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22 Facts About The Coming Demographic Tsunami That Could Destroy Our Economy All By Itself

 

TsunamiToday, more than 10,000 Baby Boomers will retire.  This is going to happen day after day, month after month, year after year until 2030.  It is the greatest demographic tsunami in the history of the United States, and we are woefully unprepared for it.  We have made financial promises to the Baby Boomers worth tens of trillions of dollars that we simply are not going to be able to keep.  Even if we didn’t have all of the other massive economic problems that we are currently dealing with, this retirement crisis would be enough to destroy our economy all by itself.  During the first half of this century, the number of senior citizens in the United States is being projected to more than double.  As a nation, we are already drowning in debt.  So where in the world are we going to get the money to take care of all of these elderly people?

The Baby Boomer generation is so massive that it has fundamentally changed America with each stage that it has gone through.  When the Baby Boomers were young, sales of diapers and toys absolutely skyrocketed.  When they became young adults, they pioneered social changes that permanently altered our society.  Much of the time, these changes were for the worse.

According to the New York Post, overall household spending peaks when we reach the age of 46.  And guess what year the peak of the Baby Boom generation reached that age?…

People tend, for instance, to buy houses at about the same age — age 31 or so. Around age 53 is when people tend to buy their luxury cars — after the kids have finished college, before old age sets in. Demographics can even tell us when your household spending on potato chips is likely to peak — when the head of it is about 42.

Ultimately the size of the US economy is simply the total of what we’re all spending. Overall household spending hits a high when we’re about 46. So the peak of the Baby Boom (1961) plus 46 suggests that a high point in the US economy should be about 2007, with a long, slow decline to follow for years to come.

And according to that same article, the Congressional Budget Office is also projecting that an aging population will lead to diminished economic growth in the years ahead…

Lost in the discussion of this week’s Congressional Budget Office report (which said 2.5 million fewer Americans would be working because of Obamacare) was its prediction that aging will be a major drag on growth: “Beyond 2017,” said the report, “CBO expects that economic growth will diminish to a pace that is well below the average seen over the past several decades [due in large part to] slower growth in the labor force because of the aging of the population.”

So we have a problem.  Our population is rapidly aging, and an immense amount of economic resources is going to be required to care for them all.

Unfortunately, this is happening at a time when our economy is steadily declining.

The following are some of the hard numbers about the demographic tsunami which is now beginning to overtake us…

1. Right now, there are somewhere around 40 million senior citizens in the United States.  By 2050 that number is projected to skyrocket to 89 million.

2. According to the Employee Benefit Research Institute, 46 percent of all American workers have less than $10,000 saved for retirement, and 29 percent of all American workers have less than $1,000 saved for retirement.

3. One poll discovered that 26 percent of all Americans in the 46 to 64-year-old age bracket have no personal savings whatsoever.

4. According to a survey conducted by the Employee Benefit Research Institute, “60 percent of American workers said the total value of their savings and investments is less than $25,000”.

5. 67 percent of all American workers believe that they “are a little or a lot behind schedule on saving for retirement”.

6. A study conducted by Boston College’s Center for Retirement Research found that American workers are $6.6 trillion short of what they need to retire comfortably.

7. Back in 1991, half of all American workers planned to retire before they reached the age of 65.  Today, that number has declined to 23 percent.

8. According to one recent survey, 70 percent of all American workers expect to continue working once they are “retired”.

9. A poll conducted by CESI Debt Solutions found that 56 percent of American retirees still had outstanding debts when they retired.

10. A study by a law professor at the University of Michigan found that Americans that are 55 years of age or older now account for 20 percent of all bankruptcies in the United States.  Back in 2001, they only accounted for 12 percent of all bankruptcies.

11. Today, only 10 percent of private companies in the U.S. provide guaranteed lifelong pensions for their employees.

12. According to Northwestern University Professor John Rauh, the total amount of unfunded pension and healthcare obligations for retirees that state and local governments across the United States have accumulated is 4.4 trillion dollars.

13. Right now, the American people spend approximately 2.8 trillion dollars on health care, and it is being projected that due to our aging population health care spending will rise to an astounding 4.5 trillion dollars in 2019.

14. Incredibly, the United States spends more on health care than China, Japan, Germany, France, the U.K., Italy, Canada, Brazil, Spain and Australia combined.

15. If the U.S. health care system was a country, it would be the 6th largest economy on the entire planet.

16. When Medicare was first established, we were told that it would cost about $12 billion a year by the time 1990 rolled around.  Instead, the federal government ended up spending $110 billion on the program in 1990, and the federal government spent approximately $600 billion on the program in 2013.

17. It is being projected that the number of Americans on Medicare will grow from 50.7 million in 2012 to 73.2 million in 2025.

18. At this point, Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years.  That comes to approximately $328,404 for every single household in the United States.

19. In 1945, there were 42 workers for every retiree receiving Social Security benefits.  Today, that number has fallen to 2.5 workers, and if you eliminate all government workers, that leaves only 1.6 private sector workers for every retiree receiving Social Security benefits.

20. Right now, there are approximately 63 million Americans collecting Social Security benefits.  By 2035, that number is projected to soar to an astounding 91 million.

21. Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.

22. The U.S. government is facing a total of 222 trillion dollars in unfunded liabilities during the years ahead.  Social Security and Medicare make up the bulk of that.

So where are we going to get the money?

That is a very good question.

The generations following the Baby Boomers are going to have to try to figure out a way to navigate this crisis.  The bright future that they were supposed to have has been destroyed by our foolishness and our reckless accumulation of debt.

