Income

Ashley’s Tragic Story: A Heartbreaking Example Of How The Economic Collapse Of America Is Destroying Lives

What you are about to read is perhaps the most heartbreaking story that I have ever come across. It is so tragic that I am not even quite sure how to introduce it. Some time ago, a reader named Ashley sent me an email that described the nightmare that she has been living through over the past year. Ashley’s email was very different from the vast majority of emails I usually receive, and I wrote her back right away and asked her some questions. One of the most important questions I asked was whether or not she really wanted me to share her story with the public. Privacy is such a precious thing, and I wanted her to understand that if I shared her story that thousands upon thousands of people would end up seeing it. After considering what I had to say, Ashley said that she was 100% sure that I should share her story because she felt that it could really help some people.

Sometimes it can be really easy to get lost in the economic numbers and to forget that this economy is really and truly destroying lives. The truth is that there are millions of Americans out there today that are hurting just like Ashley is. Her story is more dramatic than most, but that doesn’t mean that we all don’t know someone that could use our help. We have lost our sense of community in America, and thousands upon thousands of people like Ashley are falling through the cracks.

I cannot even imagine going through the things that Ashley has had to go through over the past year.  If you think about it, please say a prayer for her.  Also, let this story be an inspiration to all of us to stop being so cold-hearted and to help out those in need that are all around us.

The following is Ashley’s story as told in her own words….

*****

Dear Michael,

My name is Ashley. I live in Upstate New York I have been reading your Economic Collapse blog for the past year. Everything that you have said is true. Our economy is dying, and the economic collapse has destroyed the lives of many, many people. I should know. I am one of them. I lost my house, my car, my feet and my father, all in just seven months.

My father and I had a great life together. He raised me as a single parent. My mother died while giving birth to me. So it was just him and me as I was growing up, and things were wonderful for us, but then everything changed.

In September of 2009, my father was laid off from his job after 26 years. He tried so hard to find another job, but he just couldn’t get one. The economy was too horrible. As a result of the loss of income, he was unable to continue making the mortgage and car payments. Our car was repossessed, and not long after that, the bank foreclosed on us and we lost our house.

We moved into a low rent, hole in the wall apartment and lived off of his savings and his unemployment benefits for the next few months. Finally, in December of 2009, I was lucky enough to get a part time job at a pizza place. It was a really long walk from our apartment, but we needed the money badly. So I took the job.

By mid winter, my old snow boots, which had successfully lasted me through several terrible winters, were beginning to rapidly deteriorate. They had holes all over them and they were splitting at the seams. My feet were soaked and freezing all day long. At that point, we were lucky to have food on the table. We had to watch every penny. We couldn’t afford to get me new boots. So I had to make do with the ones I had. My father worked feverishly to try and repair them. He spent hours supergluing them duct taping them. In addition to that, I doubled up on socks and wore plastic bags inside my boots, but nothing did any good. My feet still got drenched.

One morning, in mid February of 2010, I took the last walk I would ever take on my own two feet. There was a huge blizzard raging outside, but we couldn’t afford to lose a day’s worth of pay. So I ventured out into the blizzard and made the long trudge to work anyway. As usual, my feet were drenched and freezing within minutes of leaving my apartment, but there was no choice but to just stick it out. So I kept going. I finally arrived at work to find the place closed. Nobody had called to tell me. There was nothing to do but turn around and make the long trudge back home. By the time I got home, I knew that something was seriously wrong with my feet. They felt horrible. My father helped me out of my drenched boots and socks and we discovered that my feet were all purple and swollen. They were severely frostbitten.

My father was terrified to take me to the emergency room because that would have bankrupted us. So he did everything he could to try and rewarm my feet at home. He spent the next several days giving me hot chocolate, bundling my feet up in blankets, putting my feet on his stomach, etc. But nothing did any good. My feet didn’t get any better. They just kept getting worse. They eventually turned black and began to ooze. At that point, my father broke down and called a car service to take us to the hospital. The doctors told us that, given the extent of the damage, they would not able to save my feet. The frostbite had progressed too far. I ended up having both of my feet amputated.

