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The Middle Class Is Being Destroyed: Now Only 25 Percent Of All Americans Have $10,000 Or More In Savings

We just got more evidence that the middle class is being systematically eviscerated.  According to a GOBankingRates survey that was just released, more than half the country has less than $1,000 in savings.  So in the event of a major economic disaster of some kind, over 50 percent of the nation is going to be completely out of cash almost immediately.  For years I have been writing about the steady decline of the middle class in the United States, but I still get astounded by numbers such as these.  According to this new survey, only 25 percent of all Americans have $10,000 or more in savings at this point…

$0 saved: 39 percent
Less than $1,000 saved: 18 percent
$1,000 to $4,999 saved: 12 percent
$5,000 to $9,999 saved: 6 percent
$10,000 or more saved: 25 percent

Other surveys have come up with similar results.  One discovered that about two-thirds of the country is living paycheck to paycheck, and another which was conducted by the Federal Reserve found that 44 percent of all U.S. adults do not even have enough money “to cover an unexpected $400 expense”.

Most of us have grown accustomed to barely scraping by from month to month.  But that is not what being “middle class” is supposed to be about.  If you are in the “middle class” you should be making more than you are spending and building long-term wealth.

But just like our federal government, most of us are spending money like there is no tomorrow.  If we don’t have quite enough money for what we want to do, we just borrow more.  Right now, U.S. consumers are more than 12 trillion dollars in debt, and it is impossible to build any real wealth when you are constantly drowning in red ink.

We are willingly enslaving ourselves, but most people were never even taught about the dangers of going into too much debt.

Another major factor in the decline of the middle class is the fact that we have been shipping millions of good paying jobs overseas.  We have lost more than 70,000 manufacturing facilities since China joined the WTO, and we have been replacing good paying manufacturing jobs with low paying service jobs.

Without enough good paying jobs, our middle class has been steadily shrinking.  In 2015, the middle class became a minority of the population in the United States for the first time ever recorded.

If you go back to the early 1970s, the middle class was well over 60 percent of the population, but now that number is hovering in the high 40s.

And things continue to get even worse.  For example, NBC News recently reported that the number of Americans that can’t afford to be living in their own homes has more than doubled since 2001…

Over 38 million American households can’t afford their housing, an increase of 146 percent in the past 16 years, according to a recent Harvard housing report.

Under federal guidelines, households that spend more than 30 percent of their income on housing costs are considered “cost burdened” and will have difficulty affording basic necessities like food, clothing, transportation and medical care.

But the number of Americans struggling with their housing costs has risen from almost 16 million in 2001 to 38 million in 2015, according to the Census data crunched in the report. That’s more than double.

If we want to turn things around for the middle class, we need more entrepreneurs and more small businesses.

Small businesses have traditionally been the primary engine for job growth in this country.  But instead of encouraging small businesses to start and grow, the federal government has been absolutely killing small businesses with red tape and high taxes.

If I win my election, I am going to do all that I can to fight for entrepreneurs and small businesses.  Today, the percentage of Americans that work for themselves is close to a record low, and we desperately need to get that turned around.

So I I go to Congress, one of the first things I plan to do is to push for the elimination of the “self-employment tax”.

If you are an entrepreneur, then you already know how painful that particular tax can be.

We have got to get this economy growing again.  Barack Obama was the only president in our entire history never to have a single year when the U.S. economy grew by at least 3 percent, and overall we have not had a year when our economy grew by at least 3 percent in over a decade.

And as I noted earlier this week, “our economy has still only grown at an average rate of just 1.33 percent a year over the last 10 years.”

Is that acceptable to you?

I hope not, because it sure is not acceptable to me.

What we have been doing is simply not working.  In fact, if we were not propping up the economy with the greatest debt binge in human history, we would be a in a rip-roaring economic depression right now.

If we want America to once again become the greatest economic machine on the planet, we need to do the things that made us great in the first place.  We need an extremely limited federal government that stays out of the way of business, and we need to once again embrace the principles of free market capitalism.

Free markets work tremendously well if you allow them to do so.

But if we continue to march down the road toward big government socialism, we will get what we deserve, and it won’t be pretty.

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.

Hillary Almost Proposed ‘A Universal Basic Income’ In 2016, And The Idea Is Catching Fire Among Grassroots Democrats

Should you get free money from the U.S. government every month simply for being alive?  That may sound like a crazy idea to many of us, but the truth is that this will likely be one of the biggest political issues in the 2020 presidential election.  At this point, 40 percent of all Americans already “prefer socialism to capitalism”, and the concept of a “universal basic income” is starting to catch fire among grassroots Democrats.  Many liberals are convinced that the time has come to fight for the right to “a minimum standard of living”, and one study by a “left-leaning” group found that giving every adult in the country $1,000 each month would increase the size of the U.S. economy by more than 2 trillion dollars…

Giving every adult in the United States a $1,000 cash handout per month would grow the economy by $2.5 trillion by 2025, according to a new study on universal basic income.

