The middle class was disappearing in the 1990s, its even worse today. We were warned 20 years ago what free trade was going to do to the U.S. economy. What did the people do? They elected bill clinton who did a flip-flp on NAFTA. We should have elected Ross Perot. But the people in their infinite stupidity could not bring themselves to vote for any other party besides the big two.
A guy I used to talk to lost his job in the late 1990s. The company he was working for decided it was cheaper to have the parts made in mexico then in the Texas.
After losing his job, the government paid for the guy to go to college and learn a new trade.
The government loses tax revenue through lost property taxes, lost wages, lost taxes on the wages, lost social security taxes and then the government is going to pay for people to be retrained?
Property taxes are a big loss to the local community. When the school district loses part of its tax base, the lost revenue has to be made up somewhere else. When that factory closes and, the building is demolished, the property taxes might go from lets say $100,000 a year, to just a few hundred a year.
You think the tax office is going to tell the school they have to cut $100,000 from their budget? Nope. The lost tax revenue will be divided between everyone that is paying property and school taxes.
Company B looks at their property and school taxes. the owner of the company says “well, taxes went up again, time to move to china or mexico.
Then that lost tax base has to be divided between the people and companies in the community.
Back in 2001, 2002 and 2003 I was doing computer work in a community called Kingwood Texas. The community was upper middle class, and what some people might call a “rich” area. People like George Zimmerman, owner of the mens warehouse and George Foreman owned homes in Kingwood.
One customer I was doing computer work for told me how he had retired from the telephone company and bought a home in kingwood to retire at. The problem was, his home value and property taxes were increasing at a rate that his retirement payments could not keep pace.
If the increases in property values and property taxes did not stop, he was going to have to sell his home and move.
The guy did not live in a mansion, the home was maybe a 2,000 square feet, at the end of a cul de sac, and had a nice pool.
We all like the idea of our home values going up. But once you are on a fixed income, that increase in value is a double edged sword. If your home value doubles every few years, your property taxes go up, but your retirement payments stay the same, you can expect your standard of living to go down.
Recently my wife and I asked for our home to be reappraised by the tax district. After the reappraisal, the value dropped by about 15k. We have no plans on selling the home, so the value is not “that” important right now. With the decrease in appraised value our tax rate dropped by a good bit, which means I get to keep more of my money.
Maybe we look at home values backwards? Instead of wanting home prices to go up, maybe we should want home prices to go down?
With lower home prices more people can afford to buy, and we have a lower tax rate then with a more expensive home.
Its a vicious cycle that ends in the financial ruin of the community.
The middle class is in a death spiral. The only way to stop the spiral is to end free trade and bring our jobs back from china.