I'm part of the sinking middle class...

[CoffeeCat]

Prior to the economic collapse, we were doing well. Living in the suburbs, our 401k growing and our savings at a healthy level. We rarely tapped into it. I was a stay-at-home mom and my husband was an IT executive.

Then 2008 happened. My husband survived 8 rounds of layoffs, but was called into the office one day and told, "You're a great employee, but your salary is high and we have to cut back. You'll always have a great reference from us."

We had no income--for eight months. Our savings diminished. My husband found work, but he took a 30 percent pay cut. It was as if we were "living the dream" and woke up in 2008 to a new reality and a newly structured salary rates for IT professionals.

Besides the 30 percent paycut, we now pay nearly $600 per month for our health insurance. We used to pay nothing. Food prices are through the roof, as our gas prices--which is pretty much equivalent to another pay cut. Financial death by a thousand pecks!

Our savings is down to $10,000 because we spend more than we make now, despite our very conservative budget. My student loans are in forbearance, and we are way behind our plan to pay off those loans so we can start saving for our kids' college. We were aggressively paying down those loans--more than $1,200 per month. Now, we pay nothing because we can't.

I'm working now. Being a stay-at-home-mom full time is not a viable option anymore, unless you want to play economic household roulette and risk (once again) being down to no income again. It's just too risky.

I look around at my neighborhood--an upper middle class suburb and I see differences. People replace cars with used cars. No one waters their lawn anymore. Landscaping and fence repair projects are on hold. It's as if everyone is holding their breath. I saw my neighbor with a colored shirt on the other day and he told me that he is working part time no the weekends at a big-box home improvement store. My other neighbor delivers pizzas on weeknights.

These are professional people--teachers, doctors, lawyers, managers. I don't know what is going on financially with individual people and it's none of my business--but I see most people in the grocery-store checkouts with coupons and people flock to the stores when our local grocery store has their "one-day sale" with very cheap staples. Most carts are filled with the cheap stuff and little else.

I feel it. I live it. The middle class is on life support. I'm tired. I think others are in the same boat--as evidenced by what is happening in our neighborhood--but no one talks about it. I think people are embarrassed. CNN tells us that the economy recovered along time ago. People are probably thinking that it's their fault, and they are most likely ashamed that they also are tired...probably living on less and feeling the squeeze.

I'm thankful and grateful for everything we have. I do count my blessings. However, it is hard to be sold a dream and then to have the game change when you are middle aged. It's a new reality for our family.

[NMDemDist2]

1. not to minimize your reduced circumstances

but 'doctors, lawyers and managers' are at least upper middle. most don't fall in the middle class range at all.

Median income in the US is around (or just under) $50,000.00 that's a lot less than doctors make on average.

and yes, most of us are feeling the squeeze.

[pnwmom]

4. Not true about most lawyers and most managers.

The top tier of both groups is at least upper middle, yes. But there are many small town lawyers and middle managers who are not.

But when even people like the OP's family are barely scraping by, it's a sign the economy isn't doing nearly as well as they want us to think.

[Barack_America]

21. Depends if you still have med school/student loans.

Easily over $200K. That takes a huge chunk out of the salaries of primary care docs.

And, really, it's these types of neighborhoods that were hit hardest by the housing collapse and are the most underwater.

[Cryptoad]

24. SSA data

says the Median Income of wage earners is less than $27,000 / yr.

Funny this figure goes up when Democrats are in the White House and down when the GOP is in the White House.

adjusted for inflation the figure was more than $ 38,000 / yr when Reagan took office!

[Bluenorthwest]

49. Lawyers wise, the pay is all over the map, and here is the map that it is all over

http://www.abajournal.com/magazine/article/what_americas_lawyers_earn/

[leveymg]

2. We are the Silent Majority, version 2.01.3

We all have our tales to tell. Thanks for being brave enough to share yours.

Hang in there.

[Heather MC]

3. Downsizing your wallet

My Dh Started doing our best to streamline whatever we could, most people say the bottom hit at 2008 actually if you were lower on the economic Ladder you started filling the pinch around 2004. At least we did.

1. Coupons are a great invention it's free money, I feel no shame walking around my neighborhood on recycle Wednesday and getting all the coupon inserts I can find. I share them with friends as well.

2. Craigslist Craigslist Craigslist. I sometimes will go around my neighborhood on big trash day. and find nick nacks to sell on Craigslist
I have sold couches, lamps, wall mirrors, lawn furniture, even a kitchen sink all stuff I found tossed out by my neighbors. I sold on Craigslist. I use that as our fun money. that's the money we use to have a family outtings at the movies. Or a day at six flags.

3. We ditched our expensive phone service we got Boost Mobile shrinkage plan. Cancelled our home phone only telemarkers called anyone and got standalone DSL it was $40 bucks cheaper than having phone and internet

4. Second hand goods. If we NEED anything clothes for ourselves or the children We hit up goodwill first
This summer my oldest was invited to spend a week at the beach with friends. He has gone through 3 growth spurts in the school year, by the end of school his summer clothes from last year looked as small as new born onesies. Went to goodwill got 5 pair of shorts and 5 t-shirts for 30 bucks name brand stuff. Even found a nice silk scarf for me for my hair at night.