The report was released in August by the left-leaning Roosevelt Institute. Roosevelt research director Marshall Steinbaum, Michalis Nikiforos at Bard College’s Levy Institute, and Gennaro Zezza at the University of Cassino and Southern Lazio in Italy co-authored the study.

What an incredible idea, eh?

All we have to do is give out free stuff and the economy grows like magic.  And the study also discovered that the larger the universal basic income is, the more the economy would grow.

So why not make it $10,000 a month for everyone?

Well, it turns out that there is a catch.  According to the study, the economy only grows if the universal basic income is funded by deficit spending.  If we have to raise taxes to pay for it, there is no positive benefit to the economy at all…

These estimates are based on a universal basic income paid for by increasing the federal deficit. As part of the study, the researchers also calculated the effect to the economy of paying for the cash handouts by increasing taxes. In that case, there would be no net benefit to the economy, the report finds.

Oh.

What a bummer.

Getting free stuff from the government always sounds like a great idea until you realize that we are going to end up paying for it one way or another.

Unfortunately, that little detail isn’t stopping potential Democratic presidential candidates such as Mark Zuckerberg from “exploring” the idea.  And actually, it is being reported that Hillary Clinton almost made a “universal basic income” part of her platform in 2016…

In her new book “What Happened,” and in a recent subsequent interview with Vox Editor-in-Chief Ezra Klein, Clinton explains how she seriously considered including a version of universal basic income — a radical solution to poverty, currently being tested in cities and countries around the world — as one of her platforms in the 2016 US presidential election.

The platform would have been called “Alaska for America,” in homage to the state’s Permanent Dividend Fund. Every year since 1982, Alaskans have received a yearly check — typically ranging from $1,000 to $2,000 — as a kickback from the pot of money that has been set aside in case oil reserves dry up.

If the left is ever able to get this implemented, do you think that we will ever be able to take it away?

Over time, government just keeps getting bigger and bigger and so does our national debt.  In fact, we just hit a major milestone in that regard.  According to CNS News, we just surpassed the 20 trillion dollar mark for the first time ever…

The federal debt officially surpassed $20 trillion for the first time on Friday, as the debt subject to the legal limit set by Congress jumped $317,645,000,000 in one day–following President Donald Trump’s signing of a spending-and-debt-limit deal that will fund the government through Dec. 8.

If the left wants a “universal basic income”, they are going to have to get the money from somewhere.  Our budget deficit is already larger “than the entire GDP of Argentina”, and hard working Americans are already being taxed to death.

The truth is that the money simply isn’t there.  As it is, we need to dramatically cut back our borrowing because the path that we are currently on leads to national suicide.  Just consider the following numbers…

Here’s the problem: the national debt is growing MUCH faster than the US economy. In Fiscal Year 2016, for example, the debt grew by 7.84%.

Yet even when including the ‘benefits’ of inflation, the US economy only grew by 2.4% over the same period.

This is not even close to the realm of being sustainable.  We are steamrolling toward an inevitable financial collapse, and yet most Americans don’t seem to care.

And thanks to our rapidly aging population, our entitlement spending is set to absolutely explode in coming years.  The following comes from David Stockman…

The Federal spending machine is almost entirely on autopilot and heading for disaster owing to ballooning populations and debt. Ten years from now the combined cost of mandatory programs and debt service will reach $5.12 trillion compared to just $2.87 trillion during FY 2018.

Entitlement spending will be nearly double — even if Congress took a 10-year recess!

As shown below, that means the Federal spending share of GDP is now inexorably climbing toward 30% owing to baby boom retirements, even as revenue under current law is stuck at about 18% of GDP. The CBO’s latest projection of the widening fiscal gap — soon more than 10% of GDP annually — leaves nothing to the imagination.

There is no such thing as “free money”.  In the end, we all have to pay for any “free stuff” that the government gives out.

But the “free stuff army” is going to continue to demand more free stuff from the government, and the Democrats are going to be more than happy to give it to them.

To many of you this may sound like complete and utter insanity, but the truth is that the path that we are already on is completely insane as well.  If we don’t find a way to right the ship, it is just a matter of time before it goes under, and anyone that tries to tell you otherwise is not being straight with you.

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.

Debt Nightmare: Does Anyone Actually Care That Our Exploding National Debt Is Destroying Our Future?

When will America finally wake up?  The borrower is the servant of the lender, and we now have a colossal 20 trillion dollar chain around our collective ankles.  We have willingly enslaved ourselves, our children and our grandchildren, and yet our addiction is so insatiable that we continue to add more than 100 million dollars to our debt load every single hour of every single day.  The national debt is sitting at a grand total of $20,162,176,797,904.13 at this moment, but now that the debt ceiling has been lifted that number is expected to shoot up very rapidly toward 21 trillion dollars by the end of the year.  The national debt had been held down by accounting tricks to keep it under the debt limit for many months, but every time this has happened before we have seen the national debt absolutely explode back to projected levels once the debt ceiling was raised.

