Economic Despair

10 Reasons Why Ordinary Hard-Working Americans Are About To Really Start Feeling The Squeeze

American families better get ready to tighten their belts again.  There is every indication that we are all going to really start feeling the squeeze in the months ahead.  The price of gas is starting to spike again.  The price of food is moving north.  Health insurance premium increases are being announced coast to coast and a whole slate of tax increases is scheduled to go into effect in 2011.  Meanwhile, household incomes are down substantially all over the nation and the U.S. government is indicating that there will not be an increase in Social Security benefits for the upcoming year once again.  So if the cost of most of the basic things in our monthly budgets is going up and our incomes are going down what does that mean?  It means that average American families are about to be squeezed like nothing we have seen in decades.

The reality is that it is getting really hard to make it out there.  Not only do most households have both parents working, but in many cases both parents are getting second or even third jobs.  Things have gotten so bad that millions of Americans have felt forced to turn to the government for assistance just to survive. 

It can be really disheartening to come to the end of the month and realize that despite your best efforts you have less money than you did at the beginning of the month.  But that is where millions upon millions of American families now find themselves. 

The economic despair in the air is almost palpable.  Already hordes of Americans are truly and honestly hurting and things are only going to get worse.

The following are ten reasons why ordinary hard-working Americans are about to really start feeling the squeeze….   

#1 Gas prices are going up again.  AAA says that the average price of a gallon of regular gasoline in the United States was $2.80 on Sunday.  That is 32.6 cents higher than it was during the same time period in 2009.  As oil and gas prices continue to go up, that is also going to have a significant impact on utility bills for American families this winter.

#2 The price of food is poised to rise substantially.  Bloomberg is reporting that the the cost of meat in the United States is going nowhere but up.  But meat is not the only thing that you will soon be paying much more for at the supermarket.  Wheat, corn, soybeans and almost every other major agricultural commodity is absolutely soaring this fall.  As this continues, it is inevitable that ordinary Americans will see much higher food prices at their local grocery stores.

On a previous article, a reader named Erica left a comment in which see detailed the stunning food inflation that she is seeing where she lives….

Food inflation is real, and it is here. Just yesterday I compared my receipt from a grocery run to prices I have from the same exact store from September 15, 2009. Bacon? Up 52% to $13.69 from $8.99 for 4 lbs. Butter? Up 73% to $9.99 from $5.79 for 4 lbs. Pure vanilla extract up 14% to $6.79 from $5.95. Chopped dried onions up a mere 2% but minced garlic (wet) was up 32%.

#3 It looks like those receiving Social Security are not going to be seeing cost-of-living increases again.  The Associated Press is reporting that the  U.S. government is expected to announce some time this week that the tens of millions of Americans that receive Social Security will go through yet another year without an increase in their monthly benefit payments.  You see, Social Security cost-of-living adjustments are tied to the official government inflation numbers, and according to the U.S. government there is basically very little inflation right now.  Of course we all know that is a lie, but it is what it is.

#4 The cost of health care continues to soar into the stratosphere.  Americans already pay more for health care than anyone else in the world, and yet costs continue to spiral out of control.  The cost of health care increased a staggering 9.6% for all U.S. households from 2007 to 2009.  Now, health insurance companies from coast to coast are announcing that they must raise health insurance premiums substantially due to the new health care law that Barack Obama and the Democrats have pushed through.  So in 2011 it looks like the average American family is going to have to carve out an even bigger chunk of the budget for health care.

#5 American families could desperately use a recovery in the housing industry, but that is simply not going to happen.  Foreclosure-Gate is getting worse by the day, and it threatens to bring the U.S. real estate industry to a complete and total standstill.  If it is ultimately proven that the paperwork for millions of mortgages in the United States is seriously deficient, it could push hordes of mortgage lenders into bankruptcy and render mountains of mortgage-backed securities nearly worthless.  Regardless, it is now going to be much more difficult to get a mortgage, much more difficult to buy a home and much more difficult to sell a home.  We could very well be looking at the next stage of the housing crash.  Ordinary Americans could end up losing trillions more in home equity.   

#6 More Americans than ever find themselves unable to pay their bills, and an increasing number of frustrated creditors are actually resorting to wage garnishment.  Yes, you read the correctly.  Creditors are starting to ruthlessly go after the weekly paychecks of debtors.

The following is an excerpt from a recent New York Times article that discussed the rise of wage garnishment as a weapon against debtors….

After winning, creditors can secure a court order to seize part of the debtor’s paycheck or the funds in a bank account, a procedure called garnishment. No national statistics are kept, but the pay seizures are rising fast in some areas — up 121 percent in the Phoenix area since 2005, and 55 percent in the Atlanta area since 2004. In Cleveland, garnishments jumped 30 percent between 2008 and 2009 alone.

So if you are getting behind on your debt, you better watch out – your creditors may soon decide to garnish your wages.

#7 Americans now owe more on student loans than they do on credit cards.  As hard as that is to believe, that is actually true.  Americans now owe more than $849 billion on student loans, which is a new all-time record. 

Student loan payments can be absolutely crippling to a household budget.  This is especially true for young Americans that have just gotten out of school.  Sadly, student loan debt is nearly impossible to get rid of.  Once you are committed, it will follow you around for the rest of your life. 

#8 Even as expenses rise, incomes are down from coast to coast.  Median household income in the U.S. declined from $51,726 in 2008 to $50,221 in 2009.  There are very few areas that have not been affected.  In fact, of the 52 largest metro areas in the United States, only the city of San Antonio did not see a decline in median household income during 2009.

#9 If all of this was not bad enough, now there are rumblings that the U.S. Federal Reserve is actually thinking that we need more inflation.  A number of top Federal Reserve officials have come out recently and have publicly supported the notion that the Fed needs to purposely create more inflation in order to stimulate the economy.  Of course what they don’t tell the American people is that inflation is a hidden tax on every single dollar in our wallets and in our bank accounts.  More inflation would be really bad news for ordinary Americans, because they are already having a tough time getting their dollars to stretch far enough. 

