Apr 1 2014

Sticking it to Millennials and young Americans when it comes to wealth: Households headed by those 40 years old or younger see inflation adjusted wealth 30 percent below 2007 levels while older Americans recoup losses.

The evidence continues to mount on the deep pangs of financial pain faced by younger Americans before and after the Great Recession.  The Federal Reserve Bank of St. Louis posted wealth information and what we find is that for those 40 years old and younger, there has been little recovery since the recession ended officially five years ago.  Younger Americans were exposed to housing closer to the peak but also, did not partake in the rapid rise of the stock market which is really the domain of a small portion of the population.  What is problematic with this situation is that we have a major challenge ahead of us when it comes to retirement because so many older Americans are depending on Social Security for the bulk of their retirement income.  The recovery in wealth for older Americans largely is coming from the housing market moving back up.  Yet the housing market is not the equivalent to an annuity or a job.  There still needs to be some income coming in for items like food, health care, and probably supporting kids with higher expenses from expensive colleges and lower paying jobs.  That will be an issue given that the older retiring population will depend on the active incomes of those working.  The young have seen a massive hit to what little wealth they had.

Read More

Mar 29 2014

The looming retirement train wreck: Pension issues, lack of retirement savings, and extending the date of retirement all part of the current economic future.

The concept of retirement is a fairly modern one.  In fact, we can argue that only one generation actually got to enjoy a long and relatively healthy stay in retirement over a mass population.  For most of history, life and work went hand and hand and people retired essentially when they keeled over.  The only people that had any semblance of retirement were the small wealthy elite.  The massive middle class in the US that emerged after World War II seemed to sell the concept of retirement to all.  Long endless walks on some unnamed beach followed by bottomless margaritas.  This dream seemed like a fantastic vision but they never really specified how all of this was going to be funded.  It probably isn’t attractive to talk numbers with people especially when pitching this giant dream.  As it turns out, in the early 1980s when companies started easing people off of pensions and into self-funded options like 401ks and IRAs the stock market was on the verge of a major long-term rally.  Save a few hundred bucks per month and you would have millions for that picturesque retirement.  Here we are nearly a generation later and that plan has ended in complete disaster.  People did not prepare and save (or could not save) because of the rising cost of living and real stagnant wages.  Since we can’t reverse time, many are now going to rely on Social Security for that retirement dream.  We have a major problem when it comes to the future of retirement here in the US.

Read More

Mar 27 2014

Can the young Atlas support the heavy burden of an aging population? 58 million Americans currently receiving Social Security Benefits. Over half of elderly beneficiaries receive 50 percent or more of their income from Social Security.

Social Security was never designed as a long-term retirement plan.  According to the Social Security Administration for elderly beneficiaries, 53 percent of married couples and 74 percent of unmarried persons receive 50 percent or more of their income from Social Security.  This is an incredibly high number that depend primarily on Social Security and also reflects a default usage of Social Security as the main retirement “plan” for many elderly Americans.  Yet Social Security needs a constant stream of payments from current workers and this usually comes from the younger workforce.  Young Americans are heavily burdened by the massive cost of higher education and are also paying into the system more than they are likely to get out when they reach retirement age.  There is some generational debate between the young and the old but one thing is clear and that is many older Americans did not prepare for retirement and are now left with only Social Security as their primary source of income.  Whether this is justified the young are saddled with a large burden moving forward and it is only going to get heavier as 10,000 baby boomers hit retirement age each day.

Read More

Mar 25 2014

Hand-to-mouth nation: Roughly 40 percent of US households living paycheck to paycheck but two thirds of these families are not considered poor by economic definitions.

People have a hard time believing that in the wealthiest country in the world, we have close to half of our population living hand-to-mouth bouncing from one paycheck to another.  A recent paper released by the Brookings Institution’s BPEA conference shows that people living hand-to-mouth are largely those with “middle class” incomes.  Of course middle class doesn’t say much in a world where banks are inflating our debt away and the US dollar has lost considerable purchasing power over the last generation.  What was telling from the report was that 40 percent of US households live paycheck to paycheck.  This might not be a surprise given the vast number of people working in low wage jobs.  What was telling from the report was that two out of three of these households represent a part of the “wealthier” income segment of our society.  The paper discusses how many of these people are house rich but cash poor.  These people basically live in their retirement fund.

Read More

Mar 22 2014

Quantitative Easing has been the fuel for rising inequality and welfare for the modern Gilded Age: President Fisher from the Federal Reserve Bank of Dallas mentions QE’s gift to the rich.

