The Disappearing Middle Class Dream – How the Average American is coping with the Recession: Savings, Banking, Housing, and Investing. Over 50 Million Households Living on $52,000 or less a year.
Last month the American Community Survey detailed the painful 2008 year for American households. This is a comprehensive survey looking at multiple financial, economic, and social characteristics of Americans. What we find is that the average American is having a tougher time maintaining a hold on the middle class dream. This isn’t a revelation but it does help us determine what to expect in the next few years. The American family in fact over the past decade has maintained the illusion of middle class living by going deeper into debt because of stagnant wages. The U.S. Treasury and Federal Reserve allowed this to occur by injecting liquidity and creating a credit market that had no brakes.Â
Bankruptcy Filings Spiking: Chapter 7 Booming and 8 Years of Credit Card Industry Lobbying and $100 Million in Fees.
There is probably no bigger sign of economic distress than bankruptcy. It can be in the form of a business unable to pay debt obligations or an individual simply unable to keep up with former obligations. Most people that file for bankruptcy are not in a good economic spot. In fact, if you want a better indicator of economic health bankruptcy filings are a good measure. It is interesting what passes for good news in today’s market. For example, Alcoa announced a profit for the third quarter. Good news right? Well if you look into the details the company has cut 18,000 jobs in the 12 months ending on June 30th and also planned on cutting an additional $2.4 billion in costs. In this economic crisis people need to look at the details before assuming something is just good news.
U.S. Dollar fell 35 Percent Over 18 Years from 1984 to 2002 – The U.S. Dollar then Dropped Over 40 Percent from 2002 to 2007: How the Dollar is Being Systematically Devalued since the 1980s. 5 Reason why a Weak Dollar is bad for America.
The U.S. Treasury and Federal Reserve have kept quite in recent months about any strong dollar policy. Last time Timothy Geithner was in China he was laughed at by students when he insinuated that the U.S. would get its economic house in order. The Chinese students realize just like most Americans do, that the U.S. and China are stuck at the hip for years to come. Yet what most Americans probably don’t realize is their central bank is systematically trying to destroy the currency they hold. This isn’t new. This has been going on for well over two decades. The U.S. Treasury and Federal Reserve are now on a full scale mission to cut the dollar value in half.
Economy Losing 11,000 Jobs per day since December of 2007. 824,000 Jobs Lost in Statistical Revision: 8 Million Jobs Lost Since Start of Recession. Nationwide Unemployment Rate at 17 Percent.
Since the start of this deep recession back in December of 2007 some 7.2 million jobs have been lost in the official BLS reports. The official non-farm employment has dropped from 138 million to 130 million. Think of it this way, for 21 months we have lost on average over 11,000 jobs per day. As we reach the two year anniversary of this recession not much has changed for the average American. The banking system is still in shambles and the employment picture is still bleak. Yet a surprising revision was made in the recent BLS report. That is, in February of 2010 when revisions are made some additional 824,000 jobs were lost! That is correct, some 824,000 jobs have been lost and these do not show up in the current BLS data.
Take a look at the revision: