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U.S. Household Income Drops Most in 20 Years, and It Had Nothing to Do with the Sequester

by
Bryan Preston

Bio

March 1, 2013 - 6:03 am

On January 1 your payroll taxes went up a couple of percentage points. That caused household income to drop like a stone, the sharpest drop in 20 years. Income dropped 3.6 percent, hitting its lowest level in more than five years.

By the way, gas prices are inching back up too.

The average American family’s income is going backwards, while the federal government continues to grow and grow and grow.

 

 

 

 

Yet, as congressional leaders and the president meet at the White House today, President Obama will badger Republicans for even more tax increases as part of a deal to avoid the sequestration cuts in the rate of the growth of government spending. Tax hikes were not part of the original sequestration deal — that’s the “moving the goal posts” that Obama aide Gene Sperling warned Bob Woodward he would regret reporting. Obama will fight for every penny of federal spending, casting any cut as draconian and extreme. And members of the media will do their best to provide cover for Obama, agreeing with him that any cuts in the rate of growth of spending are “extreme” and the Republicans are being unreasonable.

The bottom line today is that your income probably went down. Why shouldn’t federal government bureaucrats feel the same pinch the rest of us are feeling? Happy Sequester Day!

More: 

Americans Feeling the Pinch of Obamanomics

Bryan Preston has been a leading conservative blogger and opinionator since founding his first blog in 2001. Bryan is a military veteran, worked for NASA, was a founding blogger and producer at Hot Air, was producer of the Laura Ingraham Show and, most recently before joining PJM, was Communications Director of the Republican Party of Texas.
Top Rated Comments   
As incomes shrink the cost of living grows. Bernanke brags about keeping inflation down; that proves he hasn't been grocery shopping or bought gas lately. The Government under Obama has turned into Pinocchio on steroids.
As incomes shrink the cost of living grows. Bernanke brags about keeping inflation down; that proves he hasn't been grocery shopping or bought gas lately. The Government under Obama has turned into Pinocchio on steroids.
12 weeks ago Fri Mar 01 07:21:01 PST 2013 1
12 weeks ago Fri Mar 01 07:21:01 PST 2013 1
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All Comments   (15)
All Comments   (15)
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I saw an article on Fox asking "Will the sequester hurt you?" Of course it will but I believe allowing this government to continue spending money they don't have is going to hurt even more and for a much longer time, maybe two or three generations. For us, we will scale back our expenditures until there is a time when money is not so tight. Actually, we have already done this and we have found we can survive on less if we watch how we spend our money. We make our decisions on careful logic now, not just because we want it.
I saw an article on Fox asking "Will the sequester hurt you?" Of course it will but I believe allowing this government to continue spending money they don't have is going to hurt even more and for a much longer time, maybe two or three generations. For us, we will scale back our expenditures until there is a time when money is not so tight. Actually, we have already done this and we have found we can survive on less if we watch how we spend our money. We make our decisions on careful logic now, not just because we want it.
11 weeks ago Sat Mar 02 08:07:47 PST 2013 1
11 weeks ago Sat Mar 02 08:07:47 PST 2013 1
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It will always be Goerge Bush's fault. In 2030, it will still be George Bush's fault except by then he will be blamed for 9/11, the attack on Pearl Harbor, and the Chicago Fire too.
It will always be Goerge Bush's fault. In 2030, it will still be George Bush's fault except by then he will be blamed for 9/11, the attack on Pearl Harbor, and the Chicago Fire too.
12 weeks ago Fri Mar 01 20:05:53 PST 2013 1
12 weeks ago Fri Mar 01 20:05:53 PST 2013 1
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And New Coke. What was he thinking when he made that?
And New Coke. What was he thinking when he made that?
11 weeks ago Sat Mar 02 06:00:07 PST 2013 1
11 weeks ago Sat Mar 02 06:00:07 PST 2013 1
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Yep, this is one hell of a recovery!
Yep, this is one hell of a recovery!
12 weeks ago Fri Mar 01 14:51:44 PST 2013 1
12 weeks ago Fri Mar 01 14:51:44 PST 2013 1
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For all practcial purpsoes I have been laid off, although not formally fired. Call it a severe extended furlough. My W-2 for 2012 is around $2K, or about 5% of what it once was, and in the few previous years it was not much better than that.