But very few of our “leaders” in Washington seem to care that we are in the process of committing national suicide.  There is no possible way that we will be able to continue to be the most powerful economy on the planet if we continue down this road.  During Obama’s eight years in the White House, we added more than 9 trillion dollars to the national debt.  That certainly improved things in the short-term, because if we could go back and take 9 trillion dollars out of the economy over the past 8 years we would be in an absolutely nightmarish economic depression right now.

But even with all of this borrowing and spending, our economy has still only grown at an average rate of just 1.33 percent a year over the last 10 years.

And by going into so much debt, we are literally destroying the future for our children and our grandchildren.

What we are doing to them is beyond criminal, and people should be going to prison over this.  But instead we just keep rewarding these Congress critters by sending the same cast of characters back to Washington over and over again.

Are we insane?

The feds are now projecting that the official yearly budget deficit will reach 1.4 trillion dollars by 2027.  Of course federal projections always end up being far more optimistic than reality.

And we are already spending about 500 billion dollars a year just on interest on the national debt, and by 2027 that number is projected to jump to 760 billion dollars a year.

This is complete and utter insanity, and yet we just can’t control ourselves.  The government continues to throw around money as if there is no tomorrow, and our tax dollars are being wasted on some of the most ridiculous things imaginable.

For instance, the U.S. military is spending 42 million dollars each year on Viagra.

We must stop this madness, and we must stop it now.  I really like how an editorial in the Houston Chronicle made this point…

Tax-and-spend politics are bad, but borrow-and-spend is worse. While we have some control over whether our lawmakers raise taxes, our children and grandchildren don’t get a vote on whether we burden them with debt.

Over the long run, huge government debt takes cash out of the economy and drives up interest rates, slowing economic growth and hurting private enterprise.

To protect the U.S. economy, Republicans need to nip plans to eliminate the debt ceiling in the bud and then get to work balancing the federal budget.

Will we ever learn?

Since the beginning of our nation, many of our most prominent statesmen have been warning about the dangers of accumulating government debt.  For example, during his farewell address President George Washington instructed the country to “avoid … the accumulation of debt not only by shunning occasions of expense but by vigorous exertions to discharge the debts, no throwing upon posterity the burden which we ourselves ought to bear.”

And Thomas Jefferson famously said that he wished that he could have added one more amendment to the U.S. Constitution which would have banned government borrowing…

“I wish it were possible to obtain a single amendment to our constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of it’s constitution; I mean an additional article, taking from the federal government the power of borrowing.”

This is one of the primary reasons why we must abolish the Federal Reserve system.  The Federal Reserve was actually designed to create a government debt spiral from which we could never possibly escape.  That is why the size of our national debt has gotten more than 5000 times larger since 1913, and we are never going to permanently solve our national debt problem until we get rid of the Fed.

Most Americans don’t realize this, but the path that we are currently on is not sustainable by any definition.  Debt levels are growing much, much faster than GDP, and that is a recipe for disaster.  The following is an excerpt from one of my previous articles…

We are living in the greatest debt bubble in the history of the world.  In 1980, total government and personal debt in the United States was just over the 3 trillion dollar mark, but today it has surpassed 41 trillion dollars.  That means that it has increased by almost 14 times since Ronald Reagan was first elected president.  I am searching for words to describe how completely and utterly insane this is, but I am coming up empty.  We are slowly but surely committing national suicide, and yet most Americans don’t even understand what is happening.

According to 720 Global, total government debt plus total personal debt in the United States was just over 3 trillion dollars in 1980.  That broke down to $38,552 per household, and that figure represented 79 percent of median household income at the time.

Today, total government debt plus total personal debt in the United States has blown past the 41 trillion dollar mark.  When you break that down, it comes to $329,961.34 per household, and that figure represents 584 percent of median household income.

Sadly, most people are entirely clueless about what we are doing to ourselves.  Investors are the most optimistic that they have been in years, and most of the talking heads on television seem to believe that the party can go on indefinitely.

But that is simply not possible.

And the same thing is true from a global perspective as well.  The following comes from Chris Martenson…

First: our entire economic model, which dependent on borrowing at a faster rate than income (GDP) grows, is something that simply cannot be maintained at its current rate or level. Check.

Second: depleting species, soils and aquifers are all wildly unsustainable practices that are accelerating. Check.

Last (and most glaring of all): the world’s leadership (and we use that term very loosely) continues to insist on adhering to the indefensible idea that infinite growth on a finite planet is possible  Checkmate.

The clock is ticking, and disaster awaits at the end of this road.

Will somebody please do something?

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.

Would You Like To Steal 128 Million Dollars?

What would you do with 128 million dollars?  Many people like to daydream about winning the lottery, and I have to admit that when I was much younger I would do the same thing.  If you were suddenly financially set for life, you could quit your job, buy your dream home, travel the world and spend your days doing whatever you felt like doing.  We only get one trip through this crazy journey called life, and an enormous mountain of cash could make the journey a whole lot nicer.  So if you could steal 128 million dollars and be absolutely certain that you could get away with it, would you do it?

You would probably be surprised at how many people out there would answer that question affirmatively.  Money is a very powerful motivator, and if the fear of getting caught was out of the equation a lot of people out there would certainly be willing to “bend the rules” for a cool 128 million dollars.

But let’s turn this around for a moment.

What if someone stole 128 million dollars from you?

How would you feel about that?

Every crime has a victim, and losing that amount of money would be unimaginable.

Perhaps you think that this scenario is way too outlandish to even be considering.  After all, who in the world could steal 128 million dollars from someone and get away with it?

Well, what if I told you that this has been happening every day?

And what if I told you that this has actually been happening every single hour of every single day for many years?

When Barack Obama entered the White House, the U.S. national debt was just over 10.6 trillion dollars, and when he left the White House 8 years later it was sitting just shy of 20 trillion dollars.

So during those 8 years more than 9 trillion dollars was added to the national debt.  But for purposes of this example we will round down to an even 9 trillion dollars.

When you divide 9 trillion dollars by 8, you get an average of 1.125 trillion dollars that was added to the national debt per year during the Obama era.

Dividing that figure by 365, you find that an average of $3,082,191,780 was added to the national debt every single day during the Obama administration.

And since there are 24 hours in a day, that means that an average of $128,424,657 was stolen from our children and our grandchildren every single hour of every single day while Barack Obama was president.

When you borrow and spend 128 million dollars that you do not have every single hour of every single day, of course that is going to have a huge impact on the economy.  I am often asked why we are not in a horrendous economic depression yet, and this is one of the biggest reasons.  If we were to go back and take 9 trillion dollars of government spending out of the economy over the last eight years, we would be in the worst depression in American history right now.

But even with all of this added debt, the U.S. economy has still only grown at an average yearly rate of just 1.33 percent over the past 10 years, and that is absolutely terrible.

Our leaders in D.C. were able to prop things up in the short-term by going on the greatest debt binge in U.S. history, but of course they have also made our long-term financial problems much, much worse in the process.

Many people don’t realize this, but the growth of the national debt was actually accelerating as the Obama era drew to a close.  In fact, we added more than 1.4 trillion dollars to the debt during fiscal year 2016.

Once upon a time a lot of people out there would get really upset about the growth of our debt, but these days most Americans seem to have accepted that this is how we do things.  This fiscal liberals seem to have won, and our nation is steamrolling down a road toward financial oblivion.

When you point out the economic disasters in Greece, Italy, Cyprus, Venezuela and Zimbabwe, it doesn’t seem to register with most Americans that our country is on the exact same path.

By borrowing money, you can live way above your means for a while, but eventually you have to pay a price for being so reckless.  This has been true all throughout human history, and it will be true in our case as well.

In a letter to John Taylor on November 26th, 1798, Thomas Jefferson explained that he wished that he could have added one more amendment to the U.S. Constitution…

I wish it were possible to obtain a single amendment to our constitution; I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of it’s constitution; I mean an additional article taking from the federal government the power of borrowing.

Jefferson wrote extensively about how government debt is a way for one generation to steal money from another generation.

And what we are doing to our children and our grandchildren is absolutely inexcusable.

The term “child abuse” is not nearly strong enough to describe what is taking place, and I don’t know why more people are not seething with anger over what is being done to them.  I am going to do whatever I can to stop this madness, and I hope that you will help me.

Have you ever run up a lot of credit card debt?  If you really wanted to, you could go out today and start living like a millionaire by running up huge credit card balances.  But eventually a day of reckoning would arrive, and you would get to a point where your debts were no longer sustainable.

It is the same thing on a national level.  We have been living way beyond our means for quite a while, but we have been stealing from future generations in order to do it.

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.

Dying Middle Class: The Number Of Americans That Can’t Afford Their Own Homes Has More Than Doubled

Have you lost your spot in the middle class yet?  For years I have been documenting all of the numbers that show that the middle class in America has been steadily shrinking, and we just got another one.  According to a report that was produced by researchers at Harvard University, the number of Americans that spend more than 30 percent of their incomes on housing has more than doubled.  In 2001, nearly 16 million Americans couldn’t afford the homes that they were currently living in, but by 2015 that figure had jumped to 38 million.

When I write about “economic collapse”, I am writing about a process that has been unfolding for decades in this country.  Back in the early 1970s, well over 60 percent of all Americans were considered to be “middle class”, but now that number has fallen below 50 percent.  Never before in our history has the middle class been a minority of the population, but that is where we are at now, and the middle class continues to get even smaller with each passing day.

