Payments

The Triumph Of Materialism: The Average American Will Spend 830 Dollars On Christmas In 2015

November 24, 2015November 24, 2015 by Michael

Has there ever been a major holiday more focused on materialism than the modern American Christmas? This year, Americans are planning to spend an average of 830 dollars on Christmas gifts, which represents a jump of 110 dollars over the average of 720 dollars last year. But have our incomes gone up accordingly? Of course not. In fact, real median household income in the United States has been experiencing a steady long-term decline. So in order to fund all of our Christmas spending, we have got to go into even more debt. We love to pull out our credit cards and spend money that we do not have on lots of cheap, useless stuff made on the other side of the world by workers making slave labor wages. We do the same thing year after year, and most of us have grown accustomed to the endless cycle of growing debt. In fact, one Pew survey found that approximately 70 percent of all Americans believe that “debt is a necessity in their lives”. But then we have to work our fingers to the bone to try to make the payments on all of that debt, not realizing that debt systematically impoverishes us. It may be hard to believe, but if you have a single dollar in your pocket and no debt, you have a greater net worth than 25 percent of all Americans. I know that sounds crazy, but it is true.

Overall, when you add up all forms of debt (consumer, business, local government, state government and federal government), Americans are more than 60 trillion dollars in debt.

Let that sink in for a bit.

40 years ago, that number was sitting at about 3 trillion dollars.

We have been on the greatest debt binge in the history of the world. Even though we were “the wealthiest, most prosperous nation on the entire planet”, we always had to have more. We just kept on borrowing and borrowing and borrowing from the future until we completely destroyed it.

And we still haven’t learned anything. Instead, this Christmas season we will be partying like it’s 2007…

Americans are planning on celebrating Christmas like it’s 2007.

A November survey by Gallup found that US adults are planning on spending about $830 on average on Christmas gifts this year.

That’s a huge jump from last year’s $720 average.

Notably, American consumers haven’t suggested a number that high since November 2007, when they were planning on spending $866 on average.

Sadly, our incomes simply do not justify this kind of extravagance. As Zero Hedge has pointed out, household incomes “actually peaked at least 15 years ago in 81% of U.S. counties.”

So why can’t we adjust our lifestyles to match?

Why must we always have more?

Here are more details on our declining incomes from the Visual Capitalist…

Income peaked one year ago for many of the counties that are a part of the shale boom. This includes much of North and South Dakota, as well as parts of Texas, Nebraska, and Oklahoma. Income in Washington, D.C. and neighboring Arlington County also peaked then.
In 1999, a total of 1,623 counties had their households reach peak income. The majority of these counties are in the Midwest and Southeast.
The most southern part of California and parts of New England both peaked around 25 years ago.
Many states along the Rocky Mountains such as Wyoming and Montana had counties that peaked roughly 35 years ago.
Household income peaked in upstate New York, the northern tip of California, and southern Nevada at the same time that humans were first landing on the moon in 1969.

But you won’t hear this reported on the mainstream news, will you?

They want us to think that happy days are here again.

The following chart comes from the Federal Reserve, and it shows that real median household income in the United States has been trending down since 1999…

Americans should be having smaller Christmases instead of bigger ones, but that doesn’t fit the image of who we still think that we are.

Recently, I published an article entitled “Goodbye Middle Class: 51 Percent Of All American Workers Make Less Than 30,000 Dollars A Year” that was shared more than 44,000 times on Facebook. In that article, I included brand new figures that were just released by the Social Security Administration. As you can see, the quality of our jobs is not great…

-38 percent of all American workers made less than $20,000 last year.

-51 percent of all American workers made less than $30,000 last year.

-62 percent of all American workers made less than $40,000 last year.

-71 percent of all American workers made less than $50,000 last year.

Without a doubt, most American families should not be spending hundreds of dollars a year on Christmas gifts.

At these income levels, most American families are just barely surviving.

But once again this year, millions upon millions of Americans will flock to the malls and big box stores in a desperate attempt to make themselves happy.

Sadly, those efforts will be in vain. In fact, in a previous article I highlighted the fact that Christmas is the unhappiest season of the year. The suicide rate spikes to the highest level of the year during “the holidays”, and 45 percent of all Americans report that they dread the Christmas season. The following is an excerpt from a Psychology Today article…

We are told that Christmas, for Christians, should be the happiest time of year, an opportunity to be joyful and grateful with family, friends and colleagues. Yet, according to the National Institute of Health, Christmas is the time of year that people experience the highest incidence of depression. Hospitals and police forces report the highest incidences of suicide and attempted suicide. Psychiatrists, psychologists and other mental health professionals report a significant increase in patients complaining about depression. One North American survey reported that 45% of respondents dreaded the festive season.

In recent years, an increasing number of Americans have given up the tradition of Christmas gifts entirely, and many of them that I know seem quite happy to have done so.

