wanted some x-rays done (and I was willing to pay), and I waited nearly three hours, had a doctor condescingly talk to me for 2-3 minutes and refuse to x-ray my ankle, and then just walk away from me. How is that a better alternative? I clearly had a problem with my ankle, and the doctor did absolutely nothing useful. The doctor was harried, clearly overworked, and clearly had no capacity/interest to manage everyone that she had to see. Based on that experience and what I’ve heard, I just can’t back this kind of plan. If it takes paying for private insurance in a country with socialized medicine, how is that a better deal?
As to Iraq, I’m in the camp that says we never should’ve gone there in the first place. WMD? Yeah, categorically proven *they never existed.* Bush made a political maneuver that has done nothing except get military and innocent Iraqis killed, and rob Americans of billions of dollars that could be doing something useful for America.
If the US government can’t do something as simple as manage social security in a way that guarantees it will be around in 30 years, why should they be in charge of other ‘care for the masses’ programs? I have little confidence the government can (or even wants to) care for me as it is now.
I have to agree with you Lynnae, I can’t jump on the bandwagon with so many that think that we need to tax the rich into oblivion, and pay for all sorts of government programs and subsidies.
The government has never been good at managing these types of programs, and they never will. I would prefer to have private organizations/faith based organizations and other private individuals helping people in need. Universal Health Care and other social programs only lead to waste, sub-standard care and tons of other problems.
The rich are already paying a lopsided portion of the taxes, and they don’t need to be paying more. We need to cut wasteful spending in our government, and look at ways we can better utilize the money that we collect already.
Quoting Looby: I’m really not sure that I get the military argument- Finnish, Swedish and Canadian forces are all in Afghanistan too
I was going to mention that as well. I think it’s easy to forget all the other countries that are fighting alongside troops - here in Canada, the media only really report casualties of Canadian soldiers. But it’s important to remember that there are many, many countries fighting in the war, including those listed above.
Lynnae: The rich don’t exist to provide jobs for the non-rich. I had this discussion with my boss a while back. Business owners are constantly wondering how to be more profitable, which often means doing more with less. They don’t look for ways to employ more people, they look for ways to employ less.
You also seem to forget that those who are “good at business” are so at the expense of you and I. So there is certainly an argument that they should do perhaps a bit more than their fair share.
Fair share: someone else provided the link to Warren Buffet’s challenge. The wikipedia link you provided indicates quite clearly at the top of the list that: “It is not intended to represent the true tax burden”. Buffet, being among the richest men in the world, pays a mere 17% in taxes. So nobody is asking the rich to pay 60%, but 20% might be nice considering how many of us are paying a true 25%-40% in taxes.
By definition, most people are never going to be in the top 1%, let alone 0.01% of earners, yet most people defend low taxes for the rich because they do believe they will be in the top 1% (in the same way that we all believe ourselves to be above average drivers…)
The reason that Social Security is “improperly managed” is that Americans are not willing to make any of the few simple steps that would make the program solvent indefinitely. Don’t blame the government because you are unwilling to get your fair share (raise taxes or lower benefits compared to former generations…).
Check out the book “Nudge” when you have a chance. The subtitle is “Libertarian Paternalism”. We can’t all be expected to be experts on such diverse topics as health care, retirement, insurance, breakfast cereals, etc — and neither can our elected representative. But, I think that we could accomplish a lot in this country simply by properly incentivizing and educating the less sophisticated. One great example of this is automatic enrollment in 401(k) plans. You can opt out any time, but few people do. We need more ideas like this rather than giving people too many choices and offering them no guidance for what makes a good decision. This kind of libertarian paternalism is a great way to promote personal responsibility.
I just stumbled on your blog and am really enjoying it. I don’t want to get too political but I think some of the other comments made on here have been pretty valid. I think in an ideal situation where rich people really are providing jobs for other Americans and fueling national economy (as well as maybe doing some philanthropic work) is great, I don’t think that’s the reality. The truth is the richest of the 1% outsource their jobs to countries where there is no real welfare standard to make the most profit. I’m not sure if it’s fair that many big businesses exploit people who are not protected by welfare laws or minimum wage at the expense of having less jobs for Americans and not willing improving services for the other 99%. But I agree, the government doesn’t usually handle socialised programs very well, but I find it hard to give a good reason why the lowest 1% don’t deserve basic things like good education and healthcare.