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19 Signs That American Families Are Being Economically Destroyed

19 - Public DomainThe systematic destruction of the American way of life is happening all around us, and yet most people have no idea what is happening.  Once upon a time in America, if you were responsible and hard working you could get a good paying job that could support a middle class lifestyle for an entire family even if you only had a high school education.  Things weren’t perfect, but generally almost everyone in the entire country was able to take care of themselves without government assistance.  We worked hard, we played hard, and our seemingly boundless prosperity was the envy of the entire planet.  But over the past several decades things have completely changed.  We consumed far more wealth than we produced, we shipped millions of good paying jobs overseas, we piled up the biggest mountain of debt in the history of the world, and we kept electing politicians that had absolutely no concern for the long-term future of this nation whatsoever.  So now good jobs are in very short supply, we are drowning in an ocean of red ink, the middle class is rapidly shrinking and dependence on the government is at an all-time high.  Even as we stand at the precipice of the next great economic crisis, we continue to make the same mistakes.  In the end, all of us are going to pay a very great price for decades of incredibly foolish decisions.  Of course a tremendous amount of damage has already been done.  The numbers that I am about to share with you are staggering.  The following are 19 signs that American families are being economically destroyed…

#1 The poorest 40 percent of all Americans now spend more than 50 percent of their incomes just on food and housing.

#2 For those Americans that don’t own a home, 50 percent of them spend more than a third of their incomes just on rent.

#3 The price of school lunches has risen to the 3 dollar mark at many public schools across the nation.

#4 McDonald’s “Dollar Menu & More” now includes items that cost as much as 5 dollars.

#5 The price of ground beef has doubled since 2009.

#6 In 1986, child care expenses for families with employed mothers used up 6.3 percent of all income.  Today, that figure is up to 7.2 percent.

#7 Incomes fell for the bottom 80 percent of all income earners in the United States during the 12 months leading up to June 2014.

#8 At this point, more than 50 percent of all American workers bring home less than $30,000 a year in wages.

#9 After adjusting for inflation, median household income has fallen by nearly $5,000 since 2007.

#10 According to the New York Times, the “typical American household” is now worth 36 percent less than it was worth a decade ago.

#11 47 percent of all Americans do not put a single penny out of their paychecks into savings.

#12 One survey found that 62 percent of all Americans are currently living paycheck to paycheck.

#13 According to the U.S. Department of Education, 33 percent of all Americans with student loans are currently behind on their student loan debt repayments.

#14 According to one recent report, 43 million Americans currently have unpaid medical debt on their credit reports.

#15 The rate of homeownership in the U.S. has been declining for seven years in a row, and it is now the lowest that it has been in 20 years.

#16 For each of the past six years, more businesses have closed in the United States than have opened.  Prior to 2008, this had never happened before in all of U.S. history.

#17 According to the Census Bureau, 65 percent of all children in the United States are living in a home that receives some form of aid from the federal government.

#18 If you have no debt at all, and you also have 10 dollars in your wallet, that you are wealthier than 25 percent of all Americans.

#19 On top of everything else, the average American must work from January 1st to April 24th just to pay all federal, state and local taxes.

All of us know people that once were doing quite well but that are now just struggling to get by from month to month.

Perhaps this has happened to you.

If you have ever been in that position, you probably remember what it feels like to have people look down on you.  Unfortunately, in our society the value that we place on individuals has a tremendous amount to do with how much money they have.

So if you don’t have much money, there are a lot of people out there that will treat you like dirt.  The following excerpt comes from a Washington Post article entitled “The poor are treated like criminals everywhere, even at the grocery store“…

Want to see a look of pure hatred? Pull out an EBT card at the grocery store.

Now that my kids are grown and gone, my Social Security check is enough to keep me from qualifying for government food benefits. But I remember well when we did qualify for a monthly EBT deposit, a whopping $22 — and that was before Congress cut SNAP benefits in November 2013. Like 70 percent of people receiving SNAP benefits, I couldn’t feed my family on that amount. But I remember the comments from middle-class people, the assumptions about me and my disability and what the poor should and shouldn’t be spending money on.

Have you ever seen this?

Have you ever experienced this yourself?

These days, most people on food stamps are not in that situation because they want to be.  Rather, they are victims of our long-term economic collapse.

And this is just the beginning.  When the next major economic crisis strikes, the suffering in this country is going to go to unprecedented levels.

As we enter that time, we are going to need a whole lot more love and compassion than we are exhibiting right now.

As a nation, we have made decades of incredibly bad decisions.  As a result, we are experiencing bad consequences which are going to become increasingly more severe.

The numbers that I just shared with you are not good.  But over the next several years they are going to get a whole lot worse.

Everything that can be shaken will be shaken, and life in America is about to change in a major way.

 

When It Comes To ISIS, Obama Is Utterly Clueless

Barack Obama - FacebookThe most savage group of Islamic terrorists that any of us have ever seen has taken over large portions of Iraq, Syria and Libya.  As they go along, they are gleefully beheading, crucifying and torching innocent civilians.  They believe that they are living in the end times, and that they are part of a great Islamic army that will defeat “the forces of Rome” and bring about a glorious new age during which Islam rules the entire planet.  But Barack Obama and his minions absolutely refuse to use the words “Islam” or “Muslim” when discussing ISIS.  Instead, as you will see below, the Obama administration insists that the reason that ISIS exists is because of a lack of “job opportunities” in that area of the world.  If we could just find enough good jobs for the terrorists, apparently the entire problem of Islamic terror would just fade away according to them.  This kind of twisted politically correct thinking is going to be one of the things that leads to the downfall of this country.  Tens of thousands of crazed maniacs are not setting people on fire and beheading innocent civilians because they can’t find gainful employment.  Rather, the truth is that these radicals are obsessed with an apocalyptic version of Islam which dominates every moment of their lives.  If we deny why they are doing what they are doing because it does not fit with our view of how the world is supposed to work, then we are never going to have any hope of defeating this evil.  And without a doubt, ISIS is evil.

