Economic Despair

The Number Of Americans Living In Their Vehicles “Explodes” As The Middle Class Continues To Disappear

If the U.S. economy is really doing so well, then why is homelessness rising so rapidly?  As the gap between the rich and the poor continues to increase, the middle class is steadily eroding.  In fact, I recently gave my readers 15 signs that the middle class in America is being systematically destroyed.  More Americans are falling out of the middle class and into poverty with each passing day, and this is one of the big reasons why the number of homeless is surging.  For example, the number of people living on the street in L.A. has shot up 75 percent over the last 6 years.  But of course L.A. is far from alone.  Other major cities on the west coast are facing similar problems, and that includes Seattle.  It turns out that the Emerald City has seen a 46 percent rise in the number of people sleeping in their vehicles in just the past year…

The number of people who live in their vehicles because they can’t find affordable housing is on the rise, even though the practice is illegal in many U.S. cities.

The number of people residing in campers and other vehicles surged 46 percent over the past year, a recent homeless census in Seattle’s King County, Washington found. The problem is “exploding” in cities with expensive housing markets, including Los Angeles, Portland and San Francisco, according to Governing magazine.

Amazon, Microsoft and other big tech companies are in the Seattle area.  It is a region that is supposedly “prospering”, and yet this is going on.

Sadly, it isn’t just major urban areas that are seeing more people sleeping in their vehicles.  Over in Sioux Falls, South Dakota, many of the homeless sleep in their vehicles even in the middle of winter…

Stephanie Monroe, managing director of Children Youth & Family Services at Volunteers of America, Dakotas, tells a similar story. At least 25 percent of the non-profit’s Sioux Falls clients have lived in their vehicles at some point, even during winter’s sub-freezing temperatures.

“Many of our communities don’t have formal shelter services,” she said in an interview. “It can lead to individuals resorting to living in their cars or other vehicles.”

It is time to admit that we have a problem.  The number of homeless in this country is surging, and we need to start coming up with some better solutions.

But instead, many communities are simply passing laws that make it illegal for people to sleep in their vehicles…

A recent survey by the National Law Center on Homelessness and Poverty (NLCHP), which tracks policies in 187 cities, found the number of prohibitions against vehicle residency has more than doubled during the last decade.

Those laws aren’t going to solve anything.

At best, they will just encourage some of the homeless to go somewhere else.

And if our homelessness crisis is escalating this dramatically while the economy is supposedly “growing”, how bad are things going to be once the next recession officially begins?

We live at a time when the cost of living is soaring but our paychecks are not.  As a result, middle class families are being squeezed like never before.

A recent Marketwatch article highlighted the plight of California history teacher Matt Barry and his wife Nicole…

Barry’s wife, Nicole, teaches as well — they each earn $69,000, a combined salary that not long ago was enough to afford a comfortable family life. But due to the astronomical costs in his area, including real estate — a 1,500-square-foot “starter home” costs $680,000 — driving for Uber was a necessity.

“Teachers are killing themselves,” Barry says in Alissa Quart’s new book, “Squeezed: Why Our Families Can’t Afford America” (Ecco), out Tuesday. “I shouldn’t be having to drive Uber at eight o’clock at night on a weekday. I just shut down from the mental toll: grading papers between rides, thinking of what I could be doing instead of driving — like creating a curriculum.”

Home prices are completely out of control, but that bubble should soon burst.

However, other elements of our cost of living are only going to become even more painful.  Health care costs rise much faster than the rate of inflation every year, food prices are becoming incredibly ridiculous, and the cost of a college education is off the charts.  According to author Alissa Quart, living a middle class life is “30% more expensive” than it was two decades ago…

“Middle-class life is now 30% more expensive than it was 20 years ago,” Quart writes, citing the costs of housing, education, health care and child care in particular. “In some cases the cost of daily life over the last 20 years has doubled.”

And thanks to the trade war, prices are going to start going up more rapidly than we have seen in a very long time.

On Tuesday, we learned that diaper and toilet paper prices are rising again…

Procter & Gamble said on Tuesday that it was in the process of raising Pampers’ prices in North America by 4%. P&G also began notifying retailers this week that it would increase the average prices of Bounty, Charmin, and Puffs by 5%.

P&G is raising prices because commodity and transportation cost pressures are intensifying. The hikes to Bounty and Charmin will go into effect in late October, and Puffs will become more expensive beginning early next year.

I wish that I had better news for you, but I don’t.  We are all going to have to work harder, smarter and more efficiently.  And we are definitely going to have to tighten our belts.

Many middle class families are relying on debt to get them from month to month, and consumer debt in the United States has surged to an all-time high.  But eventually a day of reckoning comes, and we all understand that.

