If nobody is working in one out of every five U.S. families, then how in the world can the unemployment rate be close to 5 percent as the Obama administration keeps insisting? The truth, of course, is that the U.S. economy is in far worse condition than we are being told. Last week, I discussed the fact that the Federal Reserve has found that 47 percent of all Americans would not be able to come up with $400 for an unexpected visit to the emergency room without borrowing it or selling something. But Barack Obama and his minions never bring up that number. Nor do they ever bring up the fact that 20 percent of all families in America are completely unemployed. The following comes directly from the Bureau of Labor Statistics…
In 2015, the share of families with an employed member was 80.3 percent, up by 0.2 percentage point from 2014. The likelihood of having an employed family member rose in 2015 for Black families (from 76.4 percent to 77.7 percent) and for Hispanic families (from 85.9 percent to 86.4 percent). The likelihood for White and Asian families showed little or no change (80.1 percent and 88.6 percent, respectively).
For purposes of this study, families “are classified either as married-couple families or as families maintained by women or men without spouses present” and they include households without children as well as children under the age of 18.
Digging into the numbers, we find that there were a total of 81,410,000 families in America during the 2015 calendar year.
Of that total, 16,060,000 families did not have a single member employed.
So that means that in 19.7 percent of all families in the United States, nobody has a job.
And of course there are lots more families that are “partially employed”. In other words, maybe the wife has a job but the husband does not.
So based on these numbers, it would appear to me that the true rate of unemployment in this country is vastly higher than 5 percent, and John Williams of shadowstats.com agrees with me. According to his calculations, the broadest measure of unemployment in the U.S. would actually be sitting at 22.9 percent if honest numbers were being used.
But let’s not just focus on where we are.
Let’s take a look at where we are going.
According to Challenger, Gray & Christmas, job cut announcements by big companies in the United States were up 32 percent during the first quarter of 2016 compared to the first quarter of 2015, and it appears that the job losses are going to continue to mount as we roll into the second quarter. For instance, late last week Intel announced that it is going to be laying off 12,000 workers…
As it navigates its path into the future, Intel, the 47-year-old corporation best known for making microprocessor chips that power personal computers, has announced significant changes to its business.
On Tuesday, Intel’s CEO Brian Krzanich said in a letter to employees that the company over the next year will cut its 107,300-person global workforce by 12,000 people, or 11 percent.
Those are good middle class jobs, and they are exactly the kind of jobs that we cannot afford to be losing.
Meanwhile, the “retail apocalypse” appears to be accelerating once again.
Bloomberg is reporting that teen clothing chain Aeropostale is preparing to file for bankruptcy. Aeropostale currently operates more than 800 stores across the nation, and it is unclear if any of them will be able to stay open as this process plays out. But of course it isn’t just Aeropostale that has gone bankrupt lately. Here are a few more examples of major retailers that have recently filed for bankruptcy…
April 16, 2016: Vestis Retail Group, the operator of sporting goods retailers Eastern Mountain Sports (camping, hiking, skiing, adventure sports), Bob’s Stores (family clothing and shoes), and Sport Chalet (general sporting goods), filed for Chapter 11 bankruptcy. It will close all 56 stores and stop online sales.
In the filing, it blamed the going-out-of-business sales at “certain Sports Authority locations,” plus the weather, which had been too warm, and trouble with switching to a new software platform. It’s owned by private equity firm Versa Capital Management LLC.
April 7, 2016: Pacific Sunwear of California, clothing retailer with nearly 600 stores and derailed ambitions of skate-and-surf cool, filed for Chapter 11 bankruptcy. PE firm Golden Gate Capital, a lender to the company, agreed to convert over 65% of its loan into equity of the reorganized company and add another $20 million in financing. Wells Fargo agreed to provide $100 million of debtor-in-possession financing.
March 2, 2016: Sports Authority filed for Chapter 11 bankruptcy. It said it would close 140 of its 450 stores, including all stores in Texas.
Just because the stock market has been doing well in recent weeks does not mean that the crisis has passed.
In fact, many experts believe that the crisis of 2016 is just getting started. Albert Edwards of Societe Generale is one of them…
But what I do know is when in the last few weeks I have heard that Janet Yellen sees no bubble in the US, when Ben Bernanke hones and restates his helicopter money speech, and when Mario Draghi says that the ECB’s policy of printing money and negative interest rates was working, I feel utterly depressed (I could also quote similar nonsense from Japan, the UK and China). I have not one scintilla of doubt that these central bankers will destroy the enfeebled world economy with their clumsy interventions and that political chaos will be the ugly result. The only people who will benefit are not investors, but anarchists who will embrace with delight the resulting chaos these policies will bring!
All over the world, the underlying economic fundamentals continue to deteriorate. Here in the U.S., retail sales have been extremely disappointing, total business sales have been steadily falling, corporate revenues and corporate profits continue to plunge, and corporate debt defaults have soared to their highest level since the last financial crisis.
All of these numbers are screaming that a major economic downturn is here, and with each passing week things look even more ominous for the second half of 2016.
*About the author: Michael Snyder is the founder and publisher of The Economic Collapse Blog. Michael’s controversial new book about Bible prophecy entitled “The Rapture Verdict” is available in paperback and for the Kindle on Amazon.com.*
If you had to make a sudden visit to the emergency room, would you have enough money to pay for it without selling something or borrowing the funds from somewhere? Most Americans may not realize this, but this is something that the Federal Reserve has actually been tracking for several years now. And according to the Fed, an astounding 47 percent of all Americans could not come up with $400 to pay for an emergency room visit without borrowing it or selling something. Various surveys that I have talked about in the past have found that more than 60 percent of all Americans are living to paycheck to paycheck, but I didn’t realize that things were quite this bad for about half the country. If you can’t even come up with $400 for an unexpected emergency room visit, then you are just surviving from month to month by the skin of your teeth. Unfortunately, about half of us are currently in that situation.
Earlier today someone pointed me toward an excellent article in The Atlantic that discussed this, and I have to admit that The Atlantic is one of the last remaining bastions of old school excellence in journalism that you will find in the mainstream media. Of course I don’t see eye to eye with them on a lot of things philosophically, but there are some really hard working journalists over there.
The article where I found the 47 percent figure comes from The Atlantic, and it is entitled “The Secret Shame of Middle-Class Americans“. It was authored by Neal Gabler, and he says that he can identify with the 47 percent of Americans that don’t have $400 for an unexpected emergency room visit because he is one of them…
I know what it is like to have to juggle creditors to make it through a week. I know what it is like to have to swallow my pride and constantly dun people to pay me so that I can pay others. I know what it is like to have liens slapped on me and to have my bank account levied by creditors. I know what it is like to be down to my last $5—literally—while I wait for a paycheck to arrive, and I know what it is like to subsist for days on a diet of eggs. I know what it is like to dread going to the mailbox, because there will always be new bills to pay but seldom a check with which to pay them. I know what it is like to have to tell my daughter that I didn’t know if I would be able to pay for her wedding; it all depended on whether something good happened. And I know what it is like to have to borrow money from my adult daughters because my wife and I ran out of heating oil.
To me, this is yet more evidence that the middle class in America is dying.
Last year, it was reported that middle class Americans make up a minority of the population for the very first time in our history.
But back in 1971, 61 percent of all Americans lived in middle class households.
So what happened?
Well, the big corporations started shipping millions of good paying manufacturing jobs overseas. Millions of other good paying jobs were replaced by technology, and the competition for the good jobs that remained became extremely intense.
During the good times, the U.S. economy still created new jobs, but most of those jobs were low paying service jobs.
At this point, a majority of American workers have jobs that would be considered low paying. In fact, 51 percent of all American workers make less than $30,000 a year according to the Social Security Administration.
And once you account for inflation, the truth is that our incomes have been going down for years. According to a study that was released by Pew Charitable Trusts, median household income in the United States decreased by 13 percent between 2004 and 2014.
That isn’t “progress” any way that you slice it.
If you go all the way back to 1970, the middle class took home approximately 62 percent of all income in the United States.
Today, that number has fallen to just 43 percent.
So the fact that 47 percent of Americans can’t even pay for an unexpected emergency room visit is not exactly a surprise. To be honest, a whole host of other surveys have come up with similar numbers. Here is more from Neal Gabler…
A 2014 Bankrate survey, echoing the Fed’s data, found that only 38 percent of Americans would cover a $1,000 emergency-room visit or $500 car repair with money they’d saved. Two reports published last year by the Pew Charitable Trusts found, respectively, that 55 percent of households didn’t have enough liquid savings to replace a month’s worth of lost income, and that of the 56 percent of people who said they’d worried about their finances in the previous year, 71 percent were concerned about having enough money to cover everyday expenses.
What all of these numbers tell us is that the middle class is disappearing. I tend to compare it to a game of really bizarre musical chairs. With each passing month more chairs are being pulled out of the circle, and those members of the middle class that haven’t fallen into poverty yet are just hoping that a chair will still be there for them when the music stops.
Even during the “Obama recovery”, we have seen poverty in America absolutely explode. In fact, some brand new numbers just came out that are quite startling. The following comes from another author for The Atlantic named Gillian B. White…
Recently, the Brookings Institution published a report looking at the same idea but giving it a different name. The paper, builds on research from the British economist William Beveridge, who in 1942 proposed five types of poverty: squalor, ignorance, want, idleness, and disease. In modern terms, these could be defined as poverty related to housing, education, income, employment, and healthcare, respectively. Analyzing the 2014 American Community Survey, the paper’s co-authors, Richard Reeves, Edward Rodrigue, and Elizabeth Kneebone, found that half of Americans experience at least one of these types of poverty, and around 25 percent suffer from at least two.
To underscore this point, let me just run five quick facts about the growth of poverty in this country by you…
–The number of Americans that are living in concentrated areas of high poverty has doubled since the year 2000.
–In 2007, about one out of every eight children in America was on food stamps. Today, that number is one out of every five.
–46 million Americans use food banks each year, and lines start forming at some U.S. food banks as early as 6:30 in the morning because people want to get something before the food supplies run out.
–The number of homeless children in the U.S. has increased by 60 percent over the past six years.
–According to Poverty USA, 1.6 million American children slept in a homeless shelter or some other form of emergency housing last year.
That last number really gets me every time.
How can “the wealthiest and most powerful nation on the planet” have more than a million homeless children?
This is one of the reasons why I hammer on our ongoing economic collapse over and over and over. It is affecting real families with real children that have real hopes and real dreams.
This is not the way our country is supposed to work.
It is supposed to be “the land of opportunity”.
It is supposed to be a place where anyone can live “the American Dream”.
But instead it has become an economic wasteland where the largest and most prosperous middle class in the history of the world is being systematically eviscerated.
So no, the U.S. economy is not doing “just fine” – anyone that tries to tell you that lie is simply peddling fiction.
*About the author: Michael Snyder is the founder and publisher of The Economic Collapse Blog. Michael’s controversial new book about Bible prophecy entitled “The Rapture Verdict” is available in paperback and for the Kindle on Amazon.com.*
Over the past decade, there has been only one other time when the value of the U.S. dollar has increased by so much in such a short period of time. That was in mid-2008 – just before the greatest financial crash since the Great Depression. A surging U.S. dollar also greatly contributed to the Latin American debt crisis of the early 1980s and the Asian financial crisis of 1997. Today, the globe is more interconnected than ever. Most global trade is conducted in U.S. dollars, and much of the borrowing done by emerging markets all over the planet is denominated in U.S. dollars. When the U.S. dollar goes up dramatically, this can put a tremendous amount of financial stress on economies all around the world. It also has the potential to greatly threaten the stability of the 65 trillion dollars in derivatives that are directly tied to the value of the U.S. dollar. The global financial system is more vulnerable to currency movements than ever before, and history tells us that when the U.S. dollar soars the global economy tends to experience a contraction. So the fact that the U.S. dollar has been skyrocketing lately is a very, very bad sign.
Most of the people that write about the coming economic collapse love to talk about the coming collapse of the U.S. dollar as well.
But in the initial deflationary stage of the coming financial crisis, we are likely to see the U.S. dollar actually strengthen considerably.
As I have discussed so many times before, we are going to experience deflation first, and after that deflationary phase the desperate responses by the Federal Reserve and the U.S. government to that deflation will cause the inflationary panic that so many have written about.
Yes, someday the U.S. dollar will essentially be toilet paper. But that is not in our immediate future. What is in our immediate future is a “flight to safety” that will push the surging U.S. dollar even higher.
This is what we witnessed in 2008, and this is happening once again right now.
Just look at the chart that I have posted below. You can see the the U.S. dollar moved upward dramatically relative to other currencies starting in mid-2008. And toward the end of the chart you can see that the U.S. dollar is now experiencing a similar spike…
At the moment, almost every major currency in the world is falling relative to the U.S. dollar.
For example, this next chart shows what the euro is doing relative to the dollar. As you can see, the euro is in the midst of a stunning decline…
Instead of focusing on the U.S. dollar, those that are looking for a harbinger of the coming financial crisis should be watching the euro. As I discussed yesterday, analysts are telling us that if Greece leaves the eurozone the EUR/USD could fall all the way down to 0.90. If that happens, the chart above will soon resemble a waterfall.
And of course it isn’t just the euro that is plummeting. The yen has been crashing as well. The following chart was recently posted on the Crux…
Unfortunately, most Americans have absolutely no idea how important all of this is. In recent years, growing economies all over the world have borrowed gigantic piles of very cheap U.S. dollars. But now they are faced with the prospect of repaying those debts and making interest payments using much more expensive U.S. dollars.