So these new numbers saddened me, but they didn’t exactly surprise me.  The following comes from NBC News…

Over 38 million American households can’t afford their housing, an increase of 146 percent in the past 16 years, according to a recent Harvard housing report.

Under federal guidelines, households that spend more than 30 percent of their income on housing costs are considered “cost burdened” and will have difficulty affording basic necessities like food, clothing, transportation and medical care.

But the number of Americans struggling with their housing costs has risen from almost 16 million in 2001 to 38 million in 2015, according to the Census data crunched in the report. That’s more than double.

Sometimes people try to convince me that the economy is doing “well”, but when I ask them how they are doing personally the news is almost always dreary.  I know so many people that are working for close to minimum wage that used to be solidly in the middle class.

One of the biggest reasons why the middle class is shrinking is because paychecks are staying about the same while the cost of living continues to rise steadily.  Of course one of the biggest factors in the rise of the cost of living is health insurance.

There are many people out there that have seen their health insurance premiums double since Obamacare went into effect.  And one health insurance company actually tried to do this to me and my family too, and so at that time I immediately switched carriers.

But even though virtually every single Republican in Congress campaigned on repealing Obamacare, it doesn’t look like it is going to happen.  In fact, on Sunday Senator John McCain told Face the Nation that the effort to repeal Obamacare is “probably going to be dead”…

Sen. John McCain, R-Ariz., said Sunday the Republican bill to repeal and replace Obamacare is “probably going to be dead.”

“My view is that it’s probably going to be dead,” he said on CBS’s Face the Nation.

Support for the bill has been eroding over the July 4th recess, and McCain said he believes Republicans should work with Democrats to craft health care legislation.

As a voter, this greatly frustrates me.  The Republicans got a bill to repeal Obamacare through the House and through the Senate and on to Barack Obama’s desk in early 2016.  So why can’t they get that exact same bill to Donald Trump’s desk now?

We worked really hard to give the Republicans control of the White House, the Senate and the House, and now they are stabbing us in the back once again.

This is just one example of why I intend to be a “wrecking ball” if I get the chance to go to Washington.

We have got to lower health care costs on the middle class.  There is no other option.  Millions of families all over the country are being absolutely suffocated by rising health insurance premiums.  Sometimes I get so frustrated with these RINOs (Republicans In Name Only) that I want to scream.

So many families are living on the edge right now.  Various surveys have discovered that somewhere around two-thirds of the entire nation is living paycheck to paycheck at least part of the time, and one study found that 69 percent of all Americans do not have an adequate emergency fund.

But when you are living on the edge, there is always a danger that you could go over.

Every month, more Americans fall out of the middle class and into poverty.  Even during this so-called “economic recovery”, we are seeing alarming spikes in poverty all over the nation.  For example, the number of homeless people living on the street in New York City has increased by 39 percent over the past year…

Street homelessness in New York increased by 39 percent in 2017, according to the latest annual survey by the Department of Homeless Services.

There were 3,892 homeless and unsheltered people on the night of February 6, 2017, up from 2,794 people at the same time last year, said the report, which is conducted on one night of the year. This is the highest increase since 2005, when Michael Bloomberg was mayor.

And bankruptcies continue to rise as well.  Consumer bankruptcies were up once again last month, and commercial bankruptcies continue their very disturbing climb…

Commercial Chapter 11 bankruptcies – an effort to restructure the business, rather than liquidating it – jumped 16% year-over-year in June to 581 filings across the US. Total commercial bankruptcies of all types, by large corporations to tiny sole proprietorships, rose 2% year-over-year to 3,385 filings, according to the American Bankruptcy Institute. This was up 39% from June 2015 and up 18% from June 2014.

Since the end of the last recession, the middle class has continued to get smaller and smaller in this country, and now it appears that another economic downturn is upon us.

Are we just going to stand aside and do nothing as the middle class in America dies?

The Democrats don’t seem to care.

The Republicans don’t seem to care.

If we continue to do the same things that we have been doing, we are going to continue to get the same results.

In other words, unless we start doing things differently the middle class in America is going to continue to be systematically eviscerated.

Wake up America.  The middle class is dying and if we want to save it we have to take action now.

69 Percent Of Americans Do Not Have An Adequate Emergency Fund

Do you have an emergency fund?  If you even have one penny in emergency savings, you are already ahead of about one-fourth of the country.  I write about this stuff all the time, but it always astounds me how many Americans are literally living on the edge financially.  Back in 2008 when the economy tanked and millions of people lost their jobs, large numbers of Americans suddenly couldn’t pay their bills because they were living paycheck to paycheck.  Now the stage is set for it to happen again.  Another major recession is going to happen at some point, and when it does millions of people are going to get blindsided by it.

Despite all of our emphasis on education, we never seem to teach our young people how to handle money.  But this is one of the most basic skills that everyone needs.  Personally, I went through high school, college and law school without ever being taught about the dangers of going into debt or the importance of saving money.