On Monday night, State Department Spokesperson Marie Harf appeared on the Chris Matthews Show.  What she had to say about the current situation in the Middle East during that television appearance shows how completely and utterly clueless the Obama administration is when it comes to ISIS…

“We’re killing a lot of them and we’re going to keep killing more of them,” Harf said. “So are the Egyptians, so are the Jordanians. They’re in this fight with us. But we cannot win this war by killing them. We cannot kill our way out of this war. We need in the medium to longer term to go after the root causes that leads people to join these groups, whether it’s lack of opportunity for jobs… We can work with countries around the world to help improve their governance. We can help them build their economies so they can have job opportunities for these people.

Really?

That is the best that our government can come up with?

What in the world is happening to this country?

These are religiously motivated killers that are absolutely obsessed with their Islamic beliefs.  To suggest otherwise is utter insanity.  But the White House has become so politically correct that it will not even use the words “Islam” or “Muslim” when talking about ISIS…

On the eve of a White House summit on “countering violent extremism” that has already drawn complaints from some Muslim groups, the administration in its response to the beheading of 21 Egyptian Copts has not mentioned the religious affiliation of either the killers or victims.

Absent from a 192-word statement from White House press secretary Josh Earnest condemning the brutal killings were the words “Christian,” “Coptic,” “Islam” or “Muslim.”

There was a single reference to “faith” – “ISIL’s barbarity knows no bounds. It is unconstrained by faith, sect, or ethnicity.”

These terrorists truly do seem to take great joy in slaughtering people.  For example, just today we learned that ISIS burned 45 people to death in one small Iraqi town

Militants from Islamic State have burned 45 people to death in the western Iraqi town of al-Baghdadi, according to the local police chief.

Col Qasim al-Obeidi said the motive was unknown but he believed some of the victims were members of the security forces.

He has pleaded for help from the government and international community and said the compound, which houses the families of security personnel and local officials, was now under attack.

It follows the capture of al-Baghdadi, near Ain al-Asad air base, by ISIS fighters last week.

With each passing day, ISIS grows even stronger and gains more ground.

In fact, the amount of territory that ISIS controls in Syria has doubled since the beginning of the airstrikes against them.

If ISIS continues to grow, someday they will conduct operations inside the United States.  And when they do, there will be no limits.  If they had the opportunity, they would kill virtually every man, woman and child in this nation.  That is how insane they are.

In order to understand ISIS, you have to understand what motivates them.  The following is an excerpt from a recent CNS News article

In The Atlantic magazine for March 2015, reporter Grame Wood wrote an extensive article on the Islamic State and noted,  “The reality is that the Islamic State is IslamicVery Islamic. Yes, it has attracted psychopaths and adventure seekers, drawn largely from the disaffected populations of the Middle East and Europe. But the religion preached by its most ardent followers derives from coherent and even learned interpretations of Islam.”

“Virtually every major decision and law promulgated by the Islamic State adheres to what it calls, in its press and pronouncements, and on its billboards, license plates, stationery, and coins, ‘the Prophetic methodology,’ which means following the prophecy and example of Muhammad, in punctilious detail,” said Wood.

In addition, as I noted above, the followers of ISIS consider themselves to be part of an end times Islamic army that will win the final battle against the forces that oppose Islam.  ISIS is publishing a magazine named “Dabiq” that describes their apocalyptic worldview very clearly

The name of the Dabiq magazine itself helps us understand ISIS’ worldview. The Syrian town of Dabiq is where the Prophet Mohammed is supposed to have predicted that the armies of Islam and “Rome” would meet for the final battle that will precede the end of time and the triumph of true Islam.

In the recent issue of Dabiq it states: “As the world progresses towards al-Malhamah al-Kubrā, (‘the Great Battle’ to be held at Dabiq) the option to stand on the sidelines as a mere observer is being lost.” In other words, in its logic, you are either on the side of ISIS or you are on the side of the Crusaders and infidels.

So how do you defeat such an enemy?

Needless to say, giving them “good jobs” is not going to solve anything.

Meanwhile, even though large amounts of the weapons that we have airdropped to the “Syrian rebels” have repeatedly fallen into the hands of ISIS, the Obama administration plans to send the Syrian rebels even more weapons.  In addition, he wants to give the “Syrian rebels” the ability to call in U.S. airstrikes

The Obama administration is preparing to equip the so-called “moderate” Syrian rebels with the ability to order U.S. air strikes despite the group’s admitted allegiance to the Islamic State.

The rebel groups will be provided with radios to call in strikes from American B-1B bombers as well as pickup trucks with mounted machine guns as the president puts the final touches on plans to train as many as 3,000 rebels in Jordan and Turkey by the end of 2015.

The planes will reportedly use similar munitions to those seen in Afghanistan, targeting anything from small vehicles to tanks with 500 and 2,000-pound guided bombs.

Aside from the Toyota Hi-Lux trucks, multiple groups of rebels will also be given mortars and possibly antitank weapons as well.

When I first read that the Obama administration wants to give the “Syrian rebels” the ability to order U.S. air strikes, I was absolutely dumbfounded.

How could anyone be so stupid?

When it comes to dealing with ISIS, it seems like Obama is almost constantly making the wrong moves.

In the end, our nation could pay a great price for his foolishness.