5. Home repairs we do ourselves I remodeled my Kitchen in 2009 using mostly Craigslist and Ebay finds. COntractors wanted to charge us 13,000 my hubby and I did it for 2,500. He did plumbing and electrical I did everything else
What I didn't know how to do I either took a free class at home depot or watched a video on youTube, or just did a DO OVER lol

Somethings you can't cut back on, but We have learned to cut every where we can. Even gas some grocery stores give away gas points. we have gotten gas for as low as 2.60 per gallon using Safeway and Giant Gas points.

I had an Uncle who ended up homeless because he was an alcoholic. He once told me, "you can live really well on nothing, you really can" before his addiction took over his life he had a 100K per year salary. I don't want to be homeless, but I can learn how to live happy on nothing

ETA: Forgot to Add we ditched Cable TV. Thanks to Netflix, YouTube, and sites like TVPC.com paying for cable is not necessary anymore, for us.

[liberal_at_heart]

6. I actually enjoy couponing. I wish I didn't need to do it, but it's fun.

[Rebellious Republican]

18. You must have a lot of free time on your hands.

Must be unemployed, have no children and not much in the way of responsibilities.

[liberal_at_heart]

23. I do have children. I don't work because I have crippling social anxiety. My husband did work

but is now on disability because he is legally blind. I never applied for disability. I know there is a stigma with mental disabilities and I guess I am just afraid to go through the process, afraid of being denied. My husband is planning on opening his own business. He is working on creating a business plan and has a couple of investors lined up. It was when he went on disability that I started couponing.

[Rebellious Republican]

26. Did not mean to flame you....

There are many of us just trying to keep our heads above water with little time to do anything but sleep. I read your post and assumed correctly that you had time on your hands. My heart goes out to you and your family. Thank God for the social programs we have left, given the conservative philosophy you would probably be dumpster diving instead of couponing.

Many mea culpa's

[liberal_at_heart]

27. no problem. We are all suffering right now. Well everyone except the 1%.

[hfojvt]

55. we are not all suffering right now

I make about $32,000 a year. That's not even close to the 1%. Maybe 1/10th as much as even the poorest 1%er makes. But I am not hurting. I have two cars, two bikes, and three dogs.

From October 2006 until September 2011, I was working part-time, making less than half of what I do now.

But I was not hurting then either. I wasn't saving a lot, but I was not hurting.

So I am supposed to believe that members of the top 20%, who make over $88,000 a year are suffering?

I am even supposed to believe that members of the top 10% who make over $127,000 a year are suffering?

And I am even supposed to believe that members of the top 5% who make over $177,000 a year are suffering?

Even the "suffering" described by the OP is more mental than physical. They are suffering so bad, they only have $10,000 in savings. I mean, I know it does suck to have your savings go from $30,000 down to just $10,000, but surely there are people in America who are suffering far, far worse than that. Just look at Colorado if you wanna see REAL suffering.

It's not a contest, but let's not pretend that the worries of somebody making $60,000 a year or $180,000 a year are the same as that of somebody with no job, or no home, or no savings, or less than 1/10th of the income of that $180,000 couple who may or may not want to whine about their sufferings, just like young Werther.

[Heather MC]

67. Great Point!

Anyone can figure out how to live a great life at the level they are at. by learning to live within their means.

[Precisely]

70. The people who lasted longest in the bubble

are suffering the rude awakening that it CAN happen to them. The people who have been hip to reality for a while, may experience "suffering" with less anxiety, self-righteousness or sense of "this ain't right." They know it ain't right and they been knowin it for a while.

[Warpy]

30. The learning curve can be steep and very unpleasant

since every time your savings start to go the right way for a change, something breaks down (in my case, my health) and takes you back to running on empty just to deal with it as cheaply as possible.

The best advice I can give anyone starting that learning curve is learn how to cook. That alone will allow you to stay healthier longer and at far lower cost than anything else you can do. The rest helps, but cooking is essential.

I never did coupons because I never used processed foods, I was too poor.

[DFW]

34. Amen to that!

Although we would probably be considered to be in the 1%, we rarely eat out. My wife grew up in the rural farm country of northern post-war Germany, and her family only survived by learning to make meals with what was growing out of the ground. I have serious heart issues and have to watch what goes into the food I eat. My wife has shown me, too, that with a little olive oil and some basic local vegetables, a lot of heart-healthy meals can be created out of very little. The only hitch is that fish is very expensive here, and I can't eat meat any more, except for poultry. Still, if my wife is away (her mom is not well, and still lives up north), I can make my own stuff if I have to, and get by spending 2-3 euros a meal to do it.

[Bluenorthwest]

50. In the US, to be in the top 1% means your AGI is at least $343,927

Never met a person making that much who even knew the price of fish.....

[DFW]

51. I never even knew what the number was (or how to find it).

And technically, I'm not in the US any more, although I receive my salary there as I always have.

Even so, we pay over 50% in taxes, plus I'm paid in dollars in Texas and live in Euros in Germany, so it's not like we're swimming in affluence. And, yes, we both know the price of fish, and which kinds make the most sense to buy. The same goes for vegetables and heating oil and gas (about $8 a gallon here), etc. etc., and while my wife is covered by German medical insurance, I am not. We're not struggling, but only because we don't try to live like the billionaires we aren't.