If you are ever going to build any wealth, you have got to spend less than you earn.  That is just basic common sense.  Unfortunately, nearly one out of every four Americans does not have even a single penny in emergency savings…

Bankrate’s newly released June Financial Security Index survey indicates that 24 percent of Americans have not saved any money at all for their emergency funds.

This is despite experts recommending that people strive for a savings cushion equivalent to the amount needed to cover three to six months’ worth of expenses.

For years, I have been telling my readers that at a minimum they need to have an emergency fund that can cover at least six months of expenses.  It is great to have more than that, but everyone should strive to have at least a six month cushion.

Unfortunately, that same Bankrate survey found that only 31 percent of Americans actually have such a cushion…

The June survey also found that 31 percent of Americans have what Bankrate considers an ‘adequate’ savings cushion — six or more months’ worth of money to pay expenses — which means that nearly two-thirds of the country isn’t saving enough money.

That means that a whopping 69 percent of all Americans do not have an adequate emergency fund.

So what is going to happen if another great crisis arrives and millions of people suddenly lose their jobs?

Just like last time, mortgage defaults will start soaring and countless numbers of families will lose their homes.

If you do not have anything to fall back on, you can lose your spot in the middle class really fast.  And in the case of a truly catastrophic national crisis, trying to operate without any money at all is going to be exceedingly challenging.

Just recently, the Federal Reserve conducted a survey that discovered that 44 percent of all Americans do not even have enough money “to cover an unexpected $400 expense”.

That is almost half the country.

And a different survey by CareerBuilder found that 75 percent of all Americans have lived paycheck to paycheck “at least some of the time”.

Unfortunately, in a desperate attempt to make ends meet many of us continue to pile up more and more debt.  According to Moneyish, Americans have now accumulated more than a trillion dollars of credit card debt, more than a trillion dollars of student loan debt, and more than a trillion dollars of auto loan debt.

We’ve racked up $1 trillion in credit card debt — and that’s just a fraction of what we owe. That’s according to data released this year from the Federal Reserve, which found that U.S. consumers owe $1.0004 trillion on their cards, up 6.2% from a year ago; this is the highest amount owed since January 2009. What’s more, this isn’t the only consumer debt to top $1 trillion. We now also owe more than $1 trillion for our cars, and for our student loans, the data showed.

Overall, U.S. consumers are now more than 12 trillion dollars in debt.

We often criticize the federal government for being nearly 20 trillion dollars in debt.  And that criticism is definitely valid.  What we are doing to future generations of Americans is beyond criminal.

But are we not doing something similar to ourselves?

When you divide the total amount of consumer debt by the size of the U.S. population, it breaks down to roughly $40,000 for every man, woman and child in our country.

When someone lends you money, you have to pay back more than you originally borrow.  And in the case of high interest debt, you can end up paying back several times what you originally borrowed.

If you carry a balance from month to month on a high interest credit card, it is absolutely crippling you financially.  But many Americans don’t understand this.  Instead, they just keep sending off the “minimum payment” every month because that is the easiest thing to do.

If you ever want to achieve financial freedom, you have got to get rid of your toxic debts.  There are some forms of low interest debt, such as mortgage debt, that are not going to financially cripple you.  But anything with a high rate of interest you will want to pay off as soon as possible.

And everyone needs a financial cushion.  Unless you can guarantee that your life is always going to go super smoothly and you are never going to have any problems, you need an emergency fund to fall back on.

Yes, you may need to make some sacrifices in order to make that happen.  Nobody ever said that it would be easy.  But just about everyone has somewhere that a little “belt tightening” can be done, and in the long-term it will be worth it.

When you don’t have to constantly worry about how you are going to pay the bills next month, it will help you sleep a lot easier at night.  Many of us have put a lot of unnecessary stress on ourselves by spending money that we didn’t have for things that we really didn’t need.

And now is the time to get your financial house in order, because it appears that another major economic downturn is not too far away.

The Tens Of Millions Of Forgotten Americans That The U.S. Economy Has Left Behind

The evidence that the middle class in America is dying continues to mount.  As you will see below, nearly half the country would be unable “to cover an unexpected $400 expense”, and about two-thirds of the population lives paycheck to paycheck at least part of the time.  Of course the economy has not been doing that well overall in recent years.  Barack Obama was the only president in all of U.S. history not to have a single year when the economy grew by at least 3 percent, and U.S. GDP growth during the first quarter of 2017 was an anemic 0.7 percent.  During the Obama era, it is true that wealthy enclaves in New York, northern California and Washington D.C. did thrive, but meanwhile most of the rest of the country has been left behind.