The U.S. economy is not going to be getting any better than it is right now.  So it is time to be a lean, mean saving machine, because it will be important to have a financial cushion for the hard times that are ahead of us.

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

Nearly 40 Million Americans Are Still On Food Stamps

If the U.S. economy is “doing well”, then why are almost 40 million Americans still on food stamps?  That number is almost exactly where it was at the end of the last recession, and supposedly we have made so much progress since that time.  Of course any progress that has been made has been extremely uneven.  Earlier today, I wrote about how the gap between the rich and the poor in this country is the biggest that it has been since the 1920s.  For years, the Federal Reserve’s quantitative easing program pumped “hot money” into the financial markets, and that was an enormous blessing to the top 1 percent.  But meanwhile tens of millions of average families have continued to struggle and the middle class has continued to decline.  In the U.S. today, 66 percent of all of our jobs pay less than 20 dollars an hour, and close to 40 million Americans rely on the federal government to feed them every month.  The following comes from Bloomberg…

Judging by the number of Americans on food stamps, it doesn’t feel like one of the best job markets in almost a half century and the second-longest economic expansion on record.

Enrollment in the Supplemental Nutrition Assistance Program, better known as food stamps, fell to 39.6 million in April, the most recent government data show. That’s down from a record 47.8 million in 2012, but as a share of the population it’s just back to where it was as the economy emerged from the longest and deepest downturn since the Great Depression.

It is hard to argue that we are a “prosperous nation” with a number like that hanging over our heads.

Yes, some Americans have prospered individually in recent years, but many more have been deeply suffering.

In order for a family of four to qualify for food stamps, they must make less than $2,665 a month…

SNAP is available for households with incomes up to $2,665 per month for a family of four, or 130 percent of the federal poverty level. Recipients are also subject to asset and employment tests, and states can modify the program with federal permission. Households receiving SNAP had an average monthly gross income of $814 in 2016, and 20 percent had no income.

Could your family survive on just $2,665 a month?

Yet that is exactly where tens of millions of Americans find themselves today.

Yesterday I wrote about the “cesspool” that the once beautiful city of Portland, Oregon has become, and in this article I would like to share with you an excerpt from an article about the epidemic of squatters in the city of Detroit…

The Detroit Land Bank owns nearly 30,000 residential structures in the city, and with as many as 4,300 of them occupied — it’s a magnitude unlike any other place.

Squatters are a tricky problem: remove them and add to the city’s homeless population and its massive inventory of abandoned buildings. Let them stay, and the land bank is summoned often to investigate what some of its occupants may be up to: dog fighting, prostitution, drug dealing, overdoses, gambling, gun possession or running a chop shop.

Detroit police also are called regularly to land bank properties to investigate dead bodies — at least 50 homicides over the last four years.

This is what life is like for much of the country today.  The small sliver of our population that is “living the high life” is greatly outnumbered by people just barely surviving from month to month.

In fact, 102 million working age Americans do not have a job at this moment.  In case you were wondering, that number is substantially higher than it was at any point during the last recession.

If you can believe it, during the last recession we never even hit the 100 million mark.

There are so many parallels that could be made between the current state of affairs and America in the 1920s.  During the “roaring twenties”, everybody thought that the good times would last forever and that stock prices would go up indefinitely, and then one day we suddenly plunged into the worst financial crisis and the worst economic depression that the nation had ever seen.

And most people don’t even realize that we are far more vulnerable today than we have ever been in all of U.S. history.  I have been sharing numbers that back up that premise on an almost daily basis, and today let me share another example with you that comes from Mike Maloney…

  • Just prior to the dotcom collapse of 2000 and the hundreds of bankruptcies that followed, 9% of the S&P 1,500 were zombie companies.
  • Just prior to the 2008 financial crisis and the hundreds of bankruptcies that followed, 12% of the S&P 1,500 were zombie companies.
  • Right now, 15% of the S&P 1,500 are zombie companies.

Just like the “roaring twenties”, our current debt-fueled economic bubble will burst as well, and many believe that it will result in the worst economic crisis that America has ever known.

But as long as the music on Wall Street keeps playing, the optimists will continue to insist that “happy days are here again” and that the party can keep on going indefinitely.

Of course no party lasts forever, and eventually the moment will come when it is time to turn out the lights for good.