[Nay]

47. Man, I get the cooking part. I hate to cook, but I've done it for 50 years just for the savings. I

rarely used coupons for the same reason you never used them -- I rarely ate that shit. Coupons are invariably for processed foods. You never see a coupon for tomatoes, for example. Over the years it has saved us untold amounts of money. I am horrified when I hear from other people what they are spending on food -- WTF???? Then I realize they are buying boxed foods, bottled water (WTF?? in the USA???), etc.

[Heather MC]

68. I only eat Organic food. So the coupons I use are for

Other things like Soap. dish detegent, deorderant. I even got a 6 pack of Razors for 60 cents because the company had a $3 off coupon.

Toilet paper mouthwash, toothpaste. All these thing can cost more than $5.00 buck body soap in some store is as high as $8, but with coupons mixed with a sale I can knock 2 to 5 bucks off an each item I purchase. Also there are lots of Organic companies that issue coupons. Go to Ebay and search "Organic coupons" And with the money I save on toiletries, I can run down to the farmers market and by fresh veggies and fruits for my family. And that's what I do

[MADem]

57. I learned to cook when I was a starving college kid.

And that was back when college was "cheap" in the larger scheme of things.

I could eat like royalty on five bucks a week. And that included cheapo wine!

I used to go to a wholesale market (fruit-veg-meats; they sold to restaurants and hotels and institutions, mostly) at the end of their workday (which was just after noon) and get bargains--ends, or lonely one-sies, of meat, slightly tired looking but entirely serviceable fruit/veg, those dented potatoes, e.g. or those slightly bruised peaches. This was a million years ago, but I would often trot away with a backpack full of chow for under a buck--sometimes (after I got to know the vendors and they learned a bit about my reason for shopping in their out-of-the-way place) they'd just GIVE me stuff. For free. And they'd tell me how to cook it, too!

I made lots of trial and error mistakes (boy, I would have loved the internet back then--you can google a recipe, watch someone cook it, talk about idiot-proof) but the best lessons are hard learned! I ate my mistakes anyway!

I might not be Top Chef...but it's better than being at the mercy of Chef Boy-Ar-Dee! And there is a certain satisfaction as well as comfort in knowing that you have the skills, even if you don't use them all the time.

[Rebellious Republican]

91. sorry warpy, I did not get around posting a reply earlier.

You are 100% correct. Cooking for your self if possible.

[Heather MC]

64. A few time I got the Grocery store to pay me money!

[liberal_at_heart]

80. Wow. You are good. 60% off my bill is about as good as I can get. I know there's a lot of tricks

to the trade that I just never got the hang off, but hey 60% is 60%. That helps when you have a family of 5.

[Heather MC]

81. 60% is awesome!!

the average is 20% - 30%

[pnwmom]

8. Just don't have any kids then, because it's almost impossible to learn to live

happy on nothing when you have kids that NEED things you can't give them.

Like a place to live in a decent school district, healthy foods, etc.

[Heather MC]

66. Too late I have two incredible young men. We live in a great school district and thanks to couponing

We are able to eat Organic at least 95% of the time. We don’t do fast food, or a lot of eating out. Which saves a lot of money as well.

[pnwmom]

73. Then you're not living on "nothing." You have enough that you can afford,

with careful budgeting, to take care of your children in a decent place.

But good for you on the economizing -- that's an important skill.

[Heather MC]

75. I apologize for the misunderstanding

I never meant to imply I am living on nothing. My uncle said that. Although I do try to apply his philosophy in my everyday. Ex if I live off nothing what can I get for free that might get me to something?

Coupons from Recycle bins, and perfectly good items my neighbors toss on the curb I can sale.

[SheilaT]

12. I'm quite impressed at what you've accomplished.

Not to nitpick. bit some of us don't have the skills for a remodel. Good for you that you did. But is there any chance that in the future the plumbing or the electric won't be up to code?

[sendero]

37. To turn that question around.

.... does anyone really NEED a remodel right now?

Plumbing and electrical - yes there are many people, maybe most that should not be doing that sort of stuff. But there are a lot of us who are "handy", who have been building and fixing things since we are kids, that can.

Certainly, there are some deadly mistakes that can be made especially with electrical (mostly just wet mistakes with plumbing but any reasonably careful person who wanted to do some simple wiring could learn enough to do so by reading.

[Rebellious Republican]

19. "you can live really well on nothing, you really can" before his addiction took over his life

he had a 100K per year salary."

Ever wonder why he was addicted, its the Neobusiness model. Work everyone like dogs and break them before they can cash in on a retirement. Better yet, make them hate their jobs so they will move on with their portable bullshit IRA's.

[TBF]

45. There's always someone to help you on to the austerity boat -

"here - clip coupons with me".

With all due respect I know you are trying to be helpful, but this is NOT THE POINT.

The point is that the top 1% have stolen our money (most blatantly through the housing and banking markets) but in the thousands of ways we are being nickle and dimed to death everyday.

We shouldn't HAVE to live on nothing while those thieves are living in their multiple homes, with multiple yachts, and private aircraft.

It is time to redistribute the income - one way or another.

[SammyWinstonJack]

59. That is exactly right!

We shouldn't HAVE to live on nothing while those thieves are living in their multiple homes, with multiple yachts, and private aircraft.