So what do you think about all of this?  Please feel free to share your thoughts by posting a comment below…

This Housing Chart Destroys The Arguments Of The Economic Optimists

Chart - Public DomainDid you know that the rate of homeownership in the United States has fallen to a 20 year low?  Did you know that it has been falling consistently for an entire decade?  For the past couple of years, the economic optimists have been telling us that the economy has been getting better.  Well, if the economy really has been getting better, why does the homeownership rate keep going down?  Yes, the ultra-wealthy have received a temporary financial windfall thanks to the reckless money printing the Federal Reserve has been doing, but for most Americans economic conditions have not been improving.  This is clearly demonstrated by the housing chart that I am about to share with you.  If the economy really was healthy, more people would be getting good jobs and thus would be able to buy homes.  But instead, the homeownership rate has continued to plummet throughout the entire “Obama recovery”.  I think that this chart speaks for itself…

Homeownership Rate 2015

Of course this homeownership collapse began well before Barack Obama entered the White House.  Our economic problems are the result of decades of incredibly bad decisions.  But anyone that believes that things have “turned around” for the middle class under Barack Obama is just being delusional.

If the U.S. economy truly was in “good shape”, the percentage of Americans that own homes would not be at a 20 year low

The U.S. homeownership rate fell to the lowest in more than two decades in the fourth quarter as many would-be buyers stayed on the sidelines, giving the rental market a boost.

The share of Americans who own their homes was 64 percent in the fourth quarter, down from 64.4 percent in the previous three months, the Census Bureau said in a report. The rate was at the lowest since the second quarter of 1994, data compiled by Bloomberg show.

Rising prices and a tight supply of lower-end listings have put homes out of reach for some entry-level buyers, who also face strict mortgage standards. The share of U.S. homebuyers making their first purchase dropped in 2014 to the lowest level in almost three decades, the National Association of Realtors reported last week.

And it appears that this trend is actually accelerating.  During 2014, the rate of homeownership plummeted by a total of 1.2 percentage points for the year.  That was the largest one year decline that has ever been measured.

So why is this happening?

Well, in order to buy a home you have got to have a good job, and good jobs are in very short supply these days.

Over the past decade, the quality of the jobs in our economy has steadily declined as good jobs have been replaced by low paying jobs.  In addition, government policies are absolutely murdering small business.  At this point, small business ownership in the U.S. is hovering near record lows.

This has resulted in millions of people falling out of the middle class, and it has contributed to the growing divide between the wealthy and the rest of the country.

If our economy was working the way that it should, the middle class would be thriving.

But instead, it is being systematically destroyed.  If you doubt this, I have some statistics that I would like to share with you.  The following facts come from my previous article entitled “The Death Of The American Dream In 22 Numbers“…

#1 The Obama administration tells us that 8.69 million Americans are “officially unemployed” and that 92.90 million Americans are considered to be “not in the labor force”.  That means that more than 101 million U.S. adults do not have a job right now.

#2 One recent survey discovered that 55 percent of Americans believe that the American Dream either never existed or that it no longer exists.

#3 Considering the fact that Obama is in the White House, it is somewhat surprising that 55 percent of all Republicans still believe in the American Dream, but only 33 percent of all Democrats do.

#4 After adjusting for inflation, median household income has fallen by nearly $5,000 since 2007.

#5 After adjusting for inflation, “the median wealth figure for middle-income families” fell from $78,000 in 1983 to $63,800 in 2013.

#6 At this point, 59 percent of Americans believe that “the American dream has become impossible for most people to achieve”.

You can read the rest of that article right here.

The group that has been hit the hardest by all of this has been young adults.

Back in 2005, the homeownership rate for households headed up by someone under the age of 35 was approximately 43 percent.

Today, it has declined to about 35 percent.

From a very early age, we push our young people to go to college, and today more of them are getting secondary education than ever before.

But when they leave school, the “good jobs” that we promised them are often not there, and most of them end up entering the “real world” already loaded down with massive amounts of debt.

According to the Pew Research Center, close to four out of every ten households that are led by someone under the age of 40 are currently paying off student loan debt.

It is hard to believe, but total student loan debt in this country is now actually higher than total credit card debt.  At this point, student loan debt has reached a grand total of 1.2 trillion dollars, and that number has grown by an astounding 84 percent just since 2008.

If you are already burdened with tens of thousands (or in some cases hundreds of thousands) of dollars of debt when you get out of school and you can’t find a decent job, there is no way that you are going to be able to afford to buy a house.

So we have millions upon millions of young people that should be buying homes and starting families that are living with their parents instead.

Back in 1968, well over 50 percent of all Americans in the 18 to 31-year-old age bracket were already married and living on their own.

But today, that number is actually below 25 percent.  Instead, approximately 31 percent of all U.S. adults in the 18 to 34-year-old age bracket are currently living with their parents.

Something has fundamentally gone wrong.

Our economy is broken, and anyone that cannot see this is just being foolish.

So what is the solution?

Please feel free to share what you think by posting a comment below…

Anyone That Believes That Collapsing Oil Prices Are Good For The Economy Is Crazy

Oil - Public DomainAre much lower oil prices good news for the U.S. economy?  Only if you like collapsing capital expenditures, rising unemployment and a potential financial implosion on Wall Street.  Yes, lower gasoline prices are good news for the middle class.  I certainly would rather pay two dollars for a gallon of gas than four dollars.  But in order to have money to fill up your vehicle you have got to have an income first.  And since the last recession, the energy sector has been the number one creator of good jobs in the U.S. economy by far.  Barack Obama loves to stand up and take credit for the fact that the employment picture in this country has been improving slightly, but without the energy industry boom, unemployment would be through the roof.  And now that the “energy boom” is rapidly becoming an “energy bust”, what will happen to the struggling U.S. economy as we head into 2015?

At the start of this article I mentioned that much lower oil prices would result in “collapsing capital expenditures”.

