Submitted by Jim Quinn via The Burning Platform blog,
Two recent surveys, along with numerous other studies and data,
reveal
most American households to be living on the brink of
catastrophe, but continuing to act in a reckless and delusionary
manner.There have certainly been economic factors beyond
the control of average Americans that have resulted in real median
household incomes remaining stagnant for the last 36 years. The
unholy alliance of mega-corporations, Wall Street and bought off
corrupt politicians have gutted the nation of millions of good
paying jobs under the guise of globalization, while utilizing debt,
derivatives and financial schemes to enrich themselves.
The malfeasance of the sociopathic privileged class does
not discharge the personal responsibility of citizens for living
within their means. A lack of discipline, inability to delay
gratification, failure to understand basic mathematical concepts,
materialistic envy, absence of critical thinking skills, and a
delusionary view of the world have left the majority of Americans
broke and in debt.
The data that captured my attention was how little the average
American household has in savings.
Roughly 62% of Americans have less than $1,000 in savings
and 21% don’t even have a savings account, according to a new
survey of more than 5,000 adultsconducted this month by
Google Consumer Survey for
personal finance website GOBankingRates.com.
This dreadful data is reinforced by a
similar surveyof 1,000 adults carried out
earlier this year by personal finance site Bankrate.com, which also
found that 62% of Americans have no emergency savings for a medical
crisis, car repair, or unanticipated household expenditure.
The fact is these are not highly unlikely
scenarios.
They happen every day as part of our routine existence.
Everyone gets sick. Every car eventually needs new tires or an
engine repair. Every home will need a new hot water heater or roof
at some point. It is foolish and short sighted to not expect
“unexpected” expenditures. Living in the moment and fulfilling your
immediate desires may feel good today, but leaves you susceptible
to disaster tomorrow. Gradually building a rainy day fund over time
is what adults should do. Only immature children operate with no
safety net. Everyone has an excuse for why they end up living on
the edge, but the data exposes us to be an infantile nation of
spendthrifts incapable of distinguishing between wants and needs.
It might be understandable for young adults who are burdened by
student loan debt and entry level jobs to have little or no
savings, but the data for older Americans is most disturbing.
It seems 51% of all Generation X adults between the ages of 35
to 54, in the prime earning years of their lives, have ZERO
savings, the highest among all age cohorts, with over 20% of them
not even having a savings account.
This is incomprehensible and reveals an almost juvenile
approach to life. Approximately 70% of all 35 to 54 year
old households have $1,000 or less in savings. These are people who
should have been working for the last 10 to 30 years. To not have
put aside more than $1,000 is beyond irresponsible, and the
justification of earning no interest on savings is disingenuous as
they could have earned 5% up until 2008. This shocking state of
affairs can’t only be laid at the feet of the evil bankers and rich
corporate titans.
Every person has to accept personal responsibility for
their own life.There is one sure fire way to accumulate
savings and that is to spend less than you earn. It sounds simple,
but the vast majority of Americans have chosen to live beyond their
means by allowing themselves to be lured into debt by the Wall
Street debt peddlers and their Madison Avenue media maggots selling
dreams to willfully ignorant delusional consumers. Consumer
dependent corporations hawking autos, electronics, glittery
baubles, fashionable attire, toxic processed sludge disguised as
food, and other slave produced Chinese crap, require a vast
unlimited supply of easy money debt to keep profits rolling in. And
the Federal Reserve has been willing and able to accommodate
them.
Those who control the levers of this perverted economic
system utilize Fed easy money, propaganda advertising messages, and
the susceptibility of an oblivious populace, suffering from
delusions of grandeur, to create generations of debt enslaved
hamsters running on the wheel of life.But, we were not
forced into this enslavement. Millions have chosen to live lives of
quiet desperation in order to keep up with the Joneses. They would
rather portray themselves as successful and wealthy, rather than
make the necessary sacrifices required to achieve success and
wealth. Everyone has the ability to live beneath their means.
Millions have made the choice to do so. The chart above shows 10%
to 20% of people do have $10,000 or more in savings, including
young people. Many are average middle class Americans, not the
despised 1%.
It is certainly not easy to accumulate savings in an
economy stacked against the working middle class, but it is
possible.It requires self-discipline, deferring
gratification, patience, budgetary skills, staying employed, and
not coveting your neighbors’ possessions. The lack of short-term
savings is not an isolated data point. It is representative of a
nation of narcissistic live for today ne’er-do-wells who rarely
concern themselves with the future or the consequences of their
actions. They haven’t been putting all their spare cash into their
retirement plans either. When you realize the typical household
between the ages of 35 to 54 has less than $10,000 saved for their
retirement, the mass delusion becomes clear. How could Boomers, who
have worked for 30 to 40 years, and experienced the greatest bull
market in history (1981 – 2001) have only $12,000 of retirement
savings as they approach retirement?
These are median figures, so half the households have even less
retirement savings. It requires decades of living above your means
to accumulate such little in savings.