[Heather MC]

65. I agree with you, but while we are trying to win a nearly impossible fight

We still have to stay on our rafts. It's insane Our country got taken from us under our noses. But how do we get it back. I mean Look at some of the decisions Our President has made. He keeps Appointed many of the same high power jerks to high level positions. They just had Kissinger over for tea.

So how do we stop it? and what should we do in the meantime?

I don't need a mansion or a yacht, but my boys need clothes, food, and shelter. And I dream that there future includes college. So until I find the end of the rainbow, I will have to make sure I can stuff as many pennies in a jar to make those things happen.

[TBF]

85. We should use our energy to organize and fight -

not advise others on how to cut back in order to serve the overlords. You asked.

[Heather MC]

86. Ok you start the revolution I will be there

[Sirveri]

88. Be the change in the world that you wish to see.

Easier said than done, that I know.

[pnwmom]

5. Your family is an example of why the "just try harder" model that they've been pushing

isn't adequate for the world we're living in today. The deck is stacked against almost everyone.

They're constantly saying that a college education is the key, and to work in a STEM field. And yet after a few years, even a STEM graduate has a salary that's too high to be competitive, and he's out the door.

Thanks for sharing your story. There are millions out there just like you -- the ones who supposedly were doing everything right. And yet . . . that hasn't bought you any security, despite all your efforts.

Thanks for sharing your story.

[bhikkhu]

7. A game-change in midlife definitely is hard

I had it easier, as I lost a good job in 2004 when my company downsized a bit to maintain profitability. The squeeze at that time was health care costs, which they tried to adjust to by reducing staff (preferentially then, staff with families). Eventually they cut the coverage way down and started requiring big employee contributions, but I was fired for a year by then.

I tried to change careers - went to college, took courses sponsored by our local teaching hospital and so forth, but 20 years of experience in one field makes you look little but useless in another. I wound up taking a lower paying job doing the same thing, without benefits, where I still work. Budgeting was tight during unemployment, and has been pretty tight for many years now. You get used to it, and it becomes second nature.

I bicycle to work most of the time, though I have a car now that I got for $1000, that has turned out to be very reliable. We went for two years not watering the lawn, as we could barely afford the water bills. When our washer broke, we hand-washed clothes for months before a neighbor offered us their old washer. Same thing when our dryer broke - hanging laundry in the basement to dry for a long time. Not too big of a deal, and you just put a good face on and enjoy what you have to enjoy.

The big turn-around for me was refinancing our house, which took 2 years to arrange, but now we have "extra" money for the first time in a long time. And my family will qualify for affordable health insurance starting January, which is a huge relief. Things can get better, but having less was ok too - just enjoy your family, think long-term, and remember what's really important.

"Success is the best revenge" is one thing I thought of a lot; I consider being able to show a real smile to the world as success, regardless of physical circumstances.

[madville]

9. It's rough

I make $57,000 a year, I take home $2950 a month after all the taxes, deductions and contributions. After all the payments I have about a $1000 a month for gas, food and whatever pops up. I'm pretty much paycheck to paycheck these days. I went back to a federal job but am second guessing it now, I could be making $25,000 more a year in the private sector but the retirement, TSP and insurance are a better deal here I guess. I'm used to being broke though, might as well keep on with it lol.

[liberal_at_heart]

11. There are a lot of us in this boat. Struggling paycheck to paycheck while the 1% just keep

getting richer and richer and richer. For the first time I am honestly scared about the future. I'm worried my son won't make it through high school with all the new Race to the Top requirements. I'm worried about whether my children will go to college. I'm worried about my husband's and my retirement. I'm worried about our health insurance premiums. I'm worried about everything.

[question everything]

10. Thank you for a really gut wrenching story

I wonder whether you may want to submit it to your local paper - if there is one - and see what kind of reactions may come.

You may even get a job offer for one of you.

These days, more than at any time before, spreading the word is important.

Sadly, the change from a manufacturing to a service economy that started in the 70s finally is catching up with us.

[R. Daneel Olivaw]

13. But there are DUers that post how everything is wonderful or getting better.

They are the Cheney's of the Democratic party, or perhaps they are Cheney's but pretending to be from the Democratic party.

Many that I know are not doing well. There are always the few individuals that seem to be raking it in, but seriously they are few and far between.

Wake me from this bad dream when we elect a Democrat that doesn't nominate corporate suits that are comfortable molesting us.

[liberal_at_heart]

14. I got told by someone today that I was being put on ignore because I was being too negative.

Some people just want to keep their heads in the sand.

[R. Daneel Olivaw]

17. They can't stand the reality. True enough.

Next time ask them why is our Democratic President appointing corporate suits instead of reformers to important positions.

Ask them if TPP is going to help America just like NAFTA and CAFTA.

[Skittles]

33. oh they have their own forum here

put them on Ignore

[raccoon]

43. "They can't handle the truth!" nt

[SheilaT]

15. I see and hear stories like this all too often.

Part of me wants to say something snarky about how you must have spent too much money while you were living the good life, but that's totally not fair. And possibly wouldn't be accurate, either.

It seems to me as though there are two basic structural things going on. One is the underlying economy and the loss of jobs. Connected to that is the stagnation of wages, or actual downturn in wages in many areas. This is quite apart from someone like your husband eventually finding work but at lesser pay.