#10 Apparently the U.S. government (and many state and local governments) think that this is a great time to stick it to the American people by hitting them with a slew of new taxes.  There are so many tax increases scheduled to go into effect in 2011 that it is hard to keep track of them all.  In fact, there are many (myself included) that are calling 2011 “the year of the tax increase“.  But the Americans that are going to get it the worst of all are those that are going to get hit with the Alternative Minimum Tax.  One out of every six American households is going to be hit with a tax increase averaging $3,900 (thanks to the AMT) and most of them don’t even know that it is coming.

So did you think that 2010 was bad?

Well, you haven’t seen anything yet.

2010 was a Sunday picnic compared to what is coming.

Get ready to get squeezed.

Get ready for higher food prices, higher gas prices, higher health insurance premiums and higher taxes.

Get ready to try to do a lot more with a lot less.

Inflation is already here, but it is going to get a whole lot worse.  Meanwhile, the U.S. government (along with state and local governments) is going to continue to have a voracious appetite for more revenue. 

Average Americans are going to be squeezed until they have nothing left to give.  Then they are going to be squeezed just a little bit more.  

Are you ready?

20 Signs That The Economic Collapse Has Already Begun For One Out Of Every Seven Americans

For most Americans, the economic collapse is something that is happening to someone else.  Most of us have become so isolated from each other and so self-involved that unless something is directly affecting us or a close family member than we really don’t feel it.  But even though most of us enjoy a much closer relationship with our television sets than we do with our neighbors at this point, it is quickly becoming undeniable that a fundamental shift is taking place in society.  Perhaps you noticed it when two or three foreclosure signs went up on your street.  Or perhaps it got your attention when that nice fellow down the street lost his job, and he and his family seemingly just disappeared from the neighborhood one day.  The Census Bureau made front page headlines all over the nation this week when they announced that one out of every seven Americans was living in poverty in 2009.  Every single day more Americans are getting sucked out of the middle class and into soul-crushing poverty.   

Unfortunately, most Americans don’t really care because it has not affected them yet.

But this year, millions more Americans will discover that the music has stopped playing and they are left without a seat at the table.

Meanwhile, neither political party has a workable solution.  They just like to point fingers and blame each other.

The Democrats blame Bush for all the poverty and advocate expanding programs for the poor.  Not that there is anything wrong with a safety net.  But the “safety net” was never meant to hold 50 million people on Medicaid and 40 million people on food stamps.  The number of Americans on food stamps has more than doubled since 2007.  So do we just double it again as things get even worse?

The truth is that welfare programs are only short-term solutions.  Unfortunately, the Democrats do not understand this.  What Americans really need are good jobs.

The Republicans are so boneheaded that they don’t even like to talk about poverty because they think it is a “liberal issue”.  Some conservative commentators have even been so brutally cold as to mock the “99ers” (those who have been unemployed so long that even their extended federal benefits have run out).

Instead of showing some compassion and being the party of the American worker (as they should be), the Republicans are often very uncompassionate and they allow the Democrats to be “the party of the poor” by default.

Both political parties need a big wakeup call.  There is a tsunami of poverty sweeping the United States, and somebody better wake up and do something about it.  More handouts will help people get by in the short-term, but there is no way that the federal government can financially support tens of millions more poor Americans.

How long is it going to be before the “safety net” simply collapses under the weight of all this poverty?

The path we are on is not sustainable.

The economy is falling apart, and somebody better wake up and do something before even more Americans find themselves drowning in poverty.

The following are 20 signs that the economic collapse has already begun for one out of every seven Americans…..

#1 The Census Bureau says that 43.6 million Americans are now living in poverty and according to them that is the highest number of poor Americans in 51 years of record-keeping.

#2 In the year 2000, 11.3 percent of Americans were living in poverty.  In 2008, 13.2 percent of Americans were living in poverty.  In 2009, 14.3 percent of Americans were living in poverty.  Needless to say the trend is moving in the wrong direction. 

#3 In 2009 alone, approximately 4 million more Americans joined the ranks of the poor.

#4 According to the Associated Press, experts believe that 2009 saw the largest single year increase in the U.S. poverty rate since the U.S. government began calculating poverty figures back in 1959.

#5 The U.S. poverty rate is now the third worst among the developed nations tracked by the Organization for Economic Cooperation and Development.

#6 Today the United States has approximately 4 million fewer wage earners than it did in 2007.

#7 Nearly 10 million Americans now receive unemployment insurance, which is almost four times as many as were receiving it in 2007.

#8 U.S. banks repossessed 25 percent more homes in August 2010 than they did in August 2009.

#9 One out of every seven mortgages in the United States was either delinquent or in foreclosure during the first quarter of 2010.

#10 There are now 50.7 million Americans who do not have health insurance.  One trip to the emergency room would be all it would take to bankrupt a significant percentage of them.

#11 More than 50 million Americans are now on Medicaid, the U.S. government health care program designed principally to help the poor.

#12 There are now over 41 million Americans on food stamps.

#13 The number of Americans enrolled in the food stamp program increased a whopping 55 percent from December 2007 to June 2010.

#14 One out of every six Americans is now being served by at least one government anti-poverty program.

#15 California’s poverty rate soared to 15.3 percent in 2009, which was the highest in 11 years.

#16 According to an analysis by Isabel Sawhill and Emily Monea of the Brookings Institution, 10 million more Americans (including 6 million more children) will slip into poverty over the next decade.

#17 According to a recently released Federal Reserve report, Americans experienced a $1.5 trillion loss in combined household net worth in the second quarter of 2010.

#18 Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975.

#19 Median U.S. household income is down 5 percent from its peak of more than $52,000 in 1999.

#20 A study recently released by the Center for Retirement Research at Boston College University found that Americans are $6.6 trillion short of what they need for retirement.

How anyone can look at those numbers and think that things are about to “get better” absolutely boggles the mind.

It is time to wake up.

Things are not going to get better.

Things are only going to get worse.

The United States is rapidly becoming a nation where poverty is absolutely rampant.

As poverty continues to spread, crime will not be far behind.

Meanwhile, the international community wants to impose a global tax on us so that they can “redistribute” even more of our wealth around the world.

The following was just reported by CNSNews.com….

A group of 60 nations will meet next week at the United Nations to push for a tax on foreign currency transactions as a way to generate revenue to meet global poverty-reduction goals, including “climate change” mitigation.

Well isn’t that great?  As American descends into poverty, the rest of the world is pushing for a global tax that will drain us of wealth even more.

