The End of the Middle Class is The End of America - 0 views
started by Gary Edwards on 27 Jun 13
started by Gary Edwards on 27 Jun 13
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Your Best Chance at Living Well in the End of America
By Porter Stansberry
Wednesday, June 26, 2013
I've spent much of the last several years warning people about the "End of America"…
I've showed my readers what is about to happen and tried to convince them to take precautions before it's too late.
But let's face it… my work is mostly for wealthy people who mainly want to continue to be wealthy. So I've focused on how to prepare for these changes from the perspective of an investor - someone whose primary goal is to earn a return on his capital. I had precious little to offer regular wage-earners.
But the real danger right now is mostly to the middle class in America.
Americans owe more money, collectively, than ever before in our history - far, far, far more. We owe at every level: $17 trillion at the federal level, $13 trillion in mortgages, another trillion in student loans, and nearly $3 trillion in state and local government debt. Put all of these numbers together and you end up with a $60 trillion pile of obligations. That's nearly four years' worth of our entire country's total production.
To make sense of the numbers, just take a bunch of the zeroes away. Put these facts into a storyline that's become all too common in America. Our economy is like a tattooed thug living in Detroit. In between burning broken-down cars and selling crack, he makes $16,000 a year working "security" at a local nightclub. Outside of busting heads, he has no real skills.
And why would he want to work hard to acquire them? Thanks to his public school education, he is convinced other people have a moral obligation to provide for him… especially rich people. They will give him health care, a clean apartment, a phone, etc. In his worldview, that's what's fair.
And if they won't? He's got no qualms about firing first and taking what he needs. After all, they owe him. For now though, he's doing great.
The Korean grocer up the street gave him a credit account. In only a few short years, he's run up a $60,000 tab. What are the chances he's going to drastically cut his expenses, work hard to get a promotion, and find a way to repay these debts? Zero. What are the chances he ends up knocking over the Korean grocer and teaching him something about life in America?
You may object to my metaphor. But believe me, it's far more accurate than most people are comfortable talking about. We live in a country that's coming apart at the seams - financially, culturally, morally, and spiritually. The reason is simple. We have collectively become addicted to living way, way beyond our means.
My favorite example about how absurd our debts have become? The state of New Jersey still owes $110 million for a football stadium (Giants Stadium) that was demolished in 2010. It won't retire this debt until 2025.
Similar debts exist on defunct or torn-down stadiums in Houston, Kansas City, Memphis, Seattle, and Pittsburgh. These stadiums are physical reminders of the absurd promises the government has made to its citizens.
On top of the debt it now owes, our federal government has promised its citizens $124 trillion of additional benefits. That's more than $1 million per citizen. That's not only more money than we could ever finance with tax revenues, but it's considerably more money than all of the privately owned assets in the United States (roughly $99 trillion).
Keeping this lie alive… the lie that we can afford our debts (or even our defunct stadiums)… has become the most important national goal. That's why everything stops when Federal Reserve Chairman Ben Bernanke speaks. Our obsession with Fed policy statements is the best proof I have that we're far more concerned with maintaining "The Great Lie" than we are at actually building a better real economy.
Have you ever told a big lie? Did you ever exaggerate something to hide a weakness or insecurity? Or maybe you lied to cover a big mistake you'd made. Did you get away with it? Or did maintaining the lie suddenly consume all of your attention and energy?
Seemingly forgotten in our obsession to maintain the fiction of our solvency are the huge costs of lying, running our country on Asian loans, and keeping the printing press churning. Nobody notices that the purchasing power of the dollar is down by almost 50% in the last 10 years… or that real wages have been falling since the early 1970s… or that almost half of the able-bodied men in our country no longer work. Nobody mentions that most of the students at most of the urban schools in our country either don't graduate or can't achieve test scores above minimum standards. Sooner or later, the consequences of our lies will fall upon us.
Your taxes are going up. The number of people you will be forced to support (those on disability, food stamps, or Medicare… retirees… people living in war-torn countries… ) is soaring. And your ability to pay for these benefits is being destroyed by global competition and the decline of the dollar. America is promising everyone more. And you're the person who will have to pay.
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Under Obama, the Economic Policy Institute says the US is losing half a million jobs to China every year. http://economyincrisis.org/content/trade-deficit-china-could-cost-half-million-jobs . Less than 65% of men have jobs. http://research.stlouisfed.org/fred2/series/LNS12300001 , while 53% of all workers under Obama now make less than $30,000/yr www.ssa.gov/cgi-bin/netcomp.cgi?year=2011 Meanwhile, Obama's cronies are making off like bandits. (It's all part of the drive - technically known as fascism - to join the socialist state with big corporations.) -
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These stats back up what Porter says in today's update… "that real wages have been falling since the early 1970s… or that almost half of the able-bodied men in our country no longer work." I agree with Porter's major premise that the country has problems because we foster an entitlement culture instead of one of self-reliance. The best way to foster the spirit of self-reliance is to cut government spending here and now. Although it would be painful, it would force Americans to stand on their own two feet, which clearly needs to happen.
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The Obama economy is killing small business - only 7% of non-farm workers are self-employed, an all-time record low. http://theeconomiccollapseblog.com/archives/they-are-murdering-small-business-the-percentage-of-self-employed-americans-is-at-a-record-low . Small biz WAS the engine of our economy. -