Investors are starting to get nervous. At one time, investors couldn’t wait to pour money into emerging markets, but now this process is beginning to reverse. If this turns into a panic, we are going to have one giant financial mess on our hands.
The truth is that the value of the U.S. dollar is of great importance to every nation on the face of the Earth. The following comes from U.S. News & World Report…
In the early ’80s, a bullish U.S. dollar contributed to the Latin American debt crisis, and also impacted the Asian Tiger crisis in the late ’90s. Emerging markets typically have higher growth, but carry much higher risk to investors. When the economies are doing well, foreign investors will lend money to emerging market countries by purchasing their bonds.
They also deposit money in foreign banks, which facilitates higher lending. The reason for this is simple: Bond payments and interest rates in emerging markets are much higher than in the U.S. Why deposit cash in the U.S. and earn 0.25 percent, when you could earn 6 percent in Indonesia? With the dollar strengthening, the interest payments on any bond denominated in U.S. dollars becomes more expensive.
Additionally, the deposit in the Indonesian bank may still be earning 6 percent, but that is on Indonesian rupiahs. After converting the rupiahs to U.S. dollars, the extra interest doesn’t offset the loss from the exchange. As investors get nervous, the higher interest on emerging market debt and deposits becomes less alluring, and they flee to safety. It may start slowly, but history tells us it can quickly spiral out of control.
Over the past few months, I have been repeatedly stressing that so many of the signs that we witnessed just prior to previous financial crashes are happening again.
Now you can add the skyrocketing U.S. dollar to that list.
If you have not seen my previous articles where I have discussed these things, here are some places to get started…
“Guess What Happened The Last Time The Price Of Oil Crashed Like This?…”
“Not Just Oil: Guess What Happened The Last Time Commodity Prices Crashed Like This?…”
“10 Key Events That Preceded The Last Financial Crisis That Are Happening Again RIGHT NOW”
The warnings signs are really starting to pile up.
When we look back at past financial crashes, there are recognizable patterns that can be identified.
Anyone with half a brain should be able to see that a large number of those patterns are unfolding once again right before our eyes.
Unfortunately, most people in this world end up believing exactly what they want to believe.
No matter how much evidence you show them, they will not accept the truth until it is too late.
Did you know that the number of Americans on welfare is higher than the number of Americans that have full-time jobs? Did you know that 1.2 million public school students in the U.S. are currently homeless? Anyone that uses the term “economic recovery” to describe what is happening in the United States today is being deeply insulting to the nearly 150 million Americans that are considered to be either “poor” or “low income” at this point. Yes, things are great in New York City, Washington D.C. and San Francisco, but almost everywhere else economic conditions continue to steadily get worse. The gap between the wealthy and the poor is at a level that America has never seen before, and this is beginning to create a “Robin Hood mentality” that could cause a tremendous amount of social chaos in the years ahead. Anger at the “haves” in America continues to rise at a very alarming pace, and the “have nots” are becoming increasingly desperate. At some point all of this anger is going to boil over, and you won’t want to be anywhere around major population centers when that happens. Despite unprecedented borrowing by the federal government in recent years, and despite unprecedented money printing by the Federal Reserve, poverty in the United States keeps getting worse with each passing year. The following are 29 incredible facts which prove that poverty in America is absolutely exploding…
1. What can you say about a nation that has more people getting handouts from the federal government than working full-time? According to the latest numbers from the U.S. Census Bureau, the number of people receiving means-tested welfare benefits is greater than the number of full-time workers in the United States.
2. New numbers have just been released, and they show that the number of public school students in this country that are homeless is at an all-time record high. It is hard to believe, but right now 1.2 million students that attend public schools in America are homeless. That number has risen by 72 percent since the start of the last recession.
3. When I was growing up, it seemed like almost everyone was from a middle class home. But now that has all changed. One recent study discovered that nearly half of all public students in the United States come from low income homes.
4. How can anyone deny that we are a socialist nation when half the people are getting money from the federal government each month? According to the most recent numbers from the U.S. Census Bureau, 49.2 percent of all Americans are receiving benefits from at least one government program.
5. Signs of increasing poverty are even showing up in the wealthiest areas of the nation. According to the New York Post, New York subways are being “overrun with homeless“.
6. According to the U.S. Census Bureau, approximately one out of every six Americans is now living in poverty. The number of Americans living in poverty is now at a level not seen since the 1960s.
7. The gap between the rich and the poor in the United States is at an all-time record high. The wealthy may not consider this to be much of a problem, but those at the other end of the spectrum are very aware of this.
8. The “working poor” is one of the fastest growing segments of the U.S. population. At this point, approximately one out of every four part-time workers in America is living below the poverty line.
9. According to numbers provided by Wal-Mart, more than half of their hourly workers make less than $25,000 a year.
10. A recent Businessweek article mentioned a study that discovered that 300 employees at one Wal-Mart in Wisconsin receive a combined total of nearly a million dollars a year in public assistance…
“A decent wage is their demand—a livable wage, of all things,” said Representative George Miller (D-Calif.). The problem with companies like Wal-Mart is their “unwillingness, not their inability, to pay that wage,” he said. “They hand off the difference to taxpayers.” Miller was referring to a congressional report (PDF) released in May that calculated how much Walmart workers rely on public assistance. The study found that the 300 employees at one Supercenter in Wisconsin required some $900,000 worth of public assistance a year.
11. The stock market may be doing great (for the moment), but incomes for average Americans continue to decline. In fact, median household income in the United States has fallen for five years in a row.
12. The quality of the jobs in America has been steadily dropping for years. At this point, one out of every four American workers has a job that pays $10 an hour or less.
13. According to a Gallup poll that was recently released, 20.0% of all Americans did not have enough money to buy food that they or their families needed at some point over the past year. That is just under the record of 20.4% that was set back in November 2008.
14. Young adults are particularly feeling the sting of poverty these days. American families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.
15. As I wrote about a few weeks ago, one out of every five households in the United States is on food stamps. Back in the 1970s, about one out of every 50 Americans was on food stamps.
16. The number of Americans on food stamps now exceeds the entire population of Spain.
17. According to one calculation, the number of Americans on food stamps now exceeds the combined populations of “Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming.”
18. We are told that we live in the “wealthiest nation” on the planet, and yet more than one out of every four children in the United States is enrolled in the food stamp program.
19. The average food stamp benefit breaks down to approximately $4 per person per day.
20. It is being projected that approximately 50 percent of all U.S. children will be on food stamps before they reach the age of 18.
21. Today, approximately 17 million children in the United States are facing food insecurity. In other words, that means that “one in four children in the country is living without consistent access to enough nutritious food to live a healthy life.”
22. It may be hard to believe, but approximately 57 percent of all children in the United States are currently living in homes that are considered to be either “low income” or impoverished.