The apologists for the non-saving masses often argue
Americans were utilizing their homes as a store of wealth to be
used in retirement. This is just another false storyline, as the
savings poor public used their homes like an ATM machine from 2001
through 2008,extracting hundreds of billions to spend on
granite countertops, exotic Caribbean vacations, home theaters,
BMWs, Olympic sized pools, bling, and new boobs for mommy. Equity
in homes plunged from 60% to below 40% in the space of a few years
and has only recovered to 55% after the Fed induced faux housing
recovery. There are still millions of homeowners underwater, with
the next leg down guaranteed to add millions more.
The millions of American households living on the edge and
headed for a poverty stricken old age have a million excuses for
why they never saved a dime.These are the same people who
will demand the government save them from their own foolishness and
irrational life choices. They will demand the rich (anyone who
worked hard, saved, and planned for their future) be taxed more, so
they don’t have to live with the consequences of their reckless
disregard for common sense and self-discipline. These people should
have read some Shakespeare in high school, and maybe they wouldn’t
be in this predicament.
“The fault, dear Brutus, is not in our stars, but in
ourselves.”–
William Shakespeare, Julius Caesar
We are all responsible for our own lives and our own
decisions. It isn’t complicated regarding how to save money. But it
is hard. It requires simple math skills like addition, subtraction,
multiplication and division – concepts not thought too important in
our government controlled educational system. It requires
self-control, acting like an adult, and distinguishing between what
you want versus what you need.It’s OK to splurge once in a
while, but since around 1980, multiple generations have been binge
spending in an orgy of debt debauchery unmatched in human history.
Since 1980 the U.S. population has gone up by a factor of 1.42, GDP
has expanded by a factor of 6.3, and consumer debt has exploded by
a factor of 10. The amount of consumer debt per person in 1980 was
$9,300. Today, the total is an astounding $65,200 per person, a
700% increase in 35 years. We owe $21 trillion of mortgage, credit
card, student loan and other debt to the felonious Wall Street
bankers.
This nation has gone insane
.
“In individuals, insanity is rare; but in groups, parties,
nations and epochs, it is the rule.” –
Friedrich Nietzsche
With a median household income of about $56,000 and median net
wages per worker of $29,000 it is fairly easy to grasp the monthly
inflow of a middle income household. In Median World, taxes will
take about a 16% chunk out of those figures, so the median
household ends up with about $4,000 of take home pay per month. If
they own a median priced home of $189,000, their monthly mortgage
payment would likely be about $850. Add another $200 to $300 per
month for property taxes and you are on the hook for $1,100 per
month. A median rent figure would be in the same ballpark, unless
you live in SF, NYC or a few other overpriced markets.
This is where many people go off course, allowing
themselves to be lured into more house than they can really afford
with low down payments guaranteed by the government, driving the
monthly housing burden north of $1,500. McMansion envy has
destroyed more lives in the last ten years than any other
delusion.
Food, clothing, utilities, and home upkeep expenses could total
$1,500 per month for a family with kids. If one or both parents are
stuck with student loan debt, a monthly payment of $200 to $400
would be normal. There isn’t much spare change left to fund their
remaining needs, wants and desires.
But their neighbors and coworkers are all driving new cars.
They can’t be seen driving a used 10 year old clunker. People will
think they’re poor. Shallow appearances are all that matter to a
vast swath of America.According to Edmunds.com, the
average monthly payment on a new vehicle is $479. We can’t have one
spouse driving a new car, while the other slums it on public
transportation, so two newer cars will add another $900 or so of
expenses to the monthly budget.
Wall Street and the automakers are only too glad to offer
those with good credit a 7 year 0% loan, guaranteeing a permanent
status of being underwater on your loan until you must have that
new model after four years, rolling the underwater loan into the
next purchase.The permanent leasers convince themselves
they are making a good deal as they sign their lives away every
three years without understanding the financial implications of the
leases. And then there are the 20% subprime auto buyers who pretend
to pay until the repo man shows up in the middle of the night. This
delusion of debt is how annual auto sales have soared from 10
million in 2009 to almost 18 million today.
I’m on the road every day and it is mind boggling to see the
number of newer $30,000 to $50,000 vehicles cruising the highways
and byways of America. Even in the poverty stricken neighborhoods
of West Philly, brand new BMWs, Cadillacs, and other $25,000 or
more vehicles are parked in front of dilapidated hovels and low
income housing complexes. Virtually none of these vehicles are
owned outright. Americans are essentially renting their luxury
wheels so they can appear successful.
The way to become financially successful on a modest income
is to buy used cars and drive them for ten or more
years.The years of no car payment can be directed into
savings. Very few people chose this path. That is why auto loan
debt has now exceeded $1 trillion, up 40% since 2010. Wall Street
wants you in perpetual debt and millions have bought it hook line
and sinker. But at least they appear prosperous to their neighbors,
while they’re really in debt up to their eyeballs.