Of course most people are still quite satisfied with the status quo, and there are many that will get very angry with you if you dare to suggest that the way that Americans celebrate Christmas has gotten way out of hand.

But shouldn’t it alarm us that for most Americans the biggest holiday of the year is all about the “stuff” they are going to buy, the “stuff” they are going to give and the “stuff” they are going to get?

As a society, we are obsessed with things, but those things are never going to make us happy.

Perhaps we should all take some time to reflect on the traditions that we choose to participate in and what they really mean to us during this “holiday season”…

Rotting, Decaying And Bankrupt – If You Want To See The Future Of America Just Look At Detroit

June 16, 2013 by Michael

Eventually the money runs out. Much of America was shocked when the city of Detroit defaulted on a $39.7 million debt payment and announced that it was suspending payments on $2.5 billion of unsecured debt, but those who visit my site on a regular basis were probably not too surprised. Anyone with half a brain and a calculator could see this coming from a mile away. But people kept foolishly lending money to the city of Detroit, and now many of them are going to get hit really hard. Detroit Emergency Manager Kevyn Orr has submitted a proposal that would pay unsecured creditors about 10 cents on the dollar. Similar haircuts would be made to underfunded pension and health benefits for retirees. Orr is hoping that the creditors and the unions that he will be negotiating with will accept this package, but he concedes that there is still a “50-50 chance” that the city of Detroit will be forced to formally file for bankruptcy. But what Detroit is facing is not really that unique. In fact, Detroit is a perfect example of what the future of America is going to look like. We live in a nation that is rotting, decaying, drowning in debt and racing toward insolvency. Already there are dozens of other cities across the nation that are poverty-ridden, crime-infested hellholes just like Detroit is, and hundreds of other communities are rapidly heading in that direction. So don’t look down on Detroit. They just got there before the rest of us.

The following are some facts about Detroit that are absolutely mind-blowing…

1 – Detroit was once the fourth-largest city in the United States, and in 1960 Detroit had the highest per-capita income in the entire nation.

2 – Over the past 60 years, the population of Detroit has fallen by 63 percent.

3 – At this point, approximately 40 percent of all the streetlights in the city don’t work.

4 – Some ambulances in the city of Detroit have been used for so long that they have more than 250,000 miles on them.

5 – 210 of the 317 public parks in the city of Detroit have been permanently closed down.

6 – According to the New York Times, there are now approximately 70,000 abandoned buildings in Detroit.

7 – Approximately one-third of Detroit’s 140 square miles is either vacant or derelict.

8 – Less than half of the residents of Detroit over the age of 16 are working at this point.

9 – If you can believe it, 60 percent of all children in the city of Detroit are living in poverty.

10 – According to one very shocking report, 47 percent of the residents of Detroit are functionally illiterate.

11 – Today, police solve less than 10 percent of the crimes that are committed in Detroit.

12 – Ten years ago, there were approximately 5,000 police officers in the city of Detroit. Today, there are only about 2,500 and another 100 are scheduled to be eliminated from the force soon.

13 – Due to budget cutbacks, most police stations in Detroit are now closed to the public for 16 hours a day.

14 – The murder rate in Detroit is 11 times higher than it is in New York City.

15 – Crime has gotten so bad in Detroit that even the police are telling people to “enter Detroit at your own risk“.

16 – Right now, the city of Detroit is facing $20 billion in debt and unfunded liabilities. That breaks down to more than $25,000 per resident.

As Detroit Emergency Manager Kevyn Orr noted last week, it took a very long time for Detroit to get into this condition…

“What the average Detroiter needs to understand is that where we are right now is a culmination of years and years and years of kicking the can down the road,” said Orr, adding that his proposal should not be seen as a “hostile act” but as a step in the right direction.

Does that sound familiar?

It should.

U.S. politicians have also been kicking the can down the road for “years and years and years”.

But eventually you can’t kick the can down the road anymore.

Sometimes it is helpful to step back and look at what we have done to ourselves over the past several decades.

For example, back in 1980 the U.S. national debt was less than one trillion dollars. Today, it is rapidly approaching 17 trillion dollars.

And our debt binge has greatly accelerated under Barack Obama.

During Barack Obama’s first term, the federal government accumulated more debt than it did under the first 42 U.S presidents combined.

Isn’t that insane?

In fact, if you started paying off just the new debt that the U.S. has accumulated during the Obama administration at the rate of one dollar per second, it would take more than 184,000 years to pay it off.

The following are a lot more facts about our exploding national debt from one of my previous articles entitled “55 Facts About The Debt And U.S. Government Finances That Every American Voter Should Know“…

#1 While Barack Obama has been president, the U.S. government has spent about 11 dollars for every 7 dollars of revenue that it has actually brought in.

#2 During the fiscal year that just ended, the U.S. government took in 2.449 trillion dollars but it spent 3.538 trillion dollars.

#3 During fiscal year 2011, over a trillion dollars of government money was spent on 83 different welfare programs, and those numbers do not even include Social Security or Medicare.