If you do not know what a “capital expenditure” is, the following is a definition that comes from Investopedia

“Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment. This type of outlay is made by companies to maintain or increase the scope of their operations. These expenditures can include everything from repairing a roof to building a brand new factory.”

Needless to say, this kind of spending is very good for an economy.  It builds infrastructure, it creates jobs and it is an investment in the future.

In recent years, energy companies have been pouring massive amounts of money into capital expenditures.  In fact, the energy sector currently accounts for about a third of all capital expenditures in the United States according to Deutsche Bank

US private investment spending is usually ~15% of US GDP or $2.8trn now. This investment consists of $1.6trn spent annually on equipment and software, $700bn on non-residential construction and a bit over $500bn on residential. Equipment and software is 35% technology and communications, 25-30% is industrial equipment for energy, utilities and agriculture, 15% is transportation equipment, with remaining 20-25% related to other industries or intangibles. Non-residential construction is 20% oil and gas producing structures and 30% is energy related in total. We estimate global investment spending is 20% of S&P EPS or 12% from US. The Energy sector is responsible for a third of S&P 500 capex.

These companies make these investments because they believe that there are big profits to be made.

Unfortunately, when the price of oil crashes those investments become unprofitable and capital expenditures start getting slashed almost immediately.

For example, the budget for 2015 at ConocoPhillips has already been reduced by 20 percent

ConocoPhillips is one of the bigger shale players. And its decision to slash its budget for next year by 20% is raising eyebrows. The company said the new target reflects lower spending on major projects as well as “unconventional plays.” Despite the expectation that others will follow, it doesn’t mean U.S. shale oil production is dead. Just don’t expect a surge in spending like in recent years.

And Reuters is reporting that the number of new well permits for the industry as a whole plunged by an astounding 40 percent during the month of November…

Plunging oil prices sparked a drop of almost 40 percent in new well permits issued across the United States in November, in a sudden pause in the growth of the U.S. shale oil and gas boom that started around 2007.

Data provided exclusively to Reuters on Tuesday by industry data firm Drilling Info Inc showed 4,520 new well permits were approved last month, down from 7,227 in October.

If the price of oil stays this low or continues dropping, this is just the beginning.

Meanwhile, the flow of good jobs that this industry has been producing is also likely to start drying up.

According to the Perryman Group, the energy sector currently supports 9.3 million permanent jobs in this country

According to a new study, investments in oil and gas exploration and production generate substantial economic gains, as well as other benefits such as increased energy independence. The Perryman Group estimates that the industry as a whole generates an economic stimulus of almost $1.2 trillion in gross product each year, as well as more than 9.3 million permanent jobs across the nation.

The ripple effects are everywhere. If you think about the role of oil in your life, it is not only the primary source of many of our fuels, but is also critical to our lubricants, chemicals, synthetic fibers, pharmaceuticals, plastics, and many other items we come into contact with every day. The industry supports almost 1.3 million jobs in manufacturing alone and is responsible for almost $1.2 trillion in annual gross domestic product. If you think about the law, accounting, and engineering firms that serve the industry, the pipe, drilling equipment, and other manufactured goods that it requires, and the large payrolls and their effects on consumer spending, you will begin to get a picture of the enormity of the industry.

And these are good paying jobs.  They aren’t eight dollar part-time jobs down at your local big box retailer.  These are jobs that comfortably support middle class families.  These are precisely the kinds of jobs that we cannot afford to lose.

In recent years, there has been a noticeable economic difference between areas of the country where energy is being produced and where energy is not being produced.

Since December 2007, a total of 1.36 million jobs have been gained in shale oil states.

Meanwhile, a total of 424,000 jobs have been lost in non-shale oil states.

So what happens now that the shale oil boom is turning into a bust?

That is a very good question.

Even more ominous is what an oil price collapse could mean for our financial system.

The last time the price of oil declined by more than 40 dollars in less than six months, there was a financial meltdown on Wall Street and we experienced the deepest recession that we have seen since the days of the Great Depression.

And now many fear that this collapse in the price of oil could trigger another financial panic.

According to Citigroup, the energy sector now accounts for 17 percent of the high yield bond market.

J.P. Morgan says that it is actually 18 percent.

In any event, the reality of the matter is that the health of these “junk bonds” is absolutely critical to our financial system.  And according to Deutsche Bank, if these bonds start defaulting it could “trigger a broader high-yield market default cycle”

Based on recent stress tests of subprime borrowers in the energy sector in the US produced by Deutsche Bank, should the price of US crude fall by a further 20pc to $60 per barrel, it could result in up to a 30pc default rate among B and CCC rated high-yield US borrowers in the industry. West Texas Intermediate crude is currently trading at multi-year lows of around $75 per barrel, down from $107 per barrel in June.

A shock of that magnitude could be sufficient to trigger a broader high-yield market default cycle, if materialized,” warn Deutsche strategists Oleg Melentyev and Daniel Sorid in their report.

If the price of oil stays at this level or continues to go down, it is inevitable that we will start to see some of these junk bonds go bad.

In fact, one Motley Fool article recently stated that one industry analyst believes that up to 40 percent of all energy junk bonds could eventually go into default…

The junk bonds, or noninvestment-rated bonds, of energy companies are also beginning to see heavy selling as investors start to worry that drillers could one day default on these bonds. Those defaults could get so bad, according to one analyst, that up to 40% of all energy junk bonds go into default over the next few years if oil prices don’t recover.

That would be a total nightmare for Wall Street.

And of course bond defaults would only be part of the equation.  As I wrote about the other day, a crash in junk bonds is almost always followed by a significant stock market correction.

In addition, plunging oil prices could end up absolutely destroying the banks that are holding enormous amounts of energy derivatives.  This is something that I recently covered in this article and this article.

