Americans earned a smaller average income in 2005 than in 2000, the fifth consecutive year that they had to make ends meet with less money than at the peak of the last economic expansion, new government data shows.

While incomes have been on the rise since 2002, the average income in 2005 was $55,238, still nearly 1 percent less than the $55,714 in 2000, after adjusting for inflation, analysis of new tax statistics show. . . .

Total income listed on tax returns grew every year after World War II, with a single one-year exception, until 2001, making the five-year period of lower average incomes and four years of lower total incomes a new experience for the majority of Americans born since 1945. . . .

The growth in total incomes was concentrated among those making more than $1 million. The number of such taxpayers grew by more than 26 percent, to 303,817 in 2005, from 239,685 in 2000.

These individuals, who constitute less than a quarter of 1 percent of all taxpayers, reaped almost 47 percent of the total income gains in 2005, compared with 2000.

People with incomes of more than a million dollars also received 62 percent of the savings from the reduced tax rates on long-term capital gains and dividends that President Bush signed into law in 2003, according to a separate analysis by Citizens for Tax Justice, a group that points out policies that it says favor the rich.

The group’s calculations showed that 28 percent of the investment tax cut savings went to just 11,433 of the 134 million taxpayers, those who made $10 million or more, saving them almost $1.9 million each. Over all, this small number of wealthy Americans saved $21.7 billion in taxes on their investment income as a result of the tax-cut law.

The nearly 90 percent of Americans who make less than $100,000 a year saved on average $318 each on their investments. They collected 5.3 percent of the total savings from reduced tax rates on investment income.

Nearly half of Americans reported incomes of less than $30,000, and two-thirds make less than $50,000. 

The number of taxpayers making more than $100,000 grew by nearly 3.4 million and accounted for more than two-thirds of the growth in the number of returns filed in 2005 compared with those in 2000.

The fact that average incomes remained lower in 2005 than five years earlier helps explain why so many Americans report feeling economic stress despite overall growth in the economy. Many Americans are also paying a larger share of their health care costs and have had their retirement benefits reduced, adding to their out-of-pocket costs. . . .

Robert S. McIntyre, the director of Citizens for Tax Justice, said that even though he expected a few very wealthy people to reap most of the tax savings generated by lower tax rates on dividends and capital gains, the size of the savings “still takes your breath away.”

He said the tax savings at the top, combined with lower average incomes after five years, “shows that trickle down doesn’t work.”

Bush inherited from President Clinton an annual federal budget surplus of $236 billion, the largest in American history. Clinton balanced the budget for the first time since 1969. Budget surpluses were expected to total $5.6 trillion between fiscal year 2002 and 2011.

Despite this, Bush transformed the surpluses into a $1.1 trillion annual deficit in just three years because of the Iraq war and his relentless push for permanent tax cuts for wealthy Americans, a new iteration of Herbert Hoover's equally catastrophic "trickle-down" theory. Bragging about a $239 billion deficit sets such a low standard that Bush can claim horrific failure as a good thing for the country. The Bush administration's annual loss of three-quarters of a trillion dollars is unprecedented. Bush presided over the loss of 2 million American jobs in his first 2 1/2 years and has net gained 5.6 million in six years, the worst since Hoover. Clinton created 23 million jobs.

Despite a 2004 campaign promise to the contrary, President Bush continues to allow the mercury-containing vaccine preservative thimerosal to be added to childhood flu vaccines.

Thousands of parents believe the preservative has caused mercury poisoning and autism in their children. Still, President Bush plans to veto the HHS-Labor-Education Appropriations Bill, which includes a measure to ban childhood flu vaccines that contain thimerosal, because of the cost and “objectionable provisions.”

As it stands, flu vaccines which contain thimerosal, are recommended for all pregnant women, infants and children, even though the Institute of Medicine recommended in 2001 that these population groups not be exposed to thimerosal-containing vaccines.

One in every six women of childbearing age has enough mercury in their bloodstream to cause neurological damage to their unborn children, according to the U.S. Environmental Protection Agency.

[T]he study argues that there is little hope of a centralized power in Iraq and that the country's future depends on walking the fine line between decentralizing power and civil war.

The report [concludes] that a far-reaching decentralization is the country's only hope. And if it fails, the result could be devastating, including the possibility of full-scale civil war complete with foreign intervention.

"The basic assumption of this study," Steinberg writes, "is that a federalist solution will be the only possibility to maintain Iraq as a single country. The most important role of German and European policies should therefore be that of supporting steps toward a peaceful federalist solution." . . .

The sectarian wrangling means, the study says, that the best solution -- that of a federalism free of ethnic and religious divisions -- has largely been rendered impossible. But even a federalism resting on the ethnic divisions that have been established seems challenging given the opposition from within the Shiite and Sunni factions to such a solution.

And that's not to mention the opposition of other countries in the region. "The discussion within Iraq is influenced to a large degree by the interests of neighboring countries," the report states. "Due to their potential to become involved, the Iraq federalists have to take their positions into account. And Turkey, Saudi Arabia and Syria all reject the ethnic-religious federalism model out of hand." Military intervention from Iraq's neighbors to protect their interests, particularly from Turkey in the north, is a very real possibility, the report warns.

The US has been pressuring parties on all sides of the discussions to come up with a compromise agreement and to solve a number of divisive issues, including the explosive discussion over sharing oil revenues among regions and groups. But the current Iraqi government under Prime Minister Nouri al-Maliki is struggling to make any headway at all, with 11 cabinet ministers recently having quit in protest.

All of which makes the immediate future in Iraq look bleak, Steinberg writes. The alternative to a successful federalism solution, he indicates, is chaos, more violence and a Shiite dictatorship. "Iraq is a failed state," the report concludes, "and will remain unstable for the foreseeable future."

Ratings of the national economy reached a two-month low, pushing confidence back into negative double-digit territory. In a separate measure of expectations, 57 percent of Americans believe the economy is getting worse, well above the 26-year average of 39 percent. Pessimism hasn't been this high since October 2005, in the aftermath of Hurricane Katrina. . . .

[P]essimism is at a 22-month high, with 57 percent saying the economy is getting worse. Only 15 percent say the economy is improving, down from a 2007 high of 18 percent in January but up slightly from last month when 12 percent expressed optimism.

Pessimism is now 18 points higher than its long-term average in polls since March 1981 and 23 points higher than its 2007 low. It is, however, still lower than its all-time high of 77 percent in November and October of 1990.

The 42-point gap between optimism and pessimism is at its highest since May 2006. Pessimism is increasing, with fewer people on the fence this month. Only 26 percent believe the economy is "staying the same" this month, down 10 points from last month. . . .

As usual the CCI is higher in better-off groups. It's +47 among higher-income people while -31 among those with the lowest incomes, +9 among those who've been to college while -44 among high-school dropouts and -6 among whites but -32 among blacks. The gap between men and women continues to be narrower this week with men at -9 and women at -11. . . .

Partisan differences remain: The CCI is +16 among Republicans, but -20 among independents and -15 among Democrats.

Meeting with economic writers last week, President Bush dismissed several polls that show Americans are down on the economy. He expressed surprise that inflation is one of the stated concerns.

"They cite inflation?" Bush asked, adding that, "I happen to believe the war has clouded a lot of people's sense of optimism."

[T]he inflation numbers reveal the extent to which lower- and middle-income Americans are being pinched.

The Bureau of Labor Statistics said in its July inflation report that egg prices are 33.7 percent higher than they were in July 2006. Over the same period, according to the department's consumer price index, whole milk was up 21.1 percent; fresh chicken 8.4 percent; navel oranges 13.6 percent; apples 8.7 percent. Dried beans were up 11.5 percent, and white bread just missed double-digit growth, rising by 8.8 percent.

These numbers get lost in the broader inflation rate for all goods and services, which measured 2.4 percent for the same 12-month period. Across the economy, rising food prices were offset by falling prices for things bought at the mall: computers, cameras, clothing and shoes.

U.S. home foreclosure filings surged 90 percent in May 2007 from a year earlier, and were 19 percent above the April 2007 rate. This ominous spike in foreclosures during a time of year that has traditionally been the busiest for home sales may be another sign that the housing sector’s slide is not over and that the foreclosure rate may increase later in the year. The rise supports concerns that there is an emerging spike in mortgage delinquencies and foreclosures that will force many, especially low-income, families from their homes, damaging financial institutions and other lenders, seriously damaging neighborhoods, property values, the housing industry and the economy. The problem isn’t just local in nature – 43 U.S. regions reported increases in foreclosures in May with just eight states reporting a decline.                   

The Food and Drug Administration (FDA) has reportedly removed a senior FDA scientist from work on diabetes drug Avandia because the unnamed scientist voiced concerns about the drug’s safety.

"This new allegation is especially significant and raises our level of concern about FDA interference in safety decisions regarding Avandia," Congressional investigators said in a letter sent to the FDA.

Since 2005, the scientist, a medical officer who was once Avandia’s primary reviewer, believed that Avandia’s risks warranted a strong “black box” warning for its risk of congestive heart failure.

In May 2007, a study in the New England Journal of Medicine found that those taking Avandia had a 43 percent higher chance of having a heart attack.

The scientist was "sidelined after voicing safety concerns," the Congressional letter said, and “was told to stop participation in the review of potential cardiovascular safety problems associated with Avandia.”

The Bush administration has consistently thwarted efforts by the World Bank to include global warming in its calculations when considering whether to approve major investments in industry and infrastructure, according to documents made public through a watchdog yesterday.

On one occasion, the White House’s point man at the bank, the now disgraced Paul Wolfowitz, personally intervened to remove the words “climate change” from the title of a bank progress report and ordered changes to the text of the report to shift the focus away from global warming.

"He [Bush] truly believes he's on a mission from God. Absolute faith like that overwhelms a need for analysis. The whole thing about faith is to believe things for which there is no empirical evidence", Bruce Bartlett, a Reagan advisor and former treasury official told Suskind.  . . .

 The aide said that guys like me were ''in what we call the reality-based community,'' which he defined as people who ''believe that solutions emerge from your judicious study of discernible reality.'' I nodded and murmured something about enlightenment principles and empiricism. He cut me off. ''That's not the way the world really works anymore,'' he continued. ''We're an empire now, and when we act, we create our own reality. And while you're studying that reality -- judiciously, as you will -- we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors . . . and you, all of you, will be left to just study what we do.'' – The Raw Story (emphasis added)