The other is the sheer amount of money it takes to live anymore. Even a reasonably frugal lifestyle often isn't very cheap. You don't have to live in one of the extremely expensive cities, either. What's assumed to be required for a basic lifestyle includes lots of things that simply weren't around not very many years ago: a computer, internet access, cable or satellite for the TV, cell phones are the most obvious things. We seem to need more clothing than we used to. Cars. Most of us commute farther than we typically did 30 or 40 years ago, so gas does cost more. And so on.

To top it off, the really Big Lie of our time is Trickle Down. So long as jobs disappear and wages are held artificially low, there simply is no trickle down.

To me, the clear solution is to go back to the tax structure of at least the 1970's. Higher marginal income should absolutely be taxed at a higher rate. And so on.

[hunter]

16. In our neighborhood 3/4 of the kids have bounced back home, often with grandkids.

Along with other relatives, parents, random friends, and previous strangers.

Our neighborhood schools are enjoying greater-than-full enrollment. Big classes, not enough classrooms.

This is a very strange world indeed, nothing like what I glimpse on television. Few people care about their "credit ratings" anymore or the greenness of their front lawns.

[awoke_in_2003]

61. My stepdaughter and two grandchildren...

have bounced back here. It is a struggle.

[Nay]

89. Yep, here too. Son, his wife and grandson lived with us for a year. No work for union electricians

now, going on 5 years. Luckily Sonny Nay opened his own business and is now doing well.

[ErikJ]

20. Move to Ecuador

where you can live on 1/4 the money as the US. And they use the US dollar too.

[DFW]

35. I've been to Ecuador a few times

They have their 1% too, of course, but for most of the people there, it's true that you can live on ¼ the money it costs to live in the USA. The trouble there is that most of the people earn 1/10 of what people earn in the USA.

[russspeakeasy]

22. Thank you. I knew it wasn't just me.

[nadinbrzezinski]

25. This is the reality

We replaced our truck with a used jeep.

There is more, these are exactly the conditions that set the road to mass protests umtimatly.

We have seen a structural change to the economy. I have no idea before Americans go enough!

[Barack_America]

28. I've turned into a grade A penny-pincher.

Buy everything that I can second hand, refuse to move into a larger home just because our family is expanding. Any splurges are local purchases, because I figure some of that will come back to us. We're comfortable at the moment, but I have no confidence it's going to last. We're trying to save every penny we can. Basically trying to give the big "f-you" to our consumer economy.

[Liberal_in_LA]

29. thanks for sharing ur circumstances. many are in ur shoes

It's scary

[cstanleytech]

31. This ^^ is the fault of congress largely imo.

If they (the republicans) had not been playing these stupid games all these years the OP and many of us here would have been far better off instead they keep on doing stuff like voting to overturn obamacare when they should be working to make things better for everyone.

[onestepforward]

32. I slipped out of middle class a few years ago

and have exhausted my retirement and savings account. I can totally relate to what you wrote. It often feels like I'm living my life underwater and breathing through a tiny straw.

In my lower middle class neighborhood, I've noticed changes too. Besides several houses that were foreclosed on, I've also seen many cars repossessed and a renter being evicted from their home.

What is also disheartening is the noticeable lack of connection that our neighborhood once had. Everyone is so busy working and trying to keep on top of bills that there is not much time to be social or get together any more. It's a double whammy too because now is the time that we all need to connect to turn the tables around on this shitty position we're in.

There are millions of us.

[DFW]

36. It sounds like much of the USA is turning into the Hungarian joke of the Soviet era

I was visiting Hungary in 1982, and a woman showing us around told us a joke, saying "you did NOT hear this from me."

During an economic conference, the Chancellor of West Germany got up and said that in West Germany, the average citizen netted 2000 D-marks a month, needed 1400 D-marks a month to live on, and what he did with the extra 600 D-marks was his business.

Then the First Secretary of the CPSU got up and said that in the Soviet Union, the average citizen netted 162 rubles a month, needed 160 rubles a month to live on, and what he did with the extra 2 rubles was his business.

Finally, the General Secretary of the CP of the People's Republic of Hungary got up and said that in Hungary, the average citizen netted 4000 forints a month, needed 8000 forints a month to live, and where he came up with the extra 4000 forints a month was his business.

The trouble is, when you're living the Hungarian model, it's not so funny any more.

[sendero]

38. LOL..

.... never heard that one, Priceless

[DFW]

54. She told us another one, too

At a dangerous curve somewhere out in the Hungarian countryside, an American driving a big Cadillac took the curve way too fast, smashed his car into a tree and barely crawled out in one piece. He started to cry, bawling that he had had to work 11 months for the money to buy that car.

Soon after, a German in a big Mercedes took the curve too fast, and wrecked his car at the same tree where the remains of the Cadillac were. He started crying that it took him 16 months to earn the money to buy that car.

Shortly after that, a Hungarian came whizzing around the curve is his used Soviet-made Lada, and wrecked it on top of the remains of the Cadillac and the Mercedes. crawling out of his wreck, he started to cry because it had taken him twelve years to earn the money to buy that car.

Amazed, the American and the German asked him why in the world would he buy such an expensive car?