As you read this, there are five “too big to fail” banks that each have more than 40 trillion dollars in exposure to derivatives.  Of course only a small fraction of that total exposure is made up of energy derivatives, but a small fraction of 40 trillion dollars is still a massive amount of money.

These derivatives trades are largely unregulated, and even Forbes admits that they are likely to be at the heart of the coming financial collapse…

No one understands the derivative risk positions of the Too Big To Fail Banks, JP Morgan Chase, Citigroup, Bank of America, Goldman Sachs or Morgan Stanley. There is presently no way to measure the risks involved in the leverage, quantity of collateral, or stability of counter-parties for these major institutions. To me personally they are big black holes capable of potential wrack and ruin. Without access to confidential internal data about these risky derivative positions the regulators cannot react in a timely and measured fashion to block the threat to financial stability, according to a National Bureau of Economic Research study.

So do we have any hope?

Yes, if oil prices start going back up, much of what you just read about can be averted.

Unfortunately, that does not seem likely any time soon.  Even though U.S. energy companies are cutting back on capital expenditures, most of them are still actually projecting an increase in production for 2015.  Here is one example from Bloomberg

Continental, the biggest holder of drilling rights in the Bakken, last month said 2015 output will grow between 23 percent and 29 percent even after shelving plans to allocate more money to exploration.

Higher levels of production will just drive the price of oil even lower.

At this point, Morgan Stanley is saying that the price of oil could plummet as low as $43 a barrel next year.

If that happens, it would be absolutely catastrophic to the most important industry in the United States.

In turn, that would be absolutely catastrophic for the economy as a whole.

So don’t let anyone tell you that much lower oil prices are “good” for the economy.

That is just a bunch of nonsense.

Job = Just Over Broke

Jobs - Public DomainIf you are fortunate enough to have a job in America today, the phrase “just over broke” probably describes you.  Yes, there are a handful of jobs that certainly pay very well, but most Americans that work for somebody else are just barely making it from month to month.  More than half of all working Americans are living paycheck to paycheck, and more than half of all working Americans make less than $30,000 a year.  That is an amazing statistic but it is actually true.  Once upon a time, anyone that was responsible and that was willing to work hard could get a good job in America.  But now those days are long gone.  Instead, we live at a time when good jobs are disappearing and when the middle class is getting smaller with each passing year.  In some homes, the husband and the wife are both working multiple jobs and they can still barely pay their bills.  Something has gone horribly wrong, and yet our leaders just keep telling us how wonderful our economy is.

One of the biggest things that has killed jobs in this country is the fact that the U.S. economy has been steadily merged into the emerging one world economic system over the past several decades.  They call it “free trade”, but they never told us that we would be merged into a single global labor pool where we would be competing directly for jobs with workers on the other side of the planet that live in nations where it is legal to pay slave labor wages.

According to Gallup, only about 1.3 billion people around the world work full-time for an employer at this point.

But overall there are more than 7 billion people.

That means that there are a whole lot of really poor, really desperate people that need to be employed.

This has been wonderful for the big corporations.  They can just take jobs away from American workers and give them to people who are willing to work for less than a tenth of what an American worker would make.  This has resulted in the systematic deindustrialization of the United States and horrific decline in dozens of formerly great manufacturing cities.

At the same time, we have also been losing millions of middle class jobs to technology.  At this point, robots are even starting to replace warehouse workers and fast food employees.  As robots become even more advanced and become even cheaper to produce, there will be less jobs available for the rest of us.

And what happens when robots can do everything better than us?

Because there are fewer middle class jobs available, the competition for the remaining jobs has become incredibly intense.  In recent years, millions of Americans have been forced to take just about anything that they can get.  For those Americans, “just over broke” has become “just trying to survive” as they scratch and claw their way through life.

A recent CNBC article profiled one such individual.  His name is Ken Bowman, and his job at a guitar shop just barely enables him to pay his rent and feed himself…

Ken Bowman joins the line for a free lunch in the Youngstown Salvation Army canteen, just like he does every Friday.

Looking younger than his 21 years, his hair dyed jet black and wearing big, battered boots, Bowman plays heavy metal on his cell phone. He chooses a seat at the end of a table and sits hunched over his tray, his blues eyes furtively sweeping the room. The others sit in packs, regulars who’ve formed lunchtime friendships over their burnt coffee and peppered corn, discussing the jobs they once had and the government benefits they no longer get.

Bowman is sensitive to the stigma of accepting handouts like lunch. “[It] doesn’t mean you’re homeless or poor, people have standards but they struggle,” he said, his chin jutting out, his eyes glowering.

After paying his rent, Bowman says his job in a guitar shop leaves him with $50 a month to live on — if he can get shifts. He is one of America’s “underemployed,” a group of as many as 11 million Americans struggling to survive in society’s shadows on wages that put them below the federal poverty line.

There are millions of others out there just like Bowman.  In fact, as I mentioned in a previous article, one out of every four part-time workers in America is living below the poverty line.  The “working poor” is a phrase that describes a very large segment of the U.S. population today.

And the cold, hard truth of the matter is that most of the country is steadily getting poorer.  According to a study recently discussed in the New York Times, the “typical American household” is now worth 36 percent less than it was worth a decade ago.  That is a staggering decline in just ten years.

Meanwhile, the cost of living continues to rise.  This is something that I have discussed repeatedly, but sometimes a picture can say things far better than any words can.

The photo posted below has been floating around on Twitter.  It is of a McDonald’s menu from the 1960s.  As you can see, prices have gone up a little bit since then…

Inflation - McDonald's

Most people think that I am crazy when I tell them that I can remember a cup of coffee being sold for a quarter when I was young.  But it is true.  Over the long-term, our purchasing power has been systematically destroyed by the insane polices of the Federal Reserve.