23. The number of children living on $2.00 a day or less in the United States has grown to 2.8 million. That number has increased by 130 percent since 1996.
24. In Miami, 45 percent of all children are living in poverty.
25. In Cleveland, more than 50 percent of all children are living in poverty.
26. According to a recently released report, 60 percent of all children in the city of Detroit are living in poverty.
27. According to a Feeding America hunger study, more than 37 million Americans are now being served by food pantries and soup kitchens.
28. The U.S. government has spent an astounding 3.7 trillion dollars on welfare programs over the past five years.
29. It has been reported that 4 out of every 5 adults in the United States “struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives”.
These poverty numbers keep getting worse year after year no matter what our politicians do.
So is there anyone out there that would still like to argue that we are in an “economic recovery”?
And as I mentioned above, the “have nots” are becoming increasingly angry at the “haves”. For example, just check out the following excerpt from a recent New York Post article…
The maniac who butchered a Brooklyn mom and her four young kids confessed that he did it because he was jealous of their way of life, a police source told The Post on Sunday.
“The family had too much. Their income (and) lifestyle was better than his,” the source said.
The bloody suspect was caught holding the kitchen knife he used during the Saturday night rampage inside the Sunset Park apartment where he had been staying with the victims, the source added.
Sadly, this was not an isolated incident. All over the western world, a “Robin Hood mentality” is growing. This is something that I am so concerned about that I made it a big part of my new book. At this point, even wealthy Hollywood-types such as actor Russell Brand are calling for a socialist-style “revolution” and a “massive redistribution of wealth“.
Perhaps Brand does not understand that what he is calling for would mean redistributing most of his own wealth away from him.
When the next major wave of the economic collapse strikes, I fear that all of this anger and frustration that are growing among the poor will boil over in some very frightening ways. I believe that we will see a huge spike in crime and that we will eventually see communities all over America looted and burning.
But I am not the only one that is thinking along these lines. A new National Geographic Channel movie entitled “American Blackout” attempts to portray the social chaos that could erupt in the event of an extended national power failure…
American Blackout, National Geographic Channel’s two-hour, edge-of-your-seat movie event imagines the story of a national power failure in the United States caused by a cyberattack — told in real time, over 10 days, by those who kept filming on cameras and phones. You’ll learn what it means to be absolutely powerless.
You can view a clip of the film that was made available by NatGeo for the SHTFplan.com community right here.
What would you do if something like that happened to you?
How would you handle desperate, hungry people at your fence asking for food?
And what if those people were armed and were not “asking nicely” for your food?
Don’t ignore what is happening in America right now. It is setting the stage for some very chaotic times.
Get ready while you still can.
If the economy is getting better, then why do incomes keep falling? According to a shocking new report that was just released by the U.S. Census Bureau, median household income (adjusted for inflation) has declined for five years in a row. This has happened even though the federal government has been borrowing and spending money at an unprecedented rate and the Federal Reserve has been on the most reckless money printing spree in U.S. history. Despite all of the “emergency measures” that have been taken to “stimulate the economy”, things just continue to get worse for average American families. Americans are working harder than ever, but their paychecks are not reflecting that. Meanwhile, the cost of everything just keeps going up. The Federal Reserve insists that inflation is “low”, but anyone that goes grocery shopping or that stops at a gas station knows that is a lie. In fact, if inflation was calculated the exact same way that it was calculated back in 1980, the inflation rate would be somewhere between 8 and 10 percent right now. Paychecks are being stretched more than ever before, and that is probably the reason why about three-fourths of the entire country is living paycheck to paycheck at this point.
According to the Census report, the high point for median household income in the United States was back in 1999 ($56,080). It almost got back to that level in 2007 ($55,627), but ever since then there has been a steady decline. The following figures come directly from the report, and as you can see, median household income has fallen every single year for the past five years…
How far does that number have to go down before we admit that we have a major problem on our hands?
The new Census report also revealed that 46.5 million Americans are living in poverty. As CNSNews.com noted, this is far higher than when Barack Obama first entered the White House…
During the four years that marked President Barack Obama’s first term in office, the real median income of American households dropped by $2,627 and the number of people on poverty increased by approximately 6,667,000, according to data released today by the Census Bureau.
So why does Obama continue to insist that things are getting better?
Right now, one out of every five households in the United States is on food stamps.
One out of every five.
How bad does it have to get before we acknowledge that what we are doing economically is not working.
Will half of us eventually end up on food stamps?
In addition, the new Census report also says that 48 million Americans are currently without any kind of health insurance whatsoever.
The biggest culprit for this is the stunning decline of employment-based health insurance. Back in 1999, 64.1 percent of all Americans were covered by employment-based health insurance. Today, only 54.9 percent are covered by employment-based health insurance.
And of course as I noted yesterday, even more companies are going to be dumping health insurance plans because of Obamacare.
All in all, what we have been witnessing over the past decade and a half is the systematic evisceration of the middle class.
After accounting for inflation, right now 40 percent of all U.S. workers are making less than what a full-time minimum wage worker made back in 1968.
Over the years, our incomes have certainly gone up, but inflation has increased even faster.
Back when I was growing up, $50,000 a year sounded like a whole lot of money. I thought that anyone should be able to live a very comfortable lifestyle on that amount of money.
Unfortunately, $50,000 a year doesn’t go nearly as far as it once did.
If you take the current median household income ($51,017) and divide it up by 12 months, it comes to just a little bit more than $4000 a month.
And as I noted last year, it is not easy for the average American family to do everything that it needs to do on $4000 a month…
So can an average family of four people make it on just $4000 a month?
Well, first of all you have got to take out taxes. After accounting for all forms of taxation you will be lucky if you have $3000 remaining.
With that $3000, you have to pay for all of the following…
*At Least One Vehicle
*Home Or Rental Insurance
*Student Loan Debt Payments
*Credit Card Payments
*Entertainment (although it is hard to imagine any money will be left for that)
Have I left anything out?
The truth is that $3000 does not go as far as it used to.
No wonder American families are feeling so stretched financially these days.
The new Census report also noted that the gap between the wealthiest Americans and the rest of us continues to grow. There is certainly nothing wrong with making money, but if the economy was working properly all Americans should be able to have the opportunity to better themselves.
According to CNBC, the 400 wealthiest Americans now have more money than the poorest 50 percent of all Americans combined.
So why is this happening? Well, certainly there are a lot of reasons, but in recent years quantitative easing has definitely played a role. As I noted in my recent article about the Federal Reserve, quantitative easing has been incredibly good for those with stocks and other forms of financial investments. All of that liquidity has juiced the financial markets, and the extremely wealthy have been loving it.
Meanwhile, things just continue to get even tougher for most of the rest of the American people, and the frightening thing is that the next major wave of the economic collapse has not even hit us yet.
