It’s Impossible to “Get By” In the U.S.

[Newest Reality]

While the market cheers on the fantastic job “growth” of March 2010, the more astute of us are concerned with a growing tide of personal bankruptcies. March 2010 saw 158,000 bankruptcy filings. David Rosenberg of Gluskin-Sheff notes that this is an astounding 6,900 filings per day.

This latest filing is up 19% from March 2009’s number which occurred at the absolute nadir of the economic decline, when everyone thought the world was ending. It’s also up 35% from last month’s (February 2010) number.

Given the significance of this, I thought today we’d spend some time delving into numbers for the “median” American’s experience in the US today. Regrettably, much of the data is not up to date so we’ve got to go by 2008 numbers.

In 2008, the median US household income was $50,300. Assuming that the person filing is the “head of household” and has two children (dependents), this means a 1040 tax bill of $4,100, which leaves about $45K in income after taxes (we’re not bothering with state taxes). I realize this is a simplistic calculation, but it’s a decent proxy for income in the US in 2008.

http://www.marketoracle.co.uk/Article18600.html


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The Market Oracle usually has some decent articles and some provide interesting information. I realize that the site is investment-oriented, but I posted this more for the fact that it illustrates some approximations of the cost of living here and how it relates to personal income. Credit cards have played a large role in the income deficit for the last thirty-years and now the playing field is changing. Not only are we looking at less jobs available, the amount earned, (for existing or new jobs) is just as important a factor in how our economy will fare in the short and long-term.

How do WE, (as in the collective we on this side of the wealth divide) recover, rebuild, return from the edge of financial oblivion with no jobs or jobs that pay less than will allow the discretionary spending that keeps this floating crap game running? As credit dries up before our eyes like a pond in a bad drought and home equity-lines are tapped for the foreseeable future? We are all uneasy for a reason, (and still not acting on it) as we see waves of foreclosures and a new commercial real estate bubble pop coming.

Since our futures depend on it, it is NOT a matter of gloom and doom to be highly skeptical of propaganda disguised as optimistic news. Getting people to invest and spend and feel good is a sales pitch we should come to expect when we are referred to as consumers. Increasing "optimism" and painting rosy pictures via feel-good news is bound to have a benefit for the government and certain businesses. Those interested in substance can ask some salient questions about who and what is recovering and just what factors have changed or will actually contribute to any kind of return to the Status Quo that appears to have brought us to this precipice.

If we buy the Newspeak and take the bromides, we can just continue to watch the debacle unfold and sit back and forget the huge transfer of wealth that has, is, and will be taking place while we hope we won't be collateral damage and notice that many of our neighbors, as well as family and friends, are bleeding to death in the financial battle zone while charlatans swoop down to scam and pick the bones clean of anything with meat left on it.

We'll, then there is always the SHINY THING! Look over there! OOOOO! Pretty. No gloom and doom or facts there. Yay!

[Coyote_Bandit]

1. But, but, but.......

I thought that if the DOW was going up, and if consumer confidence was going up, and if there were a few jobs created then all that prosperity would trickle down to Main Street.....

Seems the idiot politicians are too damn stupid (or gutless) to actually try to strengthen the economy. Seems they'd prefer to use some duct tape and super glue and just try and fix up our broken Humpty Dumpty economy.