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

Mar 12 2014

The perpetually depressed American consumer: Stock market high and bounce in real estate does not assist in boosting consumer confidence. 57 percent of Americans think economic outlook is getting worse.

Looking at the stock market and real estate prices would lead you to believe that the economy is recovering at a healthy clip.  The underlying conditions of the economy may benefit the financial and real estate sectors (both live off each other) yet for most American families conditions are not rosy.  In fact consumer confidence since 2000 has never recovered fully.  Two mega-bubbles will do that to you.  It could be that people were irrationally exuberant in 2000 but wasn’t the housing mania of 2005 through 2007 also exuberant?  The big difference of course is that the housing bubble was largely masking the decline of the middle class while in 2000 wages were reaching their inflation adjusted peak via actual employment income.  So Americans had a right to feel giddy at this point since their income reached a “true” high.  It is no surprise that many Americans have little faith in their political system run by millionaires that simply bend to every whim of lobbyist and powerful corporations.  Is it then a surprise that the latest Gallup poll shows that 57 percent of Americans feel that economic conditions are worsening?  What is going on if peak stock values and a boom in real estate values no longer bolster the confidence of the American consumer?

Read More

Mar 9 2014

The dual income conundrum – Americans need to work two jobs to make up for stagnant wages and the sinister impact of a middle class being eaten away by inflation.

In the United States the dual income household is the status quo.  In the late 1960s dual income households were not common.  Today however two income households are the majority largely because many Americans require two incomes just to stay afloat.  This has been labeled as the “two income trap” and in many ways, it is more like the two income illusion.  You would think that by adding two incomes you would be doubling your purchasing power but since the 1970s male wages have collapsed while more women entered the workforce.  When household incomes combine these figures the collapse in income doesn’t look so dramatic but it is.  The added wage of another worker simply masks the impact inflation is having.  It is a new reality for many families struggling to enter the middle class.  Inflation has a powerful eroding impact on your purchasing power.  If your income is stagnant and housing prices just went up by 10 percent that means more of your disposable income is going to be eaten up by this sector.  If tuition is outpacing wage growth that means many people are going to finance higher education by going deep into debt.  With the dual income household situation in the US, one plus one doesn’t necessarily equal two.  In many case the illusion is that one plus one equals one.

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