The choice to indulge in driving over-priced ornamental
transportation basically leaves the average household with little
or no discretionary income at the end of the month. But that
doesn’t stop spendthrift nation from becoming addicted to their
mobile phones and binge watching reality TV. The average American,
who had never heard of a mobile phone in 1990, now can’t go 20
seconds without checking their phone. And they are paying through
the nose for the privilege of staying terminally connected. We have
smart phones for dumb people.
Even welfare recipients without jobs, living in low income
housing and dependent on food stamps, somehow find the funds to
have a smartphone in their hand 24/7. Maybe directing those funds
towards books might give them a better chance of exiting
poverty.
In one survey, 46% of Americans with mobile phones said
their monthly bill was $100 or more and 13% said their monthly bill
topped $200 per month.The average individual’s cell phone
bill was $73 per month last year, a 33% increase since 2009,
according to J.D. Power & Associates. When they aren’t texting,
tweeting, or facebooking on their iGadgets, they are watching basic
cable boob TV at average price of $100 per month, up 39% since
2010. But our connoisseurs of crapola need the NFL Package, HBO,
Showtime, Netflix, and on demand porno. Tricked out smart phones
and cable packages are not necessities. They are wants. Wasting
$200 to $300 per month on narcissistic compulsions is a choice.
Possibly the largest squandering of resources occurs on a
daily basis, as Americans spend money they don’t have on $5 lattes,
toxic fast foodstuff, craft beers, and whatever else strikes their
fancy.According to the most recent
Bureau of Labor Statistics consumer expenditure
surveys, the typical household spends $2,625 each year, or
around $219 per month, on food away from home. Those in higher
income brackets spend the most on restaurants at around $370 per
month. Millennials, with the least amount of discretionary funds,
view dining out as a social event, and choose fun and frivolity
over finances. The concept of brown bagging your lunch for $1
rather than spending $10 at Paneras, or brewing a pot of coffee for
25 cents rather than paying $5 at Starbucks is inconceivable to the
live for today credit card cowboys and cowgirls.
Dining out is the ultimate personal choice and a huge
factor in the non-existent savings of American
households.Over the last two decades Americans have
abandoned the frugality of buying food at the grocery store on
sale, using coupons in favor of eating out at a hefty premium on a
daily basis. The result has been a $10 billion gap in spending
between groceries and dining out being obliterated by an army of
live for today for tomorrow we can make the minimum payment on our
credit card juveniles. Not only has this penchant for satiating
their hunger contributed greatly to their lack of savings, but has
been financed on their credit cards. That $25 Applebees dinner,
financed at 18% interest over the next ten years ends up costing
$54. Multiply this foolishness hundreds of times per year over
decades and you understand why Boomers have less than $1,000 in
savings accounts and $12,000 or less in retirement savings. It’s
just math.
The expenditures detailed above don’t include healthcare,
entertainment, vacations, government extractions (tolls, fees,
fines, taxes) and assorted other miscellaneous wastes of money. It
is pretty clear the monthly outflow exceeds the monthly inflow for
the majority of Americans. That is why the average household has
credit card debt of $7,500 and those carrying a balance pay an
average interest rate of 14% on their $16,000 ball and chain. This
is on top of an average mortgage obligation of $155,000 and average
student loan commitment of $32,000. The Wall Street hucksters are
only too happy to help you finance a lifestyle well above your true
means. They borrow from the Fed at .25% and charge you 10% to 20%
for the use of credit created out of thin air. They always win. The
willfully ignorant are thrilled they can now pay their IRS bill,
property taxes, utilities, and just about every daily expense with
a credit card. They fail to acknowledge the insanity of their
chosen lifestyle path.
I still remember something my sophomore English teacher Mr.
McGrath taught the class, based upon the writings of Aristotle.
Human beings are rational, sentient, living, corporeal substances.
What separates us from animals is our ability to think and
act in a rational manner, rather than just on instincts and urges.
Based on what has occurred in this country over the last 35 years,
I’m starting to question the rational part. It’s almost as if a
mental illness has befallen a majority of Americans.The
Deep State and their minions on Wall Street and the corporate media
certainly attempt to mold and manipulate the minds of the masses,
but at the end of the day people are free to disregard those
messages and live meaningful lives on their own terms. Even though
living above your means has become “normal”, it is only normal in
relation to our profoundly abnormal society.
Telling people the truth today is meaningless, as they don’t
want their illusions destroyed. But destroyed they will be, when
this teetering edifice of debt comes crashing down on their
heads.
“The real hopeless victims of mental illness are to be found
among those who appear to be most normal. Many of them are normal
because they are so well adjusted to our mode of existence, because
their human voice has been silenced so early in their lives, that
they do not even struggle or suffer or develop symptoms as the
neurotic does.” They are normal not in what may be called the
absolute sense of the word; they are normal only in relation to a
profoundly abnormal society. Their perfect adjustment to that
abnormal society is a measure of their mental sickness. These
millions of abnormally normal people, living without fuss in a
society to which, if they were fully human beings, they ought not
to be adjusted.”
–
Aldous Huxley – Brave New World
Revisited
“Sometimes people don’t want to hear the truth because they
don’t want their illusions destroyed.” –
Friedrich Nietzsche