Sadly, most Americans don’t understand any of this.  They just trust that our leaders actually know what they are doing.  Meanwhile, they just keep on struggling to survive in an economic system that is stacked against them.

According to one recent study, 40 percent of all households in the United States are experiencing financial stress right now and the homeownership rate for Americans under the age of 35 is at an all-time low.

In the old days, if you got your education, worked hard and did all the right things, it was just about an automatic ticket to the middle class.

Today it doesn’t work like that.

Instead, more Americans than ever are being forced to become dependent on the government.  If you can believe it, Americans received more than 2 trillion dollars in benefits from the federal government last year alone.

So it astounds me whenever I hear anyone say that the economy is in “good shape”.

How can it be in “good shape” when one out of every three adults in the United States has an unpaid debt that is “in collections” and there are 49 million Americans that are dealing with food insecurity?

The truth is that we are in the midst of a long-term economic decline that is the result of decades of incredibly foolish decisions.

Until the American people start understanding what has happened to us, they are never going to demand real change that actually accomplishes something.

This Is What Employment In America Really Looks Like…

Warren Buffett - Photo by Mark HirscheyThe level of employment in the United States has been declining since the year 2000.  There have been moments when things have appeared to have been getting better for a short period of time, and then the decline has resumed.  Thanks to the offshoring of millions of jobs, the replacement of millions of workers with technology and the overall weakness of the U.S. economy, the percentage of Americans that are actually working is significantly lower than it was when this century began.  And even though things have stabilized at a reduced level over the past few years, it is only a matter of time until the next major wave of the economic collapse strikes and the employment level goes even lower.  And the truth is that more good jobs are being lost every single day in America.  For example, as you will read about below, Warren Buffett is shutting down a Fruit of the Loom factory in Kentucky and moving it to Honduras just so that he can make a little bit more money.  We see this kind of betrayal over and over again, and it is absolutely ripping the middle class of America to shreds.

Below I have posted a chart that you never hear any of our politicians talk about.  It is a chart that shows how the percentage of working age Americans with a job has steadily declined since the turn of the century.  Just before the last recession, we were sitting at about 63 percent, but now we have been below 59 percent since the end of 2009…

Employment Population Ratio 2014

We should be thankful that things have stabilized at this lower level for the past few years.

At least things have not been getting worse.

But anyone that believes that “things have returned to normal” is just being delusional.

And nothing is being done about the long-term trends that are absolutely crippling our economy.  One of those trends is the offshoring of middle class jobs.  As I mentioned above, Fruit of the Loom (which is essentially owned by Warren Buffett) has made the decision to close their factory in Jamestown, Kentucky and lay off all the workers at that factory by the end of 2014

Clothing company Fruit of the Loom announced Thursday that it will permanently close its plant in Jamestown and lay off all 600 employees by the end of the year.

The Jamestown plant is the last Fruit of the Loom plant in a state where the company had once been a manufacturing titan second only to General Electric.

This isn’t being done because Fruit of the Loom is going out of business.  They are still going to be making t-shirts and underwear.  They are just going to be making them in Honduras from now on…

The company, owned by Warren Buffett’s Berkshire Hathaway but headquartered in Bowling Green, said the move is “part of the company’s ongoing efforts to align its global supply chain” and will allow the company to better use its existing investments to provide products cheaper and faster.

The company said it is moving the plant’s textile operations to Honduras to save money.

So what are those workers supposed to do?

Go on welfare?

The number of Americans that are dependent on the government is already at an all-time record high.

And doesn’t Warren Buffett already have enough money?

In business school, they teach you that the sole responsibility of a corporation is to maximize wealth for the shareholders.

And so when business students get out into “the real world”, that is how they behave.

But the truth is that corporations have a responsibility to treat their workers, their customers and the communities in which they operate well.  This responsibility exists whether corporate executives want to admit it or not.

And we all have a responsibility to our fellow citizens.  When we stand aside and do nothing as millions of good paying American jobs are shipped overseas so that the “one world economic agenda” can be advanced and so that men like Warren Buffett can stuff their pockets just a little bit more, we are failing our fellow countrymen.

Because so many of us have fallen for the lie that “globalism is good”, we have allowed our once great manufacturing cities to crumble and die.  Just consider what is happening to Detroit.  It was once the greatest manufacturing city in the history of the planet, but now foreign newspapers publish stories about what a horror show that it has become…

Khalil Ligon couldn’t tell if the robbers were in her house. She had just returned home to find her front window smashed and a brick lying among shattered glass on the floor. Ligon, an urban planner who lives alone on Detroit’s east side, stepped out and called the police.

It wasn’t the first time Ligon’s home had been broken into, she told me. And when Detroit police officers finally arrived the next day, surveying an area marred by abandoned structures and overgrown vegetation, they asked Ligon a question she often ponders herself: why is she still in Detroit?

Of course this kind of thing is not just happening to Detroit.  The truth is that it is happening all over the nation.  For example, this article contains an incredible graphic which shows how the middle class of Chicago has steadily disappeared over the past several decades.

Once again, even though we have never had a “recovery”, it is a good thing that things have at least stabilized at a lower level for the past few years.

