In The Middle Of This Depression The Rich Are Getting Richer

The 99ers are facing homelessness.  Our troops are returning to no jobs.  Our recent college graduates are going back home to live. However, there is good news for some of us. Michael Snyder from BLN looked into the facts.–.html As of 2007, the top 1 percent of all Americans was taking home 24 percent of the national income.  This was a level that had not been seen since the days of the Great Depression.

Incomes have been growing in the United States, but those at the very top of the pyramid have been gobbling up almost all of the income growth.  According to Harvard Magazine, 66% of the income growth between 2001 and 2007 went to the top 1% of all Americans.

Even official government figures bear out the fact that the rich are getting richer.  An analysis of income-tax data by the Congressional Budget Office a few years ago found that the top 1% of all American households own nearly twice as much of the corporate wealth as they did just 15 years ago. Since money supply is finite that means they TOOK that wealth from somewhere and I think we all have a sense of where that is.

Most Americans have suffered during the last few years, but not the boys and girls down on Wall Street.  New York state Comptroller Thomas DiNapoli says that Wall Street bonuses for 2009 were up 17 percent when compared with 2008. 2008 was the most lucrative year for bonuses on Wall Street.  No one on the “Street” got the memo the rest of us are really hurting out here.  It speaks volumes to lack of morality in the Halls of Money. Greed has always been with us, but this is getting to the point of vulgarity.

Even as the number of Americans living in poverty sky-rockets, the number of millionaires just keeps growing.  In fact, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million during 2009. The contrast to this is that 1 in 6 Americans are receiving some kind of government assistance and homelessness among families has tripled in the last 18 months.  Government anti-poverty programs are exploding in size in response to the recent economic difficulties.  USA Today is reporting that a record one in six Americans are now being served by at least one government anti-poverty program.  Over 50 million Americans are on now Medicaid.  That figure is up more than 17 percent since the beginning of the recession. The number of Americans in the food stamp program rose to a new all-time record of 40.8 million in May.  That number is up almost 50 percent since the beginning of the recession.  The number of Americans who cannot afford even the basic necessities is absolutely staggering.  A whopping 50 million Americans could not afford to buy enough food in order to stay healthy at some point over the last year.

The amount of money some of these Wall Street hot shots are making is incredible.  Back in 2005, the top 25 hedge fund managers earned a total of 9 billion dollars.  That would be bad enough, but even in these hard economic times the rich just keep getting richer.  One year after the recent financial collapse the top 25 hedge fund managers earned a total of approximately $25 billion.  That breaks down to an average of $1 billion each.  I am supposed to support continuing the tax cuts to the rich because……  Really, where is our collective head?

Compared to other industrialized nations, the United States is doing very poorly.  The U.S. poverty rate is now the third worst among the developed nations tracked by the Organization for Economic Cooperation and Development.  The saddest part of this is what we are doing to our children.  According to one recent study, approximately 21 percent of all children in the United States are living below the poverty line in 2010.

But the American people cannot provide for their families if they don’t have jobs.  Today there are not nearly enough jobs for everyone.  In 2010, it takes the average unemployed American worker over 8 months to find a job.  Approximately 10 million Americans are currently receiving unemployment insurance, which is a number that is nearly four times higher than what it was at back in 2007.

The truth is that we are creating a permanent underclass of Americans that cannot get jobs.  The number of Americans receiving long-term unemployment benefits has increased over 60 percent in just the past year.

Increasingly, the wealth of the United States is being held in fewer and fewer hands.  One study found that as of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.  It is not a good time to be living in “the bottom half” in America.  The size of “the pie” being divided up among those at the low end of the wage scale is becoming really, really small.  In fact, the bottom 40 percent of all income earners in the United States now collectively own less than 1 percent of the nation’s wealth.

Even those Americans that still do have decent jobs are seeing their wealth fade rapidly.  For example, U.S. families have $6 trillion less in housing wealth than they did just three years ago.  Home ownership used to be a sign that one had arrived in the middle class, but in 2010 an increasing number of Americans are finding out that they simply can’t afford their homes anymore.  One out of every seven mortgages were either delinquent or in foreclosure during the first quarter of 2010.

The reality is that incomes have just not kept up with housing costs.  This has put an incredible amount of pressure on the middle class.  Just how much pressure?  Well, only the top 5 percent of all U.S. households have earned enough additional income to match the rise in housing costs since 1975. The debt binge middle class Americans have been on over the past couple of decades has drained many of them completely dry, and now more Americans than ever have bad credit scores.  Over 25 percent of Americans now have a credit score below 599, which means that they are a very bad credit risk.