But do they actually deserve a “bright future”?  Perhaps they deserve to spend their years slaving away to support previous generations during their golden years.  Young people today tend to be extremely greedy, self-centered and lacking in compassion.  They start blogs with titles such as “Selfies With Homeless People“.  Here is one example from that blog…

Selfies With Homeless People

Of course not all young people are like that.  Some are shining examples of what young Americans should be.

Unfortunately, those that are on the right path are a relatively small minority.

In the end, it is our choices that define us, and ultimately America may get exactly what it deserves.

 

The Tip Of The Iceberg Of The Coming Retirement Crisis That Will Shake America To The Core

RetirementThe pension nightmare that is at the heart of the horrific financial crisis in Detroit is just the tip of the iceberg of the coming retirement crisis that will shake America to the core.  Right now, more than 10,000 Baby Boomers are hitting the age of 65 every single day, and this will continue to happen every single day until the year 2030.  As a society, we have made trillions of dollars of financial promises to these Baby Boomers, and there is no way that we are going to be able to keep those promises.  The money simply is not there.  Yes, I suppose that we could eventually see a “super devaluation” of the U.S. dollar and keep our promises to the Baby Boomers using currency that is not worth much more than Monopoly money, but as it stands right now we simply do not have the resources to do what we said that we were going to do.  The number of senior citizens in the United States is projected to more than double by the middle of the century, and it would have been nearly impossible to support them all even if we weren’t in the midst of a long-term economic decline.  Tens of millions of Americans that are eagerly looking forward to retirement are going to be in for a very rude awakening in the years ahead.  There is going to be a lot of heartache and a lot of broken promises.

What is going on in Detroit right now is a perfect example of what will soon be happening all over the nation.  Many city workers stuck with their jobs for decades because of the promise of a nice pension at the end of the rainbow.  But now those promises are going up in smoke.  There has even been talk that retirees will only end up getting about 10 cents for every dollar that they were promised.

Needless to say, many pensioners are extremely angry that the promises that were made to them are not going to be kept.  The following is from a recent article in the New York Times

Many retirees see the plan to cut their pensions as a betrayal, saying that they kept their end of a deal but that the city is now reneging. Retired city workers, police officers and 911 operators said in interviews that the promise of reliable retirement income had helped draw them to work for the City of Detroit in the first place, even if they sometimes had to accept smaller salaries or work nights or weekends.

“Does Detroit have a problem?” asked William Shine, 76, a retired police sergeant. “Absolutely. Did I create it? I don’t think so. They made me some promises, and I made them some promises. I kept my promises. They’re not going to keep theirs.”

But Detroit is far from an isolated case.  As Detroit Mayor Dave Bing said the other day, many other cities are heading down the exact same path…

“We may be one of the first. We are the largest. But we absolutely will not be the last.”

Yes, Detroit’s financial problems are immense.  But other major U.S. cities are facing unfunded pension liabilities that are even worse.

For example, here are the unfunded pension liabilities for four financially-troubled large U.S. cities

Detroit: $3.5 billion

Baltimore: $680 million

Los Angeles: $9.4 billion

Chicago: $19 billion

When you break it down on a per citizen basis, Detroit is actually in better shape than the others…

Detroit: $7,145

Baltimore: $7,247

Los Angeles: $8,437

Chicago: $13,355

And many state governments are in similar shape.  Right now, the state of Illinois has unfunded pension liabilities that total approximately $100 billion.

There are some financial “journalists” out there that are attempting to downplay this problem, but sticking our heads in the sand is not going to make any of this go away.

According to Northwestern University Professor John Rauh, the total amount of unfunded pension and healthcare obligations for retirees that state and local governments across the United States have accumulated is 4.4 trillion dollars.

So where are they going to get that money?

They are going to raise your taxes of course.

Just check out what is happening right now in Scranton, Pennsylvania

Scranton taxpayers could face a 117 percent increase in taxes next year as the city’s finances continue to spiral out of control.

A new analysis by the Pennsylvania Economy League projects an $18 million deficit for 2014, an amount so massive it outpaces the approximate $17 million the struggling city collects annually

A 117 percent tax increase?

What would Dwight Schrute think of that?

Perhaps you are reading this and you are assuming that your retirement is secure because you work in the private sector.

Well, just remember what happened to your 401k during the financial crisis of 2008.  During the next major stock market crash, your 401k will likely get absolutely shredded.  Many Americans will probably see the value of their 401k accounts go down by 50 percent or more.

And if you have stashed your retirement funds with the wrong firm, you could end up losing everything.  Just ask anyone that had their nest eggs invested with MF Global.

But of course most Americans are woefully behind on saving for retirement anyway.  A study conducted by Boston College’s Center for Retirement Research found that American workers are $6.6 trillion short of what they need to retire comfortably.

That certainly isn’t good news.

On top of everything else, the federal government has been recklessly irresponsible as far as planning for the retirement of the Baby Boomers is concerned.

As I noted yesterday, the U.S. government is facing a total of 222 trillion dollars in unfunded liabilities.  Social Security and Medicare make up the bulk of that.

At this point, the number of Americans on Medicare is projected to grow from a little bit more than 50 million today to 73.2 million in 2025.

The number of Americans collecting Social Security benefits is projected to grow from about 56 million today to 91 million in 2035.

How is a society with a steadily declining economy going to care for them all adequately?

Yes, we truly are careening toward disaster.

If you are not convinced yet, here are some more numbers.  The following stats are from one of my previous articles entitled “Do You Want To Scare A Baby Boomer?“…

1. Right now, there are somewhere around 40 million senior citizens in the United States.  By 2050 that number is projected to skyrocket to 89 million.

2. According to one recent poll, 25 percent of all Americans in the 46 to 64-year-old age bracket have no retirement savings at all.

3. 26 percent of all Americans in the 46 to 64-year-old age bracket have no personal savings whatsoever.

