The American middle class is slipping lower and the already poor are not earning enough to cover their debt payments. In the meantime, the stupendous debts of the giant banks that caused the fiscal crisis continue to be paid off by the complicit Federal Government with taxpayer money.

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AlterNet / By Paul Buchheit

The Real Numbers: Half of America in Poverty -- and It's Creeping Upward
The Census Bureau has reported that one out of six Americans lives in poverty. A shocking figure. But it's actually much, much worse.

May 26, 2013  | Census Bureau has reported that 15% of Americans live in poverty. A shocking figure. But it's actually much worse. Inequality is spreading like a shadowy disease through our country, infecting more and more households, and leaving a shrinking number of financially secure families to maintain the charade of prosperity.

1. Almost half of Americans had NO assets in 2009 

Analysis of  Economic Policy Institute data shows that Mitt Romney's famous  47 percent, the alleged 'takers,' have taken nothing. Their debt exceeded their assets in 2009. 

2. It's Even Worse 3 Years Later 

Since the recession, the disparities have continued to grow. An  OECD report states that "inequality has increased by more over the past three years to the end of 2010 than in the previous twelve," with the U.S. experiencing one of the widest gaps among OECD countries. The 30-year  decline in wages has worsened since the recession, as low-wage jobs have replaced formerly secure middle-income positions. 

3. Based on wage figures, half of Americans are in or near poverty. 

The IRS reports that the highest wage in the bottom half of earners is about $34,000. To be eligible for food assistance, a family can earn up to  130% of the federal  poverty line, or about $30,000 for a family of four. 

Even the Census Bureau recognizes that its own  figures under-represent the number of people in poverty. Its  Supplemental Poverty Measure increases, by 50%, the number of Americans who earn between one-half and two times the poverty threshold. 

4. Based on household expense totals, poverty is creeping into the top half of America. 

A family in the top half, making $60,000 per year, will have their income reduced by a total tax bill of about $15,000 ($3,000 for  federal income tax and $12,000 for  payroll, state, and local taxes. The  Bureau of Labor Statistics and the  Census Bureau agree that food, housing, and transportation expenses will deduct another $30,000, and that total household expenditures will be about $50,000. That leaves nothing. 

Nothing, that is, except debt. The median  debt level rose to $75,600 in 2009, while the median family  net worth, according to the Federal Reserve, dropped from $126,400 in 2007 to $77,300 in 2010. 

5. Putting it in Perspective 

Inequality is at its ugliest for the hungriest people. While food support was being targeted for  cuts, just  20 rich Americans made as much from their 2012 investments as the entire  2012 SNAP (food assistance) budget, which serves 47 million people. 

And as Congress continues to cut life-sustaining programs, its members should note that their 400 friends on the  Forbes list made more from their stock market gains last year than the total amount of the  food, housing, and  education budgets combined.

Arguments about poverty won't end. Neither should our efforts to uncover the awful truth.

Note: This is an updated, corrected version of the original article, approved by the author. 

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Paul Buchheit teaches economic inequality at DePaul University. He is the founder and developer of the Web sites UsAgainstGreed.org, PayUpNow.org and RappingHistory.org, and the editor and main author of "American Wars: Illusions and Realities" (Clarity Press). He can be reached at paul@UsAgainstGreed.org.

ALL OF THE MONEY BEING PRINTED BY THE FED IS GOING INTO THE POCKETS OF CRIMINAL BANKSTERS AND OTHER MEMBERS OF THE 1%. MEANWHILE THE 99% WILL CONTINUE TO LOSE JOBS, AND THOSE LUCKY ENOUGH TO FIND WORK WILL FIND IT HARDER AND HARDER TO MAKE ENDS MEET.

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September 17, 2012 at 01:48:09

Promoted to Headline (H3) on 9/17/12:     Permalink

Money Printing Madness

 
By Stephen Lendman (about the author)

opednews.com


Money Printing Madness

Long-term pain assured.

by Stephen Lendman

According to an ancient proverb, "Those whom the gods wish to destroy they first make mad." Perhaps it had central bankers in mind.