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

Police Union President Laments That Portland Has Become A “Cesspool” As West Coast Cities Struggle With An Unprecedented Surge In Homelessness

Even though it has always been kind of crazy, at one time Portland, Oregon was quite an attractive place to live, but now those days are long gone.  Today, the city streets are strewn with garbage, drug paraphernalia and human feces.  Mentally ill homeless people and drug addicts wander about like zombies, and there are certain areas of the city that you absolutely do not want to visit at night.  In essence, the city is slowly becoming a post-apocalyptic version of its former self, and those that love the city are seething with frustration.  Of course Portland is simply experiencing the same surge in homelessness that so many other west coast cities are struggling to deal with.  As housing prices have risen dramatically, many on the lower end of the income scale have been priced out of the market entirely, and an increasing number of people are being forced to sleep in vehicles, in shelters or on the streets.

The president of the police union in Portland has had enough.  His officers are overwhelmed by the needs of the homeless on a nightly basis, and he is calling on the mayor to finally do something to resolve this crisis.  The following is the first paragraph from a statement that PPA President Daryl Turner just released…

Our City has become a cesspool. Livability that once made Portland a unique and vibrant city is now replaced with human feces in businesses doorways, in our parks, and on our streets. Aggressive panhandlers block the sidewalks, storefronts, and landmarks like Pioneer Square, discouraging people from enjoying our City. Garbage-filled RVs and vehicles are strewn throughout our neighborhoods. Used needles, drug paraphernalia, and trash are common sights lining the streets and sidewalks of the downtown core area, under our bridges, and freeway overpasses. That’s not what our families, business owners, and tourists deserve.

If that sounds familiar, that is because many other west coast cities are dealing with the exact same issues right now.

For example, new San Francisco Mayor London Breed recently admitted that there “is more feces on the sidewalks than I’ve ever seen”…

“There is more feces on the sidewalks than I’ve ever seen growing up here,” Breed told KNTV. “That is a huge problem and we are not just talking about from dogs — we’re talking about from humans.”

The streets of San Francisco are littered with a “dangerous mix of drug needles, garbage, and feces”, KNTV’s investigative team reported in February after surveying the city’s streets.

And a lot of other San Francisco residents have noticed the exact same thing.  In fact, during one recent seven day period 16,000 complaints were submitted to the city about human feces.

Sounds like a great place to live, right?

It is important to keep in mind that San Francisco supposedly has a “booming economy” and some of the highest real estate prices in the entire nation.

If this is happening in a “prosperous area”, what are things like in major cities where things are not so prosperous?

Down in L.A., there was a nearly 26 percent increase in homelessness in 2017, and overall homelessness in L.A. has risen 75 percent over the past 6 years.

Let that sink in for a moment.

During this supposed “economy recovery”, our second largest city has seen homelessness go up 75 percent.

Sadly, it is estimated that 25 percent of the nation’s entire homeless population now lives in California…

While it’s tough to say precisely how many Californians are experiencing homelessness, the federal Housing and Urban Development Department estimates the number statewide at 130,000 on a given night. That’s 25 percent of the entire nation’s homeless population. Since 2016, California experienced a larger increase in homelessness than any other state.

At one time, L.A.’s “skid row” was limited to a single street, but now it goes on mile after mile.  I just have to share with you the following excerpt from an excellent article about what life is like for those living on this famous stretch of real estate…

Most of its 2,000 residents sleep in tents or under tarps. Those with more status occupy the sides of streets shaded by trees. Location, location, location. The lowest caste sleep on cardboard or nothing. Some people rent tents for a few bucks a night.

There are no liquor stores so businessmen buy alcohol from shops a few miles away and sell it at a steep mark-up. Loan sharks collect debts by taking control of the debit cards issued to homeless people by government agencies.

A guy sits at a table on the sidewalk selling cigarettes and joints. The city has installed sidewalk restrooms. Ruffin pointed to one and figured people inside were shooting up or smoking. Meth, heroin and crack are the scourges of choice. Needles litter the gutter, as does a dead rat. On another block, homeless entrepreneurs chop and assemble bicycles for sale.

And let us not forget about Seattle.  Homeless encampments have become so pervasive in “the Emerald City” that authorities started building “tiny house villages” for the homeless out of desperation.  But these “tiny house villages” are a lot more depressing than they sound…

In the nearby neighborhood of Wallingford, a newly erected outpost of small wooden shacks offer shelter for 22 of Seattle’s homeless residents. This is a “tiny house village,” sanctioned by the city as a kind of middle ground between living at a street address and on the street. The buildings sit in the corner of a parking lot across from a seafood restaurant, shielded from view by a metal fence. Each shack, painted with one of the bold colors of a Crayola starter pack, offers electricity and a roof sturdier than the tents in Seattle’s increasingly common homeless encampments. Every resident is issued a window fan for the occasional hot day, and the people here hope to receive heaters before winter. But the small collections of potted petunias and pothos that sit in front of their temporary homes are unlikely to survive the city’s harshest months.