4. One survey that covered all American workers found that 46 percent of them have less than $10,000 saved for retirement.

5. According to a survey conducted by the Employee Benefit Research Institute, “60 percent of American workers said the total value of their savings and investments is less than $25,000”.

6. A Pew Research survey found that half of all Baby Boomers say that their household financial situations have deteriorated over the past year.

7. 67 percent of all American workers believe that they “are a little or a lot behind schedule on saving for retirement”.

8. Today, one out of every six elderly Americans lives below the federal poverty line.

9. More elderly Americans than ever are finding that they must continue working once they reach their retirement years.  Between 1985 and 2010, the percentage of Americans in the 65 to 69-year-old age bracket that were still working increased from 18 percent to 32 percent.

10. Back in 1991, half of all American workers planned to retire before they reached the age of 65.  Today, that number has declined to 23 percent.

11. According to one recent survey, 70 percent of all American workers expect to continue working once they are “retired”.

12. According to a poll conducted by AARP, 40 percent of all Baby Boomers plan to work “until they drop”.

13. A poll conducted by CESI Debt Solutions found that 56 percent of American retirees still had outstanding debts when they retired.

14. Elderly Americans tend to carry much higher balances on their credit cards than younger Americans do.  The following is from a recent CNBC article

New research from the AARP also shows that those ages 50 and over are carrying higher balances on their credit cards — $8,278 in 2012 compared to $6,258 for the under-50 population.

15. A study by a law professor at the University of Michigan found that Americans that are 55 years of age or older now account for 20 percent of all bankruptcies in the United States.  Back in 2001, they only accounted for 12 percent of all bankruptcies.

16. Between 1991 and 2007 the number of Americans between the ages of 65 and 74 that filed for bankruptcy rose by a staggering 178 percent.

17. What is causing most of these bankruptcies among the elderly?  The number one cause is medical bills.  According to a report published in The American Journal of Medicine, medical bills are a major factor in more than 60 percent of the personal bankruptcies in the United States.  Of those bankruptcies that were caused by medical bills, approximately 75 percent of them involved individuals that actually did have health insurance.

18. In 1945, there were 42 workers for every retiree receiving Social Security benefits.  Today, that number has fallen to 2.5 workers, and if you eliminate all government workers, that leaves only 1.6 private sector workers for every retiree receiving Social Security benefits.

19. Millions of elderly Americans these days are finding it very difficult to survive on just a Social Security check.  The truth is that most Social Security checks simply are not that large.  The following comes directly from the Social Security Administration website

The average monthly Social Security benefit for a retired worker was about $1,230 at the beginning of 2012. This amount changes monthly based upon the total amount of all benefits paid and the total number of people receiving benefits.

You can view the rest of the statistics right here.

Sadly, most Americans are not aware of these things.

The mainstream media keeps most of the population entertained with distractions.  This week it is the birth of the royal baby, and next week it will be something else.

Meanwhile, our problems just continue to get worse and worse.

There is no way in the world that we are going to be able to keep all of the financial promises that we have made to the Baby Boomers.  A lot of them are going to end up bitterly disappointed.

All of this could have been avoided if we would have planned ahead as a society.

But that did not happen, and now we are all going to pay the price for it.

Do You Want To Scare A Baby Boomer?

Do You Want To Scare A Baby Boomer?If you want to frighten Baby Boomers, just show them the list of statistics in this article.  The United States is headed for a retirement crisis of unprecedented magnitude, and we are woefully unprepared for it.  At this point, more than 10,000 Baby Boomers are reaching the age of 65 every single day, and this will continue to happen for almost the next 20 years.  The number of senior citizens in America is projected to more than double during the first half of this century, and some absolutely enormous financial promises have been made to them.  So will we be able to keep those promises to the hordes of American workers that are rapidly approaching retirement?  Of course not.  State and local governments are facing trillions in unfunded pension liabilities.  Medicare is facing a 38 trillion dollar shortfall over the next 75 years.  The Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.  Meanwhile, nearly half of all American workers have less than $10,000 saved for retirement.  The truth is that I was being incredibly kind when I said earlier that we are “woefully unprepared” for what is coming.  The biggest retirement crisis in history is rapidly approaching, and a lot of the promises that were made to the Baby Boomers are going to get broken.

The following are 35 incredibly shocking statistics that will scare just about any Baby Boomer…

1. Right now, there are somewhere around 40 million senior citizens in the United States.  By 2050 that number is projected to skyrocket to 89 million.

2. According to one recent poll, 25 percent of all Americans in the 46 to 64-year-old age bracket have no retirement savings at all.

3. 26 percent of all Americans in the 46 to 64-year-old age bracket have no personal savings whatsoever.

4. One survey that covered all American workers found that 46 percent of them have less than $10,000 saved for retirement.

5. According to a survey conducted by the Employee Benefit Research Institute, “60 percent of American workers said the total value of their savings and investments is less than $25,000”.

6. A Pew Research survey found that half of all Baby Boomers say that their household financial situations have deteriorated over the past year.

7. 67 percent of all American workers believe that they “are a little or a lot behind schedule on saving for retirement”.

8. Today, one out of every six elderly Americans lives below the federal poverty line.

9. More elderly Americans than ever are finding that they must continue working once they reach their retirement years.  Between 1985 and 2010, the percentage of Americans in the 65 to 69-year-old age bracket that were still working increased from 18 percent to 32 percent.

10. Back in 1991, half of all American workers planned to retire before they reached the age of 65.  Today, that number has declined to 23 percent.

11. According to one recent survey, 70 percent of all American workers expect to continue working once they are “retired”.