How bad will things be for average American families once that happens?
And there are certainly lots of troubling signs as we get ready to head into the fall season…
-Total mortgage activity has dropped to the lowest level that we have seen since October 2008.
-One of the largest furniture manufacturers in America was just forced into bankruptcy.
-According to the Wall Street Journal, the 2013 holiday shopping season is already being projected to be the worst that we have seen since 2009.
Hopefully the slow and steady economic decline that we have been experiencing will not accelerate into a full-blown avalanche any time soon.
But I would definitely get prepared just in case.
When you add maturing debt to the new debt that the federal government is accumulating, the total is quite eye catching. You see, the truth is that the U.S. government must not only borrow enough money to fund government spending for this year, it must also “roll over” existing debt that has reached maturity. Of course the government never actually pays any of that debt off. Instead, it essentially takes out new debts to cover the old ones. So the U.S. government is actually borrowing far more money each year than most Americans realize. For fiscal year 2013, the U.S. budget deficit will be about $845 billion, but on top of that the government will also have to borrow about 3 trillion dollars to pay off old debt that is maturing. Overall, the U.S. government will borrow close to 4 trillion dollars this year, and that number will likely be even higher next year. That is not going to cause a crisis as long as interest rates stay super low, but if interest rates begin to rise substantially, the game will change dramatically.
When the government borrows money, it has to pay it back someday. Back in the old days, the federal government used to issue lots of debt that would not mature for a very long time. But in recent years things have been very different…
In order to fund the government, the Treasury Department periodically auctions Treasury securities with various maturities ranging from 30-day Treasury bills to 30-year Treasury bonds, with 2-3-5-7-year and 10-year Treasury notes in between. It used to be that the bulk of Treasury borrowing was done in the longer-term instruments with maturities of at least 10 years.
In more recent years, however, this trend has shifted more toward shorter-term Treasury securities. There are pros and cons to both strategies. Generally speaking, the shorter maturities are considered more risky since short-term interest rates can vary frequently. Shorter-term maturities obviously have to be rolled over much more often. That raises the risk that there might not be enough buyers when the government needs them.
At this point, the average maturity of outstanding government debt is only 65 months, and only about 10 percent of all Treasury debt matures outside of a decade.
So what does that mean?
It means that the federal government must constantly roll over massive amounts of debt. Once again, this is not too much of a problem as long as interest rates stay super low, but as John Cochrane pointed out, if rates start rising back to “normal” levels things could get quite hairy very quickly…
Here’s the nightmare scenario: Suppose that four years from now, interest rates rise 5 percent, i.e. back to normal, and the US has $20 trillion outstanding. Interest costs alone will rise $1 trillion (5% of $20 trillion) – doubling already unsustainable deficits! This is what happened to Italy, Spain, and Portugal. Don’t think it can’t happen to us. It’s even more likely, because fear of inflation – which did not hit them, since they are on the Euro – can hit us.
Sadly, those running things appears to be quite clueless. For example, retiring U.S. Representative Michele Bachmann recently asked Federal Reserve Chairman Ben Bernanke why the national debt has remained frozen in place for 56 straight days even though we have been borrowing lots of money. Bernanke seemed to have no idea how to answer that question…
As Federal Reserve Chairman Ben Bernanke testified before the House Financial Services Committee Wednesday, Bachmann asked how there could be no increase reported in the total debt when the government is racking up about $4 billion a day in new debt.
“After nearly 10 years as the head of the Federal Reserve, Chairman Bernanke could not answer my question today in Financial Services Committee,” Bachmann told WND.
She wondered if there’s a political motive.
“I asked whether the Treasury Department was cooking the federal government’s books as it was reported that the Feds debt balance sheet remained at $16,699,396,000,000 for 56 days straight, presumably so the Treasury Department wouldn’t officially register that once again the Congress had exceeded its legal borrowing limits.”
For the moment, the federal government is able to recklessly borrow and spend money and investors are rewarding this behavior with super low interest rates.
Unfortunately, this state of affairs is completely and totally unsustainable. At some point global financial markets will begin to behave rationally, and when that happens it is going to mean a tremendous amount of pain for the United States.
Over the past decade, the U.S. government has added more than 11 trillion dollars to the national debt at a time when the U.S. economy has been steadily declining. Anyone that thinks that we can continue to pile up more debt like this indefinitely does not know what they are talking about.
The following are some more statistics about the U.S. national debt for you to consider…
-Back in 1980, the U.S. national debt was less than one trillion dollars. Today, it is rapidly approaching 17 trillion dollars.
–During Obama’s first term, the federal government accumulated more debt than it did under the first 42 U.S presidents combined.
–The U.S. national debt is now more than 23 times larger than it was when Jimmy Carter became president.
–If you started paying off just the new debt that the U.S. has accumulated during the Obama administration at the rate of one dollar per second, it would take more than 184,000 years to pay it off.
–If right this moment you went out and started spending one dollar every single second, it would take you more than 31,000 years to spend one trillion dollars.
–If you were alive when Jesus Christ was born and you spent one million dollars every single day since that point, you still would not have spent one trillion dollars by now.
–Some suggest that “taxing the rich” is the answer. Well, if Bill Gates gave every single penny of his entire fortune to the U.S. government, it would only cover the U.S. budget deficit for 15 days.
–If the federal government used GAAP accounting standards like publicly traded corporations do, the real federal budget deficit for 2011 would have been 5 trillion dollars instead of 1.3 trillion dollars.
–The United States already has more government debt per capita than Greece, Portugal, Italy, Ireland or Spain does.
–At this point, the United States government is responsible for more than a third of all the government debt in the entire world.
–The amount of U.S. government debt held by foreigners is about 5 times larger than it was just a decade ago.
–The U.S. national debt is now more than 37 times larger than it was when Richard Nixon took us off the gold standard.
–The U.S. national debt is now more than 5000 times larger than it was when the Federal Reserve was first created.
–Boston University economist Laurence Kotlikoff is warning that the U.S. government is facing a gigantic tsunami of unfunded liabilities in the coming years that we are counting on our children and our grandchildren to pay. Kotlikoff speaks of a “fiscal gap” which he defines as “the present value difference between projected future spending and revenue”. His calculations have led him to the conclusion that the federal government is facing a fiscal gap of 222 trillion dollars in the years ahead.
For the moment everything is fine because interest rates are incredibly low and the mockers in the “deficits don’t matter” fan club are having a field day.
But what is going to happen when interest rates return to rational levels?
How will the U.S. government be able to borrow the trillions of dollars that it needs to borrow every single year?
That is why it is so important to watch interest rates. When they start skyrocketing, big trouble is ahead.
