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Originally posted by Aloysius:
Buffett's a self-hating rich guy - he's for the estate tax - so it's okay

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When those at the top spend more on interview suits, others just below them must spend more as well, or else face lower odds of being hired. When upper-middle-class professionals buy 6,000-pound Range Rovers, others with lower incomes must buy heavier vehicles as well, or else face greater risks of dying. Residents in a community in which the custom is to host dinners for twelve need bigger dining rooms than if the custom were dinners for eight.

So when top earners build larger houses-a perfectly normal response to their sharply higher incomes-others just below them will have greater reason to spend more as well, and so on all the way down. Because of the growing income gap, the size of the average American house built today is roughly 2,200 square feet, up from 1,500 square feet in 1970.

The middle-income family that buys this house must carry a significantly larger mortgage than the buyer of the average house in 1970. And because public school quality is closely linked to local real estate taxes, which in turn are closely linked to average house prices within each school district, families must buy an average-priced house or else send their children to below-average schools. So even the middle-income family that doesn't want a bigger house may feel it really has no choice but to buy one.

Yet because this family has no more real income than in 1970, it must now carry more debt and work longer hours to do so. Little wonder, then, that despite the longest economic expansion on record, with the unemployment rate at a 29-year low, one American family in 68 filed for bankruptcy last year [1998], almost seven times the rate in 1980. Our national savings rate is now negative, which means that we are currently spending more each month than we earn.

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[MCCAIN:] There are many steps that can be taken absolutely, including the gas tax holiday. Everybody -- everybody...

STEPHANOPOULOS: Not a single economist in the country said it'd work.

MCCAIN: Yes. And there's no economist in the country that knows very well the low-income American who drives the furthest, in the oldest automobile, that sometimes can't even afford to go to work.

STEPHANOPOULOS: But they all say that that's...

MCCAIN: And they haven't met...

STEPHANOPOULOS: ... not who's (ph) going to get the benefit. The oil companies, the gas companies are going to absorb...

MCCAIN: You know, they..

STEPHANOPOULOS: ... any reduction.

MCCAIN: ... they say that. But one, it didn't happen before, and two, we wouldn't let it happen. We wouldn't let it -- Americans wouldn't let them absorb that.

STEPHANOPOULOS: How would you prevent that?

MCCAIN: We would make them shamed into it. We, of course, know how to -- American public opinion. And we would penalize them, if necessary. But they wouldn't. They would pass it on.

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Obama: "If we have actionable intelligence about high-value terrorist targets and President Musharraf won't act, we will."