#4 Over the past four years, welfare spending has increased by 32 percent. In inflation-adjusted dollars, spending on those programs has risen by 378 percent over the past 30 years. At this point, more than 100 million Americans are enrolled in at least one welfare program run by the federal government. Once again, these figures do not even include Social Security or Medicare.

#5 Over the past year, the number of Americans getting a free cell phone from the federal government has grown by 43 percent. Now more than 16 million Americans are enjoying what has come to be known as an “Obamaphone”.

#6 When Barack Obama first entered the White House, about 32 million Americans were on food stamps. Now, 47 million Americans are on food stamps. And this has happened during what Obama refers to as “an economic recovery”.

#7 The U.S. government recently spent 27 million dollars on pottery classes in Morocco.

#8 The U.S. Department of Agriculture recently spent $300,000 to encourage Americans to eat caviar at a time when more families than ever are having a really hard time just trying to put any food on the table at all.

#9 During 2012, the National Science Foundation spent $516,000 to support the creation of a video game called “Prom Week”, which apparently simulates “all the social interactions of the event.”

#10 The U.S. Department of Agriculture gave the largest snack food maker in the world (PepsiCo Inc.) a total of 1.3 million dollars in corporate welfare that was used to help build “a Greek yogurt factory in New York.”

#11 The National Science Foundation recently gave researchers at Purdue University $350,000. They used part of that money to help fund a study that discovered that if golfers imagine that a hole is bigger it will help them with their putting.

#12 If you can believe it, $10,000 from the federal government was actually used to purchase talking urinal cakes up in Michigan.

#13 The National Science Foundation recently gave a whopping $697,177 to a New York City-based theater company to produce a musical about climate change.

#14 The National Institutes of Health recently gave $666,905 to a group of researchers that is studying the benefits of watching reruns on television.

#15 The National Science Foundation has given 1.2 million dollars to a team of “scientists” that is spending part of that money on a study that is seeking to determine whether elderly Americans would benefit from playing World of Warcraft or not.

#16 The National Institutes of Health recently gave $548,731 to a team of researchers that concluded that those that drink heavily in their thirties also tend to feel more immature.

#17 The National Science Foundation recently spent $30,000 on a study to determine if “gaydar” actually exists. This is the conclusion that the researchers reached at the end of the study…

“Gaydar is indeed real and… its accuracy is driven by sensitivity to individual facial features”

#18 Back in 2011, the National Institutes of Health spent $592,527 on a study that sought to figure out once and for all why chimpanzees throw poop.

#19 The U.S. government spends more on the military than China, Russia, Japan, India, and the rest of NATO combined. In fact, the United States accounts for 41.0% of all military spending on the planet. China is next with only 8.2%.

#20 In a previous article, I noted that close to 500,000 federal employees now make at least $100,000 a year.

#21 In 2006, only 12 percent of all federal workers made $100,000 or more per year. Now, approximately 22 percent of all federal workers do.

#22 If you can believe it, there are 77,000 federal workers that make more than the governors of their own states do.

#23 During 2010, the average federal employee in the Washington D.C. area received total compensation worth more than $126,000.

#24 The U.S. Department of Defense had just nine civilians earning $170,000 or more back in 2005. When Barack Obama became president, the U.S. Department of Defense had 214 civilians earning $170,000 or more. By June 2010, the U.S. Department of Defense had 994 civilians earning $170,000 or more.

#25 During 2010, compensation for federal employees came to a grand total of approximately 447 billion dollars.

#26 If you can believe it, close to 15,000 retired federal employees are currently collecting federal pensions for life worth at least $100,000 annually. That list includes such names as Newt Gingrich, Bob Dole, Trent Lott, Dick Gephardt and Dick Cheney.

#27 During 2010, the federal government spent $33,387 on the hair care needs of U.S. Senators.

#28 During 2010, U.S. Senators pulled $72,370 out of the “Senate Restaurant Fund”.

#29 During 2010, an average of $4,005,900 of U.S. taxpayer money was spent on “personal” and “office” expenses per Senator.

#30 In 2013, 3.7 million dollars will be spent to support the lavish lifestyles of former presidents such as George W. Bush and Bill Clinton.

#31 During 2011, the federal government spent a total of 1.4 BILLION dollars just on the Obamas.

#32 When you combine all federal government spending, all state government spending and all local government spending, it comes to approximately 41 percent of U.S. GDP. But don’t worry, all of our politicians insist that this is not socialism.

#33 As I have written about previously, less than 30 percent of all Americans lived in a home where at least one person received financial assistance from the federal government back in 1983. Today, that number is sitting at an all-time high of 49 percent.

#34 Back in 1990, the federal government accounted for just 32 percent of all health care spending in America. This year, it is being projected that the federal government will account for more than 50 percent of all health care spending in the United States.

#35 The number of Americans on Medicaid soared from 34 million in 2000 to 54 million in 2011, and it is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.