In fall 2007, economic crisis conditions erupted. Counterproductive policies followed. Resolution is nowhere in sight. Responsible measures weren't adopted. Everything done so far failed.

Money printing madness substituted for stimulative growth policies. Since early September, coordinated central bank intervention repeated what hasn't before worked.

For most people, conditions are much worse now than earlier. Troubled European economies are cratering. Force-fed austerity crippled them. Stronger economies are faltering. Unemployment and poverty are increasing. So is public anger.

According to Fed chairman Bernanke, monetary policy is "no panacea." It hasn't slowed his money printing madness. Gloom, Boom & Doom's Marc Faber expects Fed policy to "destroy the world." It just takes time.

He worried for good reason. "The fallacy of monetary policy in the US is to believe this money will go to the man on the street," he said. It hasn't so far and "won't."
"It goes to the Mayfair economy of the well-to-do people and boosts asset prices of Warhols."
It is difficult to tell what will happen. I happen to believe that eventually we will have a systemic crisis and everything will collapse."
But the question is really between here and then. Will everything collapse with Dow Jones 20,000 or 50,000 or 10 million? Mr. Bernanke is a money printer and, believe me, if Mr. Romney wins the election, the next Fed chairman will also be a money printer."
And so it will go on. The Europeans will print money. The Chinese will print money. Everybody will print money and the purchasing power of paper money will go down."
I think there is a huge misconception and fallacy that money printing can actually improve the rate of employment because the money flows down into the system."
It goes first into the banking system and into financial institutions, into the pockets of well-to-do people. If you drop money into my pockets" at the same time (of wrongheaded) government involvement," economic development is stifled.

"I don't want to build a new business. But what I may do is look around the world (for) distressed assets. So I will go and buy existing assets, takeovers. But takeovers don't add to employment. They destroy employment."

"Secondly".they have been saying for the last 15 years that bailing out LTCM was necessary. Then they saw the NASDAQ collapse after March of 2000. We need to create another bubble. Print money. They created a gigantic credit bubble and the misery that we have today". Thank you, Mr. Bernanke."

Include his Maestro of Misery predecessor. His legacy reflects torment and devastation for millions. Bernanke matched his worst and exceeded him.

They're two of the most duplicitous scoundrels ever to serve in Washington. They're financial weapons of mass destruction. They engineered harder times than most people thought possible.
According to John Williams :

"Consumers simply cannot make ends meet. Inflation-adjusted, or real, median household income declined for the fourth-straight year, plunging to its lowest level since 1995.
Deflated by the CPI-U, the 2011 reading actually stood below levels seen in the late-1960s and early-1970s."
At the same time, despite the ongoing nature of the economic and systemic-solvency crises, and the effects of the 2008 financial panic, income dispersion - the movement of income away from the middle towards both high - and low-level extremes - has hit a record high, instead of moderating, as might be expected during periods of financial distress."
Extremes in income dispersion usually foreshadow financial-market and economic calamities. With the current circumstance at a record extreme, and well above levels estimated to have prevailed before the 1929 stock-market crash and the Great Depression, increasingly difficult times are likely for the next several years."

Economist Paul Craig Roberts said people are being "re-enserfed. The promised land" benefits only the top 1%. Globalized poverty, unemployment, and human misery grow more institutionalized.
Monetary madness combined with austerity when stimulus is needed assures much worse ahead. Progressive Radio New Hour regular Jack Rasmus tells listeners what happened and warns about about what to expect.

He calls QE 3 an open-ended money grab. It's near-free money for bankers and investors at the expense of the real economy and millions growing poorer.

Claiming it's done to create jobs, help the depressed housing market, and boost economic growth is cover for grand theft.

Over 23 million Americans remain unemployed. Economic conditions are weakening. Nearly all indicators show housing "bump(ing) along the bottom." QE 3 will do nothing to change things.
It's "subsidizing banks and investors." It's boosting financial, commodity, and other asset class valuations.