For the next whole month, my father didn’t do anything but sob. He sobbed himself to sleep every night. He blamed himself for me losing my feet. I rolled myself into his room on my wheelchair every night and wrapped my arms around him as tight as I could. I told him that it wasn’t his fault and that I didn’t blame him for anything. I told him he was the best father any girl could ever have and that I wouldn’t trade him for anything. I think it helped a little in the moment, but as time went on, he just fell further and further into depression.

On the morning of March 15th, 2010, I was awakened by a knock on the door from a police officer. He told me that my father was dead. I told the officer that was ridiculous and that there had been a mistake, but he insisted that my father was dead and that I should come with him. I went racing into my father’s room as fast as my wheelchair could carry me, but he was gone. There was a note on his bed that he had left for me. In the note, he told me that he loved me dearly. He loved me more than anything, but that he had failed me. He told me that I would be better off without him. At that moment, my heart stopped as I began to realize what must have happened. Horrified, I made my way back to the police officer, and he told me that my father had jumped out the window of our apartment in the middle of the night. I went into shock and begged the police officer to let me see him, but he insisted that I wouldn’t want to see him that way. I started sobbing so hard that the police ended up having to take me to the hospital.

I’ve cried myself to sleep every night since. I’ll never understand how my father could have thought that I’d be better off without him. If only he had known how much I needed him. If it wasn’t for my extremely kind hearted and caring neighbor, I don’t know where I would be right now. She’s such a sweet lady. After I lost my father, she took me in and took care of me as though I were her own family. She has gradually helped nurse me back to health, both physically and mentally.

This is probably going to sound really crazy, but throughout this past year, you have been one of my heroes, Michael. As devastating as the truth of your words may be, it is refreshing that somebody has the good sense and the good judgement to come forward and say them. All the government and the media do is lie to us, every single day. I only wish more people would listen to you and heed your warnings. Feel free to post my story on your blog if you would like. You have my permission to do so. I just ask that you not reveal my full name and my email address. Just use my first name. Perhaps my story will serve some purpose in the way of helping to wake some of these idiots up and getting them to realize that this nightmare is real.

Best Regards,

Ashley

Less Money, More Problems

How in the world is the U.S. economy going to recover if the American people have less money to spend?  Millions of American families are heading into 2011 knowing that either they won’t be seeing an increase in income or that their incomes will be smaller next year.  Long-term unemployment benefits are being cut off for millions of Americans, federal workers are having their wages frozen, Social Security recipients are not going to get a cost of living increase for 2011, taxes are going up for the vast majority of U.S. families and employers are forcing pay cuts on their workers across the United States.  Meanwhile, the cost of food just keeps going up, the cost of gas just keeps going up and the cost of health care just keeps going up.  So what are millions of American families that are already stretched to the limit going to do when they have less money in 2011?

Millions of unemployed American workers are heading for a very bleak 2011.  Unless Congress acts, and there is no indication that is going to happen, approximately 2 million Americans will stop receiving unemployment checks over the next couple months.

The government is really between a rock and a hard place on this one.  After all, who is so heartless that they actually want to cut off the little financial support that millions of deeply struggling American families are depending on?  Not extending the long-term unemployment benefits is going to mean more Americans are going to lose their homes, more Americans are going to go bankrupt and more Americans will end up in tent cities.

But as CNN recently reported, extending the long-term unemployment benefits through next year would cost the federal government $56.4 billion that we simply do not have.  The U.S. government is absolutely drowning in red ink and cannot afford to just chuck another 56 billion dollars more debt on to the pile.

At this point even Barack Obama is taking some small steps to get federal spending under control.  He has just announced a plan to freeze the pay of federal government workers for the next two years.

So how are federal government workers handling the news that they will not be seeing any raises for the next coupe of years?

Not well.  In fact, many of them are absolutely furious.

But can you blame them?