#36 In one of my previous articles, I discussed how it is being projected that the number of Americans on Medicare will grow from 50.7 million in 2012 to 73.2 million in 2025.

#37 If you can believe it, Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years. That comes to approximately $328,404 for each and every household in the United States.

#38 In the United States today, more than 61 million Americans receive some form of Social Security benefits. By 2035, that number is projected to soar to a whopping 91 million.

#39 Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.

#40 When Barack Obama first took office, the U.S. national debt was about 10.6 trillion dollars. Now it is about 16.7 trillion dollars. That is an increase of 6.1 trillion dollars in a little more than 4 years.

#41 The federal government has now run a budget deficit of more than a trillion dollars for four years in a row.

#42 If right this moment you went out and started spending one dollar every single second, it would take you more than 31,000 years to spend one trillion dollars.

#43 If you were alive when Jesus Christ was born and you spent one million dollars every single day since that point, you still would not have spent one trillion dollars by now.

#44 Some suggest that “taxing the rich” is the answer. Well, if Bill Gates gave every single penny of his entire fortune to the U.S. government, it would only cover the U.S. budget deficit for 15 days.

#45 If the federal government used GAAP accounting standards like publicly traded corporations do, the real federal budget deficit for 2011 would have been 5 trillion dollars instead of 1.3 trillion dollars.

#46 The United States already has more government debt per capita than Greece, Portugal, Italy, Ireland or Spain does.

#47 At this point, the United States government is responsible for more than a third of all the government debt in the entire world.

#48 The amount of U.S. government debt held by foreigners is about 5 times larger than it was just a decade ago.

#49 Between 2007 and 2010, U.S. GDP grew by only 4.26%, but the U.S. national debt soared by 61% during that same time period.

#50 The U.S. national debt is now more than 37 times larger than it was when Richard Nixon took us off the gold standard.

#51 The U.S. national debt is now more than 5000 times larger than it was when the Federal Reserve was first created.

#52 The U.S. national debt jumped more on the very first day of fiscal year 2013 than it did from 1776 to 1941 combined.

#53 Historically, the interest rate on 10 year U.S. Treasuries has averaged 6.68 percent. If the average interest rate on U.S. government debt rose to that level today, the U.S. government would find itself spending more than a trillion dollars per year just on interest on the national debt.

#54 A recently revised IMF policy paper entitled “An Analysis of U.S. Fiscal and Generational Imbalances: Who Will Pay and How?” projects that U.S. government debt will rise to about 400 percent of GDP by the year 2050.

#55 Boston University economist Laurence Kotlikoff is warning that the U.S. government is facing a gigantic tsunami of unfunded liabilities in the coming years that we are counting on our children and our grandchildren to pay. Kotlikoff speaks of a “fiscal gap” which he defines as “the present value difference between projected future spending and revenue”. His calculations have led him to the conclusion that the federal government is facing a fiscal gap of 222 trillion dollars in the years ahead.

Please share this article with as many people as you can. We are in the process of committing national financial suicide and time is rapidly running out to do anything about it.

Just like Detroit, a day is rapidly approaching when America will not be able to kick the can down the road anymore.

Sadly, our politicians don’t seem inclined to do anything about it and most of the population seems to think that our exploding national debt is not a significant problem.

By the time it becomes clear how wrong they were, it will be far too late to do anything about it.

Money Is A Form Of Social Control And Most Americans Are Debt Slaves

February 19, 2013 by Michael

Is America really “the land of the free”? Most people think of money as simply a medium of exchange that makes economic transactions more convenient, but the truth is that it is much more than that. Money is also a form of social control. Just think about it. What did you do this morning? Well, if you are like most Americans, you either got up and went to work (to make money) or to school (to learn the skills that you will need to make money). We spend a great deal of our lives pursuing the almighty dollar, and there are literally millions of laws, rules and regulations about how we earn our money, about how we spend our money and about how much of our money the government gets to take from us. Not that money is a bad thing in itself. Without money, it would be really hard to have a modern society. Unfortunately, our money is based on debt, and debt levels in the United States have exploded to absolutely unprecedented levels in recent years. The borrower is the servant of the lender, and if you are like most Americans, nearly every major purchase that you make in your life is going to involve debt. Do you want to get a college education so that you can get a “good job”? You are told to get a student loan. Do you want a car? You are encouraged to get an auto loan and to stretch out the payments for as long as possible. Do you want a home? You are probably going to end up with a big fat mortgage. And of course I could go on and on and on. The cold, hard truth of the matter is that most Americans are debt slaves. Most of us spend our entire lives trapped in an endless cycle of debt that we never escape until we die, and meanwhile our years of hard labor are greatly enriching those that own our debts.

Have you ever found yourself wondering why you can never seem to get ahead financially no matter how hard you work?

Well, it is probably because you have gotten yourself enslaved to debt.