A rapidly rising number of Americans are actually choosing bankruptcy as a way out of their financial problems.  Nationwide, bankruptcy filings rose 20 percent in the 12 month period ending this past June 30th.  The middle class manufacturing jobs that once defined so many American cities are rapidly disappearing.  Despite the fact that the U.S. population has dramatically increased, less Americans are employed in manufacturing today than in 1950.

These days it seems like almost everyone is looking for a good job, but very few people are finding them.  According to one recent survey, 28% of all U.S. households have at least one member that is looking for a full-time job.  Even many of those Americans that still have decent jobs have been hit hard by this economic downturn.  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.

The number of jobs that are evaporating is absolutely stunning.  According to one analysis, the United States has lost a total of 10.5 million jobs since 2007.  So where are the jobs going?  It doesn’t take a genius to figure it out.  China’s trade surplus (much of it with the United States) climbed 140 percent in June compared to a year earlier.

The truth is that “globalism” and “free trade” have put middle class American workers in direct competition with the cheapest labor in the world.  This is what middle class American workers must now compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.

Due to these difficult economic conditions, the middle class is being squeezed as never before.  According to a poll taken in 2009, 61 percent of Americans ”always or usually” live paycheck to paycheck.  That was up significantly from 49 percent in 2008 and 43 percent in 2007.

So what kind of future do our young people have in front of them?  Unfortunately, things don’t look pretty.  Many fresh college graduates can’t even get a job that will allow them to be independent.  One recent survey of last year’s college graduates discovered that 80 percent moved right back home with their parents after graduation.  That was up significantly from 63 percent in 2006.

This is the real picture.  The question is what next. When do we, as a nation, come to the Pearl Harbor moment.  To realize we are in deep do-do and come together, put politics aside and get down to the business of restoring our economy. When is enough enough?

Here is Uncle Willie’s thought:

Even the Happy Talk is Waning

One only has to pay moderately close attention to what is going on concerning our current economic condition to know that we are in a world of hurt.  No one has a clue what to do next.  Politicians on both sides of the aisle are shamelessly using the issue to attack one another, but offering no solutions what so ever.  The Fed is hoarding cash reserves, corporations are sitting on record cash reserves, and the banks aren’t lending anything.  All the while our economy is collapsing more and more each day.

According to Laurence Kotlikoff of Bloomberg, “last month, the International Monetary Fund released its annual review of U.S. economic policy. Its summary contained these bland words about U.S. fiscal policy: “Directors welcomed the authorities’ commitment to fiscal stabilization, but noted that a larger than budgeted adjustment would be required to stabilize debt-to-GDP.”

But delve deeper, and you will find that the IMF has effectively pronounced the U.S. bankrupt. Section 6 of the July 2010 Selected Issues Paper says: “The U.S. fiscal gap associated with today’s federal fiscal policy is huge for plausible discount rates.” It adds that “closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 percent of U.S. GDP.”  The fiscal gap is the value today (the present value) of the difference between projected spending (including servicing official debt) and projected revenue in all future years.

To put 14 percent of gross domestic product in perspective, current federal revenue totals 14.9 percent of GDP. So the IMF is saying that closing the U.S. fiscal gap, from the revenue side, requires, roughly speaking, an immediate and permanent doubling of our personal-income, corporate and federal taxes as well as the payroll levy set down in the Federal Insurance Contribution Act. “

The U.S. government can continue to try to pump up with economy with more debt, but the reality is that there is not going to be a legitimate “recovery” until consumer spending rebounds.  Consumer spending makes up the vast majority of U.S. GDP.  But without good jobs, consumers are not going to be able to spend money.  Unfortunately, our jobs base continues to be erode as millions upon millions of middle class jobs are shipped over to China, India and dozens of third world nations by the global predator corporations that now dominate the world economy.

The U.S. government cannot create real wealth out of thin air.  It can borrow even more money and flood the economy with even more paper currency, but the short-term “buzz” that creates does absolutely nothing to solve our long-term economic problems.

It is the private sector that actually creates wealth.  But unfortunately, over the last several decades we have allowed that wealth to become highly concentrated.  Now the giant global predator corporations have decided that American workers aren’t really that desirable after all.  They are slowly taking away their factories and their offices and they are moving them to where people are willing to work for one-tenth the pay.

So where does that leave middle class American “consumers”?

Well, it leaves us in a world of hurt.

According to Michael Snyder – BLN Contributing Writer:

The following are 15 key economic statistics that just keep getting worse and which reveal the horrific economic plight in which we now find ourselves….

1 – The number of Americans who are receiving food stamps rose to a new all-time record of 40.8 million in May.  The number of Americans receiving food stamps has set a new all-time record for 18 months in a row.  But there is every indication that things are going to get even worse.  The U.S. Department of Agriculture projects that the number of Americans on food stamps will increase to 43 million in 2011.