At the same time, it's hanging ordinary people out to dry. It provides no help whatever. It's transferring wealth to super-rich elites already with too much.

Banks and wealthy investors take free money and hoard it. Much ends up offshore in tax havens. It's used for speculation to make more of it. Fortunes have been made at the expense of the real economy and welfare of ordinary people.

Lending to small and mid-sized businesses stagnates or declines. Since 2008, multiple QE rounds, other handout policies, and zero interest rate policy (ZIRP) for banks exceeded $10 trillion in benefits for crooks instead of prosecuting and imprisoning them for previous grand theft.

Coordinated central bank money madness promises worse to come. At the same time, troubled economies are cratering. Weak ones grow weaker, and stronger ones now head south.

America's weak growth is slowing. Europe is in recession. It's deepening. China's heading for a hard landing. So is Japan. India, Brazil, and other strong economies are softening. As Europe and America go, so goes the world. Contagion can't be contained.

Unilateral or coordinated QEs "do little to nothing to stop slowing" economies worldwide. They're heading for "synchronized global recession."

All the money and liquidity in the world can't create jobs, end the housing slump, or stimulate growth by handing it to bankers and other financial interests. All it does is enrich them more at the expense of ordinary people and real economies.

It's not rocket science. Central bankers know it. They're not stupid. They know what's needed to end economic slumps, induce recovery, and reinvigorate growth. Knowing the right thing and doing it are world's apart.

They're beholden to big monied interests. Policies adopted serve them. The world is awash in capital. It's used for the wrong purposes.

America isn't broke. Neither is Europe or Japan. Instead of using their resources responsibly, it going to their top 1%. At the same time, greater force-fed austerity is coming. America named it. It's called the "fiscal cliff."

It's cover for making rich elites richer and poorer ones deeper in the hole. Coordinated central bank money madness is part of the dirty scheme.

As a result, free money goes to banks and other financial interests. Social benefits and disposable income cuts are mandated for everyone else.

Rasmus calls it "QEs for them." "Austerity for the rest of us." Economic slowdown and recession are assured. It's baked in the cake. Policy makers mandate it.

Bipartisan complicity pledged high times for rich folks. Everyone else is on their own out of luck. Elections change nothing. They haven't for decades. They do little more than reshuffle deck chairs.
Money power rules. What it wants, it gets. It's the American way. It's no different across Europe and most other parts of the world. It's a sorrowful state. People needing help don't get it.

Hard times devastate young people. Imagine developed countries like Spain and Greece with 50% youth unemployment. Imagine policy makers doing nothing to help. Instead they're making things worse.

Half of all US households are impoverished or bordering on it. For a family of four, America's official poverty line is slightly over $23,000.

Families this size can't manage in Chicago, New York, Boston, or other large US cities and most mid-sized ones. Adjusted for real, not manipulated, inflation, they're pressured more each year.
Incomes are declining. Benefits are eroding or ending. Job creation is moribund. Most pay borderline or sub-poverty wages. In 2011, the Gini coefficient measuring social inequality grew at the fastest pace in two decades.

Average and median family income keeps dropping. The harder times get, the less able most people can cope. Candidate Obama promised change to believe in. He didn't say what kind.

Mass social duress on a global scale explains it. So does indifference to human need and suffering. Had he leveled with people he might have become another political has-been.

If reelected, it's only by default. The least worst is better than the other way around. It might not turn out that way. Anything is possible. Big money decides.

Ordinary people have no say. Under Republicans or Democrats, Tories or New Labor in Britain, or other major parties in most countries, it's no different.

Institutionalized exploitation and indifference are baked in the cake. Bad as things are expect worse. Nothing as far as the eye can see suggests otherwise.

Ordinary people are on their own sink or swim. Fighting back is their only chance for change. It won't come any other way.

Stephen Lendman lives in Chicago and can be reached at Email address removed .