Just consider the following example about credit card debt from a former Goldman Sachs banker…

On the debt side of things, how much does your credit card company earn if you carry just an average of a $5,000 credit card balance, paying, say, 22% annual interest rate (compounding monthly) for the next 10 years?

In your mind you owe a balance of only $5,000, which is not a huge amount, especially for someone gainfully employed. After all, $5,000 is just a quick Disney trip, or a moderately priced ski-trip, or that week in Hawaii. You think to yourself, “how bad could it be?”

The answer, including the cost of monthly compounding, is $44,235, or about 9 times what it appears to cost you at face value.

But a large percentage of Americans never pay off their credit cards at all. They make small payments each month, but then they just keep on adding to their balances.

In the end, that is financial suicide.

If you carry an “average balance” on your credit cards each month, and those credit cards have an “average” interest rate, you could end up paying millions of dollars to the credit card companies by the end of your life…

Let’s say you are an average American household, and you carry an average balance of $15,956 in credit card debt.

Also, as an average American household, let’s assume you pay an average current rate of 12.83%.

Finally, let’s assume you carry this average balance for 40 years, between ages 25 and 65. How much did your credit card company make off of you and your extreme averageness?

Answer: $2,629,618.64

Sadly, approximately 46% of all Americans carry a credit card balance from month to month.

How stupid can we be as a nation?

When you become enslaved to the credit card companies, your toil and sweat makes them much wealthier. It is a form of slavery that does not require anyone pointing a gun at you.

But we never seem to learn. Incredibly, 43 percent of all American families spend more than they earn each year.

As the chart below demonstrates, consumer credit actually declined for a short while during the last recession, but now it has turned around and the growth of consumer credit is on the same trajectory as it was before the last economic crisis…

Today, the total amount of consumer credit in the United States is 15 times larger than it was 40 years ago.

And every major “milestone” in our lives typically involves even more debt.

-The total amount of student loan debt in the United States recently passed a trillion dollars, and approximately two-thirds of all college students graduate with student loan debt at this point.

-Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago, and mortgage debt as a percentage of GDP has more than tripled since 1955.

-Car loans just keep getting longer and longer, and approximately 70 percent of all car purchases in the United States now involve an auto loan.

-Want to get married? That average cost of a wedding is now $26,989 which is probably going to mean even more debt unless you have wealthy parents.

-Do you have a serious medical problem? According to a report published in The American Journal of Medicine, medical bills are a major factor in more than 60 percent of the personal bankruptcies in the United States.

Are you starting to understand why approximately half of all Americans die broke?

And I have not even begun to talk about our collective debts yet.

Government debt is a collective form of debt. You may not have voted for any of the politicians that have been racking up debt in your name, but part of it still belongs to you.

Since the year 2000, state and local government debt has more than doubled. These are collective debts for which we are all responsible…

And of course the biggest collective debt of all is the U.S. national debt.

In a previous article, I discussed how the national debt has exploded out of control in recent years. If you can believe it, the U.S. debt to GDP ratio has increased from 66.6 percent to 103 percent since 2007, and the U.S. government accumulated more new debt during Barack Obama’s first term than it did under the first 42 U.S. presidents combined.

When you break things down by household, the numbers look even more frightening.

During Barack Obama’s first four years in the White House, the amount of new debt accumulated by the federal government breaks down to approximately $50,521 for every single household in the United States.

And as I have mentioned previously, if you started paying off just the new debt that the federal government has accumulated during the Obama administration at the rate of one dollar per second, it would take more than 184,000 years to pay it off.

Well, you might argue, none of that debt will ever be paid off in our lifetimes.

And you would be right.

But what we are doing is consigning our children, our grandchildren and all future generations of Americans to a lifetime of debt slavery.

How nice of us, eh?

Over the past 10 years, the U.S. national debt has grown by an average of 9.3 percent per year, but the overall U.S. economy has only grown by an average of just 1.8 percent per year.

How do we expect to continue doing this?

Fortunately, more Americans are starting to wake up to how foolish all of this is.

For example, the following is what Home Depot Founder Kenneth Langone told CNBC on Tuesday…

“The fundamentals haven’t changed … And we don’t know when the storm is going to hit,” he predicted. “It has to happen.If you look at our debt to GDP, eventually you reach a point where there’s no turning back.”

He used an analogy to make his point. “If you had one meal left, and you had your grandchild with you, would you eat if or give it to your grandchild?”

He said all people would say “give it to my grandchild.”

But pursuing the president’s vision, he argued, “[Is] eating the grandchildren’s breakfast, lunch and dinner right now. And the [grandchildren] haven’t been born yet.”

What we are doing to our children and our grandchildren is beyond criminal. We are selling away their futures in order to make our lives more pleasant.

Right now, we are stealing more than 100 million dollars from our children and our grandchildren every single hour of every single day.

So where is the outrage over this theft?

Sadly, most Americans don’t even realize that all of this is by design. When the Federal Reserve system was created back in 1913, it was designed to get the U.S. government trapped in an endless spiral of debt.