How would you feel if your wages were just frozen for two years and yet the price of everything just continues to keep going up?

Meanwhile, the Social Security Administration announced last month that there will be no cost of living adjustments for Social Security benefits once again next year.

According to the government, the cost of living is not going up.

So now our seniors will just have to stretch those meager checks even more.

As if all that wasn’t bad enough, now a whole slew of tax increases is coming.  The U.S. Congress is busy debating which (if any) of the Bush tax cuts that they are going to allow to expire, but the truth is that the Bush tax cuts are only a small part of the story.  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 it is not just the federal government that is raising taxes.  In the past two years, 36 of the 50 U.S. states have jacked up taxes or fees.

In addition, many local governments are so strapped for cash that they are going to absolutely ridiculous lengths to raise cash.  For example, from now on if you are caught jaywalking in Los Angeles you will be slapped with a $191 fine.

This kind of thing is happening all over America.  Police departments are being turned into revenue raising operations.  Police are so busy writing tickets that they barely have any time to investigate actual crimes anymore.

Unfortunately, all of this latest news comes at a time when incomes are already down from coast to coast.  Median household income in the U.S. declined from $51,726 in 2008 to $50,221 in 2009.  Some areas are declining faster than others, but the truth is that almost all areas of the United States have been seeing incomes go down.  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.

Times are getting really tough.  Employers all over America are forcing their employees to take pay cuts.  Even some of the most prominent unions are agreeing to unprecedented concessions.  For example, just check out what The New York Times says is going on over at General Motors….

In its most recent union contract, General Motors is paying new employees $14 an hour, half the rate it pays its long-term workers.

Unfortunately, American families are going to have to try to do more with less during a time when prices are going to be going up.  Most economists agree that all of the quantitative easing that the Federal Reserve is doing is going to cause inflation to start increasing significantly at some point.  In fact, some of the top Federal Reserve officials have publicly stated that they want to purposely raise the rate of inflation as a way to stimulate the economy.

One of the great things about Americans is our relentless sense of optimism, but it is time for a major reality check.  Our economic system is in an advanced state of decay.  Our nation is a sea of red ink from coast to coast, we continue to consume tens of billions more than we produce every single month and we are rapidly being transformed into a post-industrial wasteland.

The economy is not going to be “getting better” in the long-term.  Unless fundamental changes are made to our economic system, we are going to continue to speed toward a horrific economic collapse.

The storm clouds are gathering on the horizon and time is running out.  It is imperative that we all make the most out of every single day because night is coming soon.

27 Signs That The Standard Of Living For America’s Middle Class Is Dropping Like A Rock

If you still have a job and you can put food on the table and you still have a warm house to come home to, then you should consider yourself to be very fortunate.  The truth is that every single month hundreds of thousands more Americans fall out of the middle class and into poverty.  The statistics that you are about to read are incredibly sobering.  Household incomes are down from coast to coast.  Enrollment in government anti-poverty programs sets new records month after month after month.  Home ownership is down, personal bankruptcies are way up and there are not nearly enough jobs to go around.  Meanwhile, the price of basics such as food and health care continue to skyrocket.  Don’t be fooled by a rising stock market or by record bonuses on Wall Street.  The U.S. economy is not getting better.  After World War II, the great American economic machine built the largest and most vigorous middle class in the history of the world, but now America’s middle class is disintegrating at a blinding pace.

Most of those who write about the plight of the American middle class believe that things can be turned around and that the middle class will eventually be stronger than it ever has been.  But unfortunately, that is just not the case.  As a society, we have lived far, far beyond our means for decades.  Now the bills are coming due and none of our leaders seem to know what to do.

Meanwhile, the U.S. economy is being rapidly assimilated into the emerging one world economy.  Middle class American workers now find themselves in direct competition for jobs with the cheapest labor on the other side of the globe.  Of course many multinational corporations have taken advantage of this by moving factories and jobs to countries like China where blue collar workers make about a dollar an hour.  This has helped raise the standard of living for workers in those nations by a nominal amount, but it has been absolutely devastating for the standard of living of America’s middle class.

