Dec 31 2012

How much do Americans earn? What is the average US income and other income figures. Fiscal cliff talks only useful in context of incomes.

With talk of the fiscal cliff taking up most of the headlines it is probably useful to look at income figures for Americans.  The media rarely discusses income because it is a touchy subject.  It probably would not be savvy in a marketing sense to tell viewers that their incomes have been stuck in the financial mud for well over a decade.  Household incomes in the US have been stagnant for well over a decade.  Real income growth has largely occurred in the top 10 percent of US households.  This is why we are seeing the middle class shrink in our nation.  Over 47 million Americans now rely on food stamps.  It would be useful if all this talk about the fiscal cliff actually examined the nuts and bolts of US household income.

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Dec 28 2012

The three legged fiscal cliff: US middle and working class already facing their own fiscal cliff – 2 million Americans will lose unemployment insurance by January 1 and the debt ceiling limit being hit on December 31.

To most of America the fiscal cliff is some sort of fiscal enigma.  Most realize that we are spending more than we are bringing in and also that taxes are part of our system.  What most have a harder time understanding is the machine of the Fed and how it selects winners and losers at will by digitally bailing out an entire banking industry.  Yet here we are counting down the days to a new year and we are no closer to solving this fiscal problem.  Congress is full of millionaires and come what may with the negotiations, they will remain this way.  This fiscal cliff is largely a reflection of our three legged fiscal problems; a shrinking middle class with a growing population in poverty, a ritualistic process of hiking up debt ceilings, and the taxes versus spending equation.

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Dec 25 2012

The most educated and indebted generation ever – Average student debt has tripled since 1990 while earnings have gone stagnant for college graduates. How much is the college rite of passage worth?

Most have very fond memories of their college going years.  Going off to college is one of the few rites of passage that we have in the United States ushering future generations into official adulthood.  Yet the cost to attend this passage has gotten astronomically expensive.  College has now turned into a very large business funded by deep levels of student debt.  In the past, the state took on a larger role with public universities but with state budgets in shambles these are now becoming much more expensive options.  We speak of the student debt problem as a nationwide issue but this crisis is really a burden largely shouldered by our young.  Poor Americans aspiring to go to college have to walk cautiously on this passage and avoid paper mill for-profits and going into massive student debt.  This rite of passage is now turning into a debt filled nightmare.

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Dec 21 2012

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 that what is coming in.  Sure, we can go into deeper debt and allow the Fed to issue trillion dollar bailouts to the banking system yet what we have gotten in return over the last five years is now a low wage economy.  We now bask in reports that show unemployment rates falling not because of substantial job growth but because people are dropping out of the economy like flies hitting the light.  The fiscal cliff can really be summed up in one major chart.

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Dec 18 2012

The erosion of purchasing power via inflation – Federal Reserve and the permanent portfolio.

Inflation has a subtle and quite way of eroding your purchasing power.  The process can unfold slowly and before you know it you suddenly wake up realizing your paycheck no longer stretches so far.  This is happening across the US in many ways.  Those on very tight budgets, especially those now on food stamps are feeling the pinch of higher food costs.  Middle class Americans seeking to send their kids to college realize that it might be difficult to do so without going into deep student debt.  Inflation as measured by the CPI understates the real change in purchasing power because our system is flooded with massive levels of debt.  Access to debt is viewed as a vector in which you can pretend to have money and spend on things you are unable to afford.  Yet debt and wealth are not the same.  Inflation is creeping into the system and people are feeling it.

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Dec 15 2012

New Retirement Model of Working into Old Age – Baby Boomers hitting retirement age with little to no savings.

The fiscal issues facing the country are troubling for a variety of reasons but one big reason is the reality that many older Americans simply do not have enough money to retire.  The idea of entering your golden years without the need of working is a relatively modern one.  In fact, it was the generation that grew up after World War II that enjoyed this middle class ideal.  A secure job, a paid off house, and the ability to send your children to a good college.  That was the dream.  Yet that dream is now largely gone in a puff of smoke.  It has been gone for sometime but the ability to access unsupportable debt kept the party illusion going a decade or so longer.  Today, Americans are now entering retirement at a time when the stock market has given zero returns over a decade.  Government debt is tipping over and we continually spend more than we earn.  For millions of older Americans, retirement means continuing to work.

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Dec 11 2012

The food stamp economic recovery – Food stamps increase by over 600,000 in last month of data. GDP at record levels yet US employment is 4 million below start of recession.

There was a startling figure that came across my desk from the United States Department of Agriculture regarding food stamp usage in the SNAP program.  Food stamp usage has grown dramatically in the last decade even during the debt inspired boom times.  Yet the devil is always in the details as we reported with the unemployment rate really dropping because of the over 500,000 Americans simply dropping out of the labor force.  The food stamp figures are stunning because they show in the last two months food stamp usage has skyrocketed by over 1,000,000.  In the last month of data observation, food stamp usage increased by more than 600,000.  Keep in mind to qualify for food stamps you have to carefully demonstrate that you are earning very little and technically are classified as being in poverty.  So what does it say that our nation now has 47.7 million Americans on food stamps?

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