12. According to a poll conducted by AARP, 40 percent of all Baby Boomers plan to work “until they drop”.

13. A poll conducted by CESI Debt Solutions found that 56 percent of American retirees still had outstanding debts when they retired.

14. Elderly Americans tend to carry much higher balances on their credit cards than younger Americans do.  The following is from a recent CNBC article

New research from the AARP also shows that those ages 50 and over are carrying higher balances on their credit cards — $8,278 in 2012 compared to $6,258 for the under-50 population.

15. A study by a law professor at the University of Michigan found that Americans that are 55 years of age or older now account for 20 percent of all bankruptcies in the United States.  Back in 2001, they only accounted for 12 percent of all bankruptcies.

16. Between 1991 and 2007 the number of Americans between the ages of 65 and 74 that filed for bankruptcy rose by a staggering 178 percent.

17. What is causing most of these bankruptcies among the elderly?  The number one cause is medical bills.  According to a report published in The American Journal of Medicine, medical bills are a major factor in more than 60 percent of the personal bankruptcies in the United States.  Of those bankruptcies that were caused by medical bills, approximately 75 percent of them involved individuals that actually did have health insurance.

18. In 1945, there were 42 workers for every retiree receiving Social Security benefits.  Today, that number has fallen to 2.5 workers, and if you eliminate all government workers, that leaves only 1.6 private sector workers for every retiree receiving Social Security benefits.

19. Millions of elderly Americans these days are finding it very difficult to survive on just a Social Security check.  The truth is that most Social Security checks simply are not that large.  The following comes directly from the Social Security Administration website

The average monthly Social Security benefit for a retired worker was about $1,230 at the beginning of 2012. This amount changes monthly based upon the total amount of all benefits paid and the total number of people receiving benefits.

Could you live on about 300 dollars a week?

20. Social Security benefits are not going to stretch as far in future years.  The following is from an article on the AARP website

Social Security benefits won’t go as far, either. In 2002, benefits replaced 39 percent of the average retirees salary, and that will decline to 28 percent in 2030, when the youngest boomers reach full retirement age, according to the Center for Retirement Research at Boston College.

21. In the United States today, more than 61 million Americans receive some form of Social Security benefits.  By 2035, that number is projected to soar to a whopping 91 million.

22. Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.

23. As I wrote about in a previous article, the number of Americans on Medicare is expected to grow from 50.7 million in 2012 to 73.2 million in 2025.

24. Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years.  That comes to approximately $328,404 for each and every household in the United States.

25. Today, only 10 percent of private companies in the U.S. provide guaranteed lifelong pensions for their employees.

26. Verizon’s pension plan is underfunded by 3.4 billion dollars.

27. In California, the Orange County Employees Retirement System is estimated to have a 10 billion dollar unfunded pension liability.

28. The state of Illinois has accumulated unfunded pension liabilities of more than 77 billion dollars.

29. Pension consultant Girard Miller told California’s Little Hoover Commission that state and local government bodies in the state of California have 325 billion dollars in combined unfunded pension liabilities.

30. According to Northwestern University Professor John Rauh, the latest estimate of the total amount of unfunded pension and healthcare obligations for retirees that state and local governments across the United States have accumulated is 4.4 trillion dollars.

31. In 2010, 28 percent of all American workers with a 401(k) had taken money out of it at some point.

32. Back in 2004, American workers were taking about 30 billion dollars in early withdrawals out of their 401(k) accounts every single year. Right now, American workers are pulling about 70 billion dollars in early withdrawals out of their 401(k) accounts every single year.

33. Today, 49 percent of all American workers are not covered by an employment-based pension plan at all.

34. According to a recent survey conducted by Americans for Secure Retirement, 88 percent of all Americans are worried about “maintaining a comfortable standard of living in retirement”.

35. A study conducted by Boston College’s Center for Retirement Research found that American workers are $6.6 trillion short of what they need to retire comfortably.

So what is the solution?  Well, one influential organization of business executives says that the solution is to make Americans wait longer for retirement.  The following is from a recent CBS News article

An influential group of business CEOs is pushing a plan to gradually increase the full retirement age to 70 for both Social Security and Medicare and to partially privatize the health insurance program for older Americans.

The Business Roundtable’s plan would protect those 55 and older from cuts but younger workers would face significant changes. The plan unveiled Wednesday would result in smaller annual benefit increases for all Social Security recipients. Initial benefits for wealthy retirees would also be smaller.

But considering the fact that there aren’t nearly enough jobs for all Americans already, perhaps that is not such a great idea.  If we expect Americans to work longer, then we are going to need our economy to start producing a lot more good jobs than it is producing right now.

Of course the status quo is not going to work either.  There is no way that we are going to be able to meet the financial obligations that are coming due.

The federal government, our state governments and our local governments are already drowning in debt and we are already spending far more money than we bring in each year.  How in the world are we going to make ends meet as our obligations to retirees absolutely skyrocket in the years ahead?

That is something to think about.

So what do you think?  Do you believe that there is a solution to our retirement crisis?  Do you think that we can actually keep all of the promises that we have made to the Baby Boomers?  Please feel free to post a comment with your thoughts below…

Get Ready Baby Boomers - The Retirement Crisis Is Coming

Americans May Be Getting Poorer, But At Least We Are Getting Fatter And Sicker

I know, there really isn’t any good news in that headline.  Americans are steadily getting poorer, fatter and sicker and yet most people continue to operate under the delusion that things are somehow going to get better.  Sadly, not only are we not better off than we were four years ago, the truth is that things have been getting worse for a very long time.  Median household income in the United States has declined for four years in a row, and it has fallen by more than $4000 overall since Barack Obama has been in the White House.  Yet the media insists that we are in the midst of an “economic recovery”.  A higher percentage of Americans are obese or severely obese than ever before, and Baby Boomers are much sicker than their parents were at the same age.  Yet we are supposedly a “health conscious” nation.  Technology is advancing faster than we have ever seen before in human history, but the life expectancy of poor Americans has dropped significantly in recent years.  So exactly what in the world is going on here?

