Bye Bye Middle Class: The Rate Of Homeownership In The United States Has Hit The Lowest Level Ever

Abandoned House - Public Domain
Source: EconomicCollapseBlog.com
Michael Snyder
July 28, 2016

The percentage of Americans that own a home has fallen to the lowest level ever recorded.  During the second quarter of 2016, the non-seasonally adjusted homeownership rate fell to just 62.9 percent, which was exactly where it was at when the U.S. Census began publishing this measurement back in 1965.  This is not what a “recovery” looks like.  All throughout the Obama years, the percentage of Americans that own a home has gotten smaller and smaller and smaller.  The reason for this, of course, is that the middle class in America is dying.  Last year, we learned that middle class Americans now make up a minority of the population for the first time ever.  In order to have a high rate of homeownership, you need a thriving middle class, and you can’t have a thriving middle class without good paying middle class jobs.  This is why I write about the evisceration of the middle class so extensively, because the U.S. economy is systematically being hollowed out and most Americans don’t understand what is happening.

Traditionally, owning a home has been a sign that you have arrived as a member of the middle class, but under Barack Obama the percentage of Americans that own a home has fallen every single year.  In the past, we have talked about how it had fallen to the lowest level in decades, but now it has officially fallen to the lowest level ever.  The following comes from CNBC

After rising just over a decade ago to its highest level ever, the nation’s homeownership rate fell to match its all-time low and could drop even further in the months to come.

In the second quarter of this year, the rate fell to 62.9 percent, not seasonally adjusted, which is the same as it was in 1965, when the U.S. Census started tracking the metric. During the epic housing boom in the mid-2000s, the rate soared as high as 69.2 percent. That was when politicians touted the so-called “ownership society.”

So why is this happening?

Well, according to Wolf Richter analysts are blaming many factors…

  • Rising home prices in an economy of stagnant wages (for the lower 80%) have pushed entry-level homes out of reach for many people.
  • Lower priced homes in many urban areas entail a huge and costly ($ and time) commute every day. And even then, these homes may be too much of stretch for big parts of the population in expensive urban areas.
  • First time buyers are having trouble saving for a down payment since they spend their last available dime to meet soaring rents.
  • Millennials have been blamed. They always get blamed for everything. They saw their parents deal with the American Dream as it turned into the American Nightmare, and they learned their lesson early in life.
  • The super-low interest rate environment hasn’t made homes more affordable because home prices, in response to super-low interest rates, have soared, and in the end, mortgage payments are higher than they were before.
  • Higher home prices entail other costs that are higher, including taxes, brokerage fees, and insurance.

Certainly all of those points are legitimate, but the truth is that what we are facing is much broader than all of that.  The middle class in the United States has been dying for decades, and in recent years the long-term trends that have been slowly eating away at the middle class like cancer have accelerated significantly.  Just consider these numbers…

-In America today, nobody has a job in one out of every five families.

-At this moment, 102 million working age Americans do not have a job.

-According to the Social Security Administration, 51 percent of American workers currently make less than $30,000 a year.

-In 1970, the middle class brought home approximately 62 percent of all income. Today, that number has plunged to just 43 percent.

-The Federal Reserve says that 47 percent of Americans could not pay an unexpected $400 emergency room bill without borrowing the money from somewhere or selling something.

-One recent survey discovered that 62 percent of all Americans have less than $1,000 in savings.

-If you currently have no debt and you also have ten dollars in your pocket, that gives you a greater net worth than about 25 percent of all Americans.

-According to Kathryn J. Edin and H. Luke Shaefer, the authors of a book entitled “$2.00 a Day: Living on Almost Nothing in America“, there are 1.5 million “ultrapoor” households in the United States that live on less than two dollars a day.  If you can believe it, that number has doubled since 1996.

-Back in 2007, approximately one out of every eight children in America was on food stamps. Today, that number is one out of every five.

-Things continue to get worse for the middle class as we head into the second half of 2016.  Gallup’s U.S. economic confidence index just hit the lowest level so far this year.

I could keep quoting numbers at you all day, but hopefully you are getting the picture.

Continue Reading At: TheEconomicCollapseBlog.com

 

The Gold Standard: Friend Of The Middle Class

In-Gold-We-Trust
Source: AntoniusAquinas.com
July 8, 2016

It has been theoretically demonstrated and seen in general practice that a monetary system of 100% metallic money devoid of central banking checks monetary inflation, prevents a general rise in the price level, and eliminates the dreaded business cycle while making all sorts of monetary mischief nearly impossible.  A gold standard is not only economically superior to any paper money scheme, but is morally just, which is why it is hated by the politically well-connected, academics, politicians, and the rest of the Establishment.