It is just a tax on foreign currency transactions, but history has taught us that once taxers get their foot in the door they always go for more eventually.

Sadly, it is not just the United Nations that is discussing a global tax.  In fact, the IMF and the World Health Organization have both been very open about the fact that they want to impose global taxes of their own.

Not that we aren’t taxed enough already.  We already pay dozens of different kinds of taxes each year, and 2011 is already being dubbed as “the year of the tax increase“.

But most Americans don’t have any more to give.  Most Americans can barely make it from month to month.  More Americans than ever are slipping into poverty. 

What a mess we have on our hands.

Do any of you have any suggestions for how we should go about fixing all of this?

15 Shocking Poverty Statistics That Are Skyrocketing As The American Middle Class Continues To Be Slowly Wiped Out

The “America” that so many of us have taken for granted for so many decades is literally disintegrating right in front of our eyes.  Most Americans are still operating under the delusion that the United States will always be “the wealthiest nation” in the world and that our economy will always produce large numbers of high paying jobs and that the U.S. will always have a very large middle class.  But that is not what is happening.  The very foundations of the U.S. economy have rotted away and we now find ourselves on the verge of an economic collapse.  Already, millions upon millions of Americans are slipping out of the middle class and into the devastating grip of poverty.  Statistic after statistic proves that the middle class in the United States is shrinking month after month after month.  Meanwhile, millions of Americans are starting to wake up and are beginning to realize that we have very serious problems on our hands, but they have no idea what is causing our economic distress and they are unaware that most of our politicians have absolutely no idea how to fix the economic disaster that we have created.

On the mainstream news, the American people are treated to endless footage of leaders from both political parties proclaiming that the primary reason that we are in the midst of such an economic mess is because of what the other political party has done.

Republicans proclaim that we are experiencing all of this economic chaos because of the Democrats.

Democrats proclaim that we are experiencing all of this economic chaos because of the Republicans.

Even many readers of this column (who are generally more educated and more informed than most average Americans) leave comment after comment blaming either the Democrats of the Republicans for our current economic mess.  

But do you really want to know who is to blame for our economic problems?

Both of them.

This economic nightmare has taken literally decades to develop, and both Democrats and Republicans have contributed greatly to this disaster.

Both parties have absolutely refused to stand up to the Federal Reserve and the horrific economic policies that they have been shoving down our throats for decades.

Both parties have stood idly by as the U.S. trade deficit has absolutely exploded in size and the United States has become significantly poorer month after month after month.

Both parties have refused to do anything as month after month after month large numbers of factories and good paying jobs leave the United States.

Both parties have shoved the spending accelerator to the floor when they have been in power and now we have the largest national debt in the history of the world.

Both parties have done essentially nothing as the health care industry, which was once the envy of the world, has degenerated into a cesspool of corruption and greed and now seems designed to do little more than to provide pharmaceutical companies and health insurance crooks with obscene profits. 

If factories keep leaving the United States and jobs keep leaving the United States and the federal government keeps going into more debt and state governments keep going into more debt and local governments keep going into more debt, then things are going to keep getting worse. 

It does not take a genius to figure that out.

The United States is continually getting poorer and is continually going into more debt.

Can anyone out there explain how that is a formula for economic prosperity?

Seriously.

Can anyone explain how that would work?

Please leave a comment and explain that to all of us if you can.

The truth is that as wealth continues to leave the United States and as the U.S. gets even deeper into debt, more Americans are going to become poor.

It really is that simple.

The following are 15 shocking poverty statistics that are skyrocketing as the American middle class continues to be slowly wiped out….

#1 Approximately 45 million Americans were living in poverty in 2009.

#2 According to the Associated Press, experts believe that 2009 saw the largest single year increase in the U.S. poverty rate since the U.S. government began calculating poverty figures back in 1959.

#3 The U.S. poverty rate is now the third worst among the developed nations tracked by the Organization for Economic Cooperation and Development.

#4 According to the U.S. Department of Agriculture, on a year-over-year basis, household participation in the food stamp program has increased 20.28%.

#5 The number of Americans on food stamps surpassed 41 million for the first time ever in June.

#6 As of June, the number of Americans on food stamps had set a new all-time record for 19 consecutive months.

#7 One out of every six Americans is now being served by at least one government anti-poverty program.

#8 More than 50 million Americans are now on Medicaid, the U.S. government health care program designed principally to help the poor.

#9 One out of every seven mortgages in the United States was either delinquent or in foreclosure during the first quarter of 2010.

#10 Nearly 10 million Americans now receive unemployment insurance, which is almost four times as many as were receiving it in 2007.

#11 The number of Americans receiving long-term unemployment benefits has risen over 60 percent in just the past year.

#12 According to one recent survey, 28% of all U.S. households have at least one member that is looking for a full-time job.

#13 Nationwide, bankruptcy filings rose 20 percent in the 12 month period ending June 30th.

#14 More than 25 percent of all Americans now have a credit score below 599.

#15 One out of every five children in the United States is now living in poverty.

As millions more Americans continue to climb on to the “safety net”, how long is it going to be before it breaks?

The reality is that the system can only support so many people.  We are now at a point where our anti-poverty programs are clearly unsustainable in the long-term, but nobody has a solution for how we are going to get all of these people off of these programs or how we are going to provide good jobs for all of them.

The cost of every U.S. government anti-poverty program is absolutely soaring.  Meanwhile, the U.S. government is already running a budget deficit that is approaching 1.5 trillion dollars every year.  If you cannot understand that we have a very serious problem on our hands then you are probably not awake.

The U.S. economic system is dying.  Blaming the other political party is not a solution.  Running around the country offering “hope” and “change” and giving people a vague sense that things will get “better” soon is not going to cut it either.

The American people need very real economic solutions to very real economic problems. 

But nearly all of our politicians are way too busy either trying to get elected or trying to stay in office to tackle the very serious problems which are destroying our economy.

Unfortunately, the American people love to watch our politicians play politics.  They love to watch the little ping-pong ball of blame go back and forth.  They love to pick sides and to cheer for their “team”.

None of that is doing any good.  Right now millions of Americans are getting sucked into poverty each year and neither major political party is doing anything real to address the very real economic problems that are causing that to happen. 