This is no time to be complacent. Massive economic problems are erupting all over the globe, but most people seem to believe that everything is going to be just fine. In fact, a whole bunch of recent polls and surveys show that the American people are starting to feel much better about how the U.S. economy is performing. Unfortunately, the false prosperity that we are currently enjoying is not going to last much longer. Just look at what is happening in Europe. The eurozone is now in the midst of the longest recession that it has ever experienced. Just look at what is happening over in Asia. Economic growth in India is the lowest that it has been in a decade and the Japanese financial system is beginning to spin wildly out of control. One of the only places on the entire planet where serious economic problems have not already erupted is in the United States, and that is only because we have “kicked the can down the road” by recklessly printing money and by borrowing money at an unprecedented rate. Unfortunately, the “sugar high” produced by those foolish measures is starting to wear off. We are going to experience a massive amount of economic pain along with the rest of the world – it is just a matter of time.
But for the moment, there are a lot of skeptics out there.
For the moment, there are a lot of people that are declaring that the problems of the past have been fixed and that we are heading for incredibly bright economic times ahead.
Unfortunately, those people appear to be purposely ignoring the economic horror that is breaking out all over the globe.
The following are 18 signs that massive economic problems are erupting all over the planet…
#1 The eurozone is now in the midst of its longest recession ever. Economic activity in the eurozone has declined for six quarters in a row.
#2 Italy’s economy has now been contracting for seven quarters in a row.
#3 Industrial production in Italy has fallen for 15 months in a row. It has now fallen to its lowest level in about 25 years.
#4 The number of people that are considered to be “seriously deprived” in Italy has doubled over the past two years.
#5 Consumer confidence in France has just hit a new all-time low.
#6 The number of unemployed workers seeking a job in France has hit a brand new all-time record high. Many unemployed workers in France are utterly frustrated at this point…
“I’ve sent CVs everywhere, I come to the unemployment agency every day, for 3 or 4 hours to look for work as a truck driver and there’s never anything,” said 42-year old Djamel Sami, who has been unemployed for a year, leaving a job agency in Paris.
#7 Unemployment in the eurozone as a whole has just hit a brand new all-time record high of 12.2 percent.
#8 Youth unemployment continues to soar to unprecedented heights in Europe. The following is from an article that was recently posted on the website of the Guardian that detailed how bad things are getting in some of the worst countries…
In Greece, 62.5% of young people are out of work, in Spain it’s 56.4%, then Portugal with 42.5%, and then Italy with 40.5%.
#9 Youth unemployment is being partially blamed for the worst rioting that Sweden has seen in many years. The following is how the Daily Mail described the riots…
Sweden is reeling after a third night of rioting in largely run-down immigrant areas of the capital Stockholm.
In the last 48 hours violence has spread to at least ten suburbs with mobs of youths torching hundreds of cars and clashing with police.
It is Sweden’s worst disorder in years and has shocked the country and provoked a debate on how Sweden is coping with youth unemployment and an influx of immigrants.
#10 An astounding 10 percent of all banking deposits were pulled out of banks in Cyprus during the month of April alone.
#11 Economic growth in India is the slowest that it has been in an entire decade.
#12 Suddenly Australia is experiencing some tremendous economic challenges. The following quotes are from a recent Zero Hedge article…
-“We’re seeing a much sharper contraction in the Australian economy than we’d anticipated four or five months ago”. Coffey MD, John Douglas. The engineering group has seen its shares, which traded above $4 in 2007, hit 10c last week.
-“By 10am, the Fitness First gym in the city is packed full of brokers who’ve had a gutful of sitting at their desk doing nothing – salary cuts are starting and next it will be jobs” Perth broker
-“Oh mate, the funding market is dead. You are now seeing a few deeply discounted rights issues for those that are reaching desperate levels ….. liquidity has completely disappeared” Perth broker
#13 The financial system in Japan is beginning to spin wildly out of control. The Japanese stock market has now declined about 15 percent from the peak, and many believe that the yen will continue to get weaker and that interest rates in Japan will start to rise significantly.
#14 Global cash flow is declining at a rate not seen since the last recession. This indicates that we could be headed for a global credit crunch.
#15 Real wages continue to decline in the United States. Even though we are being told that the U.S. is experiencing an “economy recovery”, real weekly earnings have declined from $297.79 in 2010 to $295.49 in 2011 to $294.83 in 2012. (The preceding calculation is based on 1982-1984 dollars)
#16 Wall Street is buzzing about the fact that “the Hindenburg Omen” appeared at the end of last week. So exactly what is “the Hindenburg Omen”? The following are the criteria that are used to determine whether it has appeared or not…
1. The daily number of NYSE new 52 Week Highs and the daily number of new 52 Week Lows must both be greater than 2.2 percent of total NYSE issues traded that day.
2. The smaller of these numbers is greater than or equal to 69 (68.772 is 2.2% of 3126). This is not a rule but more like a checksum. This condition is a function of the 2.2% of the total issues.
3. That the NYSE 10 Week moving average is rising.
4. That the McClellan Oscillator ( a market breadth indicator used to evaluate the rate of money entering or leaving the market and interpretively indicate overbought or oversold conditions of the market)is negative on that same day.
5. That new 52 Week Highs cannot be more than twice the new 52 Week Lows (however it is fine for new 52 Week Lows to be more than double new 52 Week Highs).
When the Hindenburg Omen makes an appearance, it supposedly means that the U.S. stock market is likely to experience a serious decline within the next 40 days.
#17 As I wrote about the other day, the SentimenTrader Smart/Dumb Money Index is now the lowest that it has been in more than two years. That means that lots of “smart money” has been getting out of the market and lots of “dumb money” has been pouring in.
#18 Margin debt on the New York Stock Exchange has set a new all-time high. The following is from a recent Market Oracle article…
Margin debt—that’s the amount of money borrowed to purchase stocks—on the New York Stock Exchange (NYSE) reached its all-time high in April. Margin debt on the NYSE registered at $384.3 billion as the key stock indices hit new record-highs. (Source: New York Stock Exchange web site, last accessed May 29, 2013.) The highest margin debt ever reached prior to this was in July of 2007, when it stood just above $381.0 billion. At that time, just like today, the key stock indices were near their peaks and “buy now before it’s too late” was the prominent theme of the day
Whenever margin debt spikes like this, a stock market crash almost always follows. If you doubt this, just check out the chart in this article.
Wall Street has had a good couple of years, but it has been a “false prosperity” that has been pumped up by reckless money printing by the Federal Reserve. Just like all of the other stock market bubbles that we have seen in recent years, this one is going to burst too. And as Marc Faber recently pointed out, this bubble has been particularly beneficial to the wealthy…
The Fed has been flooding the system with money. The problem is the money doesn’t flow into the system evenly. It doesn’t increase economic activity and asset prices in concert. Instead, it creates dangerous excesses in countries and asset classes. Money-printing fueled the colossal stock-market bubble of 1999-2000, when the Nasdaq more than doubled, becoming disconnected from economic reality. It fueled the housing bubble, which burst in 2008, and the commodities bubble. Now money is flowing into the high-end asset market – things like stocks, bonds, art, wine, jewelry, and luxury real estate.
