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40% of Americans have negative net income

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A remarkable new study published by Ashlyn Still and Jonathan Spicer for Reuters reveals that fully 40% of Americans currently have a negative net income, which means that their living expenses exceed their annual incomes. In fact, according to this study, even the middle quintile of the population -- the average American -- is only barely above water financially, and the margin has collapsed.

A few other factoids are also telling: the rate of personal savings has fallen from a high of 11% in December of 2012 to just 3.1% in March of this year, which amounts to a drop-off of more than three-quarters over the last five years or so, including a drop of half within just the last three. The authors also call attention to how, historically, U.S. consumption growth is dominated by the top 40% of earners, while, by contrast, in the past few years, the bottom 60% of earners has accounted for the majority of consumption. Consumption makes up for over 70% of all economic activity in the United States and plays a critical role in economic growth. Meanwhile, serious credit card delinquencies and defaults have surged in recent years.

Put all these facts together and the picture you get is that, while the average middle class American is slightly above water financially, the economic significance of this fact is outweighed by the sheer volume of debt that the working class is accumulating. The poorer 40% of the population (to which I belong, incidentally) is exhausting its savings to pay debts and living expenses; a formula for survival that is obviously not sustainable. Eventually, the working class, which is now fueling the main driver of the economy -- consumption -- will not be able to sustain its consumption levels and have to scale back, which will have ripple effects across the economy, and especially for the barely-above-water middle class population. As the authors point out, what it all means is that "the nearly decade-long economic expansion may be more vulnerable to a further spike in gasoline prices or an escalation of trade conflicts" at present. In an unsustainable situation like this, little shocks can trigger a recession.

While the findings of this study explain a lot, really the telltale signs that (contrary to what you hear from the White House) all is not well with working America have been there already. In recent years, the United States has been wracked by growing epidemics of alcohol and opioid addiction, increasing rates of depression, anxiety, and suicide, and declining life expectancy. But now we can clearly see a big part of why.

Last edited by Jaicee - on 06 August 2018

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With fiat currency we're all losing "money" .



In the wilderness we go alone with our new knowledge and strength.

"As the authors point out, what it all means is that "the nearly decade-long economic expansion may be more vulnerable to a further spike in gasoline prices or an escalation of trade conflicts" at present. In an unsustainable situation like this, little shocks can trigger a recession."


Trump Logic:
Perfect time for a new Trade war! Trade wars are easy to win, China isnt treating us fairly! what do we really have to lose?



JRPGfan said:

"As the authors point out, what it all means is that "the nearly decade-long economic expansion may be more vulnerable to a further spike in gasoline prices or an escalation of trade conflicts" at present. In an unsustainable situation like this, little shocks can trigger a recession."


Trump Logic:
Perfect time for a new Trade war! Trade wars are easy to win, China isnt treating us fairly! what do we really have to lose?

Don't put Trump and Logic in the same sentence. Just don't.

OT: Maybe they should stop buying all that avocado bread!



If you demand respect or gratitude for your volunteer work, you're doing volunteering wrong.

The reason why all of this is nonsense is because we know that all money is debt and even if everyone paid everything they had, they only be debt left. Money is debt. Quite literally. So until someone invents a better banking system, we are all screwed. Money needs to be destroyed. It entraps us.



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JRPGfan said:

"As the authors point out, what it all means is that "the nearly decade-long economic expansion may be more vulnerable to a further spike in gasoline prices or an escalation of trade conflicts" at present. In an unsustainable situation like this, little shocks can trigger a recession."


Trump Logic:
Perfect time for a new Trade war! Trade wars are easy to win, China isnt treating us fairly! what do we really have to lose?

so its ok to have tarrifs on us products. not just free trade which he is wanting, but that doesnt fit your narrative.

on the topic, its too easy to rack up debt, putting them in a hole. no one learns about this in school, im not sure if anyone learns anything in schools anymore.



 

LiquorandGunFun said:
JRPGfan said:

"As the authors point out, what it all means is that "the nearly decade-long economic expansion may be more vulnerable to a further spike in gasoline prices or an escalation of trade conflicts" at present. In an unsustainable situation like this, little shocks can trigger a recession."


Trump Logic:
Perfect time for a new Trade war! Trade wars are easy to win, China isnt treating us fairly! what do we really have to lose?

so its ok to have tarrifs on us products. not just free trade which he is wanting, but that doesnt fit your narrative.

on the topic, its too easy to rack up debt, putting them in a hole. no one learns about this in school, im not sure if anyone learns anything in schools anymore.

Considering who's president that's probably what's going on.



If you demand respect or gratitude for your volunteer work, you're doing volunteering wrong.

CosmicSex said:
The reason why all of this is nonsense is because we know that all money is debt and even if everyone paid everything they had, they only be debt left. Money is debt. Quite literally. So until someone invents a better banking system, we are all screwed. Money needs to be destroyed. It entraps us.

Very true. We trade fiat currency around these days, not even money. What people think is money is actually worthless bank credit. And what traps us is, is the ignorance of the people .

 



In the wilderness we go alone with our new knowledge and strength.

LiquorandGunFun said:
JRPGfan said:

"As the authors point out, what it all means is that "the nearly decade-long economic expansion may be more vulnerable to a further spike in gasoline prices or an escalation of trade conflicts" at present. In an unsustainable situation like this, little shocks can trigger a recession."


Trump Logic:
Perfect time for a new Trade war! Trade wars are easy to win, China isnt treating us fairly! what do we really have to lose?

so its ok to have tarrifs on us products. not just free trade which he is wanting, but that doesnt fit your narrative.

on the topic, its too easy to rack up debt, putting them in a hole. no one learns about this in school, im not sure if anyone learns anything in schools anymore.

Wow.. the US actually have a surplus on tarrifs when everything is counted....



If it isn't turnbased it isn't worth playing   (mostly)

And shepherds we shall be,

For Thee, my Lord, for Thee. Power hath descended forth from Thy hand, That our feet may swiftly carry out Thy command. So we shall flow a river forth to Thee And teeming with souls shall it ever be. In Nomine Patris, et Filii, et Spiritūs Sancti. -----The Boondock Saints

I 100% agree with that. The problem with using an alternate system whether as a nation or the entire world is we never have that open conversation about an alternate. We can't just say socialism or capitalism or any other form of economic will work, we have to conversate, plan and agree on how a system will work. One tactic I've thought of is your service to society should be societies service back to you. In another words if you work for a living you should be able to go to your store and attain your groceries or things you need or want. But you shouldn't just take the entire bin of beef as that doesn't leave anything left for anyone else. So then you think ration control. The problem with that is some families are bigger than others. So where's the cap? The rations for a 4 person family is the same as a 7 person family? Who makes those decisions other than a voting system to decide. Vote and decide on the individual policies, not the president/prime Minister or king or queen to make decisions for all.