2 – The U.S. economy lost 131,000 more jobs during the month of July.  (edit note: August is looking a little better, but not much).  But the truth is that the U.S. economy has been bleeding jobs for a long time.  According to one analysis, the United States has lost 10.5 million jobs since 2007.  Meanwhile, immigrants (both legal and illegal) continue to pour into this nation in unprecedented numbers.

3 – Americans who are out of work are finding it incredibly difficult to get back into the workforce.  In the United States today, the average time needed to find a job has risen to an all-time record of 35.2 weeks.

4 – The U.S. government keeps trying to pump up the economy with debt, and in the process things are getting wildly out of control.  According to a U.S. Treasury Department report to Congress, the U.S. national debt will top $13.6 trillion this year and climb to an estimated $19.6 trillion by 2015.

5 – The interest on all of this debt is becoming increasingly oppressive.  As of July 1st, the U.S. government had spent $355 billion so far in 2010 on interest payments to the holders of the national debt.  The total for 2010 should be somewhere in the neighborhood of $700 billion.  According to Erskine Bowles, one of the heads of Barack Obama’s national debt commission, the U.S. government will be spending $2 trillion just on interest on the national debt by 2020.  Keep in mind that the entire U.S. government budget is less than $4 trillion for the entire year of 2010.

6 – If the U.S. government was forced to use GAAP accounting principles (like all publicly-traded corporations must), the annual U.S. government budget deficit would be somewhere in the neighborhood of $4 trillion to $5 trillion.

7 – Social Security will pay out more in benefits in 2010 than it receives in payroll taxes.  This was not supposed to happen until at least 2015.  In the years ahead, these new “Social Security deficits” are projected to be absolutely catastrophic.

8 – There are simply far too many retirees and not nearly enough workers to support them.  Back in 1950 each retiree’s Social Security benefit was paid for by 16 workers.  Today, each retiree’s Social Security benefit is paid for by approximately 3.3 workers.  By 2025 it is projected that there will be approximately two workers for each retiree.

9 – Wealth continues to become highly concentrated at the top.  Since 1973, the average CEO’s salary has increased from 26 times the median income to over 300 times the median income.

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

11 – The Mortgage Bankers Association recently announced that more than 10% of all U.S. homeowners with a mortgage had missed at least one mortgage payment during the January to March time period.  That was a new all-time record and represented an increase from 9.1 percent a year ago.

12 – A recent survey of last year’s college graduates found that 80 percent moved right back home with their parents after graduation.  That was up substantially from 63 percent in 2006.

13 – During the first quarter of 2010, the total number of loans that are at least three months past due in the United States increased for the 16th consecutive quarter.

14 – The total number of U.S. bank failures passed the 100 mark in July of this year.  In 2009, the total number of U.S. bank failures did not pass the century barrier until October.

15 – The U.S. dollar continues to rapidly decline in value.  An item that cost $20.00 in 1970 would cost you $112.35 today.  An item that cost $20.00 in 1913 would cost you $440.33 today.

So what can we each individually do to somewhat insulate ourselves from the economic problems that are coming? Beside the given of being an informed voter and demanding the fiscal reforms we need and voting with our pocket books, such as not supporting companies that are exporting jobs overseas or exploiting illegal immigrant labor, here are some suggestions.

1 – Get Out Of Debt: The old saying, “the borrower is the servant of the lender”, is so incredibly true.  The key to insulating yourself from an economic meltdown is to become as independent as possible, and as long as you are in debt, you simply are not independent.  You don’t want a horde of creditors chasing after you when things really start to get bad out there.

2 – Find New Sources Of Income: In 2010, there simply is not such a thing as job security.  If you are dependent on a job (“just over broke”) for 100% of your income, you are in a very bad position.  There are thousands of different ways to make extra money.  What you don’t want to do is to have all of your eggs in one basket.  One day when the economy melts down and you are out of a job are you going to be destitute or are you going to be okay?

3 – Reduce Your Expenses: Many Americans have left the rat race and have found ways to live on half or even on a quarter of what they were making previously.  It is possible – if you are willing to reduce your expenses.  In the future times are going to be tougher, so learn to start living with less today.

4 – Learn To Grow Your Own Food: Today the vast majority of Americans are completely dependent on being able to run down to the supermarket or to the local Wal-Mart to buy food.  But what happens when the U.S. dollar declines dramatically in value and it costs ten bucks to buy a loaf of bread?  If you learn to grow your own food (even if is just a small garden) you will be insulating yourself against rising food prices.

