Friday, July 10, 2009

Wealth and spending in 2009

The Dallas Morning News published a story yesterday lifted from the Chicago Tribune entitled, "Rich hold tight to money" (Thursday, July 9, 2009, 13A).

As a result of the current economic crisis, "luxury spending" is down by 10% so far this year. Evidently, a proven indicator of our economy's resurgence can be found in the spending habits of our wealthy neighbors. According to the report, businesses selling luxury items shouldn't expect a "full recovery until 2012."

Here's an interesting fact: the richest 10% of us in this country account for 50% of all consumer spending. And, according to the Federal Reserve, consumer spending fuels 70% of the nation's GDP.

The report includes a brief analysis of the losses incurred by the mega-wealthy since the collapse of 2008. But then, it adds, "One school of thought is that the well-heeled shoppers are holding back because they are self-conscious about their wealth."

That's interesting, don't you think?

I know at CDM we continue to be grateful for our more affluent donors who continue to support our work. In a number of cases these donors have stepped forward to do even more than normal to help those who are hurting due to the faltering economy.

Other donors have disappeared.

Our mission and purpose leads us to work on poverty every day, regardless the state of the economy.

We don't talk much about wealth here.

The complexities of both poverty and wealth are clear to me.

One thing I know for certain, as different as rich and poor may be on the surface, we are all neighbors and our community will work best when we regard one another as such.

What are you ideas about wealth?


Chris said...

Recently I took a trip to the hills of Arkansas for a funeral. The little church, 50 members, where the funeral was held had a luncheon for members and guests. I don't think anyone was wealthy in this community and yet they were. I have never seen such abundant, good home cooked food in my life! Except for perhaps social security, I doubt anyone was dependent on government aid or a food pantry. To me, these people were as wealthy as a family say in New York City who made $200,000 a year, by the time they paid $2500 a month for an apartment the size of a closet, maybe private school, etc.

Obama can't pay for his massive spending without raising taxes which, in my opinion, will be a mistake.

Anonymous said...

Wow, chris... you were actually on topic until that last sentece...

Chris said...

There is talk of raising taxes on the so called "wealthy." This will cause the economy to go further down the toilet. There is a limit on taxation you know. It is every bit on topic. With higher taxes there will be fewer people to take the risk of creating jobs, there will be less money to give to non-profits because non-profits depend on the profit making entities for their existence.

Jeff said...

Chrisi, your comments show a full head of ideology, and a paucity of human kindnes. I am an absurdly wealthy middle aged white American, and I haven't owed any taxes over the last 8 years, in spite of an interest and dividend income of $300-$600 thousand a year. The current situation is riiculous, and more taxes are not going to put us back in the middle ages. How can you support by scripture the idea of not wanting to pay taxes, when Jesus explicitly says, "Render unto Caesar"?

He's a hell of a lot fuzzier on abortion and gay marriage, which I assume you oppose. What is wrong witth Christians that makes them ignore the red words?

Dean Smith said...

Wow, Jeff! I'm impressed. I'd like to hear more from you.

Chris said...


I hardly think you are the one to talk about human kindness and "Rendering unto Caesar" if you make an income like that and don't pay taxes.

My husband and I pay taxes, probably more than our share, in order to make up for people like you.

More taxes wouldn't put you back in the middle ages since you don't pay any.

Perhaps you should be investigated by the IRS.

Anonymous said...

Just as a clarification, Jeff said he didn't "owe" any taxes... he didn't say that he refused to pay taxes. I'm assuming Jeff has quarterly or yearly tax payments that are calculated by his accountant and paid off the top. It sounds like Jeff is pleased with those tax payments and has not had to "owe" any taxes on a yearly basis above his normal tax withholdings.

Jeff, correct me if I'm wrong in those assumptions. If Chris is right in her assumptions then pay up.

Anonymous said...

Jeff is merely confirming what Warren Buffet has already pointed out -- that wealthy Americans derive most of their income from dividends and interest, the tax rates on which are absurdly lower than that on wage-based income. Poor Americans derive most of their income from wage-based income...