Often not discussed, however, even by its proponents is the beneficial effect that “hard money” has for the middle class.

It is not a coincidence that since the U.S. left the last vestiges of the gold standard in 1971 with President Nixon’s nefarious decision to no longer redeem international central bank payments in gold, real wages for Americans have stagnated.  Nixon’s decision to put the nation on an irredeemable paper money standard set it on a course of economic ruination, which is why he should have been hounded from office not for his role in the bungled, petty cover up at the Watergate.

Stagnating wage rates have been confirmed by a number of studies, take, for instance one from the Pew Research Center which states that “today’s average hourly wage has just about the same purchasing power as it did in 1979. . . . [I]n real terms the average wage peaked more than 40 years ago: The $4.03-an-hour rate recorded in January 1973 has the same purchasing power as $22.41 would today.”*

While the absence of the gold standard has impoverished laborers, it has benefitted (not surprisingly) the very wealthy – hence, the reason why it was abandoned, as the Pew Study reports: “What gains have been made, have gone to the upper income brackets.  Since 2000, usual weekly wages have fallen 3.7% (in real terms) among workers in the lowest tenth of the earnings distribution, and 3% among the lowest quarter.  But among people near the top of the distribution, real wages have risen 9.7%.”**

Continue Reading At: AntoniusAquinas.com

Breakaway Links Of The Day – 3/31/2016

Breakaway
TheBreakaway
Zy Marquiez
March 31, 2016

Today’s news is buttressed by intriguing and thought provoking economic analysis.  Jeff Nielson harpoons the declining middle class while James Corbett narrows in on how Yellen has the reigns of the global economy.  Both reads are quite salient.

In other news, Dr. Farrell gives his take into Lockheed Martin’s latest development, which portends some notable future changes, while the everpresent cornerstone of corruption – Big Pharma – is again embroiled in vaccine machinations.

Ending with some encouraging and positive news, another company chooses to label genetically modified foods to increase the growing list, while we also got some information into non-toxic Cancer therapies discussed by Dr. Jeffrey Dach.

Hope you all are doing well, and be safe.

Things that Make You Go Hmmm: Lockheed Martin Creates New Energy…
[Source: GizaDeathStar]

How Janet Yellen Now Controls The Global Economy
[Source: TheInternationalForecaster]

Authorities Plan Strategy Attack Of Anti-Vaccine “Myths”
[Source:  TheDailyBell]

In Syria, Militias Armed By The Pentagon Fight Those Armed By The CIA
[Source: LATimes]

The Vaccine In Vaxxed: So Pure, Angels Sent it For Your Kiddies
We have quite a bit of data presented by Rappoport that should be alarming to those who haven’t researched issues with vaccinations.
[Source: JonRappoport’sBlog]

The Great Divide: The Death Of The Middle Class – Jeff Nielson
Incisive, yet concerning read considering how certain things are playing out economically. 
[Source: SprottMoney]

Minimal Success With This Cancer Treatment
[Source: iHealthTube]

Wages ‘Flat or Declining’ Since NAFTA
[Source: RT]

Strongest Evidence Yet: Good Breakfast Equals Better Grades
[Source: NaturalSociety]

ConAgra To Label All Products With Genetically Modified Ingredients
Who’s Next?
[Source: NaturalSociety]

Targeting Cancer Stem Cells With NonToxic Therapies
[Source: GreenMedInfo]

The Great Divide: the Death of the Middle Class – Jeff Nielson

Source: SprottMoney
Jeff Nielson
March 30, 2016

The focal point of the aforementioned article was that when it came to “the world’s poorest people,” the Corrupt West has now produced a greater percentage of severe poverty in its own populations than in India, and an equal percentage of such poverty as exists in Africa.

Stacked beside this, we see that when it comes to the richest-of-the-rich, the Corrupt West remains in a league of its own. Supposedly, we are living in “the New Normal,” where life is supposed to get increasingly harder and harder. So why does the New Normal never affect those on top?

Of course all of these extremely poor people being manufactured by our governments (as these regimes give away our jobs, destroy wages, and eviscerate our social programs) have to come from somewhere. Certainly they don’t come from the Wealthy Class.

Indeed, the chart above provides us with a crystal-clear view of where all these poor and very-poor people are coming from: the near-extinct Middle Class. In order to manufacture hundreds of millions of impoverished citizens in our nations, the Old World Order has had to engage in a campaign to end the Middle Class.