It seems like there is a health food store or a vitamin store on almost every corner, and yet as a whole we are in much worse condition than our parents were.  The following is from a recent news story by the CBS News affiliate in Washington D.C.….

Obesity among baby boomers is more than double the rate of their parents at the same age, and boomers with three or more chronic conditions was 700 percent greater than the previous generation.

But it isn’t just the Baby Boomers that are obese.  Sadly, obesity has become a raging epidemic in America and all of the numbers show this.

For example, a study by the RAND corporation discovered that the percentage of Americans that are severely obese rose from 3.9 percent in the year 2000 to 6.6 percent in 2010.

That is a huge increase in just a decade.

And the numbers are even more sobering when you look at the percentage of Americans that are just obese (rather than being severely obese).

As I wrote about the other day, 36 percent of all Americans are considered to be obese, and it is being projected that by 2030 that number will rise to 42 percent.

To put that in perspective, it is important to note that only 13 percent of all Americans were obese back in 1962.

Sadly, not only are we getting fatter, many of us are also living shorter lives.

In a previous article, I quoted a CBS News story that discussed recent research which shows that the lifespans of poor Americans have been dropping rapidly in recent years….

Overall life expectancy has dropped for white Americans who have less than a high school diploma to rates similar to those of the 1950s and 1960s, new research finds.

The study found non-Hispanic white men without a diploma lived on average until 67.5 in 2008, three years less than they did in 1990. The drop in lifespan was even bigger for non-Hispanic white women with low education: They live five years shorter than 1990 rates, from 78 years old to just 73.5.

Why are people not living as long?

Well, our lifestyles certainly are not helping things.  The average American watches 28 hours of television every single week.  That is not conducive to a long and happy life.

But of course a lot of other factors are at play as well.

When you don’t have a lot of money, you can’t afford to eat healthy and you can’t afford to go see the doctor much.

Unfortunately, average Americans have steadily seen their incomes drop even as the cost of living has continued to go up.  The following is from a recent article posted on Investors.com….

Since 2009, the middle 20% of American households saw their average incomes drop 4%. In 2011 alone, they fell 1.7%. The poorest 20% have fared even worse under Obama, Census data show. Their incomes have dropped more than 7% since 2009, and are now lower than they’ve been at any time since 1985, after adjusting for inflation.

Median household income (adjusted for inflation) fell in 41 U.S. states between 2000 and 2011.

So which state saw the worst decline in median household income during that time period?

Would you be surprised to hear that it was Michigan?

Between 2000 and 2011, median household income in Michigan dropped by a whopping 18.9 percent.

I have written extensively about how Detroit is a perfect example of where most of the rest of the country is headed.  The manufacturing facilities are being torn down and Detroit has become a rotting shell of what it once was.

You can see 30 pictures of the ruins of Detroit right here, and you can view a great video of a homeless man giving a very creepy tour of Detroit’s abandoned Michigan Central Station right here.

So what part of the country do you think has done the best over the past decade?

If you guessed Washington D.C. you would be correct.

Median household income in Washington D.C. increased by 18.1 percent between 2000 and 2011.

Of course this “prosperity” for the D.C. area can be directly attributed to the explosion in the growth of the federal government.

Members of Congress and government workers are living the high life at your expense, and much of it is being done with borrowed money that we expect our children and our grandchildren to repay.

You would be absolutely shocked to learn what goes on at some of these federal agencies.  For example, the following was revealed by a former Social Security Administration employee recently in the Baltimore Sun….

It is not uncommon to see employees taking lunches lasting up to two hours. Often, a day at the office is nothing more than seeing people sleep at their desks or watch movies on their computers. With a few exceptions, employees with goals and expectations of some sort are nowhere to be found inside the walls of SSA.

I once saw an older employee take 10 smoke breaks in one afternoon and do absolutely no work when he was at his desk. He told me he was just waiting it out until he could get more retirement money. Several elderly individuals literally died right at their desks because they refused to retire. A lack of professionalism was obvious in the way the employees dressed and most apparently in their juvenile, non-professional language.

Would you like to have a job where you can sleep at your desk, take two hour lunches and watch movies on your computer all day?

If so, then working for the federal government might be for you.

Of course this does not happen at all federal agencies.  At some agencies the employees actually are very professional.  However, there are other agencies that are even worse than the Social Security Administration.

The sad truth is that what is wrong with our society is not limited to the White House and Congress.  They are simply a reflection of who we have become.  Our problems are very wide and very deep.

So why do you think Americans are getting poorer, fatter and sicker?

Please feel free to post a comment with your thoughts below….

25 Bitter And Painful Facts About The Coming Baby Boomer Retirement Crisis That Will Blow Your Mind

For decades we were warned that when the Baby Boomers started to retire that this country would be facing a retirement crisis of unprecedented magnitude.  Well, that day has arrived ladies and gentlemen.  Back on January 1st, the Baby Boomers began to retire and more than 10,000 of them will be retiring every single day for years to come.  Most of them have not saved up nearly enough money for retirement.  At the same time, private sector pension plans are failing all over the place, hundreds of state and local government pension plans from coast to coast are woefully underfunded, and the Social Security system is on the road to complete and total disaster.  A massive wave of humanity is hitting retirement age at a moment in history when the U.S. economy is coming apart at the seams.  We do not have the resources to keep the promises that we made to the Baby Boomers, and most of them have not made adequate preparations for retirement.  What we have is a gigantic mess on our hands, and millions of Baby Boomers are going to find retirement to be very bitter and very painful.

