The majority of Americans can’t make ends meet.
Bob Allen shared a message with me that you might relate to:
If it seems like you always have more month left at the end of each paycheck… you’re not alone. The trend is not the nation’s friend, no matter how often the government and financial television lie about the glorious “economic recovery.”
Thanks to Congress, the economy has only recovered for the top five to ten percent of households, and the rest… are scrambling just to survive.
He was referring to a recent entry in one of his favorite blogs, Charles Hughes Smith’s Of Two Minds: “U.S. Households Under Pressure: Stagnant Incomes, Rising Basic Expenses.” It begin:
How do you support a consumer economy with stagnant incomes for the bottom 90%, rising basic expenses and crashing employment for males ages 25-54? Answer: you don’t.
Frequent contributor B.C. passed along a sobering set of charts that provide context for How The Average U.S. Consumer Spends Their Paycheck. The basic story is well-known to the bottom 90%: most of the household income goes to taxes, housing, food and transportation, with healthcare and insurance, pensions and retirement contributions rounding out the big-ticket items. (Higher education is, as we all know, paid with student loans by all but the top-tier of families.)
Here’s the question this raises: is the sliver that’s left enough to support a $17 trillion consumer economy? The answer is obvious: no.
These problems became obvious even before Barack Obama came to office, but he has done nothing but make them worse by robbing households of more income through Obamacare and massively accelerating the growth of the national debt.Stagnant household income has a number of systemic causes, including the generational decline of full-time employment (A Rising Share of Young Adults Live in Their Parents’ Home) and the concentration of wage gains in the top 10%. These dynamics are not easily addressed, for the simple yet profound reason that the amount of human labor that generates a meaningful profit in a stagnant, over-indebted, financialized economy is declining.
We desperately need a return to sound money (end the Federal Reserve and make money a commodity again) and an end to the economic superstition that consumer spending is the essence of a healthy economy. As it stands now, our government encourages more economic problems in the name of relieving economic distress and growing the economy.