But most Americans have become so “dumbed down” that they don’t even understand what the real problems are anymore.

All most Americans seem to want these days is to watch a good show.

So send in the clowns.

There are certainly enough of them in Washington D.C. to keep Americans entertained for quite a long time.

As Americans Celebrate Labor Day 2010, U.S. Factories Are Closing In Droves

Labor Day 2010 comes in the midst of a stunning wave of U.S. factory closings that stretches from coast to coast.  Once upon a time America was the greatest manufacturing machine that the world has ever seen, but now it seems as though the only jobs available for working class Americans involve phrases such as “Welcome to Wal-Mart” and “Would you like fries with that?”  Even though the population of the United States has exploded over the last several decades, the number of Americans employed in the manufacturing sector today is smaller than it was in 1950.  America has become a voracious economic black hole that “consumes” as much as possible and yet actually produces very little.  The United States is becoming deindustrialized at a blinding pace, and it is becoming increasingly difficult for blue collar American workers to find jobs that will actually enable them to support their families.  The sad truth is that American workers don’t have a whole lot to actually celebrate this Labor Day.  14 million U.S. workers are “officially unemployed” and tens of millions of others have been forced to take part-time or temporary jobs that they are overqualified for just so they can survive.   Unfortunately, this is not just a temporary situation for American workers.  As millions of good jobs continue to get outsourced and offshored, Labor Day celebrations in coming years will be even more depressing.

The following are just some examples of the recent factory closings that have been sweeping the nation…. 

*Chrysler has announced that its plans to close an engine plant in Kenosha, Wisconisn are official.  The factory will be shut down for good on approximately October 8th and about 575 jobs will be lost.

*The largest milk producer in the United States, Dean Foods, says that it will close a South Carolina dairy plant in October.  That factory closing will eliminate 151 jobs.  This is just the latest in a string of factory closings for Dean Foods.  Over the past several years Dean Foods has closed factories in Michigan, Nebraska, Pennsylvania, Tennessee and Wisconsin.

*Continental Structural Plastics, a major producer of body panels for cars, is shutting down its plant in North Baltimore, Ohio in October and as a result 214 people will lose their jobs.

*Perfect Fit Industries (a prominent manufacturer of bedding accessories, pillows and comforters) has announced that it plans to close a factory in Loogootee, Indiana by the end of the year. As a result, 95 jobs will be lost.

*Ford Motor Company recently announced the closure of a factory that produces the Ford Ranger in St. Paul, Minnesota.  Approximately 750 good paying jobs are going to be lost.  Minnesota Governor Tim Pawlenty was so desperate to keep the plant open that he offered Ford a multi-million dollar incentive package full of tax cuts and job creation incentives to keep it open, but Ford rejected the offer, saying that the St. Paul plant just does not fit with Ford’s new “global” manufacturing strategy.

*The city of Breckenridge, Texas has been shaken by news that Karsten Homes notified nearly 130 employees that their local factory will be closing in two months.

*It has been announced that there will be a new round of layoffs at the Whirlpool factory in Fort Smith, Arkansas, but at this point the company is not saying how many jobs will be lost.  Whirlpool has been laying off workers at the plant steadily over the past few years as much of the work that was once done at the factory has been moved to a facility down in Mexico.

*Midcoast Aviation is closing its Savannah, Georgia factory by the end of the year.  This move will affect approximately 362 jobs.

*Federal-Mogul has been making headlamps for automobiles and for industrial use since 1954 in Boyertown, Pennsylvania, but now that era is coming to an end.  Federal-Mogual has announced that the Boyertown plant will close by the end of the year and 70 jobs will be lost.

*Duro Bag Manufacturing Co. plans to close its factory in Hudson, Wisconsin by October 22nd.  As a result, 63 workers will be without jobs.

*Quad/Graphics is the second-largest commercial printer in the United States.  It prints Newsweek, Rolling Stone, Sports Illustrated, Time and Wired magazines.  Unfortunately, times are tough for Quad/Graphics and they have announced the closing of five plants.  The facilities to be closed are located in Mississippi, Ohio, Nevada and Tennessee.  As a result of the closings, 2,200 workers will lose their jobs.

Scenes such as these are being repeated over and over and over across the United States.

What we are witnessing is the slow-motion deindustrialization of the United States.

This is very bad news for American workers, and indeed it is very bad news for all Americans, because the truth is that any economy that consumes far more than it produces does not have a bright future.

So what do you think about the deindustrialization of America?  Feel free to express your opinion by leaving a comment below….

Can A Family Of Four Survive On A Middle Class Income In America Today?

When I was growing up, $50,000 sounded like a gigantic mountain of money to me.  And it was actually a very significant amount of money in those days.  But in 2010 it just does not go that far.  Today, the median household income in the United States for a year is approximately $50,000.  About half of all American households make more than that, and about half of all American households make less than that.  So if your family brings in $50,000 this year that would put you about right in the middle.  So can a family of four survive on $50,000 in America today?  The answer might surprise you.  Twenty years ago a middle class American family of four would have been doing quite well on $50,000 per year.  But things have changed.

You see, despite government efforts to manipulate the official inflation numbers, the price of everything just keeps going up.  The price of food slowly but surely keeps moving up each year.  The price of gas is far higher than it was 10 or 20 years ago.  Taxes just keep going up.  Utility bills just keep going up.  Each year middle class American families have found themselves increasingly squeezed as their expenses have risen much more rapidly than their incomes.  

So just how far will $50,000 go for a middle class American family of four today?  Well, $50,000 breaks down to about $4,000 a month.  So how far will $4,000 a month stretch for a family of four in today’s economy?….

First of all, the family of four needs some place to live.  Even though house prices have come down a bit recently, they are still quite expensive compared to a decade ago.  Let’s assume that our family of four has found a great deal and is only spending $1000 a month on rent or on a mortgage payment.  In many of the larger U.S. cities this is a completely unrealistic number, but let’s go with it for now.

Next, our family of four has to pay for power and water for their home.  This amount can vary dramatically depending on the climate, but let’s assume that the average utility bill is somewhere around $300 a month.