And it worked. Today, the U.S. national debt is now more than 5000 times larger than it was when the Federal Reserve was first created.

Our society has become addicted to debt, and that means that we have become addicted to slavery.

We are not the “land of the free”. The truth is that we are now the “land of the servants”.

Over the past 40 years, the total amount of debt owed in the United States (government, business, consumer, etc.) has grown from less than 2 trillion dollars to more than 55 trillion dollars…

So who benefits from all of this?

I talked about this in a previous article. The ultra-wealthy and the international bankers make enormous profits by lending money to all the rest of us.

According to a stunning report that was released last summer, the global elite have up to 32 trillion dollars stashed away in offshore tax havens around the globe.

How did they get so much money?

The borrower is the servant of the lender. They have gotten rich at our expense.

But most people live their entire lives without ever understanding how the game is being played.

Today, most Americans see that the Dow is back above 14,000 and they hear the mainstream media telling them that happy days are here again and so they just believe that things are going to turn out okay somehow.

And it certainly does not help that most people seem to let others do their thinking for them. In fact, about 23% of all Americans can’t even read at this point.

So is there any hope for us?

Please feel free to post a comment with your opinion below…

The Student Loan Debt Bubble Is Creating Millions Of Modern Day Serfs

September 11, 2012September 10, 2012 by Michael

Every single year, millions of young adults head off to colleges and universities all over America full of hopes and dreams. But what most of those fresh-faced youngsters do not realize is that by taking on student loan debt they are signing up for a life of debt slavery. Student loan debt has become a trillion dollar bubble which has shattered the financial lives of tens of millions of young college graduates. When you are just starting out and you are not making a lot of money, having to make payments on tens of thousands of dollars of student loan debt can be absolutely crippling. The total amount of student loan debt in the United States has now surpassed the total amount of credit card debt, and student loan debt is much harder to get rid of. Many young people view college as a “five year party“, but when the party is over millions of those young people basically end up as modern day serfs as they struggle to pay off all of the debt that they have accumulated during their party years. Bankruptcy laws have been changed to make it incredibly difficult to get rid of student loan debt, so once you have it you are basically faced with two choices: either you are going to pay it or you are going to die with it.

But we don’t warn kids about this before they go to school. We just endlessly preach to them that they need a college degree in order to get a “good job”, and that after they graduate they will easily be able to pay off their student loans with the “good job” that they will certainly be able to find.

Sadly, tens of millions of young Americans have left college in recent years only to find out that they were lied to all along.

As I have written about previously, college has become a giant money making scam and the victims of the scam are our young people.

Back in 1952, a full year of tuition at Harvard was only $600.

Today, it is over $35,000.

Why does college have to cost so much?

At every turn our young people are being ripped off.

For example, the cost of college textbooks has tripled over the past decade.

Has it suddenly become a lot more expensive to print books?

Of course not.

The truth is that an entire industry saw an opportunity to gouge students and they went for it.

The amount of money being spent on higher education in this country is absolutely outrageous. One father down in Texas says that he will end up spending about 1.5 million dollars on college expenses for his five daughters before it is all said and done.

Unfortunately, most young adults in America don’t have wealthy fathers so they have to take out large student loans to pay for their educations.

Average student loan debt at graduation is estimated to be about $28,720 right now.

That is a crazy figure and it has absolutely soared in recent years. In fact, student loan debt in America has grown by 511 percent since 1999.

And student loan debt will follow you wherever you go.

If you do not pay your loans when you graduate, you could end up having your wages, your tax refunds and even your Social Security benefits garnished.

In addition, your account could be turned over to the debt collectors and they can be absolutely brutal.

The student loan debt bubble is the best thing to happen to debt collectors in ages. The following is what one professional who works in the industry said in a recent article that he wrote for a debt collection industry publication….

As I wandered around the crowd of NYU students at their rally protesting student debt at the end of February, I couldn’t believe the accumulated wealth they represented – for our industry.

It was lip-smacking.

At my right, to graphically display how she was debt-burdened, was a girl wearing a t-shirt emblazoned with the fine sum of $90,000, another with $65,000, a third with $20,000 and over there a really attractive $120,000 was printed on another shirt. Guys were shouldering their share, with t-shirts of $20,000, $15,000, $27,000, $33,000 and $75,000.

There is no way that our young people can afford to take on those kinds of debt loads, and that is one reason why student loan delinquency rates continue to surge.

In fact, the student loan default rate in the United States has nearly doubled since 2005.

Today, one out of every six Americans that owes money on a student loan is in default.

One out of every six.

And it is going to get a whole lot worse.

At this point there are about 5.9 million Americans that are at least 12 months behind on their student loan payments.

So could the bursting of the student loan bubble do tremendous damage to our financial system?

Don’t worry – Federal Reserve Chairman Ben Bernanke is promising that the student loan debt bubble won’t cause a crisis.

And you can trust him, right?