[sendero]

39. Thanks for sharing.

.... folks who have been here a long time have (except the ones that have me on ignore have probably read some of my "warning" posts.

I got an early preview to this mess, when the dot-com bust had an outsized effect in my geographical location and I was put out of work for the first time since I was 14 years old.

I was out of work for 4 years, and I was lucky that savings-wise I was able to bridge the gap. But near the end of that time, I realized that something was terribly wrong. I would listen to the radio all day selling no-money-down mortgages, stated-income (liar-loan) mortgages, interest only mortgages I knew this would end badly. In fact the guys in the office would laugh at my predictions but one called me years later and said that they had agreed that "Smith was right all along". I took to warning people here to get their finances in order and prepare. I had some agreement and a lot of derision being called "chicken little" and the like. I wonder where those geniuses are now?

The FACTS are simple. There is no economic recovery for anyone except the very rich in this economy. And the sadder thing is that almost nothing has been done that will make things better. Economists and even the general population has the view that "recessions" are just cycles in the economy that are natural and run their course in a few years worst case. But this is not your typical recession. This is a structural problem that might not be solvable by any politician.

So, despite being called names I will continue to say it, not because I want to make people feel bad but because I want them to UNDERSTAND REALITY and PREPARE, that there is no real improvement in the economy on the horizon. In fact, quite the opposite. Because the Fed has realized it cannot buy $85 billion of bonds every month forever. They are looking for an end game and when the "taper" really begins the markets are going to swoon. Some folks believe that the Fed will blink and keep buying. Maybe. But when they stop it is going to be very negative for the economy we have left.

[Nay]

41. Thank you, sendero. Mr Nay and I had been warning people for years before the crash that none of

this shit was gonna last, and if they had any sense, they needed to save, save, save and stop going into debt, etc. We did that over the years (except for one terrible year where neither of us could find work and stayed with relatives). I have always shopped at Goodwill, for example, and yard sales as well. Savings went into the bank.

We still have coworkers and friends who thank us for telling them to prepare; they did, and are better off for it.

There is, and will be, no recovery from this recession for exactly the reason you state -- it's not really a recession. It's a forced reordering of the way things are, mainly pushed by the 1% and aided and abetted by governments, and ushered into our lives by computers.

[sendero]

42. "it's not really a recession"...

... well said and exactly right. This is not a business cycle phenomenon. It is the result of many factors including globalization, technology, side-effects from the ongoing banking and derivatives debacles.

I don't worry about it much any more because I have done everything possible to be ready for the next leg down, which IMHO is coming and not far away.

But it is important for folks to understand that this is not over, we are not recovering, and to avoid becoming the next person being kicked out of their home.

[Nay]

46. I totally agree about "the next leg down." There are still a lot of people who think it's over,

whatever that means to them. For us, it has helped that we have always been frugal (cheap, actually, let's not mince words). Most people aren't cheap and get into financial trouble easily. This is what a normal economy counts on, people buying stuff they don't need -- but when that stops, we're in real trouble as far as the economy goes. And it will stop because the 1% is determined to show us who's boss, and since they've made their nut, they don't really care if their income stream from consumers stops -- they've got enough money for the next hundred years, and they are now interested in becoming feudal lords. It's quite true that they will be able to hire one half of us to kill the other half, if history is a guide.

[deutsey]

40. I think we internalize the blame because of the free market's "rugged individual" myth

There is no such thing as society, as that bastard, I mean, bastion of free market capitalism Margaret Thatcher once mused.

That Randian myth prevails here in America, too ("Gov't isn't the solution to the problem; gov't is the problem&quot , and most of us have bought into it, even if only on a subconscious level.

Free market individualism is the natural order of things. That's the prevailing meta-narrative of today, anyway. Many of our Democratic politicians don't challenge it (some even openly support it); our pop culture reinforces it ("Survivor&quot ; although attitudes have apparently softened toward socialism in some ways, especially among the young, to be called a "socialist" still has the stink of insult attached to it (as does "liberal", for that matter).

You do not see genuine alternative views (such as socialism or any narrative that promotes a "we're all in this together" ethos) on our main source of information, TV (or "Lucifer's Dream Box," as the late great Bill Hicks called it).

So when what's happening to you and in your neighborhood, and to me and in my neighborhood, and to people and neighborhoods across the country occurs, we all see ourselves as isolated, atomized individuals who failed to win because of some personal flaw that, according to the individualist way of thinking, is our fault.

It isn't the fault of casino-style capitalism that's rigged to favor the 1%, no sir. The same system that crashed and burned because of the careless arrogance of those at the top who were rewarded with bail-outs with our money.

No...it's OUR fault. Somehow.

And as you say, we feel ashamed.

Until we all realize that it's not us as individuals who are failing but it's our economic fairy tales that are failing most of us (rich fucks at the top exempted), we'll all continue to see our lives worsen and blame ourselves for it.

PS: I do feel for you and your family. My family is struggling to maintain what little we have too.

[sendero]

44. I believe that..

... this "free market / rugged individualist" narrative has been carefully crafted and foisted on the public in anticipation of today's economic climate. The right has taken over the airwaves, virtually all of them, and made a careful case based on enough truth to be swallowed whole by most people.

Of course, what passes for the left is going along with the program also so what is a voter to do?