So what does all of this mean?

It means that the U.S. economy is headed for collapse and middle class Americans are in for some really, really hard times.

The following are  27 signs that the standard of living for America’s middle class is dropping like a rock….

#1 Household spending for the middle fifth of all U.S. income earners was down 3.5% in 2009.  That was the steepest one year decline since records began being kept back in 1984.

#2 Median household income in the United States fell from $51,726 in 2008 to $50,221 in 2009.

#3 According to one new report, in 2009 residents of New York state experienced their first full-year decline in income in more than 70 years.

#4 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 in 2009.

#5 Home ownership in the United States declined for the third year in a row in 2009.

#6 In 2009, approximately 4 million Americans fell out of the middle class and now live below the federal poverty line.

#7 The number of Americans enrolled in the food stamp program has set a new all-time record for 20 consecutive months. 

#8 In July (the last month for which data is available), 41.8 million Americans were on food stamps.

#9 The number of Americans in the food stamp program skyrocketed more than 55 percent between December 2007 and July 2010.

#10 In 2009, more than 48 million Americans were enrolled in the Medicaid program.

#11 One out of every six Americans is now enrolled in at least one anti-poverty program run by the U.S. government.

#12 According to one recent study, approximately 21 percent of all children in the United States are living below the poverty line in 2010.

#13 According to the Cato Institute, anti-poverty spending by the U.S. government has increased 89 percent over the past decade.

#14 The cost of health care increased a staggering 9.6% for all U.S. households from 2007 to 2009.

#15 It turns out that only the top 5 percent of all U.S. households have earned enough additional income to match the rise in housing costs since 1975.

#16 35 percent of all U.S. households now live on $35,000 or less.

#17 New York state Comptroller Thomas DiNapoli says that Wall Street bonuses for 2009 were up 17 percent when compared with 2008.

#18 According to a poll taken in 2009, 61 percent of Americans “always or usually” live paycheck to paycheck.  That was up substantially from 49 percent in 2008 and 43 percent in 2007.

#19 Today, 28% of all American households have at least one member that is searching for a full-time job.

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

#21 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.

#22 In 2009, 43.6 million Americans were living in poverty.  Sadly, the number of Americans living in poverty has increased for three consecutive years, and the 43.6 million poor Americans in 2009 was the highest number that the U.S. Census Bureau has ever recorded in 51 years of record-keeping.

#23 A staggering 25 percent of all American adults now have a credit score below 599.

#24 It is estimated that nearly a third of all Americans cannot qualify for a mortgage because of low credit scores.

#25 For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all American households put together.

#26 Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a stunning 32 percent increase over 2008.

#27 According to a new report by the U.S. Census Bureau, the bottom fifth of all U.S. income earners brought in just 3.4 percent of all income in 2009 while the top fifth brought in a whopping 49.4 percent of all income.

So is there any hope that things will turn around soon?

No, not really.

At this point, even some of the top economic authorities in the nation are admitting that we are headed for very difficult times.

Goldman Sachs recently announced that the U.S. economy is likely to be either “fairly bad” or “very bad” over the next 6 to 9 months.

Not only that, but Federal Reserve Chairman Ben Bernanke now says that the U.S. economy is in a situation that is dire and “unsustainable”.

Not that Goldman Sachs or Fed Chairman Ben Bernanke should be trusted when it comes to the economy.

When it comes to the problems we are facing, the truth can be found in the long-term trends.  If you have not done so already, please read “11 Long-Term Trends That Are Absolutely Destroying The U.S. Economy“.  It will open your eyes to the true horrors that our economy is now facing.

But statistics alone do not tell the real story.

Sometimes what gets lost in the endless economic statistics is the very real pain of the millions of Americans who are trying to live through this.  The following story from the Unemployed Friends website is from a woman named Leetah who is desperately hoping to be able to get through this upcoming winter….

