The great deleveraging event – household debt has fallen 4 percent since recession hit. Household debt has fallen dramatically from the peak when household debt aligned itself with annual GDP.
The debt bubble bursting has jammed the bottom line of American households. Debt and money are synonymous for many households in our current economy. The ability to spend, or buying capacity, is looked at in the same light as savings from many in the financial sector. This is why data recently released shows the balance sheet issues faced by many typical households are more dire than once imagined. Since the recession hit US households have seen their debt fall by 4 percent, an amount of $584 billion. This is good news right? Well yes but the reality of this “good news†is that two-thirds of this debt reduction came from home loan foreclosures and default on other debt. To put it more simply Americans have decreased their debt load simply because they were unable to pay off inflated assets. On the flip side the financial sector has been handed a blank check for the ill-advised lending and predatory bets they made but US households do not have access to the unlimited piggybank at the Federal Reserve.
The catastrophe of our economy for the young American worker. Average college debt higher than typical new automobile cost, annihilation of pensions, and younger Americans moving back home because of financial necessity.
The economy for young Americans might as well be in a parallel universe to the stock market run since early 2009. Talks of recovery must fall on confused ears as many young college graduates compete for fewer jobs with higher amounts of student debt. In the last decade college graduates have encountered the highest tuition increases ever while getting a lower return on their investment once they enter into the workforce. The economy is still a mess if we dig into the data and look outside of the stock market gains. Many of the S&P 500 companies added jobs globally but outsourced many domestic jobs to foreign markets to save money. So profits increase but how does this help the domestic job market? It doesn’t and that is why this recovery is one of low wage capitalism and banking handouts. For the millions of young Americans that are entering the workforce with tens of thousands of dollars in student debt, what can they expect from the current economic structure?
The sordid details of the employment market – Before recession hit 5,000,000 job openings were available while today there are 3,000,000. 1,000,000 Americans have completely quit looking for work and average duration of unemployment is 40 weeks, twice the amount of the 1980s recession.
There is a growing disconnect in America as the middle class is hollowed out. Many Americans hear talks of a recovery that is now going on three years but look at their tight monthly budgets and wonder what recovery is being discussed. The median household income is roughly $50,000 and with rising food, healthcare, energy, and college costs many are left with little each month once the basics are paid for. And that is the core of the issue. The typical American family is seeing their paycheck devoured by items that are used on a daily basis. The employment situation is tenuous at best. We still have a peak in discouraged workers. Roughly 1,000,000 Americans have simply stopped looking for work since the recession hit. These are people willing and able to work but have given up in the current economy. We are adding jobs and many are in the lower paying service sectors. What is meant by a recovery?
EBT Nation – Electronic Benefit Transfer. Since the recession ended in summer of 2009 we have added 14,000,000+ Americans to food stamp programs. Family Dollar Stores up 23 percent in 2011 while overall stock market flat.
They say a nation is not measured on how it treats its wealthiest, but on how it treats those that are struggling. From this base the mission of the United States is becoming muddied by the large scale financial speculation that has fractured the core of our economic system. Everywhere you look you are starting to see signs posted of “EBT accepted here†meaning those with food assistance can use their debit cards in the stated location. Food stamps now labeled “SNAP†are typically the last rung on the economic ladder for millions of Americans. With the latest round of information we see that we are in record territory for those receiving food assistance. Over 46,220,000 Americans are receiving this assistance. How is it that we officially exited the recession in the summer of 2009 yet continue to expand the number of Americans on food stamps?