We are conditioned to consider economic “classes” within our own societies, but with the chart above, we’re given a global perspective. Where does the Middle Class exist today, globally? At the upper end, it exists in China, and to a lesser extent, in Latin America and other Asian nations. At the lower end of the Middle Class, we see such populations growing in India and even Africa.

Only in the West, and especially North America, is the Middle Class clearly an endangered species. Two incredibly important aspects of this subject are necessary to cover:

1) How and why has the One Bank chosen to perpetrate Middle Class genocide?

2) What are the consequences of the Death of the Middle Class?

Attempting to catalogue the nearly infinite number of ways in which the oligarchs of the One Bank have perpetrated their Middle Class genocide is impractical. Instead, discussion will be limited to the five most important programs responsible for the Death of the Middle Class: three of them relatively new, and two of them old.

  1. a) Globalization
  2. b) Union decimation/wage destruction
  3. c) Small business decimation
  4. d) Money-printing/inflation
  5. e) Income taxation

Globalization was rammed down our throats in the name of “free trade,” the Holy Grail of charlatan economists . But, as previously explained, real free trade is a world of “comparative advantage” where all nations play by a fair-and-equal set of rules. Without those conditions, “free trade” can never exist.

The globalization that has been imposed upon us is, instead, a world of “competitive devaluation,” a corrupt, perpetual, suicidal race to the bottom. The oligarchs understood this, given that they are the perpetrators. The charlatan economists were too blinded by their own dogma to understand this. And, as always, the puppet politicians simply do what they are told.

Continue Reading At: SprottMoney.com

What’s Eroding the Middle Class?

MiddleClass

Source: OfTwoMinds.com
Charles Hugh Smith

This erosion of a self-employed, independent middle class was an important pre-condition for the collapse of Rome and the French Revolution.
I have devoted many blog posts to the erosion of the middle class, for the specific reason that when the middle class–the layers of the economy between the Power Elites and landless laborers/state dependents–erodes away, the nation/empire is destabilized and descends into crisis.
A society without a functioning middle layer of economic and social activity is not stable, though repression can mask this for a time.

As historian Peter Turchin explained in his book War and Peace and War: The Rise and Fall of Empires, societies that lose the cohesion needed for concerted, collective action collapse, either by failing to meet an external threat or from internal conflicts.

Economies constructed of a supremely wealthy elite, a thin layer of independent artisans and small farmers, and a great mass of laborers with no assets has no shared sense of identity or purpose; those at the bottom have little in common with those at the top, and the thin middle that is scraping by has little affinity with either the elite above or the poverty-stricken below.

This erosion of a self-employed, independent middle class was an important pre-condition for the collapse of Rome and the French Revolution.

As I have outlined in some detail, the middle class in the U.S. is eroding: the lifestyle that was widely accessible to a broad swath of households in the 1960s is now only available to the top 10% below the wealthy (the top 5%). This includes not just possessions like a home or vehicle but productive assets that can be handed down to the next generation.

Continue Reading At: OfTwoMinds.com

 

Another Reason Why the Middle Class and the Velocity of Money Are in Terminal Decline

Source: OfTwoMinds.com
Charles Hugh Smith
January 20, 2016

In response to a recent post on the structural decline in the velocity of money, correspondent Mike Fasano described a key dynamic in both the decline of money velocity and the middle class.
“There is another reason for falling velocity. People like me who have saved all their lives realize that they their savings (no matter how much) will never throw off enough money to allow retirement, unless I live off principal. This is especially so since one can reasonably expect social security to phased out, indexed out or dropped altogether. Accordingly, I realize that when I get to the point when I can no longer work, I’ll be living off capital and not interest. This is an incentive to keep working and not to spend.”

Thank you, Mike, for highlighting the devastating long-term impact of the Federal Reserve’s zero-interest rate policy (ZIRP): with the real (i.e. adjusted for inflation) return on savings near zero (or even negative, for those who have to pay soaring rents, healthcare insurance premiums, college tuition, etc.), those saving for retirement are losing the Red Queen’s Race: no matter how much they save, the income will be too paltry to support retirement.

This has three extremely negative consequences. Those seeking a return above zero are forced to put their savings at risk in boom-and-bust markets that tend to reward only those who get into the bubble expansion early and exit early.
These boom-and-bust markets tend to savage the assets of the middle class when they blow up, but do little to rebuild these assets in the bubble expansion phase, as prudent investors who were burned in the previous bubble bust shun risk assets.

Continue Reading At: OfTwoMinds.com