Today, there are approximately 205 million working age Americans, and close to half of them have no financial cushion whatsoever.  In fact, a new survey conducted by the Federal Reserve has found that 44 percent of Americans do not even have enough money “to cover an unexpected $400 expense”…

Nearly eight years into an economic recovery, nearly half of Americans didn’t have enough cash available to cover a $400 emergency. Specifically, the survey found that, in line with what the Fed had disclosed in previous years, 44% of respondents said they wouldn’t be able to cover an unexpected $400 expense like a car repair or medical bill, or would have to borrow money or sell something to meet it.

Not only that, the same survey discovered that 23 percent of U.S. adults will not be able to pay their bills this month…

Just as concerning were other findings from the study: just under one-fourth of adults, or 23%, are not able to pay all of their current month’s bills in full while 25% reported skipping medical treatments due to cost in the prior year. Additionally, 28% of adults who haven’t retired yet reported to being grossly unprepared, indicating they had no retirement savings or pension whatsoever.

But just because you can pay your bills does not mean that you are doing well.  Tens of millions of Americans barely scrape by from paycheck to paycheck each and every month.

In fact, a survey by CareerBuilder discovered that 75 percent of all Americans live paycheck to paycheck at least some of the time…

Three-quarters of Americans (75 percent) are living paycheck-to-paycheck to make ends meet, according to a survey from CareerBuilder. Thirty-eight percent of employees said they sometimes live paycheck-to-paycheck, 15 percent said they usually do and 23 percent said they always do. While making ends meet is a struggle for many post-recession, those with minimum wage jobs continue to be hit the hardest. Of workers who currently have a minimum wage job or have held one in the past, 66 percent said they couldn’t make ends meet and 50 percent said they had to work more than one job to make it work.

So please don’t be fooled into thinking that the U.S. economy is doing well because the stock market has been hitting new record highs.

The stock market was soaring just before the financial crisis of 2008 too, and we remember how that turned out.

The truth is that the long-term trends that have been eating away at the foundations of the U.S. economy continue to accelerate, and the real economy is in substantially worse shape this year than it was last year.

Just about everywhere you look, businesses are struggling and stores are shutting down.  Yes, there are a few wealthy enclaves where everything seems wonderful for the moment, but for most of the country it seems like the last recession never ended.

In a desperate attempt to stay afloat, a lot of families have been turning to debt to make ends meet.  U.S. household debt has just hit a brand new all-time record high of 12.7 trillion dollars, but we are starting to see an alarming rise in auto loan defaults and consumer bankruptcies.  This is precisely what we would expect to see if the U.S. economy was moving into another major recession.

In fact, we are seeing all sorts of signs that point to a major economic slowdown right now.  Just check out the following from Wolf Richter’s latest article…

Over the past five decades, each time commercial and industrial loan balances at US banks shrank or stalled as companies cut back or as banks tightened their lending standards in reaction to the economy they found themselves in, a recession was either already in progress or would start soon. There has been no exception since the 1960s. Last time this happened was during the Financial Crisis.

Now it’s happening again – with a 1990/91 recession twist.

Commercial and industrial loans outstanding fell to $2.095 trillion on May 10, according to the Fed’s Board of Governors weekly report on Friday. That’s down 4.5% from the peak on November 16, 2016. It’s below the level of outstanding C&I loans on October 19. And it marks the 30th week in a row of no growth in C&I loans.

Perhaps we will be very fortunate and break this pattern that has held up all the way back to the 1960s.

But I wouldn’t count on it.  Here is what Zero Hedge has to say about this alarming contraction in commercial and industrial loans…

Here’s the bottom line: unless there is a sharp rebound in loan growth in the next 3-6 months – whether due to greater demand or easier supply – this most accurate of leading economic indicators guarantees that a recession is now inevitable.

We are way overdue for a recession, the hard economic numbers are screaming that one is coming, and the financial markets are absolutely primed for a major crash.

As Americans, we tend to have such short memories.  Every time a new financial bubble starts forming, a lot of people out there start behaving as if it can last indefinitely.

But of course no financial bubble is going to last forever.  They all burst eventually, and now the biggest one in U.S. history is about to end in spectacular fashion.

Trump will get a lot of the blame since he is the current occupant of the White House, but the truth is that the conditions for the next crisis have been building up for many years, and the horrors that the U.S. economy is heading for were entirely predictable.

U.S. Auto Sales Plunge Dramatically As The Consumer Debt Bubble Continues To Collapse

One sector of the economy that is acting as if we were already in the middle of a horrible recession is the auto industry.  We just got sales figures for the month of April, and every single major U.S. auto manufacturer missed their sales projections.  And compared to one year ago, sales were way down across the entire industry.  When you add this latest news to all of the other signals that the U.S. economy is slowly down substantially, a very disturbing picture begins to emerge.  Either the U.S. economy is steamrolling toward a major slowdown, or this is one heck of a head fake.

One analyst that has been waiting for auto sales to start declining is Graham Summers.  According to Summers, the boom in auto sales that we witnessed in previous years was largely fueled by subprime lending, and now that subprime auto loan bubble is starting to burst…

Auto-loan generation has gone absolutely vertical since 2009, rising an incredible 56% in seven years. Even more incredibly roughly 1/3 of this ~$450 billion in new loans are subprime AKA garbage.