[deutsey]

48. Exactly..."what passes for the left" is a big problem

We need real left analyses of the situation on the airwaves, but good luck with that, considering who owns the airwaves.

BTW: people can at least go check out Richard Wolff's stuff online...you won't see him much on American TV (although I think Bill Moyers interviewed him once):

http://rdwolff.com/

[Precisely]

72. Well put

People feel ashamed and guilty because that Reagany "myth prevails here in America, too ("Gov't isn't the solution to the problem; gov't is the problem&quot , and most of us have bought into it, even if only on a subconscious level." Because they thought it wouldn't couldn't EVER happen to them. Because they got those college loans and degrees. Vehicles and toys. Kids. Identical row custom homes. Identical neighbors. Because they climbed the ladder and ignored the news. Because they flipped those houses. Got while the gettin was good. And then it wasn't.

Thank god for Grocery Outlet.

[hfojvt]

52. except for the steep drop during the recession

gas prices are NOT up all that much.

In 2005, for example, they hit a peak of 3.11 and were 2.86 for much of 2006.

According to the inflation calculator 2.86 in 2006 is the same as 3.31 today. Not that different from the current price, and some past prices were higher.

Before the crash, gas had hit a peak of over $4 in 2008. Then it fell to 1.90. That it has come back up shows that the global economy HAS recovered a fair amount - enough to push gas prices over $3 again.

[BeyondGeography]

53. The owners have a sharing problem

No one is entitled to perpetually higher incomes...except them. Corporate profits have continued to rise throughout the downturn, apart from a few post-meltdown quarters. The owners have done what they've always done, but it has hurt much more this time: take worker productivity gains and put them in their pockets. There have been many give backs on pay and takeaways on benefits that have not been restored as bottom lines have risen. Ownership greed has been by far the biggest drag on the recovery, not that the business press will spend any time on it.

People are figuring it out and changing behavior. They'll still spend when they can on big-ticket items they can use, like cars, but retail, restaurants and all the discretionary stuff has still not recovered.

The reason why I don't see it changing is the pattern was in place before the meltdown. Capital has been soaking up a disproportionate share of average productivity gains for decades; average real-incomes were stagnant as a result. People still spent more because they were more confident and had more access to credit. But underneath it all, many felt over-extended and reacted accordingly when the shit hit the fan.

With the necessary and often painful adjustments, people can still find a way to live decently, but having health care as a major wild card expense that eats up too much cash and is prone to spiral out of control is an unbearable burden in our version of capitalism. It really is the top issue in a country that is aging as we are.

[LiberalLoner]

56. Thank you for sharing this. I think they want most of us to die, and soon.

[Precisely]

71. and yet no one will call this

a Depression

[PasadenaTrudy]

58. I'm scared too.

I'm almost 50 and I hope I don't live long. Maybe 70 tops. Can't afford to get too old.

[Arugula Latte]

60. I think about the circumstances/expectations of my youth and the reality now.

The contrast is breathtaking.

[Auntie Bush]

62. This whole discussion thread has been a downer although very informational.

I think I'll turn off the computer and get something useful done...maybe I feel better later and join in again after lunch.

[LWolf]

63. So am I.

In January of 2005, I had a good job, a good salary, a little cottage of my own with an affordable mortgage, and a retirement account.

Then there was a family crisis. In the spring of 2005, I sold my cottage and moved 1200 miles away to take care of the family crisis. I took a job for less than 2/3 what I was making before, and was lucky to get it, as I was competing with about 200 other people for that job. I needed a bigger house for the family who would be living with me through the crisis, but it was at the peak of the housing boom. I ended up with a mortgage twice as high as previously, making less money, in a fixer-upper mobile home. But it was family.

We were out of the area in a hospital, taking turns in intensive care, when inspections were done and escrow closed. This place NEVER should have passed inspections. The well shared with a neighbor apparently passed inspection, but when we moved in, suddenly didn't. I had to cash in most of my small retirement account to dig another, build the pumphouse, provide the pump, etc.. So my retirement was gone.

We expected that at least one of those family members would be able to work and help with that big mortgage, especially since my income was drastically reduced, but it turned out that our family member could not be left alone, so I alone was making money. For two and a half years. I maxed out my credit trying to stay afloat. We couldn't keep up with all the major repairs needed on this mobile home that shouldn't have passed inspection.

When we could finally send someone else back to work, jobs were harder to find. Because of the need to be available at a moment's notice for the recovering family member, he ended up with a minimum-wage job in retail; his old job was gone, never to return.

When the crisis had resolved itself enough that everyone moved out, I was left with a mortgage I couldn't afford and a place falling down around my ears. Today, I need:

a new roof; a new sub floor and new flooring; new plumbing, plumbing fixtures, sinks, and a bathtub; new electrical wiring; new walls; new ceilings; more and better insulation; a new deck, since the one out there leading to the front door is rotten; new windows;

and...the place is worth less than half of what I paid for it, the mortgage is still breaking me, ensuring that I'll never have the money to haul this pos out of here and replace it, and I live like I'm camped out here, never knowing what will work and what won't that day.

I would have loved to refinance, but there's no way the place would pass an inspection to do so. I'd sell the place, but I'm upside down. I'm just here surviving.