Our family is also going to need phone and Internet service.  Cell phone bills for a family of four can balloon to ridiculous proportions, but let’s assume that our family of four is extremely budget conscious and has found a package where they can get basic phone service, Internet and cable for $100 a month.  Most middle class American families spend far more than that.

Both parents are also going to need cars to get to work.  Let’s assume that both cars were purchased used, so the car payments will only total about $400 a month.  If the vehicles were purchased new this number could potentially be much higher.

If our family has two cars that means that they will also be paying for automobile insurance.  Let’s assume that they both have exemplary driving records and so they are only spending about $100 a month on car insurance.

Our hypothetical family of four is also going to need health insurance.  In the past, families could choose to go without health insurance (at least for a while), but now thanks to Barack Obama all American families will essentially be forced to purchase health insurance.  Health insurance premiums are absolutely skyrocketing, but let’s assume that our family has somehow been able to find an amazing deal where they only pay $500 a month for health insurance.

Our hypothetical family is also going to have to eat.  Let’s assume that our family clips coupons and cuts corners any way that it can and only spends about $50 for each member of the family on food and toiletries each week.  That works out to a total of $800 a month for the entire family.

Lastly, the parents are also going to need to buy gas to get to and from work each week.  Let’s assume that they don’t live too far from work and only need to fill up both cars about once per week.  That would give them a gasoline bill of about $50 a week or $200 a month.  Of course if either of them lived a good distance from work or if a lot of extra driving was required for other reasons this expense could be far, far higher.

So far our family has spent $3400 out of a total of $4000 for the month.  Not bad, eh?

Wrong.

We haven’t taken federal, state and local taxes out of the paycheck yet.  Depending on where our family lives, this will be at least $1000 a month. 

So now we are $400 in the hole.

But to this point we have assumed that our family does not have any credit card debt or student loan debt at all.  If they do, those payments will have to be made as well.

In addition, the budget above includes no money for clothing, no money for dining out, no money for additional entertainment, no money for medications, no money for pets, no money for hobbies, no money for life insurance, no money for vacations, no money for car repairs and maintenance, no money for child care, no money for birthday or holiday gifts and no money for retirement.

On top of all that, if our family of four has a catastrophic health expense that their health insurance won’t pay for (and health insurance companies try to weasel out of as many claims as they can), then our family of four is not just broke – they are totally bankrupt.

Are you starting to get the picture?

It is getting really, really hard out there for middle class American families these days.

And unfortunately, many American families now have at least one parent that is not working.  In some areas of the nation it just seems like there are virtually no jobs available.  For example, at 14.3%, the state of Nevada now has the highest unemployment rate in the nation.  Michigan (which had been number one) is not very far behind.

But even those Americans who are able to find work are finding themselves increasingly squeezed.  For many Americans, a new job means much lower pay.  Millions of highly educated people who once worked in professional positions now find themselves working in retail positions or in the food service industry.  Many are hoping that the economy will “turn around” soon and that they will be able to go back to higher paying jobs, but the truth is that the U.S. economy is simply not producing enough good jobs for everyone any longer.

So where did all the good jobs go?  Well, millions of them have been shipped off to China, India and dozens of other nations around the globe.  Today the United States spends approximately $3.90 on Chinese goods for every $1 that China spends on goods from the United States.  A Chinese factory worker makes about a tenth of what an American factory worker makes.  And China continues to keep their currency artificially low so that jobs will continue to flow into China and so that we will continue to run a massive trade imbalance with them.

In a previous article, “Winners And Losers“, I went into much greater detail about how globalism is destroying middle class jobs.  We are rapidly moving toward an America where there will be a small group of “haves” and a very large group of “have nots”. 

The middle class in America is going to continue to shrink and shrink and shrink in the years ahead.  Not only are both parents going to have to work to pay the bills, but both parents in many families will be forced to take two or three jobs each just to make it each month. 

So what do you think?  Do you think that a family of four can make it on a middle class income in America today?  Feel free to leave a comment with your thoughts….

This Economy Is Ripping The Dignity Of Millions Of Unemployed Americans To Shreds

If you can still put a roof over your head and food on the table for your family, you should consider yourself to be very fortunate.  There are millions of Americans out there right now that are really, really suffering.  The cold, hard reality of it is that there aren’t even close to enough jobs out there for everyone right now.  It is almost as if we are all caught in a really bizarre game of musical chairs where the losers get stripped of their tickets to the middle class.  What this horrible economy is doing to the dignity of millions of middle class Americans is incredibly saddening.  There are a lot of very highly educated and very hard working Americans who cannot seem to get jobs no matter what they do and now find themselves doing whatever they can just to survive.  It can be really hard to keep your dignity when you played by all the rules and you worked as hard as you could all your life and now you find yourself a half step away from being homeless.  Those of us who are still doing okay should never look down on those who are struggling in this economy, because the truth is that any of us could be next.   

If you really want to read some horror stories about what long-term unemployment is doing to some people in America, you should go spend an hour or two over at Unemployed-Friends some time.  It is a great forum with a lot of great resources for the unemployed, but it also contains dozens and dozens and dozens of heartbreaking stories from middle class Americans who have had their lives shattered by this economic downturn.      

The following is a typical story on Unemployed-Friends.  It is from a 48 year old Air Force veteran who has lost everything and is now sleeping in his vehicle.  It turns out that Scott48’s job was shipped off to India and now he has been out of work for over two years….

“I am a 48 year old USAF Vet. I got my house in 1996 with the help of the VA. In 2009 the company I worked for went out of buisness(gone to India) I then became a 99er. I notified Wells Fargo that I lost my job and they said they would work with me, the next mortgage statement I got they conveniently increased my mortgage! With what I got from UE was enough for the house but I had to cut out the luxury of food, gas, utillities, insurance, entertainment and alcohol. That was it for me, so the forecloser ball was in motion. I had to give my dog to my cousin so he would get fed, I took everything I owened to the auction( execpt tools, clothes, pictures, tech manuals and my Saxophone) and sold it. I went to a half-way house the VA recomended for a week and it was joke, so my cousin said I could stay with her. After 4 months she diecided that I wasnt looking hard enough and kicked me out, and Ive applied for everything except selling myself. This summer I was staying in an abandoned house due to forecloser and the real estate company has now put it on the market, and I am now on the street sleeping in my vehicle or a friend here and there. Keeping clean is going to be a challenge cuz the Flying J truck stops charge $10 for a shower, rip-off. What a country!”