In the simplest of terms, this is Subprime 2.0… the tip of the $199 TRILLION debt iceberg, just as subprime mortgages were for the Housing Bubble.

I’ve been watching this industry for months now, waiting for the signal that it’s ready to explode.

That signal just hit.

The signal that Summers is referring to is a persistent decline in U.S. auto sales.  It would be easy to dismiss one bad month, but U.S. auto sales have been falling for a number of months now, and the sales figures for April were absolutely dismal.  Just check out how much sales declined in April compared to one year ago for the biggest auto manufacturers…

General Motors: -5.8 percent

Ford: -7.1 percent

Fiat Chrysler: -7.0 percent

Toyota: -4.4 percent

Honda: -7.0 percent

For auto manufacturers, those are truly frightening numbers, and nobody is really projecting that they will get better any time soon.

At the same time, unsold vehicles continue to pile up on dealer lots at a staggering pace…

Meanwhile, inventory days are still trending higher as OEMs continue to push product on to dealer lots even though sale through to end customers has seemingly stalled.

GM, one of the few OEMs to actually disclose dealer inventories in monthly sales releases, reported that April inventories increased to 100 days (935,758 vehicles) from 98 days at the end of March and just 71 days (681,402 vehicles) in April 2016.

So why is this happening?

Of course there are a lot of factors, but one of the main reasons for this crisis is the fact that U.S. consumers are already drowning in debt and are simply tapped out…

Now, a new survey from Northwestern Mutual helps to shed some light on why Americans are completely incapable of saving money.

First, roughly 50% of Americans have debt balances, excluding mortgages mind you, of over $25,000, with the average person owing over $37,000, versus a median personal income of just over $30,000.

Therefore, it’s not difficult to believe, as Northwestern Mutual points out, that 45% of Americans spend up to half of their monthly take home pay on debt service alone.…which, again, excludes mortgage debt.

When you are already up to your eyeballs in debt, it is hard just to make payments on that debt.  So for many American families a new car is simply out of the question.

And it isn’t just the U.S. auto industry that is in trouble.  The credit card industry is also starting to show signs of distress…

Synchrony Financial – GE’s spin-off that issues credit cards for Walmart and Amazon – disclosed on Friday that, despite assurances to the contrary just three months ago, net charge-off would rise to at least 5% this year. Its shares plunged 16% and are down 27% year-to-date.

Credit-card specialist Capital One disclosed in its Q1 earnings report last week that provisions for credit losses rose to $2 billion, with net charge-offs jumping 28% year-over-year to $1.5 billion.

If you didn’t understand all of that, what is essentially being said is that credit card companies are starting to have to set aside more money for bad credit card debts.

Previously I have reported that consumer bankruptcies and commercial bankruptcies are both rising at the fastest rate that we have seen since the last recession.  This trend is starting to spook lenders, and so many of them are starting to pull back on various forms of lending.  For example, Bloomberg is reporting that lending by regional U.S. banks was down significantly during the first quarter of 2017…

Total loans at the 15 largest U.S. regional banks declined by about $10 billion to $1.73 trillion in the first quarter, compared with the previous three-month period, the first such drop in four years, according to data compiled by Bloomberg. All but two of those banks missed analysts’ estimates for total loans, as a slump in commercial and industrial lending sapped growth.

This is how a credit crunch begins.  When the flow of credit starts restricting, that slows down economic activity, and in turn that usually results in even more credit defaults.  Of course that just causes lending to get even tighter, and pretty soon you have a spiral that is hard to stop.

Just about everywhere you look, there are early warning signs of a new economic downturn.  And just like we saw prior to the great crash of 2008, those that are wise are getting prepared for what is coming ahead of time.  Unfortunately, most people usually end up getting blindsided by economic downturns because they believe the mainstream media when they insist that everything is going to be just fine.

Thankfully, there are at least a few people that are telling the truth, and one of them is Marc Faber.  Just a few days ago, he told CNBC that the U.S. economy is “terminally ill”…

“Dr. Doom” Marc Faber says the U.S. economy is “terminally ill,” and the current outlook doesn’t seem to be improving.

“The U.S. has run a deficit for [so long],” he said Tuesday on CNBC’s “Futures Now.” “The conditions today are more fragile than they were ever before, and unless somebody comes and introduces minus 5 percent interest rates, I think the economy is really not in such a great shape.”

“I’m actually amazed that people are so optimistic,” the editor and publisher of the “Gloom, Boom & Doom Report” added.

I have to agree with Faber on this point.

We are more primed for a major economic downturn and a horrifying stock market crash than we were back in 2008.

It isn’t going to take much to push us over the edge, and with our world becoming more unstable with each passing month, it appears that our day of reckoning is likely to come sooner rather than later.

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