Unfortunately, this is probably only just the beginning of this crisis.  Homelessness always explodes during a recession, and many believe that we are rapidly approaching another one.  West coast cities are really struggling to deal with this crisis right now, and it is hard to imagine how they will deal with the tsunami of human suffering that is coming their way once economic conditions begin to sour.

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

$28,166: What It Costs To Provide Health Care For An American Family Of Four For One Year

One of the primary reasons why the middle class in America is disappearing so rapidly is because of skyrocketing health care costs.  Families all over the country are being absolutely crushed by extremely high health insurance premiums, ridiculously high deductibles and very large out-of-pocket expenses that were not anticipated.  In fact, medical bills are the number one reason why individuals go bankrupt in the United States today.  Once upon a time, the medical profession was all about helping people, but today it has become a heartless money-making operation that is dominated by health insurance corporations and pharmaceutical companies.  If we do not make major changes quickly, our out of control health care system will destroy the middle class in our country all by itself.

I knew that health care costs were astronomical, but I had no idea that health care costs for an average family of four for one year had hit $28,166…

The total costs for a typical family of four insured by the most common health plan offered by employers will average $28,166 this year, according to the annual Milliman Medical Index.

The estimate includes the average cost of health insurance paid by employers and employees, as well as deductibles and out-of-pocket expenses.

That is a crazy amount of money.  Once upon a time, you could buy an entire house in America for $28,000.  But now that will only cover health care costs for a single year.

The largest portion of that amount goes to pay for health insurance.  For those that receive health benefits at work, usually the employer pays most of that bill…

Last year, the premium for the most popular health plan offered by employers — what is known as a preferred provider organization  — for family coverage was $19,481, according to the annual survey done by the Kaiser Family Foundation and the Health Research & Educational Trust.

Employers paid $13,430 and employees paid $6,050 of the premium on average.

When you break down that total, it comes to more than $1,500 a month just for health insurance.

That is insane.

And of course those of us that are self-employed or that work for businesses that don’t provide health insurance have to pay for it all on our own.

Needless to say, that can be financially crippling.  And thanks to Obamacare, it is harder than ever before.  Not too long ago, I wrote about one family in Virginia that is now faced with the prospect of paying $3,000 a month for an Obamacare plan…

Could you afford to pay $3000 a month for health insurance? Previously, Ian Dixon had been paying $900 a month for health insurance for his family of four, but thanks to changes in the Charlottesville insurance market, a similar plan will now cost him more than $3,000 a month.

This is one of the biggest reasons why the percentage of Americans that are self-employed is hovering near record lows.  People simply cannot afford the health insurance.

And every year it gets worse.  For 2018, it was being projected that the average rate increase for Obamacare plans would be 37 percent.

If our paychecks were going up 37 percent each year, that would be fine.

But of course that just isn’t happening.

This is one of our great long-term challenges as a society.  We have got to get health care costs under control if our system is going to be sustainable.

There is absolutely no reason why an appendectomy in the United States needs to be 10 times more expensive than an appendectomy in Mexico.  The quality of care in Mexico is not 10 times worse than in the United States.  In fact, it is actually pretty comparable to what we have here, and many Americans are now taking “medical vacations” to have procedures performed down there because our system is so badly broken.

Sadly, this figure of $28,166 for a family of four will be out of date by next month.

According to one expert quoted by USA Today, every single month the number goes up by another one hundred dollars…

“But every month, a family of four’s health care costs are going up $100 a month,” Weltz said.

The costs have been going up by that amount — on average — for more than a decade.

I have to admit that our health care system makes me angry.  Today, the U.S. health care system accounts for nearly one-fifth of the U.S. economy, but back in 1960 it only accounted for about 5 percent of the overall economy.

There is no reason why we can’t start moving back toward that level.  We just need to reintroduce true competition and free market principles into our health care system.  Those that have been abusing their power need to be held accountable, and something desperately needs to be done about the health insurance companies and the big pharmaceutical giants.  In one recent year, more than 100 billion dollars was spent on cancer drugs, and that is absolutely outrageous.

If you go all the way back to 1960, an average of $146 was spent on health care per person for the entire year.

So for a family of four, the total would have been about $600, but now it is over $28,000.

It doesn’t have to be this way.

On a per capita basis, we spend far, far more than anyone else in the world on health care.

If you can believe it, we actually spend nearly twice as much as most of the other industrialized nations in the world on a per capita basis.

The only way that we are going to have a thriving middle class is if we get health care costs under control, but unfortunately Congress is such a mess right now that nothing is likely to get done for the foreseeable future.

So our health care system is going to continue to deteriorate, and many Americans will continue to travel overseas when they need important procedures to be done.