A lot of younger Americans just assume that Social Security is enough to take care of the needs of elderly Americans.  But that is just not the case.

Have you ever tried to live solely on a Social Security check?

It is not easy.  The truth is that those checks are just not that large.

The following comes directly from the Social Security Administration….

The average monthly Social Security benefit for a retired worker was about $1,177 at the beginning of 2011.

Could you live on less than 300 dollars a week?

And keep in mind that the $1,177 monthly figure is just an average.  Many receive a lot less than that.

In addition, Social Security benefits have been seriously squeezed by inflation in recent years.  The cost of food and other basics has risen briskly and Social Security benefits have not.

Today, many elderly Americans have to make a choice between buying food, heating their homes or buying medicine that they need.  They simply do not have enough money to do all of them.

It would have been nice if all of the Baby Boomers had been busy saving money for retirement all these years, but that just did not happen.  In fact, the Baby Boomers as a group are trillions of dollars short of what they need for retirement.

So why doesn’t the U.S. government step in to help them out?

Well, the reality of the situation is that the U.S. government is flat broke.  The federal government is now over 15 trillion dollars in debt.  During the Obama administration so far, the U.S. government has accumulated more new debt than it did from the time that George Washington took office to the time that Bill Clinton took office.

Lawmakers are already looking at ways to make the Social Security program less costly.  No, the federal government is not going to be riding to the rescue.

In fact, it will be a minor miracle if the Social Security program is able to survive until the end of this decade, and it will be a major miracle if the Social Security program is able to survive until 2030.

As for myself, I do not believe that I will ever see a single penny from Social Security, and many other working age Americans feel the same way.

Retirement is supposed to be a fun time, but sadly most Americans that are approaching retirement age are not going to have any “golden years” to look forward to.

Rather, millions of elderly Americans are going to find the years ahead absolutely agonizing as they struggle just to survive.

The following are 25 bitter and painful facts about the coming Baby Boomer retirement crisis that will blow your mind….

#1 According to the Employee Benefit Research Institute, 46 percent of all American workers have less than $10,000 saved for retirement, and 29 percent of all American workers have less than $1,000 saved for retirement.

#2 According to a recent poll conducted by Americans for Secure Retirement, 88 percent of all Americans are worried about “maintaining a comfortable standard of living in retirement”.  Last year, that figure was at 73 percent.

#3 A study conducted by Boston College’s Center for Retirement Research has found that American workers are $6.6 trillion short of what they need to retire comfortably.

#4 Today, one out of every six elderly Americans lives below the federal poverty line.

#5 On January 1st, 2011 the very first Baby Boomers started to retire.  For almost the next 20 years, more than 10,000 Baby Boomers will be retiring every single day.

#6 At the moment, only about 13 percent of all Americans are 65 years of age or older.  By 2030, that number will soar to 18 percent.

#7 Right now, there are somewhere around 40 million senior citizens.  By 2050 that number is projected to increase to 89 million.

#8 Back in 1991, half of all American workers planned to retire before they reached the age of 65.  Today, that number has declined to 23 percent.

#9 According to one recent survey, 74 percent of American workers expect to continue working once they are “retired”.

#10 According to a recent AARP survey of Baby Boomers, 40 percent of them plan to work “until they drop”.

#11 A poll conducted by CESI Debt Solutions found that 56 percent of American retirees still had outstanding debts when they retired.

#12 A study by a law professor at the University of Michigan found that Americans that are 55 years of age or older now account for 20 percent of all bankruptcies in the United States.  Back in 2001, they only accounted for 12 percent of all bankruptcies.

#13 Between 1991 and 2007 the number of Americans between the ages of 65 and 74 that filed for bankruptcy rose by a staggering 178 percent.

#14 What is causing most of these bankruptcies among the elderly?  The number one cause is medical bills.  According to a report published in The American Journal of Medicine, medical bills are a major factor in more than 60 percent of the personal bankruptcies in the United States.  Of those bankruptcies that were caused by medical bills, approximately 75 percent of them involved individuals that actually did have health insurance.

#15 Public retirement funds all over the United States are woefully underfunded.  For example, it has been reported that the $33.7 billion Illinois Teachers Retirement System is 61% underfunded and is on the verge of complete collapse.

#16 Most U.S. states have huge pension obligations which threaten to bankrupt them.  For example, pension consultant Girard Miller told California’s Little Hoover Commission that state and local government bodies in the state of California have $325 billion in combined unfunded pension liabilities.  When you break that down, it comes to $22,000 for every single working adult in the state of California.

#17 Robert Novy-Marx of the University of Chicago and Joshua D. Rauh of Northwestern’s Kellogg School of Management have calculated the combined pension liability for all 50 U.S. states.  What they found was that the 50 states are collectively facing $5.17 trillion in pension obligations, but they only have $1.94 trillion set aside in state pension funds.  That is a difference of 3.2 trillion dollars.  So where in the world is all of that extra money going to come from?

#18 According to the Congressional Budget Office, the Social Security system paid out more in benefits than it received in payroll taxes in 2010.  That was not supposed to happen until at least 2016.  Sadly, in the years ahead these “Social Security deficits” are scheduled to become absolutely nightmarish as hordes of Baby Boomers retire.

#19 In 1950, each retiree’s Social Security benefit was paid for by 16 U.S. workers.  According to new data from the U.S. Bureau of Labor Statistics, there are now only 1.75 full-time private sector workers for each person that is receiving Social Security benefits in the United States.

#20 The U.S. government now says that the Medicare trust fund will run out five years faster than they were projecting just last year.

#21 The total cost of just three federal government programs – the Department of Defense, Social Security and Medicare – exceeded the total amount of taxes brought in during fiscal 2010 by 10 billion dollars.  In the years ahead expenses related to Social Security and Medicare are projected to skyrocket dramatically.

#22 The Pension Benefit Guaranty Corporation is the agency of the federal government that pays monthly retirement benefits to hundreds of thousands of retirees that were covered under defined benefit pension plans that failed.  The retirement crisis has barely even begun and the PBGC is already dead broke.  The PBGC says that it ran a deficit of $26 billion during the fiscal year that just ended and that it will probably need a huge bailout from the federal government.

#23 According to a survey by careerbuilder.com, 36 percent of all Americans say that they don’t contribute anything at all to retirement savings.

#24 More than 30 percent of all investors in the United States that are currently in their sixties have more than 80 percent of their 401k plans invested in equities.  So what is going to happen to them if the stock market crashes?

#25 A survey taken earlier this year found that 20 percent of all U.S. workers admitted that they had postponed their planned retirement age at least once during the last 12 months.  Back in 2008, that number was only at 14 percent.

Our politicians should have addressed the retirement crisis decades ago before we got to the point of being in debt up to our eyeballs.

It is being projected that the U.S. national debt will hit 344% of GDP by the year 2050, and the Congressional Budget Office says that U.S. government debt held by the public will reach a staggering 716% of GDP by the year 2080.

Obviously those figures will never be reached because our financial system would totally collapse long before then.

So what do we do?

We have tens of millions of elderly Americans that are completely and totally dependent on Social Security and Medicare, but those programs also threaten to bankrupt us as a nation.

Anyone that believes that there is a “quick fix” to these issues is being naive.

The “supercommittee” was supposed to address this problem, but they failed so spectacularly that they have become a national joke.

Sadly, most of our politicians just keep kicking the can down the road.  They hope that somehow things will just magically “work out”.

Well, the truth is that things are not going to “work out”.  The poverty level among the elderly is going to continue to increase.  Pension plans all over this nation are going to continue to fail in staggering numbers.  Social Security and Medicare are going to bleed more red ink with each passing year.

Something should have been done about this problem a long, long time ago.

But it wasn’t.

This crisis was ignored, dealing with it was put off time after time and all the doomsayers were laughed at.

Now the crisis is here, and we are all going to pay the price.

21 Signs That The New Reality For Many Baby Boomers Will Be To Work As Wage Slaves Until They Drop Dead

All over America tonight, millions of elderly Americans are wondering if their money is going to run out before it is time for them to die.  Those that are now past retirement age are not going to be rioting in the streets, but that doesn’t mean that large numbers of them are not deeply suffering.  There are millions of elderly Americans that are leading lives of “quiet desperation” as they try to get by on meager fixed incomes.  Many are surviving on Ramen noodles, oatmeal, peanut butter or whatever other cheap food they can find in the stores.  There are some that are so short on cash that they will not turn on the heat in their homes until things get really desperate.  As health care costs soar, millions of elderly Americans find themselves deep in debt and facing huge medical bills that they cannot possibly pay.  A lot of older Americans would go back to work if they could, but jobs are scarce and very few companies seem to even want to consider hiring them.  Right now caring for all of the Americans that have already retired is turning out to be an overwhelming challenge, and things are about to get a whole lot worse.  On January 1st, 2011 the very first Baby Boomers turned 65.  A massive tsunami of retirees is coming, and America is not ready for it.

Sadly, most retirees have not adequately prepared for retirement.  For many, the recent economic downturn absolutely devastated their retirement plans.  Many were counting on the equity in their homes, but the recent housing crash crushed those dreams.  Others had their 401ks shredded by the stock market.

Meanwhile, corporate pension plans all across America are vastly underfunded.  Many state and local government pension programs are absolute disasters.  The federal government has already begun to pay out significantly more in Social Security benefits than they are taking in, and the years ahead are projected to be downright apocalyptic for the Social Security program.

So needless to say, things do not look good for the Baby Boomers that are now approaching retirement age.

The following are 21 signs that the new reality for many Baby Boomers will be to work as wage slaves until they drop dead….

#1 According to a shocking AARP survey of Baby Boomers that are still in the workforce, 40 percent of them plan to work “until they drop”.

#2 A recent survey of American workers that included all age groups found that 54 percent of them planned to keep working when they retire and 39 percent of them plan to either work past age 70 or never retire at all.

#3 A poll conducted by CESI Debt Solutions found that 56 percent of American retirees still had outstanding debts when they retired.

#4 A recent study by a law professor from the University of Michigan found that Americans that are 55 years of age or older now account for 20 percent of all bankruptcies in the United States.  Back in 2001, they only accounted for 12 percent of all bankruptcies.

#5 Between 1991 and 2007 the number of Americans between the ages of 65 and 74 that filed for bankruptcy rose by a staggering 178 percent.

#6 Most of the bankruptcies among the elderly are caused by our deeply corrupt health care system.  According to a report published in The American Journal of Medicine, medical bills are a major factor in more than 60 percent of the personal bankruptcies in the United States.  Of those bankruptcies that were caused by medical bills, approximately 75 percent of them involved individuals that actually did have health insurance.

#7 The U.S. government now says that the Medicare trust fund will run dry five years faster than they were projecting just last year.

#8 Starting on January 1st, 2011 the Baby Boomers began to hit retirement age.  From now on, every single day more than 10,000 Baby Boomers will reach the age of 65.  That is going to keep happening every single day for the next 19 years.

#9 Over 30 percent of all U.S. investors currently in their sixties have more than 80 percent of their 401k retirement plans invested in equities.  So what happens if the stock market crashes again?