His new book is titled "How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War"

http://www.claritypress.com/Lendman.html

Visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

click here

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I was born in 1934, am a retired, progressive small businessman concerned about all the major national and world issues, committed to speak out and write about them.

AMERICAN MIDDLE CLASS AND POOR TAKING A SHELLACING -- AND CONGRESS COULD GIVE A DAMN

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Permalink





Flat-Lining the Middle Class
 
Economic Numbers to Die For
By Andy Kroll

Food pantries picked over. Incomes drying up. Shelters bursting with the homeless. Job seekers spilling out the doors of employment centers. College grads moving back in with their parents. The angry and disillusioned filling the streets.

Pan your camera from one coast to the other, from city to suburb to farm and back again, and you'll witness scenes like these. They are the legacy of the Great Recession, the Lesser Depression, or whatever you choose to call it.

In recent months, a blizzard of new data, the hardest of hard numbers, has laid bare the dilapidated condition of the American economy, and particularly of the once-mighty American middle class. Each report sparks a flurry of news stories and pundit chatter, but never much reflection on what it all means now that we have just enough distance to look back on the first decade of the twenty-first century and see how Americans fared in that turbulent period.

And yet the verdict couldn’t be more clear-cut. For the American middle class, long the pride of this country and the envy of the world, the past 10 years were a bust. A washout. A decade from hell.

Paychecks shrank. Household wealth melted away like so many sandcastles swept off by the incoming tide. Poverty spiked, swallowing an ever-greater share of the population, young and old. "This is truly a lost decade," Harvard University economist Lawrence Katz said of these last years. "We think of America as a place where every generation is doing better, but we're looking at a period when the median family is in worse shape than it was in the late 1990s."

Poverty Swallows America

Not even a full year has passed and yet the signs of wreckage couldn’t be clearer. It’s as if Hurricane Irene had swept through the American economy. Consider this statistic: between 1999 and 2009, the net jobs gain in the American workforce was zero. In the six previous decades, the number of jobs added rose by at least 20% per decade.

Then there's income. In 2010, the average middle-class family took home $49,445, a drop of $3,719 or 7%, in yearly earnings from 10 years earlier. In other words, that family now earns the same amount as in 1996. After peaking in 1999, middle-class income dwindled through the early years of the George W. Bush presidency, climbing briefly during the housing boom, then nosediving in its aftermath.

In this lost decade, according to economist Jared Bernstein, poor families watched their income shrivel by 12%, falling from $13,538 to $11,904. Even families in the 90th percentile of earners suffered a 1% percent hit, dropping on average from $141,032 to $138,923. Only among the staggeringly wealthy was this not a lost decade: the top 1% of earners enjoyed 65% of all income growth in America for much of the decade, one hell of a run, only briefly interrupted by the financial meltdown of 2008 and now, by the look of things, back on track.

The swelling ranks of the American poor tell an even more dismal story. In September, the Census Bureau rolled out its latest snapshot of poverty in the United States, counting more than 46 million men, women, and children among this country's poor. In other words, 15.1% of all Americans are now living in officially defined poverty, the most since 1993. (Last year, the poverty line for a family of four was set at $22,113; for a single working-age person, $11,334.) Unlike in the lost decade, the poverty rate decreased for much of the 1990s, and in 2000 was at about 11%.

Even before the housing market imploded, during the post-dot-com-bust years of “recovery” from 2001 to 2007, poverty figures were the worst for any recovery on record, according to Arloc Sherman, a senior researcher at the Center on Budget and Policy Priorities. The Brookings Institution, meanwhile, predicts that the ranks of the poor will continue to grow steadily during the years of the Great Recession, which officially began in December 2007, and are expected to reach 50 million by 2015, almost 10 million more than in 2007.

Hitting similar record highs are the numbers of "deep" poor, Americans living way below the poverty line. In 2010, 20.5 million people, or 6.7% of all Americans, scraped by with less than $11,157 for a family of four -- that is, less than half of the poverty line.