As the Fed begins to slightly ease up on Quantitative Easing the reality of the winners and losers is becoming more apparent.  QE was welfare for the wealthy and even President Fisher of the Dallas Federal Reserve Bank hints at QE being a massive gift to boost wealth.  Well if we merely look at wealth across America, the only group that saw wealth increase after the recession ended was the top 10 percent.  QE was ushered in under the guise of helping the nation overall but what we have seen is massive low-wage work taking over good paying jobs while banking profits hit new record highs. The Fed’s balance sheet has ballooned to well over $4 trillion and even though tapering is slowly beginning, there is no sign that the balance sheet is shrinking.  The average American may not care about the Fed or even realize what is going on with rising wealth inequality but this is absolutely important.  QE was the picture perfect example of welfare for the wealthy.

Read More

Mar 17 2014

A land of low-wage jobs: For every job that pays above the low-wage threshold of $15 an hour you have 7 job-seekers. 51.4 million low-wage jobs in U.S.

The Great Recession has only accelerated deeper structural changes to our economy when it comes to low-wage employment.  While many good paying jobs were lost during the Great Recession many of the new jobs have come in the form of low-wage employment.  Large organizations have used this slack in the market to reduce wages, cut benefits, and ultimately increase profits at the expense of the American worker.  A Job Gap Study found that close to 40 percent of all U.S. employment pays $15 or less.  The threshold changes in terms of inflationary pressures on housing, food, and other items but this is the largest share of our workforce that is now struggling to meet the daily costs of living.  This trend is only increasing as more wealth is filtered into the hands of a very small part of our population.  Banking profits hit another record at the same time we have a record number of families on food stamps.  The U.S. is largely becoming a bifurcated economy where wealth and income inequality is only getting more dramatic.  For every employment opportunity that opens where pay is $15 or more you have 7 job-seekers to this one position.

Read More

Mar 15 2014

The big economies cannot avoid a soft default as they face their debt reckoning: U.S. and other central banks battle it out for artificially low interest rates on unsupportable levels of debt.

Would you lend money to someone that you knew would never pay you back?  The answer is, probably not unless you are okay with burning through hard earned cash.  The global central banks unfortunately have entered into terminal velocity when it comes to debt support.  The U.S. carries a stunning $17.51 trillion in total public debt.  This is bigger than the annual GDP of the largest economy in the world but this pattern is not only in the domain of the U.S. Other central banks like the Bank of Japan and European Central Bank have also entered a mode where digital money printing is the only way out.  Everyone does realize that this $17.51 trillion is never going to be paid back right?  The Fed needs to push rates low in whatever method it can because the interest payments on the total outstanding debt would crush our economy alone.  The Fed is mainly looking out for this when it comes to facing the debt reckoning and why we are witnessing inflation in debt based items like housing and higher education.  It should be clear that many large economies are simply in a soft default already.  In other words, they can only pay their debt by financial chicanery.

Read More

Page 2 of 11312345...102030...Last »




Enter your email address to receive updates from My Budget 360:

100% Private & Spam Free.


Popular – All Time

  • 1. How much does the Average American Make? Breaking Down the U.S. Household Income Numbers.

  • 2. Top 1 Percent Control 42 Percent of Financial Wealth in the U.S. – How Average Americans are Lured into Debt Servitude by Promises of Mega Wealth.

  • 3. Is college worth the money and debt? The cost of college has increased by 11x since 1980 while inflation overall has increased by 3x. Diluting education with for-profits. and saddling millions with debt.

  • 4. The Perfect $46,000 Budget: Learning to Live in California for Under $50,000.

  • 5. Family Budget: How to go Broke on $100,000 a year. Why the Middle Class has a hard time Living in Expensive Urban Areas.

  • 6. Lining up at Midnight at Wal-Mart to buy Food is part of the new Recovery. Banks offering Mattress Interest Rates. The Invisible Recovery Outside of Wall Street.

  • 7. You Cannot Afford a $350,000 Home with a $75,000 Household Income!

  • 8. Crisis of generations – younger Americans moving back home in large numbers. Student loan default rates surging largely due to for-profit college expansion.

  • 9. The next massive debt bubble to crush the economy – 10 charts examining the upcoming implosion of the student loan market. $1 trillion in student loans and defaults sharply increasing.

  • 10. Welcome to the new model of retirement. No retirement. In 1983 over 60 percent of American workers had some kind of defined-benefit plan. Today less than 20 percent have access to a plan and the majority of retired Americans largely rely on Social Security as their de facto retirement plan.
  • Categories