What the heck? U.S. Public Debt up $518 billion in November alone: U.S. debt ceiling made of toilet paper.
You might remember that back in March, we hit our debt ceiling limit. The amount registering on the U.S. Treasury Department website was stuck at roughly $18.15 trillion. Of course given our addiction to spending and debt, we simply charged all new spending off the books. We as a country have a deeply rooted addiction to debt. The government was using “extraordinary measures” to circumvent the debt ceiling even though we are supposedly in a big recovery. Eventually late in October, The Treasury decided to unwind this accounting mess and added the debt to “the books” for all to see. The public is currently overwhelmed with worldly events and the reality TV based election year. So in one day alone on November 2, total public debt soared by $340 billion. As a comparison, the GDP of Greece is roughly $242 billion for an entire year. In fact, since the start of November total public debt has increased by a mind blowing half a trillion dollars.
100 American CEOs have more retirement wealth than 116 million Americans. The retirement divide grows larger each year.
Most Americans have no retirement strategy. In fact, the new model of retirement appears to be work until you die. It isn’t an uncommon model. In fact, this used to be the status quo for centuries on end. Some tend to believe that having a middle class is the natural order of things. That is simply not true. The middle class needs to have an economic system that favors those that work hard instead of protecting a modern day corporatocracy where politicians simply protect those that pay them off. This is the new system in place. So it is no surprise that 100 American CEOs now have as much retirement wealth as 116 million Americans. It is no surprise then that many older Americans are going to rely on Social Security as their primary source of income into retirement. As you would expect in older age medical costs go up so the burden on Medicare will also rise. The retirement divide simply grows larger in this country.
The 20 small cities struggling the most in the U.S. based on economics, education, quality of life, and affordability: All of the cities are in California.
It is hard to quantify what makes a city great or bad. Simply having a higher income is not enough to separate an area from another city if the cost of living is outrageous. There have been attempts to use cost of living adjustments but the attempt to rank cities has been paltry. Most of the rankings looked at larger areas but failed to look at smaller cities where a large portion of our population lives. A recent report actually made the effort to rank small cities based on four key metrics. The first item looks at economics. The next metric looks at education and health. The third metric looks at quality of life which includes things like commute time. Finally, affordability is looked at since housing prices have outpaced income gains in many areas of the U.S. It should comes as no surprise that 20 of the lowest performing cities that popped up on the list are in California.
Most Americans are too broke to afford to buy a basic home! The typical family is unable to purchase the standard $221,000 priced home. Home prices up 30% since 2012 while incomes are stagnant.
Most Americans still hold tightly that the American Dream involves owning a home. But that dream has come into deep questioning as banks and large investors crowd out the single family home market driving prices to ludicrous levels. Most Americans are scraping by and many need to do their shopping at dollar stores to get by. Your typical home in the U.S. is now selling for $221,000, a rise of 30 percent just since 2012. How did incomes do? They did what they’ve been doing for a decade and that is nothing. Housing is the biggest single outflow of cash for households. So this is a big deal and is also a reason why many more Americans are renting instead of buying. Young Americans are hit the hardest since many are coming out with monster levels of student debt. Studies do show that student debt is impacting home purchases. In reality, most Americans are unable to afford the standard priced home.
Wal-Mart, the mega retailer has over 5,000 stores in the United States. We tend to think of Wal-Mart as the low price leader crushing prices to their rock bottom level by cutting costs at every corner. However, there is an even lower cost option and many working class Americans are turning to these stores. Dollar stores have seen a dramatic rise in numbers thanks to the ongoing effects of the recession. There are more than 11,500 Dollar General stores in the United States (twice the amount of Wal-Mart locations). The growth in dollar stores is reflecting the cash crunch many Americans are facing. We’ve mentioned this in the past but many dollar stores have suddenly become low cost grocery stores as people struggle to get by. This is a smart strategy to tap into the ever growing number of Americans on food stamps. It is expected that by 2016 over 30,000 dollar stores will exist in the United States.
Half of Millennials live at home with parents: The economy still feels like it is in a deep recession for millions of Millennials.
The Great Recession officially ended in the summer of 2009. That was a long time ago. Yet somehow along the windy road, Millennials are not feeling the love from this so-called economic recovery. Millennials continue to graduate with mountains of student loan debt coming out with an average of $30,000 per graduate. Millennials are struggling to find good paying jobs in a sea of low wage employment that in many cases is a mismatch for their degrees. You also have a large number of Millennials living at home with their parents unable to move out into a rental or to purchase a new home. Part of this stems from lower incomes but also the inflated cost of housing brought on by an artificially low rate environment and big investors crowding out regular first time buyers. In many ways, the recession is still very much here for Millennials and this is the next big cohort to move through the economic system.
The two income trap and the myth of high American wages: 50 percent of wage earners had net compensation of $28,851 or less.
If you can sum up the sentiment among the American public in two words it would be economic frustration. The public is frustrated that inflation is eating away at the quality of life many have come to expect. While families don’t need bankers or politicians to tell them about this, it is especially infuriating when the Fed and other policy makers jabber on that inflation is very low. From 2000 onward the cost of housing, healthcare, and education has far outstripped any true income gains. In other words households are feeling poorer because they are. And we are living under a two income household trap as well. The only reason people feel like they are keeping up is having dual lower wage earners. Social Security data highlights an economy that is doing a great job of producing low wage jobs. The two income trap is also magnified because little is discussed about the cost of raising children (it is extremely expensive when you factor in daycare and then try to save for college). The myth of US high wages is slowly taking a hit and the public is becoming more aware.