That's not all about the economy; family crisis played its part. Without the real estate boom and bust, though, I'd be in a hell of a lot better shape.

[Precisely]

69. It is their fault

if they voted for Reagan or any Trickle Down candidates/policies of past decades.

"However, it is hard to be sold a dream and then to have the game change when you are middle aged. It's a new reality for our family."

The game was changed 33 years ago. The student loan scam also started in the 80's. Beautiful essay, thank you for sharing. Be well.

[Bunnahabhain]

74. After reading this thread some advice:

Do not wait until a crisis to start living below your means. Growing up dirt poor living below my means is something I've done all my life...even as my means expanded.

Do not buy a ton of things. When you need something buy high quality that will last a lifetime (or at least a very long time). Think quality not quantity when it comes to things and keep things to a minimum.

Coupons? We use coupons for groceries, wait for big X% off entire purchase ones for big purchases (capital good like washer/dryers, etc.). We put everything we can on my AMEX for the points. We buy our gas as Sam's Club and CostCo.

Homes. Here is a huge problem. Homes are not to be treated as investments or as ATMs (that's the real reason people lost so many homes in the crash). Don't buy unless you have at least 30% down, don't buy more than you need, and DO NOT do interest only loans.

Cooking at home. I took a ton of shit in another thread about cooking cheap and healthy foods. It made me chuckle but I kept right on making cheap and healthy meals. So many excuses were put forth as to why it's impractical and I kept shooting holes in them and people kept giving me shit. Just cook at home as often as you can. It's better for both your waistline and your pocketbook.

Also, I will say because of what I've read up thread, I know many people that make over six figures that live pay to pay. Combinations of things like over buying in their home(s), expensive vacations, poor money management skills, etc. One of my direct reports (and I know exactly how much he makes as I'm his boss and it's well over 100k) actually had a garage sale to help fund a family trip to Paris because his credit cards are maxed. One hiccup in life and this guy is going to go bankrupt...and deservedly so IMO. I think he's probably more the norm than people like me so I can see why so many in the upper middle class were wiped out in the last several years.

[dkf]

77. Do you have a link to the cooking at home thread?

I'm trying to do more of this.

[Bunnahabhain]

78. It was not a recipe thread. :)

Someone in a thread said something about how fast food is cheaper than home cooking and/or home cooking is expensive. I raised how inexpensive and healthy things like cabbage and beans are and it was 100 posts of, "OMFG how can you recommend people eat beans for three meals a day?" when I of course did not suggest that, had people tell me my advice was no good because so many people have gluten issues (beans are gluten free), etc. It was comical.

[dkf]

79. That's exactly the thing I am looking for.

I haven't figured out how to buy things that keep and if it tastes good, I can eat it endlessly. .

I've saved decently well for retirement, but want to live under my means as you say. I've been on a binge lately and need to regain control of it all, including spending and weight gain.

[dkf]

76. Until the unemployment rate is cut cut cut, wages aren't going to go up.

Meanwhile the economic recovery is a sham, disguised by an outsized number of part time jobs.

Moreover the policies of the US, namely the NSA fiasco, has CUT the potential for worldwide growth of our technology sector, exactly where we should expect good paying jobs.

Our leadership is misguided. Not only are they clueless what it takes to grow the economy, they are focused on WAR of all things...unless that is their great economic stimulus plan.

Aaaaaggggghhhhhh I can't take it.

[Phlem]

82. I know it doesn't help

but we're in the exact same boat as you. We're in WA state and we live on a hill right between Microsoft and another Microsoft campus on the other side of the hill. There are countless Tech companies all over but on our hill it's noticeable that no one is making home improvements, the lawns are all brown are a lot less fancy cars driving around than there used to be and more beaters on the road. It's been a big change.

I've been out of work for 5 + years. I manage a contract work here and there for my tech skills but it is no where near enough to take care of a family. We've been skimping and scrounging for so long.

Before all this I was making $60+ a year, this year I didn't even crack $1000.

I feel it bad.

But your right MSM won't report on it, the Obama administration will not say anything about it since it doesn't fit their narrative, and after the TTP passes it's going to make everything worse.

I didn't know that the Democratic party was so into shipping jobs over seas. We have a lame duck congress that can't get anywhere except for Full Bipartisanship when it comes to war and free trade agreements.

Take Care CoffeeCat

You can survive! Yes I know that's not living the American Dream or if it's even living, but like you, I'll do anything for my child. I know you will too.

-p

[scorpiogirl]

83. I can relate

My husband too was in IT and we lost everything as result of the recession. Savings, 401k, we downsized to an apartment from a rented house. After his last job in 2008, he was never able to find anything in IT that was actually a job that provided benefits. No such thing in the IT world as far as I'm concerned. We are now unable to even afford the apartment and are going to live in a house in the Sierras for half the price of this place. We are going to work at home and raise our kids in a more simple place were we have a better chance of survival. It sucks when you realize after having hit the bottom financially that you were never entitled to the life you created. That's hard to swallow when you feel like you've done everything the best you could.

[progressoid]

84. Savings? 401K? What are those things?

Oh, yeah, I remember having those things back in the late 90's.

Our new "American Dream" is to eventually get to retire...at 80...maybe 85.

[gopiscrap]

87. we're part of the sinking middle class also.