The place I live in right now has no jobs and no places to live. My fiance, Lloyd, and I have been looking for anything but he lost his job from McDonald’s and the factories (the only jobs to make a living off of) consider him an insurance liability. I can’t get hired to a factory because of I was fired from our major factory for attendance (I had to miss 3 days of work because I was sick). So we are moving to the Edmond/OKC region where we are hoping to find a job and a place with running water and heating. We’ve spent the last few years without heat and running water and so having a place with water and heat would be heaven.

Winter is coming up fast and I am so afraid. Last winter we almost died from the cold and now the thought of cold makes my throat close up and my heart pound. But it isn’t just ourselves we are looking out for, we have our dog too. Our wonderful APBT Maggie who is 2-years-old and has been with us since she was 5-months-old. She’s our baby girl and we can’t lose her. We almost lost her to the cold too and it scared me so much. We are going to be living in our car soon with our dog.

I am hoping to be able to keep our food stamps in the new city so we can still eat. I have already applied for ten+ jobs and nothing yet but I am keeping my hopes up. Hopefully it will get easier to find a job once we get there. Then we just have to save up and then we can afford an apartment. Now finding an apartment with my awesome dog is another story.

Please say a prayer for those who are out of work and on the verge of being forced out on the street.

You never know, you might be next.

The Proof Is In The Numbers: America Is Getting Poorer

How in the world can anyone claim that things are getting better?  Sometimes the numbers are so clear that they simply cannot be denied.  According to the U.S. Census Bureau, median household income in the United States fell from $51,726 in 2008 to $50,221 in 2009.  That was the second yearly decline in median household income in a row.  In other words, America is getting poorer.  Just let that statistic above sink in for a little bit.  In 2009, American families had roughly $1,500 less coming in than the year before.  Not that the cost of living has gone down either.  Have you been to the supermarket lately?  Things are getting ridiculous out there.  In fact, middle class American families are being squeezed as never before.  More mothers and fathers are scrambling to find second and third jobs just to pay the mortgage and to keep the lights on and to put food on the table.  This is not a time of prosperity in America.  We are in a state of serious decline and it is time to wake up and admit it.

When you stop and analyze the new Census data, something jumps out at you right away.  You quickly realize that these income declines are not limited to just a few regions of the country – they are literally happening from coast to coast.

The U.S. economy is in deep, deep trouble and the proof is in the numbers.  The following are 12 statistics that reveal just how far the standard of living in America is declining….

1 – According to the Census Bureau, median household income dropped in 34 U.S. states in 2009, and the only state where median household income actually increased was in North Dakota.

2 – The Census Bureau data also revealed that of the 52 largest metro areas in America, only the city of San Antonio did not see a decline in median household income in 2009.

3 – 35 percent of all U.S. households now live on $35,000 or less.

4 – According to the Census Bureau, the percentage of Americans living below the poverty line is the highest it has been in 15 years.

5 – The number of Americans enrolled in the food stamp program passed the 41 million mark for the first time ever in June.

6 – The number of Americans in the food stamp program increased a staggering 55 percent from December 2007 to June 2010.

7 – One out of every six Americans is now enrolled in at least one anti-poverty program run by the federal government.

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

9 – In 2009, U.S. consumer spending experienced the biggest decline since 1942.

10 – As millions of young Americans struggled just to survive, marriages fell to a record low in 2009.  Today, only 52% of Americans 18 years or older are married. 

11 – The only group that saw their household income increase in 2009 was those making $180,000 or more.

12– According to the Huffington Post, the gap between the richest and poorest Americans grew in 2009 to its largest margin ever….

The top-earning 20 percent of Americans – those making more than $100,000 each year – received 49.4 percent of all income generated in the U.S., compared with the 3.4 percent made by the bottom 20 percent of earners, those who fell below the poverty line, according to the new figures. That ratio of 14.5-to-1 was an increase from 13.6 in 2008 and nearly double a low of 7.69 in 1968.

Not that it is a bad thing to make money. 