But now there are all sorts of indications that we are rapidly heading toward yet another economic downturn.  The tsunami of retail store closings that is now upon us is just one sign of this.  The following is a partial list of retail store closings from a recent article by Daniel Jennings

  • Quiznos has filed for bankruptcy, USA Today reported, and could close many of its 2,100 stores.
  • Sbarro which operates pizza and Italian restaurants in malls, is planning to close 155 locations in the United States and Canada. That means nearly 20 percent of Sbarro’s will close. The chain operates around 800 outlets.
  • Ruby Tuesday announced plans to close 30 restaurants in January after its sales fell by 7.8 percent. The chain currently operates around 775 steakhouses across the US.
  • An unknown number of Red Lobster stores will be sold. The chain is in such bad shape that the parent company, Darden Restaurants Inc., had to issue a press release stating that the chain would not close. Instead Darden is planning to spin Red Lobster off into another company and sell some of its stores.
  • Ralph’s, a subsidiary of Kroger, has announced plans to close 15 supermarkets in Southern California within 60 days.
  • Safeway closed 72 Dominick’s grocery stores in the Chicago area last year.

And the following are some more signs of trouble for the retail industry from one of my recent articles entitled “20 Facts About The Great U.S. Retail Apocalypse That Will Blow Your Mind“…

#1 As you read this article, approximately a billion square feet of retail space is sitting vacant in the United States.

#2 Last week, Radio Shack announced that it was going to close more than a thousand stores.

#3 Last week, Staples announced that it was going to close 225 stores.

#4 Same-store sales at Office Depot have declined for 13 quarters in a row.

#5 J.C. Penney has been dying for years, and it recently announced plans to close 33 more stores.

#6 J.C. Penney lost 586 million dollars during the second quarter of 2013 alone.

#7 Sears has closed about 300 stores since 2010, and CNN is reporting that Sears is “expected to shutter another 500 Sears and Kmart locations soon”.

#8 Overall, sales numbers have declined at Sears for 27 quarters in a row.

#9 Target has announced that it is going to eliminate 475 jobs and not fill 700 positions that are currently empty.

#10 It is being projected that Aéropostale will close about 175 stores over the next couple of years.

#11 Macy’s has announced that it is going to be closing five stores and eliminating 2,500 jobs.

#12 The Children’s Place has announced that it will be closing down 125 of its “weakest” stores by 2016.

But it isn’t just the retail industry that is deeply troubled.

All over America we are seeing economic weakness.

In this economic environment, it doesn’t matter how smart, how educated or how experienced you are.  If you are out of work, it can be extremely difficult to find a new job.  Just consider the case of Abe Gorelick

Abe Gorelick has decades of marketing experience, an extensive contact list, an Ivy League undergraduate degree, a master’s in business from the University of Chicago, ideas about how to reach consumers young and old, experience working with businesses from start-ups to huge financial firms and an upbeat, effervescent way about him. What he does not have — and has not had for the last year — is a full-time job.

Five years since the recession ended, it is a story still shared by millions. Mr. Gorelick, 57, lost his position at a large marketing firm last March. As he searched, taking on freelance and consulting work, his family’s finances slowly frayed. He is now working three jobs, driving a cab and picking up shifts at Lord & Taylor and Whole Foods.

So what does Abe need in order to find a decent job?

More education?

More experience?

No, what he needs is an economy that produces good jobs.

Sadly, the cold, hard reality of the matter is that the U.S. economy will never produce enough jobs for everyone ever again.

The way that America used to work is long gone, and it has been replaced by a cold, heartless environment where the company that you work for could rip your job away from you at a moment’s notice if they decide that it will put a few extra pennies into the pockets of the shareholders.

You may have worked incredibly hard for 30 years and been super loyal to your company.

It doesn’t matter anymore.

All that matters is the bottom line, and in the process the middle class is being destroyed.  But by destroying the middle class, those corporations are destroying the consumer base that their corporate empires were built upon in the first place.

Read more here: http://www.kentucky.com/2014/04/03/3177378/fruit-of-the-loom-to-close-jamestown.html#storylink=cpy
Read more here: http://www.kentucky.com/2014/04/03/3177378/fruit-of-the-loom-to-close-jamestown.html#storylink=cpy

You Can Buy A House For One Dollar Or Less In Economically Depressed Cities All Over America

Free House In Yakima, WashingtonWould you like to buy a house for one dollar?  If someone came up to you on the street and asked you that question, you would probably respond by saying that it sounds too good to be true.  But this is actually happening in economically-depressed cities all over America.  Of course there are a number of reasons why you might want to think twice before buying any of these homes, and I will get into those reasons in just a little bit.  First, however, it is worth noting that many of the cities where these “free houses” are available were once some of the most prosperous cities in the entire country.  In fact, the city of Detroit once had the highest per capita income in the entire nation.  But as millions of good jobs have been shipped overseas, these once prosperous communities have degenerated into rotting, decaying hellholes.  Now homes that once housed thriving middle class families cannot even be given away.  This is happening all over America, and what we are witnessing right now is only just the beginning.

The photo that I have posted below was sent to me by a reader just the other day.  It is a photo of a house in Yakima, Washington that is apparently being given away for free.  At one time it was probably quite a lovely home, but now nobody seems to want it…

Free Home In Yakima, Washington

This piqued my curiosity, so I started doing some research and I discovered that homes all over the nation are being sold off for a dollar or less.  The following are just a few examples…

Buffalo, New York: “The Urban Homestead Program that is offered by the City of Buffalo enables qualified buyers to purchase a home that has been deemed ‘homestead eligible’ for $1.00 and there are plenty of properties left. There are three main requirements when purchasing a homestead property; the owner must fix all code violations within 18 months, have immediate access to at least $5000, and live there for at least three years. You also have to cover the closing costs of the purchase.”

Gary, Indiana: “Officials say that a third of the houses in Gary are unoccupied, hollowed dwellings spread across a city that, like other former industrial powerhouses, has lost more than half its population in the last half-century.

While some of those homes will be demolished, Gary is exploring a more affordable way to lift its haggard tax base and reduce the excess of empty structures: sell them for $1.”