Money-printing boosts the economy of the people closest to the money flow. But it doesn’t help the worker in Detroit, or the vast majority of the middle class. It leads to a widening wealth gap. The majority loses, and the minority wins.
The fact that the U.S. stock market has set new all-time record high after new all-time record high in recent months means very little. At this point, the stock market has become completely divorced from economic reality. When this current bubble bursts, the adjustment is going to be very painful. Wall Street will likely whine and complain and ask for more bailouts, but they may find that authorities are not nearly as sympathetic this time.
Much of the rest of the world is already experiencing the next major wave of the economic collapse. Reckless money printing by the Fed and reckless borrowing and spending by the federal government may have delayed the inevitable in the United States for a little while, but those measures have also made our long-term problems even worse.
There was one piece of advice that Ben Bernanke included in his commencement speech to students at Princeton recently that I thought was particularly ironic…
“Don’t be afraid to let the drama play out.”
Will he take his own advice when the next great financial crisis strikes the United States?
That seems very unlikely.
Unfortunately, things are not going to be so easy to fix this next time.
What happened back in 2008 was just a preview.
What is coming next is going to absolutely shock the world.
How can anyone not see that the U.S. economy is collapsing all around us? It just astounds me when people try to tell me that “everything is just fine” and that “things are getting better” in America. Are there people out there that are really that blind? If you want to see the economic collapse, just open up your eyes and look around you. By almost every economic and financial measure, the U.S. economy has been steadily declining for many years. But most Americans are so tied into “the matrix” that they can only understand the cheerful propaganda that is endlessly being spoon-fed to them by the mainstream media. As I have said so many times, the economic collapse is not a single event. The economic collapse has been happening, it is is happening right now, and it will continue to happen. Yes, there will be times when our decline will be punctuated by moments of great crisis, but that will be the exception rather than the rule. A lot of people that write about “the economic collapse” hype it up as if it will be some huge “event” that will happen very rapidly and then once it is all over we will rebuild. Unfortunately, that is not how the real world works. We are living in the greatest debt bubble in the history of the world, and once it completely bursts there will be no going back to how things were before. Right now, we are living in a “credit card economy”. As long as we can keep borrowing more money, most people think that things are just fine. But anyone that has lived on credit cards knows that eventually there comes a point when the game is over, and we are rapidly approaching that point as a nation.
Have you ever been there? Have you ever desperately hoped that you could just get one more credit card or one more loan so that you could keep things going?
At first, living on credit can be a lot of fun. You can live a much higher standard of living than you otherwise would be able to.
But inevitably a day of reckoning comes.
If the federal government and the American people were forced at this moment to live within their means, the U.S. economy would immediately plunge into a depression.
That is a 100% rock solid guarantee.
But our politicians and the mainstream media continue to perpetuate the fiction that we can live in this credit card economic fantasy land indefinitely.
And most Americans could not care less about the future. As long as “things are good” today, they don’t really think much about what the future will hold.
As a result of our very foolish short-term thinking, we have now run up a national debt of 16.4 trillion dollars. It is the largest debt in the history of the world, and it has gotten more than 23 times larger since Jimmy Carter first entered the White House.
The chart that you see below is a recipe for national financial suicide…
Of course things have accelerated over the past four years. Since Barack Obama entered the White House, the U.S. government has run a budget deficit of well over a trillion dollars every single year, and we have stolen more than 100 million dollars from our children and our grandchildren every single hour of every single day.
It is the biggest theft of all time. What we are doing to our children and our grandchildren is beyond criminal.
And now our debt is at a level that most economists would consider terminal. When Barack Obama first entered the White House, the U.S. debt to GDP ratio was under 70 percent. Today, it is up to 103 percent.
We are officially in “the danger zone”.
If things really were “getting better” in America, we would not need to borrow so much money.
Our politicians are stealing from the future in order to make the present look better. During Obama’s first term, the federal government accumulated more debt than it did under the first 42 U.S presidents combined.
That is utter insanity!
If you started paying off just the new debt that the U.S. has accumulated during the Obama administration at the rate of one dollar per second, it would take more than 184,000 years to pay it off.
So what is the solution?
Get ready to laugh.
The most prominent economic journalist in the entire country, Paul Krugman of the New York Times, recently suggested the following in an article that he wrote entitled “Kick That Can“…
Realistically, we’re not going to resolve our long-run fiscal issues any time soon, which is O.K. — not ideal, but nothing terrible will happen if we don’t fix everything this year. Meanwhile, we face the imminent threat of severe economic damage from short-term spending cuts.
So we should avoid that damage by kicking the can down the road. It’s the responsible thing to do.
You mean that we might actually do damage to the debt-fueled economic fantasy world that we are living in if we stopped stealing so much money from future generations?
Oh the humanity!
It is horrifying to think that all that one of the “top economic minds” in America can come up with is to “kick the can” down the road some more.
Unfortunately, neither Paul Krugman nor most of the American people understand that our financial system is actually designed to create government debt.
The bankers that helped create the Federal Reserve intended to permanently enslave the U.S. government to a perpetually expanding spiral of debt, and their plans worked.
At this point, the U.S. national debt is more than 5000 times larger than it was when the Federal Reserve was first created.
So why don’t the American people understand what the Federal Reserve system is doing to us?
It is because most of them are still plugged into the matrix. A Zero Hedge article that I came across today put it beautifully…
US society in a nutshell: Chris Dorner has been around for a week and has 222 million results on Google; the Federal Reserve has been around for one hundred years and has 187 million results.
If nothing is done about our exploding debt, it is only a matter of time before we reach financial oblivion.
According to Boston University economist Laurence Kotlikoff, the U.S. government is facing a “present value difference between projected future spending and revenue” of 222 trillion dollars in the years ahead.
So how in the world are we going to come up with an extra 222 trillion dollars?
But it is not just the U.S. government that is drowning in debt.
Just check out this chart which shows the astounding growth of state and local government debt in recent years…
All over the United States there are state and local governments that are on the verge of bankruptcy. Just check out what is going on in Detroit. The only way that most of our state and local governments can keep going at this point is to also “kick the can” down the road some more.
And of course most of the rest of us are drowning in debt as well.
40 years ago, the total amount of debt in the U.S. economic system (government + business + consumer) was less than 2 trillion dollars.
Today, the total amount of debt in the U.S. economic system has grown to more than 55 trillion dollars.
Can anyone say bubble?
The good news is that U.S. GDP is now more than 12 times larger than it was 40 years ago.
The bad news is that the total amount of debt in our financial system is now more than 30 times larger than it was 40 years ago…
At the same time that we are going into so much debt, our ability to produce wealth continues to decline.