The truth is that this economy is driving many Americans to the brink of desperation.  Even recent college graduates are becoming desperate enough to actually consider suicide.  The following story is from an Unemployed-Friends user known as 08pacollegegrad….

“I could just take any job like working at fast food places, but I hear people who try can’t even get hired there. I went to Wendy’s for lunch the other day and I thought of picking up an application…but the slot where they keep the applications was completely empty. That should say it all. Plus, I feel like if I take just any job…I will be set back further and never be able to gain experience in my chosen fields.

I follow up on job applications, but employers ignore me for the most part when I try to contact them. I sent five follow up e-mails last week and got no responses. I contacted an employer expressing my interest in working for them, but all they gave me is the link to their online application system that I have never gotten a job from.

I am thinking of applying for more internships (I have already done two), but I don’t want employers to think why I am applying for an internship when I should have had a full fledged job by now.

I have almost killed myself over my situaion and am taking anti-depressants right now. I see a psychiatrist every 4-6 weeks, but I still have days where I feel so empty. I am sick of sitting at home searching for jobs and praying for a response that never comes.”

Many Americans spend day after day after day looking for a job that never comes.  The sense of hopelessness that can build after doing this for a few years is almost indescribable.  The following is another incredibly sad story from an Unemployed-Friends user known as feuxdejoie….

“I lost my job in June 2008, my husband was working but sentenced to prison for 4 years, for DUI, no accidents or injuries. I had been using my unemployment to pay bills but my last check came June 12, 2010. I’m alone and scared. The city that I live in has the highest unemployment in the State, Illinois. Our children are grown and I sit alone all day searching for jobs. My husband can only call once a month because of the outrageous rates for telephone calls. I’m at the end of my rope and don’t know where to turn if they don’t pass a tier V for unemployment or open up some jobs.
I turned 50 in April and had worked all of my life, starting at age 14 with a work permit! My employer stated to me that they needed someone bilingual and terminated me even after I told them that I would take classes to learn.  I signed up for college and began classes in January then unemployment told me that I wasn’t elgible for unemployment while attending school.”

There are millions of Americans who believe that their lives are over because they can’t get decent jobs.  When you lose your job, your home, your car, your health insurance and then finally your unemployment insurance runs out, it is easy to lose all hope as an Unemployed-Friends user named Ember has done….

“so i feel pretty much hopeless. been unemployed since July 2008. in over two years i haven’t even been called for an interview. tired of looking and applying for jobs outside of my field that require experience i don’t have. it’s all for naught. i have two bachelor of science degrees. my BS degrees, cuz that’s what they’re worth. since losing my job i’ve gotten divorced. lost my house. lost my health insurance. totalled my car and sustained chronic back pain. and moved in with my mom. and did i mention, when all this started i was a new mom, just back from maternity leave? so (now) i’m raising a toddler on my own, with no income. my unemployment insurance ran out a few weeks ago. i don’t even know what to do now. i just want to disappear. i’m tired of trying. i’m tired of being a burden on everyone. if i didn’t have the responsibility to take care of my child i wouldn’t be around anymore.”

This final example is from an Unemployed-Friends user identified as Faith1028.  Be warned that this one will shake you to your core if you have any sensitivity at all.  As you read this, keep in mind that this kind of thing is literally happening to millions of Americans these days…. 

“HI, y’all! This is my story. I’m from Chicago.

I lost my job 11.06.09 – I did my best to remain positive & confident that I would get a job by the end of November.

December 2009 – Still no job. I’m getting food stamps (LINK card) & Unemployment Benefits. Not much money at all, but I’m surviving. Thanks to all this stress, my stomach has been burning and/or been painful daily for all December. I puked my guts out on the 26th.

January 2010 – My stomach is still hurting every day. I had to close out my savings account. I haven’t told my slumlord or my fellow tenants that I lost my job; I go on pretending I’m still going to work everyday. Unfortunately on the 26th, I got my eviction notice. I called the office to ask why. The response was “I don’t know.” I became hysterical. I’ve no job, no money, no family/friends to help. (I have many *relatives*, but no *family*.) I truly believed my only alternative was suicide. I wanted to say good-bye to my brother (my only sibling), but we haven’t spoken to each other for over 4 years; I no longer have his address/phone number. I found him on Facebook. I didn’t bring up my situation because I felt he wouldn’t care. We exchanged a few messages and that was it. I haven’t heard from him since. Good riddance.

February 2010 – Someone found a family that I can stay with for only $250/month! My own room! They turned out to be aquaintances of mine. Vegetarian, too! At least I have a place to stay. I’d rather live alone, but, hey, I’m desperate! — And I’m not too crazy about the bedbugs. OW!

June/July 2010 – Thanks to daily/nightly use of citrine crystals since 30 May, I have no more stomach problems!
Thanks to weekly use of a natural (green!) pesticide from PlusNaturalEnzymes.com, I no longer have a problem with bedbugs! However…
Mid-June, my Unemployment Benefits ran out. Of course, I’m still looking for a job! What am I supposed to do – put a gun to someone’s head and force them to hire me? As of this date, I have $12 left to my name; $0 in my chequeing account. I recently reapplied for and am now receiving food stamps. Before I got my food stamps back, I’ve eaten whatever (Vegetarian!) food I can get, even stuff I’m allergic to. As a result, I’ve become sick: cold-like symptoms, pain in lower intestines…and a rash over my arms, legs, & neck. Oh, does it itch! At least my food allergies are not life-threatening.
Needless to say, my depression has gotten worse.

I am really trying hard to remain positive — and alive.
But why? Is it really all worth it?

I haven’t paid July’s rent, and the people I’m staying with are getting very *impatient*; I fear I’ll be evicted again! The money is coming! It’s not my bloody fault!

Someone on Twitter sent me a link to this site. I know I’m not the only one suffering; some folks have already committed suicide. I don’t want to die, but I don’t want to be homeless, either. I am so bloody scared.
Just give me money that my tax dollars paid for!
–Or better yet: GIVE ME A BLASTED JOB!!”

The really sad thing is that there are countless other stories just like these being posted all over the Internet all the time.

People are hurting.