Contrary to what our socialist friends may think, it is actually a very good thing to work hard and make money.

The point is that the game is rigged and the bottom 80 percent of us are being left behind.

The middle class is being systematically destroyed.  At the rate we are going, we will eventually have a very small group of ultra-wealthy Americans and a gigantic mountain of very poor Americans that are barely able to survive.

The answer to this is not a “redistribution of wealth”. 

What middle class Americans actually need are good jobs with good benefits.

You know, the kind of jobs that the U.S. economy used to produce.

For the vast majority of Americans, all they have to offer in the marketplace is their labor.  If they cannot get someone to hire them for a wage that will enable them to take care of their families then they simply cannot make it without government assistance.

But what our leaders have done in the name of “globalism” is that they have essentially merged our economy with the economies of nations such as China where blue collar workers are paid about a dollar an hour to do the same jobs that American workers get paid 15 to 20 dollars an hour to do.

As a result, jobs and factories are fleeing the United States so rapidly it is hard to even describe.  The deindustrialization of America is happening right in front of our eyes, but the American people have become so dumbed down that most of them don’t even seem to have the capacity to understand what is going on. 

Quite a few advocates of “free trade” (which is not “free” or “fair” at all under our current system) have left comments on my columns telling me that the American people better just suck it up because this is how it is now and the world isn’t going back.  These advocates of the globalist system say that the American people just need to toughen up and learn to compete and need to just accept that the standard of living for workers across the globe is going to be equalized and that is all there is to it.

So are you ready to have the same standard of living as a Chinese sweatshop worker who works 12 hours a day for one dollar an hour?

That is where we are headed.

But things did not have to be this way.  We did not have to merge our economy with communist China and allow them to keep their currency devalued 40 percent lower than it should be so that they could dump massive amounts of cheap goods on our shores.  We did not have to elect politicians that believe that “globalism” is the answer to all of our problems.  We did not have to sign on to the WTO, NAFTA and all the other “free trade” agreements that are destroying the American middle class.

Labor is now a global commodity.  American workers are now part of the global labor force.  The bargaining power of the average American worker has dropped through the floor.  Now the monolithic predator corporations that dominate our economy don’t even have to deal with American workers if they don’t want to.

Very few of our politicians admitted that merging us into a one world economy would mean a dramatic decline in the standard of living of middle class Americans.

But that is exactly what is happening.

Meanwhile, the federal government, our state governments and our local governments keep going into massive amounts of new debt in an effort to keep paying the bills. 

There are some state governments, like Illinois, that are basically flat broke.  In fact, Illinois doesn’t even bother to pay many of their bills anymore.

Of course the federal government is the worst offender of them all.  The U.S. national debt is rapidly approaching 14 trillion dollars, and most of us have gotten so accustomed to it that we don’t even talk about it much anymore.

That is how bizarre things have gotten.

As America keeps getting poorer, and as U.S. taxpayers see their incomes continue to decline, how in the world are U.S. government finances going to turn around?

The truth is that our leaders should be in full blown crisis mode in an attempt to fix this thing.  Pieces of the U.S. economy are literally falling off all around us and our leaders are pushing the debt accelerator to the floor as we head toward a giant cliff.

But instead our politicians are prancing about the countryside telling us that everything is going to be just great as long as we cast our votes for them in the fall.

And the mainstream media keeps telling us that the “recession” is over and that soon the U.S. economy will be better than ever.

Is it any wonder that faith in the mainstream media is now at an all-time low?      

According to a new poll just released by Gallup, the number of Americans that have little to no trust in the mass media (57%) is at an all-time high.

A significant percentage of the American people is starting to wake up.

What about you?

Are you awake yet?

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….