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is the author of four books including The Beginning Of The End and Living A Life That Really Matters.

15 Signs That The Middle Class In The United States Is Being Systematically Destroyed

If your family is really struggling right now, you are far from alone.  I have been publishing The Economic Collapse Blog for more than eight years, and all throughout that time I have seen the middle class in America get smaller and smaller and smaller.  It is almost as if we are all playing a really bizarre game of musical chairs and every month someone pulls a few more chairs from the game.  Yes, there are some people that have gotten exceedingly wealthy over the past eight years, and most of that wealth is concentrated in places such as New York, Washington D.C. and San Francisco.  But meanwhile, most of the rest of the country has been steadily getting poorer.  Just take a look at Detroit – at one time it had the highest per capita income in the entire nation and now it is a rotting, decaying war zone.  Of course dozens of other formerly great manufacturing cities all over the nation have suffered a similar fate.  Since 2001, we have lost more than 70,000 manufacturing facilities and millions of good paying manufacturing jobs.  Those good paying jobs have been replaced by lower paying “service jobs”, and you can’t support a middle class lifestyle on those types of jobs.

In order to have a thriving middle class, you need middle class jobs, and our country is in desperate need of more of those jobs.  At this point most American families are living on the edge, and more are falling into poverty with each passing month.  The following are 15 signs that the middle class in the United States is being systematically destroyed…

#1 78 million Americans are participating in the “gig economy” because full-time jobs just don’t pay enough to make ends meet these days.

#2 In 2011, the average home price was 3.56 times the average yearly salary in the United States.  But by the time 2017 was finished, the average home price was 4.73 times the average yearly salary in the United States.

#3 In 1980, the average American worker’s debt was 1.96 times larger than his or her monthly salary.  Today, that number has ballooned to 5.00.

#4 In the United States today, 66 percent of all jobs pay less than 20 dollars an hour.

#5 102 million working age Americans do not have a job right now.  That number is higher than it was at any point during the last recession.

#6 Earnings for low-skill jobs have stayed very flat for the last 40 years.

#7 Americans have been spending more money than they make for 28 months in a row.

#8 In the United States today, the average young adult with student loan debt has a negative net worth.

#9 At this point, the average American household is nearly $140,000 in debt.

#10 Poverty rates in U.S. suburbs “have increased by 50 percent since 1990”.

#11 Almost 51 million U.S. households “can’t afford basics like rent and food”.

#12 The bottom 40 percent of all U.S. households bring home just 11.4 percent of all income.

#13 According to the Federal Reserve, 4 out of 10 Americans do not have enough money to cover an unexpected $400 expense without borrowing the money or selling something they own.

#14 22 percent of all Americans cannot pay all of their bills in a typical month.

#15 Today, U.S. households are collectively 13.15 trillion dollars in debt.  That is a new all-time record.

When you think of “poverty in America”, you probably think of our blighted inner cities, but that is not where poverty is growing the fastest.

According to author Scott Allard, it is actually our suburbs where poverty is growing more rapidly than anywhere else…

According to a May report from the Pew Research Center, since 2000, suburban counties have experienced sharper increases in poverty than urban or rural counties.

This is consistent with research across the U.S. over the past decade – as well as my own book, “Places in Need.”

This is why tens of millions of square feet of retail space is being closed down and why formerly great shopping malls all over America now resemble ghost towns.

When I was growing up, the shopping mall was the place to be for average middle class kids.  My family was middle class and virtually everyone that I knew was middle class.  In fact, I don’t remember any really wealthy or really poor kids in my school at all.

But today most families have little to no financial cushion and are deep in debt.  As a result, discretionary income has really dried up and that means less shopping.

So we are on pace for the worst year for store closings in American history, and yet the mainstream media keeps telling us that the economy is in “good shape”.

That is a load of nonsense.  The numbers don’t lie, and the U.S. economy is never going to be in “good shape” until the middle class starts growing again.

Is there a solution?

Well, the mayor of Stockton, California seems convinced that the solution is just to give people free money.  The following comes from Reuters…

Michael Tubbs, the 27-year-old mayor of Stockton, California, has a radical plan to combat poverty in his cash-strapped city: a “no strings” guaranteed basic income of $500 a month for its residents.

Starting in early 2019, Tubbs plans to provide the monthly stipend to a select group of residents as part of a privately funded 18-month experiment to assess how people use the money.

Wouldn’t it be wonderful if we all just started getting big, fat checks from the government every month?

Why didn’t somebody think about this before?

Of course the truth is that we simply cannot afford to do that.  State and local government debt levels have surged to record highs, and the federal government is now 21 trillion dollars in debt.  We are on a path that leads to national suicide, and we desperately need to start living within our means.