People are losing hope.

So how did we get here?

Well, it turns out that the “haves” have figured out that they really don’t need the “have nots” after all.  Incredible advances in technology have increasingly enabled employers to replace humans with machines and computers.  In addition, as we have detailed previously, millions upon millions of middle class American jobs are being shipped off to China and to dozens of third world nations where workers are more than happy to work for less than a tenth of what an American worker would make.

All of those jobs that have been lost to technology and that have been sent overseas are not going to come back.  The hordes of long-term unemployed that we are seeing now is just the beginning.  It is going to get a lot worse.

So the next time you hear a hard luck story from an unemployed American, don’t look down on that person.

You might be next.

We Killed The Goose That Laid The Golden Egg And Now The Number Of Americans Receiving Long-Term Unemployment Benefits Has Risen A Whopping 60 Percent In Just One Year

For middle class Americans, the new global economy has provided mountains of cheap products made in China, India and dozens of other nations, but it has also killed the goose that laid the golden egg.  Millions of American workers have been discovering that the price for all of those inexpensive foreign-made goodies is their jobs.  Now we have so many long-term unemployed workers in the United States that we are inventing new terms (such as “the 99ers”) to describe them.  Unemployment is on the rise again (we’ll get to the figures in a minute) and everyone seems perplexed at the continuing inability of the “greatest economy in the world” to provide jobs for everyone.  But the truth is that this has been coming for a long time.  The debt-fueled prosperity of the past couple of decades allowed us to live far beyond our means and provide very high levels of employment for a while, but now economic reality is setting in.  The millions of middle class jobs that have been shipped overseas are never coming back.  Unfortunately, the existence of a large class of chronically unemployed Americans that are struggling just to survive is going to quickly become “the new normal”.

This week the U.S. Labor Deparment announced that for the week ending August 14th, new applications for unemployment insurance benefits reached the half-million mark.  That was the first time since last November that the psychologically important 500,000 threshold had been hit.  Most economists had predicted that unemployment claims would actually decline, but instead they experienced their fourth increase in the past five weeks.

But the increase in new applications for unemployment benefits is only part of the story.  It is not such a bad thing to be unemployed if you can find another job in a couple of weeks or a couple of months.  But in 2010, there are millions of Americans that cannot seem to find a job no matter what they do month after month after month.

In fact, the number of Americans that have exhausted their state unemployment benefits and that are collecting long-term federal unemployment benefits has increased 60 percent over the past year.  The following is how a recent article on CNBC recently described the situation….

“Claimants under the Emergency Unemployment Compensation provision—who have exhausted their state benefits—surged 260,105 to 4,753,456 for the week ended July 31 (the data lags the weekly claims by two weeks). While that represents a weekly increase of 0.5 percent, the total is 60.5 percent higher than the 2009 figure of 2,961,457.”

So what will the figure be at this time next year?

6 million?

7 million?

And what happens if the U.S. Congress finally decides to cut off the long-term unemployment benefits at some point?

The truth is that things are getting really frightening out there.

“There’s a red flag being waved right now that says ‘Danger,’” Bloomberg quoted Mark Vitner, a senior economist at Wells Fargo Securities LLC as saying recently. “Growth is going to slow in the second half and we might face something a little more ominous than that.”

The reality is that there are not nearly enough jobs out there for everyone.  According to one recent survey, 28% of U.S. households have at least one member that is looking for a full-time job.

Just think about that.

Almost 30 percent of all U.S. homes have someone who is looking for a full-time job.

That is not just a problem.

That is a national crisis.

But it is not just those who are unemployed who are suffering.  The reality is that this economic downturn has hurt most of us in one way or another.  A recent Pew Research survey found that 55 percent of the U.S. labor force has experienced either unemployment, a pay decrease, a reduction in hours or an involuntary move to part-time work since the recession began.

Millions of Americans are putting up with increased workloads, pay decreases and benefit cuts right now because the alternative is joining the hordes of jobless Americans that are fighting tooth and nail over the few jobs that are actually available. 

Once you lose your job in this economy there is no telling when you are going to be able to get another one.  In America today, the average time needed to find a job has risen to a record 35.2 weeks.

Could you imagine being unemployed for 35 weeks?

The truth is that in 2010, it is employers that have all the power and all the leverage.

In fact, when you really analyze it, it is a wonder that companies are hiring new workers at all.  It is a massive pain in the rear end to hire a new worker in America today.  The thousands upon thousands of regulations that must be complied with, the big pile of forms that need to be filled out and the elaborate bookkeeping that must be maintained make hiring someone a major headache.  One top of that, tax contributions, benefit packages and health insurance premiums make each worker a very expensive proposition.

There is a reason why so many companies are trying to squeeze more out of the employees that they already have or are only hiring temporary employees right now.

But the biggest reason why there is such a lack of jobs is because millions upon millions of good jobs have been shipped overseas.  Globalism and “free trade” have put middle class American workers into a situation where they are in direct competition for jobs against the cheapest labor in the world.

Why in the world should U.S. companies hire American workers when they can hire very willing workers on the other side of the world who will do the same job for less than one-tenth the cost?

Those who once warned us about “the great sucking sound” that globalism would create were right, and the truth is that the U.S. has already been bleeding good jobs for years.  According to one analysis, the United States has lost 10.5 million jobs since 2007, and the truth is that unless something is done things are going to get even worse.

But what can get lost in all of these statistics is the very real pain that so many millions of Americans are now experiencing.

Losing a job and watching everything that you have worked for crumble can be extremely soul crushing.  In fact, this economy is pushing some Americans completely over the edge.

The following is an excerpt from an actual letter to U.S. Representative Anthony Weiner….

“My dad, S, killed himself March 16, 2009 because he ran out of money and could not find work. My whole family had been devastated by the economy. He was 61 years old and could not take it anymore. He could not figure out how to keep the electric on, buy food, or keep a roof over his head. A day before his electric was to be shut off, and 2 weeks away from eviction, my dad took the hardest walk of his life. He left a note on the dining room table for my sister and I. His suicide letter said ‘I love you. I had to do this. I ran out of money. I wish you both luck in your lives’. He left the door unlocked with the door key left in the lock. He carefully laid out two suits for us to pick from to bury him in.”

Could you imagine if that was your father?

As the economy continues to deteriorate, many more Americans are going to be pushed to the edge of despair.

Life is not about paying our bills or about the things that we own, but there is no denying the pain that comes when you run completely out of money and you feel totally helpless.

But nobody should ever give up.  There is always hope.  Things can always be turned around.

Unfortunately, we have entered a time when there are always going to be a large number of unemployed Americans because there are just not nearly enough jobs to go around.

Anyone who thought that we could merge American workers into a massive global labor pool and still be able to maintain our middle class lifestyles was living in fantasy land. 

No, the truth is that globalism has killed the goose that laid the golden egg and now tens of millions of Americans are going to pay the price.

18 Signs That America Is Rotting Right In Front Of Our Eyes

Sometimes it isn’t necessary to quote facts and figures about government debt, unemployment and the trade deficit in order to convey how badly America is decaying.  The truth is that millions of Americans can watch America rotting right in front of their eyes by stepping out on their front porches.  Record numbers of homes have been foreclosed on and in some of the most run down cities as many as a third of all houses have been abandoned.  Unemployment remains at depressingly high levels and the number of Americans on food stamps continues to set new records month after month.  Due to severe budget cuts, class sizes are exploding and school programs are being eliminated.  In some areas of the U.S. schools are even going to four day weeks.  With little to no funding available, bridges are crumbling and street lights are being turned off in many communities.  In some areas, asphalt roads are actually being ground up and turned back into gravel roads because they are less expensive to maintain.  There aren’t even as many police available to patrol America’s decaying cities because budget problems have forced local communities across the U.S. to lay off tens of thousands of officers.

Once upon a time, the American people worked feverishly to construct beautiful, shining communities from coast to coast.  But now we get to watch those communities literally crumble and decay in slow motion.  Nothing lasts forever, but for those of us who truly love America it is an incredibly sad thing to witness what is now happening to the great nation that our forefathers built.

The following are 18 signs that America is rotting right in front of our eyes….

1 – Due to extreme budget cuts, school systems across the United States are requiring their students to bring more supplies with them than ever this year.  In Moody, Alabama elementary school students are being told to bring paper towels, garbage bags and liquid soap with them to school.  At Pauoa Elementary School in Honolulu, Hawaii all students are being required to show up with a four-pack of toilet paper.

2 – According to the American Association of School Administrators, 48 percent of all U.S. school districts are reporting budget cuts of 10 percent or less for the upcoming school year, and 30 percent of all U.S. school districts are reporting cuts of 11 to 25 percent.

3 – In Chicago, drastic budget cuts could result in an average class size of 37 students.

4 – The governor of Hawaii has completely shut down that state’s schools on Fridays – moving teachers and students to a four day week.

5 – According to the Federal Highway Administration, approximately a third of America’s major roadways are already in substandard condition.

6 – All over the United States, asphalt roads are being ground up and are being replaced with gravel because it is cheaper to maintain.  The state of South Dakota has transformed over 100 miles of asphalt road into gravel over the past year, and 38 out of the 83 counties in the state of Michigan have now turned some of their asphalt roads into gravel roads.

7 – According to the U.S. Department of Transportation, more than 25 percent of America’s nearly 600,000 bridges need significant repairs or are burdened with more traffic than they were designed to carry.

8 – In a desperate attempt to save money, the city of Colorado Springs turned off a third of its streetlights and put its police helicopters up for auction.

9 – The state of Arizona has eliminated funding for full-day kindergarten and has shut down a number of state parks.

10 – Over the past year, approximately 100 of New York’s state parks and historic sites have had to cut services and reduce hours.

11 – In Georgia, the county of Clayton recently eliminated its entire public bus system in order to save 8 million dollars.

12 – Elsewhere in Georgia, 30,000 people recently turned out to pick up only 13,000 applications for government-subsidized housing.   A near-riot ensued and 62 people were left injured.  The amazing thing is that all of this commotion was just to get on a waiting list.  There are no aid vouchers even available at this time.

13– In the city of Philadelphia, rolling fire station “brown outs” recently cost a 12 year old autistic boy named Frank Marasco his life.

14– Oakland, California Police Chief Anthony Batts says that due to severe budget cuts there are a number of crimes that his department will simply not be able to respond to any longer.  The crimes that the Oakland police will no longer be responding to include grand theft, burglary, car wrecks, identity theft and vandalism.

15– The sheriff’s department in Ashtabula County, Ohio has been slashed from 112 to 49 deputies, and there is now just one vehicle remaining to patrol all 720 square miles of the county.

16 – Of 315 municipalities the New Jersey State Policemen’s union recently canvassed, more than half indicated that they were planning to lay off police officers.

17 – Not that the criminals are doing that much better.  Things have gotten so bad in Camden, New Jersey that not even the drug dealers are spending their money anymore.

18 – Almost everyone knows someone who has been severely impacted by this economic downturn.  A new Rasmussen Reports national telephone survey has found that 81 percent of American adults know someone who is out of work and looking for a job.

So can’t the states just step up and start spending more money and fix these things?

Well, no.  The truth is that the states are absolutely broke.  Quite a few of the states are actually on the verge of default, and there is no getting around the fact that budget cuts that are much more severe are going to be required in the years ahead.

So can’t the U.S. government step in and bail out the states?

Well, yes, but as we have detailed previously, the U.S. government is literally drowning in a sea of red ink.  The U.S. government is already spending an amount of money equivalent to approximately 25.4 percent of GDP this year.

How much more money can the U.S. government possibly spend?

To get an idea of just how bad things are already, the IMF says that in order to fix the U.S. government budget deficit, taxes need to be doubled on every single U.S. citizen.

Are you ready to pay double the taxes?

No matter how you slice it, the U.S. is in a massive amount of financial trouble and the American people are starting to realize this fact.  In fact, one new poll found that nearly two-thirds of Americans believe that the U.S. economy will get worse before it gets better.

But unfortunately things are not going to get “better” – at least in the long-term.  The decay and the rot that have already set in are only going to get worse.

These problems did not appear overnight and they are not going to be solved overnight.  Our leaders have been making very bad decisions for decades, and all of those bad decisions are starting to catch up with us.

But perhaps you disagree.  Feel free to tell us what you think in the comments section below….

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