Winners And Losers

When you mention the word “globalism” to most people, they think of something that is going to happen someday in the future.  But the truth is that globalism is already here.  At this point we essentially already have a one world economy.  Goods and services flow across national borders more freely today than at any other point in human history.  A major economic event on one side of the world instantly affects financial markets on the other side of the world.  Labor has become a truly global commodity.  You can go to the exact same fast food restaurant or buy the exact same iPod on six different continents.  A whole host of international trade agreements are making national borders economically irrelevant.  Today our “big box” stores and shopping malls are jammed full with products that have been made overseas and it is becoming increasingly difficult to find American-made products.  The reality is that it has now become undeniable that globalism has arrived and we are now part of a world economy that is integrating at lightning speed.  Unfortunately, all of this globalism has created some very clear winners and losers.  But most middle class Americans are in such a deep sleep that they don’t even realize that they are the losers.

The sad truth is that as work has become a global commodity, middle class American workers have been placed in direct competition with the cheapest labor in the world.  For years the U.S. economy was so strong that nobody really noticed that it was bleeding thousands of jobs every single month.  But now that 14 million Americans are unemployed and the U.S. economy is literally hemorrhaging jobs people are starting to sit up and take notice.

Let’s take a look at one recent example.  Ford Motor Company has just announced the closure of a facility that produces the Ford Ranger in St. Paul, Minnesota.  Approximately 750 good paying jobs are going to be lost.

But isn’t Ford doing better these days?

Sure.

Don’t people still need Ford Rangers?

Of course they do.

Minnesota Governor Tim Pawlenty even offered Ford a multi-million dollar incentive package full of tax cuts and job creation incentives to keep the factory going.

Basically, Pawlenty did everything except get down on his hands and knees and beg Ford to keep the plant open.

But it wasn’t good enough for Ford.

So where is Ford going to make those Ford Rangers now?

Well, the statement issues by Ford did not say, but it did offer some clues….

“Ford continues to concentrate on implementing the plan we initiated four years ago to streamline our plant operations and better leverage our global platforms. At this time, the Twin Cities Assembly Plant does not fit into our global manufacturing strategy.”

Did you notice that the world “global” was used twice there?

In other words, Ford plans to move their factory some place where labor is cheaper.

But the truth is that this is happening in every industry.

Between 2004 to 2008, tire imports from China increased 215 percent by volume and 295 percent by value.

During that same time period, tire manufacturing in the United States fell by 25 percent.

It turns out that there are lots of people who are willing to make tires for near slave labor wages in China.

In our new “global economy”, American workers are just far too expensive.  So middle class manufacturing jobs are fleeing our shores at a staggering pace.

Since 1979, manufacturing employment in the United States has fallen by 40 percent.

Are you alarmed yet?

You should be.

The truth is that we did not have to merge our economy with nations like China.  China does not have the same minimum wage laws that we do.  China does not have the same environmental protection laws that we do.  In China, companies can treat their workers like crap.  As a result of open trade with the United States, scores of shiny new factories have opened all over China while once great manufacturing U.S. cities such as Detroit have degenerated into rotting war zones.  We continue to expand trade with China even though their communist government stands for things that are absolutely repulsive and has a list of human rights abuses that is seemingly endless.

But politicians from both parties swore up and down that globalism would be so good for us.  Now we have created a network of free trade agreements that would be virtually impossible to unwind.  The following are just some of the free trade agreements in force around the world right now….

The ASEAN Free Trade Area (AFTA)
The Central American Integration System (SICA)
The Central European Free Trade Agreement (CEFTA)
The Common Market for Eastern and Southern Africa (COMESA)
The Commonwealth of Independent States Free Trade Agreement (CISFTA)The G-3 Free Trade Agreement (G-3)
The Greater Arab Free Trade Area (GAFTA)
The Gulf Cooperation Council (GCC)
The North American Free Trade Agreement (NAFTA)
The Southern African Development Community (SADC)
The South Asia Free Trade Agreement (SAFTA)
The Trans-Pacific Strategic Economic Partnership (TPP)

Of course the most important trade organization of them all is the World Trade Organization (WTO) which is constantly working to expand world trade and further integrate the economies of the world.

But the American people don’t understand all this.  They just want the U.S. government to do something to create more jobs. 