South Bend, Indiana: “How could you refuse this offer? The city of South Bend, Indiana wants to give this handsome circa-1851 Italianate farmhouse away to anyone willing to properly restore it. Aside from the boarded up windows (the boards are painted to look like real windows), the place is in pretty good shape, with a completely restored exterior, new roof, and all new HVAC, plumbing and electrical systems. All you’ll need to do is restore the gutted (but clean as can be) interior.”

Detroit, Michigan: “Now that the motor city has effectively run out of gas and declared bankruptcy, some rather eye-popping deals are presenting themselves to first time home buyers who appreciate the challenge of a fixer-upper.

Hundreds of Detroit homes currently listed on Zillow have asking prices below $5,000, with at least one seller so desperate as to offer his house for just $1, ABC News reported.”

—–

And guess who is selling more “one dollar homes” than anyone else?

If you guessed “the federal government” you would be correct.

Right now, the federal government is selling foreclosed homes to low income families all over the country for just one dollar

HUD’s Dollar Homes initiative helps local governments to foster housing opportunities for low to moderate income families and address specific community needs by offering them the opportunity to purchase qualified HUD-owned homes for $1 each.

Dollar Homes are single-family homes that are acquired by the Federal Housing Administration (which is part of HUD) as a result of foreclosure actions. Single-family properties are made available through the program whenever FHA is unable to sell the homes for six months.

By selling vacant homes for $1 after six months on the market, HUD makes it possible for communities to fix up the homes and put them to good use at a considerable savings.

Before you get too excited, there are a whole bunch of reasons why you wouldn’t want to actually buy any of these one dollar homes.

First of all, most of them have been totally trashed.  Just to get them up to livable condition would take thousands of dollars in most cases.  Many of them are full of asbestos, and severe wiring and plumbing issues are quite common.

Secondly, you assume all of the liability for a home when you buy it.  So if a homeless person stumbles in and injures himself, you could be liable for his injuries.

Thirdly, many of these homes are in very high crime neighborhoods.  In some of these areas, people will literally rip up and carry away anything that is not bolted down.

Fourthly, property taxes are very high in many of these cities.  Local governments are desperate to get people into these homes so that they can get the taxes flowing again.  In many cases, what you would pay in taxes for a year is more than the true value of the home itself.

So, like I said, these homes are not the “great deal” that they may appear to be at first glance.

But that is not really the issue.

The real question is this: What is causing our communities to decay so dramatically?

And of course a big part of the answer is that the middle class in America is dying.

According to Time Magazine, one new report has discovered that nearly half the country is constantly living in a state of “persistent economic insecurity”…

But as evidenced by a report out Thursday from the Corporation for Enterprise Development, nearly half of Americans are living in a state of “persistent economic insecurity,” that makes it “difficult to look beyond immediate needs and plan for a more secure future.”

That same report also found that 56 percent of all Americans now have “subprime credit”.

We are a nation that is losing our independence and sinking into poverty.

Right now, 49.2 percent of all Americans are receiving benefits from at least one government program, and the U.S. government has spent an astounding 3.7 trillion dollars on welfare programs over the past five years.

Millions of our jobs have been shipped overseas, the control freak bureaucrats that are running things are absolutely killing “the little guy”, and poverty in the United States is exploding at a frightening pace.

Things are “changing” in this country, and not for the better.

One way that the death of the middle class is manifesting itself is in the death of shopping malls all over America.  The following is an excerpt from a recent Business Insider article

All across America, once-vibrant shopping malls are boarded up and decaying.

Traffic-driving anchors like Sears and JCPenney are shutting down stores, and mall owners are having a hard time finding retailers large enough to replace them. With a fresh wave of closures on the horizon, the problem is set to accelerate, according to retail and real estate analysts.

According to that same article, one prominent retail analyst believes that we could see up to 50 percent of the shopping malls in America close within 20 years…

Within 15 to 20 years, retail consultant Howard Davidowitz expects as many as half of America’s shopping malls to fail. He predicts that only upscale shopping centers with anchors like Saks Fifth Avenue and Neiman Marcus will survive.

And did you catch that last part?  Only the shopping malls in wealthy areas will survive because the wealthy will be the only ones with enough money to support them.

For much more on this phenomenon, please see my previous article entitled “What Recovery? Sears And J.C. Penney Are DYING“.

At this point, things have already gotten so bad that now even Wal-Mart is having trouble.  In fact, Wal-Mart is blaming the recent slowdown in sales on cuts to the federal food stamp program

Wal-Mart announced today that cuts in a federal food stamp program as well as record cold temperatures hurt its fourth quarter profits.

After previously reporting “relatively flat” sales for the quarter, Wal-Mart Stores Inc. now says that sales for its namesake store and its Sam’s Club locations would be “slightly negative” for the November-January quarter, according to Agence France-Presse.

Wal-Mart’s Chief Financial Officer, Charles Holley, blamed the revised forecast on deeper-than-expected cuts to the U.S. Supplemental Nutrition Assistance Program (SNAP) and the extreme cold weather occurring in the past month.

This is how far the middle class in America has fallen.  So many people are now on food stamps that even a slight reduction in benefits has a huge impact on the largest retailer in the entire country.

And actually, many rural communities could end up losing their Wal-Mart stores in the years ahead as the economy continues to deteriorate.  In a recent CNBC article entitled “Time to close Wal-Mart stores? Analysts think so“, it was suggested that Wal-Mart should close about 100 “underperforming” supercenters in rural locations around the nation.

We are rapidly becoming “two Americas”.  In the “good America”, the wealthy will still have plenty of retail stores to choose from within easy driving distance from their million dollar homes.

In the “bad America”, which will include most of us, our shopping malls will be closing down and the rotting, decaying homes of our neighbors will be sold off for next to nothing.

So which America do you live in?  Please feel free to share what is going on in your neck of the woods by posting a comment below…

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