Bread, butter, and food stamp economy: Is the US developing a permanent under-class of citizens economically?
The American economy has developed a deep disconnect between its financial markets and the working and middle class. The stock market has soared by 138 percent from the low reached in 2009. Yet very little of this has trickled down to the majority of Americans. In fact, most Americans actually saw little to negative growth [...]
Americans are slowly creeping back to their non-saving and debt based spending ways: Drop in the savings rate and shift in type of debts being taken.
The personal saving rate in the United States is on a multi-decade decline. Part of this has to do with Americans putting their money into alternative savings vehicles like 401ks and IRAs but a large part of this has to do with Americans simply not saving. Roughly one-third of US households have no savings to [...]
Reinventing GDP: US GDP to be revised in July by adding “intangibles” to the tune of $500 billion. The make believe economy.
The US debt-to-GDP ratio is now quickly reaching insurmountable levels. It is interesting that a paper citing this issue is now being openly discredited as if this is reason enough to put on the rocket boosters of quantitative easing. Japan has gone so far off the deep end that they are now intervening in their [...]
Food service workers at a record high in US economy: Record percent of Americans now employed in food services as a share of total employment coupled with peak food stamp usage.
One of biggest contributors to jobs over the last few years has come from the low-wage food service sector. A record 7.6 percent of Americans now work in food services and drinking places. Given that we have 47+ million Americans on food stamps and this figure has boomed in the last decade, it should come [...]
Where did the American worker go? 663,000 people were removed from the labor force pushing the figure to 90 million Americans not looking for work.
The employment report was very weak no matter how you sliced it. The unemployment rate fell but this was largely driven by an incredibly large number of people dropping out of the labor force. This recession has been extremely tough on US households. The recession was technically over in the summer of 2009 which seems [...]
US Household income continues to fall in midst of recovery: Since the recession started median household income is down 7.3 percent.
US households continue to face a declining standard of living. The first obvious item comes from falling incomes. Some of this is being masked by renewed access to debt as banks are once again lending money to over stretched consumers. Yet real wealth recovery this is not. The next major depressing factor for households is [...]
An economy of peak food stamp usage, peak Dow, and peak Debt: What does it say about our economy that at the same time the Dow Jones hits a peak, we have the highest percentage of Americans on food stamps?
It is a dichotomy that speaks to the current state of our economy. Food stamp usage has peaked at the very same time that the Dow Jones Industrial Average is setting new highs. Of course, the Dow is setting new nominal highs but still has a way to go to catch up to the eroding [...]
The United States of Debt Addiction: Our reliance on debt has created an entire economy fortified in the fires of moral hazard and fiscally dangerous leverage.
16 point 7 trillion dollars. That is our current national debt. 12 point 8 trillion dollars. That is the amount households carry in mortgage and consumer debt. We are now addicted to debt to lubricate the wheels of our financial system. There is nothing wrong with debt per se, but it is safe to say [...]
What does Detroit say about the working class in the US? City has lost over 25 percent of its population since 2000. People take scrap metal from old buildings to export to China.
One of the biggest examples of the US eroding its working class is through the example of Detroit. The city of Detroit has lost a stunning 25 percent of its population between 2000 and 2010. Poverty is rampant with 3 out of 5 kids living below the poverty line. It is a startling revelation of [...]
Diving into the fiscal economic mess – Fiscal cliff a reckoning for decades of poor financial management and massive debt based spending.
The media is making it appear that the fiscal cliff is a sudden event. Like a countdown to a New Year’s party. Yet this cliff was as predictable more than a decade ago as we spent more than we took in as an economy. The challenge is real because our spending is so much more [...]