The ranks of the poor are no longer concentrated in inner cities or ghettos in the country’s major urban areas as in decades past. Poverty has now exploded in the suburbs. Last year, more than 15 million suburbanites -- or one-third of all poor Americans -- fell below the poverty line, an increase of 11.5% from the previous year.

This is a development of the last decade. Those suburbs, once the symbol of by-the-bootstraps mobility and economic prosperity in America, saw poverty spike by 53% since 2000.  Four of the ten poorest suburbs in America -- Fresno, Bakersfield, Stockton, and Modesto -- sit side by side on a map of California's Central Valley like a row of broken knuckles.  The poor are also concentrated in border towns like El Paso and McAllen, Texas, and urban areas cratered by the housing crash like Fort Myers and Lakeland, Florida.

The epidemic of poverty has hit minorities especially hard. According to Census data, between 2009 and 2010 alone the black poverty rate jumped from 25% to 27%. For Hispanics, it climbed from 25% to 26%, and for whites, from 9.4% to 9.9%. At 16.4 million, more children now live in poverty than at any time since 1962.  Put another way, 22% of kids currently live below the poverty line, a 17-year record.

America’s lost decade also did a remarkable job of destroying the wealth of nonwhite families, the Pew Research Center reported in July. Between 2005 and 2009, the household wealth of a typical black family dropped off a cliff, plunging by a whopping 53%; for a typical Hispanic family, it was even worse, at 66%. For white middle-class households, losses on average totaled “only” 16%.

Here's a more eye-opening way to look at it: in 2009, the median wealth for a white family was $113,149, for a black family $5,677, and for a Hispanic family $6,325. The second half of the lost decade, in other words, laid ruin to whatever wealth was possessed by blacks and Hispanics -- largely home ownership devastated by the popping of the housing bubble.

The New Lost Decade

As for this decade, less than two years in, we already know that the news isn't likely to be much better. The problems that plagued Americans in the previous decade show little sign of improvement.

Take the jobs market. Tally the number of jobs eliminated since the recession began and also the labor market's failure to create enough jobs to keep up with normal population growth, and you're left with an 11.2 million jobs deficit, a chasm between where the economy should be and where it is now. Filling that gap is the key to any recovery, but to do so by mid-2016 would mean adding 280,000 jobs a month -- a pipe dream in an economy limping along creating an average of just 35,000 jobs a month for the past three months. Unless the country's jobs engine were somehow jump-started, 11.2 million jobs in this decade would be a real stretch.

But few in Congress, and none of the controlling Republican politicians, will even think about using the jumper cables. President Obama's relatively modest American Jobs Act, for instance, was declared a corpse on arrival at the House of Representatives. On Monday, a reporter asked House Majority Leader Eric Cantor (R-Va.), "The $447 billion jobs package as a package: dead?" Yes, Cantor assured him, indeed it was.

The president and his administration watch despondently from the other end of Pennsylvania Avenue. And for the majority of Americans, a jobless “recovery” exacts an ever-greater toll on their earnings, their families, their health, their basic ability to make ends meet.

The question on many economists' minds is: Will the U.S. slump into a double-dip recession? But for so many Americans living outside the political and media hothouses of Washington and New York, this question is silly.  After all, how can the economy tumble back into recession if it never left in the first place?

No one can say for certain how many years will pass before America regains anything like its pre-recession swagger -- and even then, there's little to suggest that the devastating effects of the middle class's lost decade won’t have changed this country in ways that will prove permanent, or that the gap between the wealthy and everyone else will do anything but increase in good times or bad in the decade to come. The deep polarization between the very rich and everyone else has been decades in the making and is a global phenomenon. Reversing it could be the task of a lifetime.

In the meantime, the middle class has flat-lined. Life support is nowhere close to arriving. One lost decade may have ended, but the next one has likely only begun.


Andy Kroll is a staff reporter in the D.C. bureau of Mother Jones magazine and an associate editor at TomDispatch. He writes about the economy and national politics, and has appeared on MSNBC, Al Jazeera English, and Countdown with Keith Olbermann.
Copyright 2011 Andy Kroll