According to the World Bank, U.S. GDP accounted for 31.8 percent of all global economic activity in 2001. That number dropped to 21.6 percent in 2011. That is not just a decline – that is a nightmarish freefall. Just check out the chart in this article.
We are becoming less competitive as a nation with each passing year. In fact, the U.S. has fallen in the global economic competitiveness rankings compiled by the World Economic Forum for four years in a row.
Most Americans don’t understand this, but the United States buys far more from the rest of the world than they buy from us each year. In 2012, we had a trade deficit of more than 500 billion dollars with the rest of the world.
That means that more than 500 billion dollars that could have gone to U.S. workers and U.S. businesses went out of the country instead.
So how does our country survive if hundreds of billions of dollars more is flowing out of the country than is flowing into it?
Well, to make up the shortfall we go to the countries that we sent our money to and we beg them to lend it back to us. If that doesn’t work, we just print and borrow even more money.
Overall, the United States has run a trade deficit of more than 8 trillion dollars with the rest of the world since 1975.
That is 8 trillion dollars that could have saved U.S. businesses, paid the salaries of U.S. workers and that would have helped fund government.
But instead, our foolish policies have greatly enriched China and the oil barons of the Middle East.
Sadly, politicians from both political parties continue to boldly support the one world economic agenda of the global elite.
Just consider how destructive many of these “free trade” deals have been to our economy…
When NAFTA was pushed through Congress in 1993, the United States had a trade surplus with Mexico of 1.6 billion dollars.
By 2010, we had a trade deficit with Mexico of 61.6 billion dollars.
Back in 1985, our trade deficit with China was approximately 6 million dollars (million with a little “m”) for the entire year.
In 2012, our trade deficit with China was 315 billion dollars. That was the largest trade deficit that one nation has had with another nation in the history of the world.
In particular, our trade with China is extremely unbalanced. Today, U.S. consumers spend approximately 4 dollars on goods and services from China for every one dollar that Chinese consumers spend on goods and services from the United States.
But isn’t getting cheap stuff from China good?
No, because it costs us good paying jobs.
According to the Economic Policy Institute, the United States is losing half a million jobs to China every single year.
Overall, more than 56,000 manufacturing facilities in the United States have been shut down since 2001. During 2010, manufacturing facilities in the United States were shutting down at a rate of 23 per day. How can anyone say that “things are getting better” when our economic infrastructure is being absolutely gutted?
The truth is that there are never going to be enough jobs in America ever again, because millions of our jobs are being sent overseas and millions of our jobs are being lost to technology.
You won’t hear this on the news, but the percentage of the civilian labor force in the United States that is employed has been steadily declining every single year since 2006.
Younger workers have been hit particularly hard. In 2007, the unemployment rate for the 20 to 29 age bracket was about 6.5 percent. Today, the unemployment rate for that same age group is about 13 percent.
If you are under the age of 30 and you aren’t living with your parents, there is a really good chance that you are living in poverty. If you can believe it, U.S. families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.
Our economy has been steadily bleeding huge numbers of middle class jobs, and many of those jobs have been replaced by low paying jobs in recent years.
According to one study, 60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs.
And at this point, an astounding 53 percent of all American workers make less than $30,000 a year.
Oh, but “things are getting better”, right?
Maybe if you live on Wall Street or if you are an employee of the federal government.
But for most families this economic decline has been a total nightmare. Median household income in America has fallen for four consecutive years. Overall, it has declined by over $4000 during that time span.
Sometimes people forget how good things were about a decade ago. About three times as many new homes were sold in the United States in 2005 as were sold in 2012.
But we like to live in denial.
In fact, a lot of families are trying to keep up their standards of living by going into tremendous amounts of debt.
Back in 1983, the bottom 95 percent of all income earners in the United States had 62 cents of debt for every dollar that they earned. By 2007, that figure had soared to $1.48.
Fake it until you make it, right?
But how much debt can our system possibly handle?
Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago.
Total credit card debt in the United States is now more than 8 times larger than it was just 30 years ago.
We are a nation that is completely addicted to debt, but as the financial crisis of 2008 demonstrated, all of that debt can have horrific consequences.
As the economy has slowed in recent years, the Federal Reserve has decided that “the solution” is to recklessly print money in an attempt to get the debt spiral cranked up again.
Have they gone overboard? You be the judge…
And of course this won’t have any affect on the value of the money that you have been saving up all these years right?
Every single dollar that you own is continually losing value…
Overall, the value of the U.S. dollar has declined by more than 96 percent since the Federal Reserve was first created.
As the cost of living continues to go up and wages continue to go down, millions of American families have fallen out of the middle class and into poverty.
If you can believe it, the number of Americans on food stamps has grown from about 17 million in the year 2000 to more than 47 million today.
But “things are getting better”, right?
Incredibly, more than a million public school students in the United States are homeless. This is the first time that has ever happened in our history.
But “things are getting better”, right?
There are now 20.2 million Americans that spend more than half of their incomes on housing. That represents a 46 percent increase from 2001.
But “things are getting better”, right?
In 1999, 64.1 percent of all Americans were covered by employment-based health insurance. Today, only 55.1 percent are covered by employment-based health insurance.
But “things are getting better”, right?
Today, more Americans than ever have found themselves forced to turn to the federal government for help.
Overall, the federal government runs nearly 80 different “means-tested welfare programs”, and at this point more than 100 million Americans are enrolled in at least one of them.
According to the U.S. Census Bureau, 49 percent of all Americans live in a home that receives direct monetary benefits from the federal government. Back in 1983, less than a third of all Americans lived in a home that received direct monetary benefits from the federal government.
So is it a good sign or a bad sign that the percentage of Americans that are financially dependent on the federal government is at an all-time high?
And in future years the number of Americans that are receiving benefits from the federal government is projected to absolutely skyrocket.
Back in 1965, only one out of every 50 Americans was on Medicaid. Today, one out of every 6 Americans is on Medicaid, and things are about to get a whole lot worse. It is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.
If you take a look at Medicare, things are very more sobering.
As I wrote recently, 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.
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.
Are you ready to contribute your share?
Social Security is a complete and total nightmare as well.
Right now, there are approximately 56 million Americans collecting Social Security benefits.
By 2035, that number is projected to soar to an astounding 91 million.
Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.
Oh, but don’t worry because “things are getting better”, right?
I honestly do not know how anyone can look at the numbers above and come to the conclusion that the economy is in good shape.
We have accumulated the largest mountain of debt in the history of the world, our economic infrastructure is being gutted, we are bleeding good jobs, government dependence is at an all-time high and we are getting poorer as a nation with each passing day.
But other than that, everything is rainbows and lollipops, right?
If you want to see the economic collapse, just open up your eyes.
And if dramatic changes are not made quickly, things are going to get much, much worse from here.
Please share this article with as many people as possible. Time is quickly running out and there are a whole lot of people out there that we need to wake up while we still can.