We have been consuming far more wealth than we have been producing for a very long time, but we have been doing it for so long that many of us now think that this is “normal”.  Meanwhile, our long-term debt problems continue to escalate and our once thriving middle class continues to shrink.

If we continue to do the same things, we will continue to get the same results, and right now we are in the process of absolutely destroying the greatest economic machine that the world has ever seen.

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is the author of four books including The Beginning Of The End and Living A Life That Really Matters.

Federal Reserve: More Than 4 Out Of 10 Americans Do Not Even Have Enough Money To Cover An Unexpected $400 Expense

The U.S. economy is not doing nearly as well as the mainstream media would have you believe.  A few days ago I wrote about a new study that discovered that nearly 51 million U.S. households “can’t afford basics like rent and food”, and just yesterday I discussed the fact that we are on pace for the worst year for retail store closings ever.  Now we have just gotten new numbers from the Federal Reserve which are absolutely staggering.  According to the Fed’s latest study, more than 4 out of every 10 Americans do not even have enough money to cover an unexpected $400 expense without borrowing the funds or selling something.  In essence, nearly half the country has no significant financial cushion whatsoever.  So what are all of those people going to do when the next economic crisis hits?

Sadly, living on the edge has become a daily reality for tens of millions of Americans.  The following is from a CNN article about the Fed’s new report…

Can you cover an unexpected $400 expense?

Four in ten Americans can’t, according to a new report from the Federal Reserve Board. Those who don’t have the cash on hand say they’d have to cover it by borrowing or selling something.

According to the report, the exact figure is 41 percent.

41 percent of all U.S. adults cannot cover an unexpected $400 expense.

Let that number sink in for a moment.

I am sorry – if you can’t come up with $400 right now without borrowing it, you are broke.  And as of right now that is the financial condition of 41 percent of all Americans.

Amazingly, the Federal Reserve is actually trying to spin this report as good news…

“This year’s survey finds that rising levels of employment are translating into improved financial conditions for many but not all Americans,” Fed Governor Lael Brainard said.

Really?

Fortunately, there are others that are seeing right through the spin and are telling it like it is…

“The finding that four-in-ten adults couldn’t cover an unexpected $400 expense without selling something or borrowing money is troubling,” said Greg McBride, chief financial analyst at Bankrate.com. “Nothing is more fundamental to achieving financial stability than having savings that can be drawn upon when the unexpected occurs.”

And that wasn’t the only bad news in the report.

Here are some more incredible facts from the report as summarized by Zero Hedge…

  • One-third of those with varying income, or 10 percent of all adults, say they struggled to pay their bills at least once in the past year due to varying income
  • Over three-fourths of whites were at least doing okay financially in 2017 versus less than two-thirds of blacks and Hispanics.
  • Over a quarter of young adults ages 25 to 29, and slightly more than 1 in 10 in their 30s, live with their parents.
  • Over two-fifths of young adults in their late 20s provide financial assistance to their parents
  • Nearly 25 percent of young adults under age 30, and 10 percent of all adults, receive some form of financial support from someone living outside their home.
  • While 8 in 10 adults living in middle- and upper-income neighborhoods are satisfied with the overall quality of their community, only 6 in 10 living in low- and moderate-income neighborhoods are satisfied
  • Seven in 10 low-income renters spend more than 30 percent of their monthly income on rent

And on top of all of that, here is one more really alarming number to chew on…

Even without an unexpected expense, the report reveals, 22% of adults expected to forgo payment on some of their bills in the month of the survey. “One-third of those who are not able to pay all their bills say that their rent, mortgage, or utility bills will be left at least partially unpaid.”

When 22 percent of the people in your country cannot pay their bills this month, that is called a crisis.

Yes, we are hopeful for better things for the U.S. economy under President Trump.  But the current blind optimism that we are witnessing out there right now is simply absurd…

A new poll shows an overwhelming number of Americans believe President Trump is playing a positive role in the current state of the economy.

The CBS survey reveals almost 70% of respondents think the president is –either mostly or somewhat– responsible for the current economic climate.

Additionally, around 65% of Americans believe the economy is doing well, compared to under 10% who think it’s doing ‘very poorly.’

Ladies and gentlemen, the U.S. economy has not had a full year of 3 percent GDP growth since the middle of the Bush administration.

This is the longest stretch of below 3 percent growth in all of U.S. history by a very wide margin.

So please don’t try to tell me that the U.S. economy is “doing well” until we can get back above that 3 percent number.

The sad truth is that we have been in a very long period of economic stagnation, and during this period wealth is being increasingly concentrated at the very top of the pyramid and the middle class is being systematically eviscerated.