Went to a restaurant yesterday, where I have been many times before, because it has the one of the best low price deals for lunch. Prices had gone up 20%, more if you count the higher sales tax. Went to the store to buy some dogfood after that, and it had gone up 20%.

And I need not mention the price of gasoline. I had put of filling up the car for weeks in hope the price would go down; well it did, finally, by a 2 cents a gallon. I filled up, since the last time I had put gas in the car I had bought only 3 gallons under the theory it would go down - instead it... (show more)
For all practcial purpsoes I have been laid off, although not formally fired. Call it a severe extended furlough. My W-2 for 2012 is around $2K, or about 5% of what it once was, and in the few previous years it was not much better than that.

Went to a restaurant yesterday, where I have been many times before, because it has the one of the best low price deals for lunch. Prices had gone up 20%, more if you count the higher sales tax. Went to the store to buy some dogfood after that, and it had gone up 20%.

And I need not mention the price of gasoline. I had put of filling up the car for weeks in hope the price would go down; well it did, finally, by a 2 cents a gallon. I filled up, since the last time I had put gas in the car I had bought only 3 gallons under the theory it would go down - instead it went up by 13 cents a gallon.

So prices are going up, some up quite sharply, and income is down. I have been visiting the Dollar Tree store more often, after I found some better deals on things like off-brand cereal. Well now the price is still $1.00 but the quantity in the container has dropped off a bunch.

Indeed, we need to take more money out of the economy to fund more government programs - that's the answer! (show less)
12 weeks ago Fri Mar 01 14:51:15 PST 2013 1
12 weeks ago Fri Mar 01 14:51:15 PST 2013 1
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You can also go check the pay rates for Federal employees. I looked a couple of years ago (maybe one year into their "freeze") and from 2000-2010 (I think 2009 and 2010 were "freeze" years, when the rates did not rise) wages for an employee who stayed in the same grade and step went up around 50% (I hesitate to be specific because the bottom was not 50% and neither was the top) while everyone else's wages were stagnant or went down. Meanwhile, they kept the great benefits (up to 50 days off after 15 years, great medical coverage, immunity to firings or layoffs, lots of training, and many other things). It's hard to pity them when their salaries are higher than people who can lose their jobs.
You can also go check the pay rates for Federal employees. I looked a couple of years ago (maybe one year into their "freeze") and from 2000-2010 (I think 2009 and 2010 were "freeze" years, when the rates did not rise) wages for an employee who stayed in the same grade and step went up around 50% (I hesitate to be specific because the bottom was not 50% and neither was the top) while everyone else's wages were stagnant or went down. Meanwhile, they kept the great benefits (up to 50 days off after 15 years, great medical coverage, immunity to firings or layoffs, lots of training, and many other things). It's hard to pity them when their salaries are higher than people who can lose their jobs.
12 weeks ago Fri Mar 01 13:02:46 PST 2013 1
12 weeks ago Fri Mar 01 13:02:46 PST 2013 1
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Moreover, these apparatchiki have full-time jobs with benefits.

The rest of us, not so much.
<a href="http://1389blog.com/2012/11/29/the-biggest-economic-story-of-2013-disappearance-of-full-time-jobs-with-benefits/" rel="nofollow" target="_blank">http://1389blog.com/2012/11/29/the-biggest-economic-story-of-2013-disappearance-of-full-time-jobs-with-benefits/</a>

Moreover, these apparatchiki have full-time jobs with benefits.

The rest of us, not so much.
<a href="http://1389blog.com/2012/11/29/the-biggest-economic-story-of-2013-disappearance-of-full-time-jobs-with-benefits/" rel="nofollow" target="_blank">http://1389blog.com/2012/11/29/the-biggest-economic-story-of-2013-disappearance-of-full-time-jobs-with-benefits/</a>

12 weeks ago Fri Mar 01 13:25:11 PST 2013 1
12 weeks ago Fri Mar 01 13:25:11 PST 2013 1
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"...nothing to do with the Sequester"

So what? The media drumbeat will say otherwise, and the masses of low-info voters will believe that all of their economic woes are due to the GOP.