For those living with the burden of unpaid student loan debt, life can be really tough. Some try to avoid the debt collectors, but it is easier said than done. The following is from a recent article in the New York Times….

Hiding from the government is not easy.

“I keep changing my phone number,” said Amanda Cordeiro, 29, from Clermont, Fla., who dropped out of college in 2010 and has fielded as many as seven calls a day from debt collectors trying to recover her $55,000 in overdue loans. “In a year, this is probably my fourth phone number.”

Unlike private lenders, the federal government has extraordinary tools for collection that it has extended to the collection firms. Ms. Cordeiro has already had two tax refunds seized, and other debtors have had their paychecks or Social Security payments garnisheed.

The biggest problem, of course, is that there are not nearly enough jobs for the hordes of college graduates that our system produces each year.

During 2011, 53 percent of all Americans with a bachelor’s degree under the age of 25 were either unemployed or underemployed.

So without a good job, how are those young people supposed to service their student loans?

Once upon a time, a college degree was a guaranteed ticket to the middle class.

Sadly, those days are long gone. Today, millions upon millions of college graduates have taken jobs that do not even require a college education. The following is from a recent CNBC article….

In the last year, they were more likely to be employed as waiters, waitresses, bartenders and food-service helpers than as engineers, physicists, chemists and mathematicians combined (100,000 versus 90,000). There were more working in office-related jobs such as receptionist or payroll clerk than in all computer professional jobs (163,000 versus 100,000). More also were employed as cashiers, retail clerks and customer representatives than engineers (125,000 versus 80,000).

You probably know young people who have experienced the “wake up call” that comes as a result of entering the “real world” in this horrible economic environment.

It is not easy out there.

And this can be extremely disappointing for parents as well. How would you feel if your daughter got very high grades all of the way through college and ended up working as a waitress because she couldn’t find anything else?

Even those that pursue advanced degrees are having an extremely challenging time finding work in this economy.

For example, a Business Insider article from a while back profiled a law school graduate named Erin that is actually on food stamps….

She remains on food stamps so her social life suffers. She can’t afford a car, so she has to rely on the bus to get around Austin, Texas, where she lives. And currently unable to pay back her growing pile of law school debt, Gilmer says she wonders if she will ever be able to pay it back.

“That has been really hard for me,” she says. “I have absolutely no credit anymore. I haven’t been able to pay loans. It’s scary, and it’s a hard thing to think you’re a lawyer but you’re impoverished. People don’t understand that most lawyers actually aren’t making the big money.”

And the really sad thing is that the quality of the education that our young people are receiving is very poor. I spent eight years attending U.S. universities, and most parents would be absolutely shocked at how little our college students are actually learning.

Going to college really has become a ticket to party for four or five or six years with a little bit of “education” thrown in.

But our society has put a very high value on those little pieces of paper called “diplomas” so we all continue to play along with the charade.

Some college students are finding other “creative” ways to pay for their educations other than going into tremendous amounts of debt. For example, an increasing number of young women are seeking out “sugar daddies” who will “sponsor” their educations. The following is from a Huffington Post article about this disturbing trend….

On a Sunday morning in late May, Taylor left her Harlem apartment and boarded a train for Greenwich, Conn. She planned on spending the day with a man she had met online, but not in person.

Taylor, a 22-year-old student at Hunter College, had confided in her roommate about the trip and they agreed to swap text messages during the day to make sure she was safe.

Once in Greenwich, a man who appeared significantly older than his advertised age of 42 greeted Taylor at the train station and then drove her to the largest house she had ever seen. He changed into his swimming trunks, she put on a skimpy bathing suit, and then, by the side of his pool, she rubbed sunscreen into the folds of his sagging back — bracing herself to endure an afternoon of sex with someone she suspected was actually about 30 years her senior.

Of course that young woman will probably deeply regret doing that later on in her life.

Once graduation comes, millions upon millions of our young people are discovering that it is really hard to be financially independent if you are drowning in student loan debt and you can’t find a good job.

So what are they doing?

They are moving back in with Mom and Dad.

One poll discovered that 29 percent of all Americans in the 25 to 34 year old age bracket are still living with their parents.

Ouch.

So what do you think about all of this? Please feel free to post a comment with your thoughts below….

Underemployed And Hating Life

October 21, 2011October 21, 2011 by Michael

Today, millions of smart, hard working Americans are flipping burgers, waiting tables or working dead end retail jobs not because they want to, but because they have no other options. According to the U.S. Bureau of Labor Statistics, about 14 million Americans are currently unemployed and another 9.3 million Americans are currently “underemployed”. During this economic downturn, a lot of Americans have been forced to take part-time jobs because they have been unable to find full-time jobs. For many, this can be a soul-crushing experience. It can be easy to become very bitter when you have worked very hard all your life and yet you find yourself having to take a job that only pays you a fraction of what you used to make. A lot of young college graduates end up hating life because the only jobs that they can seem to find do not even require a college degree and don’t even come close to enabling them to keep up with their crippling student loan debt payments. Sadly, the underemployment problem continues to grow even worse. In September alone, the number of underemployed Americans rose by close to half a million.