Tens of millions of families are just barely scraping by from month to month, and when an unexpected emergency happens that is often enough to push a lot of families completely over the edge.

In fact, my good friend Daisy Luther recently wrote about how this actually happened to her own family…

Before my daughter’s illness, I was doing everything “right.”

  • I had enough money in my emergency fund to carry me through 3 lean months
  • I had numerous credit cards with zero balances
  • My only debt was my car
  • My kids are going to school without student loans
  • I opted out of health insurance because it was more financially practical to pay cash (and I still agree with that decision)

Everything was great.

Until it wasn’t.

I am sure that many of you can identify with Daisy.

Most of us have had a life-altering event cause serious financial stress at some point.  And close to half the country is completely unprepared for such an event.

For years, I have been strongly encouraging my readers to build up their emergency funds, because one thing that you can count on in life is that the unexpected will happen.  Having a good financial cushion is one of the best things that you can possibly do for yourself and your family financially, and if you haven’t gotten started on that yet, I would urge you to do so as soon as possible.

Michael Snyder is a nationally syndicated writer, media personality and political activist.  He is the author of four books including The Beginning Of The End and Living A Life That Really Matters.

 

Nearly 51 Million Households In The United States ‘Can’t Afford Basics Like Rent And Food’

If the U.S. economy is performing well, then why can’t 51 million households in the United States “afford basics like rent and food”.  A stunning new report that was just put out by the United Way ALICE Project shows that the gap between the wealthy and the poor in this country is perhaps the biggest that it has been in any of our lifetimes.  In some of the wealthiest areas of the nation, homes are now selling for up to 100 million dollars, but meanwhile tens of millions of families are barely scraping by from month to month.  Many believe that this growing “inequality gap” is setting the stage for major societal problems.

In general, the U.S. economy seems to be performing better than expected so far in 2018, but the ranks of the poor and the working poor just continue to grow.  The following comes from CNN…

Nearly 51 million households don’t earn enough to afford a monthly budget that includes housing, food, child care, health care, transportation and a cell phone, according to a study released Thursday by the United Way ALICE Project. That’s 43% of households in the United States.

The figure includes the 16.1 million households living in poverty, as well as the 34.7 million families that the United Way has dubbed ALICE — Asset Limited, Income Constrained, Employed. This group makes less than what’s needed “to survive in the modern economy.”

If 43 percent of all Americans cannot even afford “the basics”, what does that say about the true state of the U.S. economy?

Of course the biggest reason why so many American families are struggling is the lack of good jobs.

In America today, 66 percent of all jobs pay less than 20 dollars an hour.

66 percent.

Just let that sink in for a minute.

You cannot support a middle class family on 20 dollars an hour.  As a result, many Americans are working more than one job, and in many households both the mother and the father are working more than one job.

Housing costs account for the biggest item in most family budgets, and the fact that housing costs have just continued to soar is putting a huge amount of financial stress on hard working families.  Just today we learned that there is a tremendous rush to buy homes as mortgage rates rise rapidly…

Today, according to the latest Freddie Mac mortgage rates report, after plateauing in recent weeks, mortgage rates reversed course and reached a new high last seen eight years ago as the 30-year fixed mortgage rate edged up to 4.61% matching the highest level since May 19, 2011.

But while the highest mortgage rates in 8 years are predictably crushing mortgage refinance activity, they appears to be having the opposite effect on home purchases, where there is a sheer scramble to buy, and sell, houses. As Bloomberg notes, citing brokerage Redfin, the average home across the US that sold last month went into contract after a median of 36 only days on the market – a record speed in data going back to 2010.

If you will remember, we witnessed a very similar pattern just before the subprime mortgage meltdown in 2008.

History is repeating itself, and we never seem to learn from our past mistakes.

Housing prices in some cities are absolutely obscene right now, and many working families find themselves completely priced out of the market.  That has some people asking one very simple question…

Many San Francisco renters I met while reporting an article on affordable housing lotteries had responded to the region’s housing crisis by putting up with great discomfort: They crammed in with family; they split apartments with strangers. Some even lived out of their cars.

Why, lots of readers wanted to know, didn’t they simply move away instead?

Yes, some people are moving, and this is something that I plan to do an article about very soon.

But for most hard working families, moving across the country simply is not an option.  Moving out of state is very expensive, it can be very difficult to find a similar job in an entirely new area, and many families are very dependent on the social networks where they currently live…

People who struggle financially often have valuable social networks — family to help with child care, acquaintances who know of jobs. The prospect of dropping into, say, Oklahoma or Georgia would mean doing without the good income and the social support. Those intangible connections that keep people in places with bad economies also keep people in booming regions where the rent is too high.