But whenever the U.S. Congress tries to do something nice for U.S. workers like raising the minimum wage or requiring companies to give them more benefits it ends up backfiring.

Why?

Because those things make American workers even more expensive and it gives companies even more incentive to send our jobs overseas.

We have recklessly merged our economy with economies around the world that are far less developed than our own.  Unless this thing is reversed, it is inevitable that the standard of living of American workers will be forced down until it approximately matches workers in the rest of the world.

Already, millions of high-paying manufacturing jobs are being replaced by low-paying service jobs.

The U.S. Labor Department’s 2009 Occupational Employment and Wages report found that retail sales, cashiers, general office clerks, food preparation and service workers, and nurses were the occupations with the highest levels of employment in 2009.

Retail sales and food service workers?

Those are jobs for 17 year old kids.

But today apologists for this flawed system tell us that we just need to suck it up and take two or even three low paying jobs because things will never go back to how they used to be.

So has globalism created any winners?

Of course.

As I noted yesterday, the folks down on Wall Street are doing quite well.  New York state Comptroller Thomas DiNapoli says that Wall Street bonuses for 2009 were up 17 percent when compared with 2008.

The reality is that the exploitation of very cheap foreign labor has enabled many large global corporations to make insane amounts of money.  Things are very good if you are at the top of the food chain.  According to Harvard Magazine, 66% of the income growth between 2001 and 2007 went to the top 1% of all Americans.

In addition, our elected officials are doing quite nicely these days.  According to an analysis by The Hill, the 50 wealthiest members of the U.S. Congress saw their collective fortunes increase 85.1 million dollars to $1.4 billion in 2009.

Yes, it is very profitable to be part of America’s ruling class.

Meanwhile, tens of millions of average Americans continue to suffer.  Recently a user on Unemployed-Friends named Jim shared his tragic story….

My Name is Jim and I was laid off last June.

My whole department was outsourced.

There was talk of it and when I heard it from my boss (the CFO) when I went home I started to send out resumes.

Then the day came when the layoff came.

So in 1.3 years I have sent out 160K resumes, between blasting, send out from job boards and e-mailing my resume blindly to companies HR departments.

I was on 5 interviews.

I want to work badly.

Everyday I send out resumes but lately I have been getting depressed, I found out who my real friends and family are now.

I have been kicked down substantially in these 1.3 years.

I feel like I’m staring into an abyss of no jobs, will I ever work again? IDK.

When I used to talk to “Friends” and “Family” they all say “Things will get better” “Don’t worry”, Yeah right.

I feel so alone and worthless.

I wish I had at least 1 GOOD friend but it seems like no-a-days the dog eat dog world is worst than ever.

I’m NOT suicidal, not at all.

Then I found this site.

I have been saying we are in a depression for 2 years but nobody listened and people have dismissed what I have said.

The sad thing is it seems like we are on the verge of an economic collapse or worst.

So that is my story

Americans like Jim don’t understand why they can’t get jobs anymore.

They feel like failures, but it is actually the system that is failing.

Globalism is not good for middle class American workers.

Democrats can continue to pass law after law that attempts to help American workers, but unless something is done to protect American jobs they are going to continue to be shipped overseas.

Republicans can pass tax break after tax break, but unless those tax breaks are linked to jobs the ruling elite and the big global corporations will just pocket those tax breaks and will continue to ship jobs overseas in order to make bigger profits.

What both parties should be doing is trying to figure out ways to keep American jobs in America, but at this point both parties are completely sold out to globalism.

Globalism was the official policy of the Bush administration and it is the official policy of the Obama administration.

Unless something dramatic changes, the U.S. economy is going to continue to lose huge numbers of jobs and people like Jim are going to continue to wonder what in the world happened to their lives.

But in 2010, most Americans are so busy drinking beer, watching sports, keeping up with Lady Gaga and Justin Bieber, and obsessing over the new cast of Dancing With The Stars that they aren’t even aware that things are literally falling apart all around them.

It is really sad.

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