#10 All over the United States predatory lenders are coldly and cruelly foreclosing on elderly homeowners.  You can read what one lender is doing to a 70-year-old woman and her terminally ill husband right here.

#11 Medical bills are absolutely devastating large number of elderly Americans right now.  Many are going to great lengths to try to pay their bills.  An elderly woman that lives in the Salem, Oregon area that is fighting terminal bone cancer tried to raise some money for her medical bills by holding a few garage sales on the weekends.  However, a neighbor ratted her out, and so now the police are shutting her garage sales down.

#12 Social Security’s disability program has already been pushed to the brink of insolvency and wave after wave of new applications continue to pour in.

#13 Approximately 3 out of every 4 Americans start claiming Social Security benefits the moment they are eligible at age 62.  Most are doing this out of necessity.  However, by claiming Social Security early they get locked in at a much lower amount than if they would have waited.

#14 According to the Congressional Budget Office, the Social Security system paid out more in benefits than it received in payroll taxes in 2010.  That was not supposed to happen until at least 2016.  Sadly, in the years ahead these “Social Security deficits” are scheduled to become absolutely nightmarish as hordes of Baby Boomers retire.

#15 In 1950, each retiree’s Social Security benefit was paid for by 16 U.S. workers.  In 2010, each retiree’s Social Security benefit was paid for by approximately 3.3 U.S. workers.  By 2025, it is projected that there will be approximately two U.S. workers for each retiree.  How in the world can the system possibly continue to function properly with numbers like that?

#16 According to a shocking U.S. government report, soaring interest costs on the U.S. national debt plus rapidly escalating spending on entitlement programs such as Social Security and Medicare will absorb approximately 92 cents of every single dollar of federal revenue by the year 2019.  That is before a single dollar is spent on anything else.

#17 Most states have huge pension liabilities that are woefully underfunded.  For example, pension consultant Girard Miller recently told California’s Little Hoover Commission that state and local government bodies in the state of California have $325 billion in combined unfunded pension liabilities.  When you break that down, it comes to $22,000 for every single working adult in the state of California.

#18 Robert Novy-Marx of the University of Chicago and Joshua D. Rauh of Northwestern’s Kellogg School of Management recently calculated the combined pension liability for all 50 U.S. states.  What they found was that the 50 states are collectively facing $5.17 trillion in pension obligations, but they only have $1.94 trillion set aside in state pension funds.  That is a difference of 3.2 trillion dollars.  So where in the world is all of that extra money going to come from?  Most of the states are already completely broke and on the verge of bankruptcy.

#19 According to one recent survey, 36 percent of Americans say that they don’t contribute anything at all to retirement savings.

#20 According to another recent survey, 24 percent of all U.S. workers say that they have postponed their planned retirement age at least once during the past year.

#21 Even though prices for necessities such as food and gas have been exploding, those receiving Social Security benefits have not received a cost of living increase for two years in a row.  Many elderly Americans that are living on fixed incomes are being squeezed like they have never been squeezed before.

There are millions of Americans out there that have done everything “right” all of their lives, but that now find the system letting them down in their golden years.

So how badly are some people hurting?  Well, a reader identified as “Anna44” recently shared with us what some of her family members have been going through in this economy….

My B-I-L was a dealership owner/manager who worked long hours over 38 years and had to close his doors when Saturn was dissolved. When his dealership went under, 72 others lost their job. That’s 72 families who took a hit. He lost his home, everything. A few of his former employees lost their homes as well eventually. They were not lazy or WORTHLESS. It took him a year and a half to finally find something, but now he lives in a hotel unable to qualify for a house or apartment. This is an educated man who competed nationwide for top dog and got it more then once. His biggest fault? He’s almost 60, young enough to need the work, but too old to be hired.

As for my husband- 26 years AF officer, handling millions & billions on International & National levels has just entered his 7th month of unemployment. Two tours abroad- lazy he is NOT. He doesn’t qualify for unemployment, nor is he counted because he gets a retirement check. He wants and needs to work- yet there is little out there. If he doesn’t find something soon, we too will lose the home we sunk every cent into after 20 years of saving for it!

These are Americans that should be getting ready to enjoy their golden years, but that are now fighting just to survive.

Today you will find a disturbingly large number of elderly Americans flipping burgers or welcoming people to Wal-Mart.  But most of them are not doing it because they are bored with retirement.  Rather, most of them are working as wage slaves because that is what they have to do in order to survive.

Sadly, there are a whole lot of companies out there that do not want to hire people that are past a certain age.  If you are older than 50, there are a lot of jobs that you should just basically forget about applying for.

Instead of valuing the experience and wisdom of our elders, our society openly makes fun of them and treats them as undesirables.

If you are afraid of getting old, you are not being irrational.  Getting old is indeed something to fear in this society.  We tend to treat elderly Americans like garbage.

Abuse of the elderly is rampant.  For example, a report from a couple of years ago found that 94 percent of all nursing homes in the United States had committed violations of federal health and safety standards.

As the U.S. economy continues to crumble, the way we treat the elderly is probably going to get even worse.

Right now there is tons of bad news about the economy, and another major economic downturn would put even more pressure on federal, state and local government budgets.

The truth is that there is simply no way that we can keep all of the financial promises that we have made to elderly Americans even if the most optimistic projections for our economy play out.

If the worst happens, we are going to see a lot more elderly Americans eating out of trash cans and freezing to death in their own homes.

The United States is facing a retirement crisis of unprecedented magnitude.  A comfortable, happy retirement is rapidly going to become a luxury that only the wealthy will enjoy.

For most of the rest of us, our golden years are going to mean a whole lot of pain and suffering.

That may not be pleasant to hear, but that is the truth.

Finca Bayano

Panama Relocation Tours




 

ProphecyHour

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