In the end, moving is just not an option for a lot of people.

We need to structure our economic system so that it works for all Americans – not just a few.  Unfortunately, it is probably going to take another major crisis before people are ready for such a restructuring.

And such a crisis may not be that far away.  In fact, even Pope Francis is now warning about the dangers of derivatives…

In a sweeping critique of global finance released by the Vatican on Thursday, the Holy See singled out derivatives including credit-default swaps for particular scorn. “A ticking time bomb,” the Vatican called them. The unusual rebuke — derivatives rarely reach the level of religious doctrine — is in keeping with Francis’s skeptical view of unbridled global capitalism.

“The market of CDS, in the wake of the economic crisis of 2007, was imposing enough to represent almost the equivalent of the GDP of the entire world. The spread of such a kind of contract without proper limits has encouraged the growth of a finance of chance, and of gambling on the failure of others, which is unacceptable from the ethical point of view,” the Vatican said in the document.

I have written about derivatives extensively in the past, and Pope Francis is 100 percent correct when he says that they are a ticking time bomb which could absolutely devastate the global financial system at any moment.

We don’t know exactly when it will happen, but we do know that such a crisis is coming at some point.

Sadly, most of the population is completely asleep, and they will be completely blindsided by the coming crisis when it does finally arrive.

Michael Snyder is a nationally syndicated writer, media personality and political activist.  He is the author of four books including The Beginning Of The End and Living A Life That Really Matters.

41 Million Americans Are Living In Poverty This Christmas

Even though the stock market continues to set new record high after new record high, poverty is exploding all over America.  It is being reported that 41 million people are living in poverty at this moment, and 9 million of them do not receive a single penny of income from anyone.  Once you have been unemployed for long enough, you don’t qualify for unemployment payments any longer, and once you are on the street there is nowhere for other governments programs to send a check to.  I have previously discussed the rising epidemic of homelessness in our nation, but most people don’t want to think about that sort of a thing these days.  Even though New York City has the most homeless since the Great Depression, and even though homelessness in Los Angeles is at an all-time record high, most people want to pretend that everything is just fine.

Well, the truth is that everything is not just fine.

A reporter from the Guardian recently traveled with a special UN envoy to some of the most impoverished areas of the United States.  His report is extremely eye-opening, and I wanted to share a short excerpt from his story.  This portion of his article is about a 41-year-old woman named Ressy Finley who is desperately trying to stay alive on the mean streets of Skid Row in Los Angeles…

Ressy Finley, 41, was busy sterilizing the white bucket she uses to slop out in her tent in which she has lived on and off for more than a decade. She keeps her living area, a mass of worn mattresses and blankets and a few motley possessions, as clean as she can in a losing battle against rats and cockroaches. She also endures waves of bed bugs, and has large welts on her shoulder to prove it.

She receives no formal income, and what she makes on recycling bottles and cans is no way enough to afford the average rents of $1,400 a month for a tiny one-bedroom. A friend brings her food every couple of days, the rest of the time she relies on nearby missions.

She cried twice in the course of our short conversation, once when she recalled how her infant son was taken from her arms by social workers because of her drug habit (he is now 14; she has never seen him again). The second time was when she alluded to the sexual abuse that set her as a child on the path towards drugs and homelessness.

Los Angeles has declared a state of emergency because the number of homeless is rising so rapidly, and so have nine other cities along the west coast.  For much more on this, please see my previous article entitled “As America Gives Thanks, Homelessness Continues To Set New Records In Major Cities All Over The Nation”.

The sad thing is that there are more than a million homes sitting empty in America right now.  As economic opportunities have dried up, many communities in the middle part of the nation are becoming “ghost towns”, and it is getting worse with each passing day…

There are nearly 1.4 million vacant residential properties across the country — abandoned, not for sale, mostly unoccupied homes. With vacant properties comprising as much as 30% of residential properties, some neighborhoods are starting to feel like ghost towns.

Many believe that the answer to the decline of the middle class and the growth of poverty is even more socialism.

But if you want to see where that road leads, just look at what is happening in Venezuela.  People are eating cats and dogs, and just today there were a whole bunch of mainstream news articles about how children are literally starving to death.

No, the real answer is to do what made our economy so great in the first place.  Between 1872 and 1913, we didn’t have an income tax or a central bank, and it was the greatest period of economic growth in U.S. history.

What we have today is not free market capitalism.  We have gone very far down the road toward government-controlled socialism, and it has created a giant mess.

If we want to have a healthy middle class again, we need to have a society that promotes entrepreneurs and the creation of small businesses.  Today we are literally choking the financial life out of entrepreneurs and small businesses, and when I am elected to Congress I am going to fight as hard as I can to change that.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

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