There are other measurements that indicate that unemployment in America is even worse that the Bureau of Labor Statistics is indicating.

For example, a recent Gallup poll found that approximately one out of every five Americans that currently have a job consider themselves to be underemployed.

In addition, according to author Paul Osterman about 20 percent of all U.S. adults are currently working jobs that pay poverty-level wages.

When you try as hard as you can and you still can’t pay the bills, it is easy to end up hating life.

What some Americans are going through is absolutely heart breaking. Just consider the following story from a recent article on Fox News….

Damian Birkel, of Winston-Salem N.C., found himself in similar circumstances. He was a marketing manager at Sarah Lee in the early 1990s when he was downsized. Since then, he has been laid off from three other jobs, including one at a recruiting firm.

“I felt like I had ‘loser’ tattooed to my forehead, and ‘will work for food’ tattooed to my chest,” he says.

The hardest part was telling his young daughter that there might not be enough money to pay the bills — among them, sending her to summer camp. “She brings her piggy bank and says, ‘Daddy, why don’t you break into the piggy bank so that you can pay some of the bills.’”

How would you feel if your little daughter said that to you?

Unfortunately, the number of good jobs just continues to decrease.

There are fewer payroll jobs in the United States today than there were back in 2000 even though we have added 30 million extra people to the population since then.

And the mix of jobs that our economy is producing continues to change.

Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs.

What that means is that the middle class is shrinking.

A lot of young people are coming out of college right now and are having their dreams absolutely crushed. Large numbers of them are entering the “real world” with nightmarish student loan debt burdens and only a limited number of them can find decent jobs.

A recent USA Today article told the story of one of these very frustrated young Americans….

Kate Wolfe chased a dream when she moved to New York after college, looking to break into acting while working as a maître d’.

Her $50,000 worth of student loans were a distraction she could handle. Then the uninsured 25-year-old was mugged last year, and the final indignity was the $30,000 emergency room bill.

We are pumping out tons of college graduates, but we are not pumping out nearly enough jobs for all of them.

If you can believe it, in the United States today there are 317,000 waiters and waitresses that actually have college degrees.

That is an absolutely horrifying statistic.

But the truth is that the lack of good jobs is hitting every age level really hard.

For example, the average American family is under a tremendous amount of financial stress in this economy. Once you adjust it for inflation, median household income in the United States has declined approximately 10 percent since December 2007.

Meanwhile, the cost of food, gas, health insurance and just about everything else a family needs has gone up significantly.

Our politicians keep talking about “jobs, jobs, jobs” but the number of decent jobs continues on a very clear downward trend.

Back in 1980, 52 percent of all jobs in the United States were middle income jobs. Today, only 42 percent of all jobs in the United States are middle income jobs.

Sadly, it now looks like even the low income jobs are starting to dry up.

Mall vacancies recently hit a brand new all-time record. Major retail chains all over the country are announcing layoffs. Things do not look very promising for the upcoming holiday season.

So what are our leaders doing about all of this?

Well, unfortunately they continue to fumble the football very badly.

According to a recent ABC News report, the U.S. government actually gave a $529 million loan guarantee to an electric car company that decided to make its cars in Finland….

Vice President Joseph Biden heralded the Energy Department’s $529 million loan to the start-up electric car company called Fisker as a bright new path to thousands of American manufacturing jobs. But two years after the loan was announced, the job of assembling the flashy electric Fisker Karma sports car has been outsourced to Finland.

If we don’t figure out how to stop millions of jobs from leaving this country we are going to be in a world of hurt.

The trade policies of the federal government are neither “free” nor “fair” and they are causing the standard of living of American workers to rapidly sink toward the level of the rest of the world.

We are told that it is “inevitable” that we are going to be deindustrialized and that we are going to become a service economy.

But guess what?

Service jobs generally pay a lot less than manufacturing jobs do.

A “one world economy” where our labor force is merged with the labor forces of the rest of the globe is not a good thing for the average American worker and it is not a good thing for America.

But of course trade is not the only reason why we are losing good jobs. There are a whole bunch of reasons why this is happening. For many more reasons, just check out this article.

A lot of you that are reading this article are unemployed or underemployed right now.

Unfortunately, there is not much hope that the U.S. economy is going to experience a significant turnaround any time soon.

In fact, it is likely that things are going to be getting even worse.

Our economic system is dying. Now is the time to try to get as independent of it as you can.

Don’t count on a job (“just over broke”) as your only source of income. In this economy, no job is safe.

There are millions upon millions of unemployed and underemployed Americans that never dreamed that their lives would go so horribly wrong.

But they did.

Our nation is experiencing the consequences of decades of very bad decisions.

There is no help on the horizon and the cavalry is not on the way to rescue us.

You better prepare accordingly.

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