5 – Make Sure You Have A Reliable Water Supply: Water shortages are popping up all over the globe.  Water is quickly becoming one of the “hottest” commodities out there.  Even in the United States, water shortages have been making headline news recently.  As we move into the future, it will be imperative for you and your family to have a reliable source of water.  Some Americans have learned to collect rainwater and many others are using advanced technology such as atmospheric water generators to provide water for their families.  But whatever you do, make sure that you are not caught without a decent source of water in the years ahead.

We will continue to do our best to tell the truth, get the REAL information, and pass it on here.  Katie bar the door please.  Storm is acomin’.

Pigs are Flyin..Politicians are lyin…and our young men and women are dying.

I don’t know about you, but it seems we have totally lost our common sense and our collective resolve.  Common sense, in fact, seems to be inversely proportional to IQ these days.  We need to stop and rethink this madness.  On the economic front, unemployment essentially remains unchanged, banks are continuing to fail at record pace, foreclosures are again accelerating and states are basically shutting down essential services because a lack of revenue.  Washington passes a financial reform bill that does nothing to attack the very issue that got us in this mess in the first place..Credit Derivative Swaps.  On top of that we have politicians saying that unemployment benefits are the cause because people don’t want to work!!  Are you kidding me!

American families have lost over 10 trillion dollars in asset in the last five years. $10,ooo,ooo,ooo,ooo! During that same period social programs may have cost $450 billion, so why are they trying to focus on unemployment and immigration as economic issues.  The facts are that the tax cuts have the greatest impact on revenues by far!  A stagnant economy and the lack of tax revenues generated have a much greater impact than either of these issues.  When you examine where the so called stimulus money went, there are two eye-opening facts.  First a lot of the money sent to Goldman Sachs, et al seems to have ended up in foreign banks or the FED in reserve accounts and the rest, well… it really hasn’t been released yet!  You combine with the fact we are spending $2 billion a day on war and what does common sense tell you?

We get a health care bill that really doesn’t kick in until 2014 or later, with no public option and no regulation of the health care industry per se.  So we get higher rates, denial of services, and cancellation of whole groups of policies such as uninsured children! What does common sense say about that?

We have 150,000 troops in Afghanistan fighting for a corrupt government, not supported outside of Kabul and admittedly there may be only 250 Al Qaeda in the country, so we are fighting the Taliban.  Could someone please explain to me how the Taliban are a threat to the US.  The last time I checked, there has never been a terrorist attack led by the Taliban anywhere outside of the region and I am not aware of any threats by the Taliban to blow up anything in the US.  So who are we really fighting and why? What does common sense tell you about Afghanistan?

We have debates and accusations flying on both sides of the aisle in congress and they do nothing.  Republicans blocking and filibustering everything just to make sure Obama is not effective at the cost of all of us and Democrats are weak kneed and powerless to do anything except blame the previous administration for every problem.  In the meantime, the only activity in Washington is the wave of corruption and sex investigations.  What does common sense tell you about our congress?

What do we do?  Let’s get back to common sense.  I agree with the tea party that we need to throw the bums out, but I would suggest that we extract a promise from every candidate that is not an incumbent.  That promise would be that the first legislative action is a public campaign finance law to be enacted.  No special interest monies allowed.  Period.

Secondly, we need to grab Wall Street by the.. well you know what and both regulate and tax CDS transactions.  Period.

Finally, we need to bring our kids and fathers and mothers and in a lot cases grandfathers home from Afghanistan.  Let Pakistan and Afghanistan deal with their local insurgency and let India worry about the consequences not US.

Finally, we need to take a hard look at the fossil fuel industry.  Reality says we are not going to migrate to alternative and renewable energy sources in the near future.  However, we need to further invest in solar, wind and yes even nuclear energy.  What doesn’t make sense is we are giving subsidies to oil and gas and not alternative energy.  We need to reverse that role and make sure that as the oil and gas industry go for harder and harder sources to recover, that we are sure we have the technology to deal with all of the consequences.  In the gas field we need to find alternatives to hydrofracturing, so called “fracting”, because there is no doubt that such practices are destroying our water tables.

All of these issues seem clear and the common sense approaches are obvious.  We have put convenience and profit before prudence and reasonable solutions.  This is not a Democrat vs. Republican issue.  it is not a liberal vs. conservative issue.  It is a matter of taking our government back from those special interests that have co-opted our representative process.  We can do this, but we must stop taking sides and parroting this or that sensationalism being fomented by paid talking whores and start doing our own thinking and acting on what we know is right.  For example only 11% of us have faith in congress, so we clearly understand the root of the problem.  Now it is just a matter of us doing the next obvious common sense thing.  Throw all of the bums out and no wackos need apply.  We all know the exactly correct people in our communities who should be representing us.  We need to convince them to run for office and support them once they are elected. This November should not be about which party takes the majority.  It should be about sending real statesmen to Washington.