"...nothing to do with the Sequester"

So what? The media drumbeat will say otherwise, and the masses of low-info voters will believe that all of their economic woes are due to the GOP.

12 weeks ago Fri Mar 01 11:46:15 PST 2013 1
12 weeks ago Fri Mar 01 11:46:15 PST 2013 1
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The reason that this will not register with the "American People" is because the "American People" have been turned into nothing more than trained circus animals, jumping through hoops and following the cues from their ringmasters - the media and its Democratic Party masters. They deserve what they get. And the only reason I give a hoot is because what they get is also inflicted on the rest of us.
The reason that this will not register with the "American People" is because the "American People" have been turned into nothing more than trained circus animals, jumping through hoops and following the cues from their ringmasters - the media and its Democratic Party masters. They deserve what they get. And the only reason I give a hoot is because what they get is also inflicted on the rest of us.
12 weeks ago Fri Mar 01 11:41:18 PST 2013 1
12 weeks ago Fri Mar 01 11:41:18 PST 2013 1
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There are many times that I feel like not giving a hoot either. I am already on SS and Medicare and feel that I can just "go on down the road the rest of the way", so to speak. But then I think about how this will impact on my grandchildren and what they will have to pay and I get sick thinking about it.
There are many times that I feel like not giving a hoot either. I am already on SS and Medicare and feel that I can just "go on down the road the rest of the way", so to speak. But then I think about how this will impact on my grandchildren and what they will have to pay and I get sick thinking about it.
12 weeks ago Fri Mar 01 20:11:39 PST 2013 1
12 weeks ago Fri Mar 01 20:11:39 PST 2013 1
Link To Comment
Food and fuel have been intentionally kept out of government inflation calculations since the Carter administration. If it were a partisan issue, Reagan and Bush (41 & 43) have had ample opportunity to correct the math, but they didn't. The statistics touted by politicians is as useless and phony as the employment statistics. It should make us ask why we pay them so much higher salary and benefits than us, only to mislead and lie to us.
Food and fuel have been intentionally kept out of government inflation calculations since the Carter administration. If it were a partisan issue, Reagan and Bush (41 & 43) have had ample opportunity to correct the math, but they didn't. The statistics touted by politicians is as useless and phony as the employment statistics. It should make us ask why we pay them so much higher salary and benefits than us, only to mislead and lie to us.
12 weeks ago Fri Mar 01 10:42:52 PST 2013 1
12 weeks ago Fri Mar 01 10:42:52 PST 2013 1
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It was George Bush's fault...or did the shelf life for that mendacity expire at the end of the First Term?
It was George Bush's fault...or did the shelf life for that mendacity expire at the end of the First Term?
12 weeks ago Fri Mar 01 10:02:26 PST 2013 1
12 weeks ago Fri Mar 01 10:02:26 PST 2013 1
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Nope. Blaming Bush has the shelf life of MREs. It will still be Bush's fault at the end of Hillary's second term.
Nope. Blaming Bush has the shelf life of MREs. It will still be Bush's fault at the end of Hillary's second term.
12 weeks ago Fri Mar 01 11:55:13 PST 2013 1
12 weeks ago Fri Mar 01 11:55:13 PST 2013 1
Link To Comment
As incomes shrink the cost of living grows. Bernanke brags about keeping inflation down; that proves he hasn't been grocery shopping or bought gas lately. The Government under Obama has turned into Pinocchio on steroids.
As incomes shrink the cost of living grows. Bernanke brags about keeping inflation down; that proves he hasn't been grocery shopping or bought gas lately. The Government under Obama has turned into Pinocchio on steroids.
12 weeks ago Fri Mar 01 07:21:01 PST 2013 1
12 weeks ago Fri Mar 01 07:21:01 PST 2013 1
Link To Comment
If Bernanke's right about that, when the real inflation kicks in, we are all going to be starving.
If Bernanke's right about that, when the real inflation kicks in, we are all going to be starving.
12 weeks ago Fri Mar 01 10:56:12 PST 2013 1
12 weeks ago Fri Mar 01 10:56:12 PST 2013 1
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