Guest Post: It's Impossible To "Get By" In The US

Tyler Durden's picture

Submitted by Graham Summers of Phoenix Capital Research

It’s Impossible to “Get By” In the US

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.

Now, $45K in income spread out over 26 pay periods (every two weeks), means a bi-weekly paycheck of $1,730 and monthly income of $3,460. This is the money “Joe America” and his family to live off of in 2008.

Now, in 2008, the median home value was roughly $225K. Assuming our “median” household put down 20% on their home (unlikely, but it used to be considered the norm), this means a $180K mortgage. Using a 5.5% fixed rate 30-year mortgage, this means Joe America’s 2008 monthly mortgage payments were roughly $1,022.

So, right off the bat, Joe’s monthly income is cut to $2,438.

According to the US Department of Agriculture, the average 2008 monthly food bill for a family of four ranged from $512-$986 depending on how “liberal” you are with your purchases. For simplicity’s sake we’ll take the mid-point of this range ($750) as a monthly food bill.

This brings Joe’s monthly income to $1,688.

Now, Joe needs light, energy, heat, and air conditioning to run his home. According to the Energy Information Administration, the average US household used about 920 kilowatt-hours per month in 2008. At a national average price of 11 cents per kilowatt-hour this comes to a monthly electrical bill of $101.20.

Joe’s now down to $1,587.
Now Joe needs to drive to work to make a living. Similarly, he needs to be able to drive to the grocery store, doctor, etc. According to AAA, the average cost per mile of driving a minivan (Joe’s a family man) in 2008 was 57 cents per mile. This cost is based on average fuel consumption, tires, maintenance, insurance, license and registration, and average loan finance charges.

Multiply this cost by 15,000 miles per year and you’ve got an annual driving bill of  $8,550. Divide this into months (by 12) and you’ve got a monthly driving bill of  $712.

Joe’s now down to $877 (I’m also assuming Joe’s family only has ONE car). Indeed, if Joe’s family has two cars (one minivan and one sedan) he’s already run out of money for the month.

Now, assuming Joe’s family is one of the lucky ones (depending on your perspective) they’ve got medical insurance. Trying to find an average monthly medical insurance premium for a family in the US is extremely difficult because insurance plans have a wide range in deductibles, premiums, and co-pays. But according to eHealth Insurance, the average  monthly premium for family policies in February 2008 was $369.

So if Joe has medical insurance on his family, he’s now down to $508. Throw in cell phone bills, cable TV and Internet bills, and the like, and he’s maybe got $100-200 discretionary income left at the end of the month.

This analysis covers all of the basic necessities of the average American household: mortgage payments, food, energy, gas, driving expenses, and medical insurance. It also assumes that Joe:

1)    Didn’t overpay for his house
2)    Made a 20% down-payment of $45K on his home purchase
3)    Has no debt aside from his mortgage (so no credit card debt, student loans, etc)
4)    Only has one car in the family and drives 15,000 miles per year
5)    Keeps his energy bill reasonable
6)    Does not eat out at restaurants ever/ keeps food expenses moderate
7)    Has no pets
8)    Pays for health insurance but has no monthly medical expenses (unlikely with two kids)
9)    Keeps his personal budget under control regarding cable TV, Internet, and the like
10)    Doesn’t spoil his kids with toys, gadgets, trips to the movies, etc.
11)    Doesn’t take vacations.

Suffice to say, I am assuming Joe maintains EXTREMELY conservative spending habits. Personally, I know NO ONE who meets all of the above criteria. However, even if the above assumptions applied to the average American, you’re still only looking at $100-200 in “wiggle” room for spending per month!

If Joe:

1)    Overpaid on his house
2)    Didn’t have a full 20% down payment
3)    Owns two cars
4)    Eats at restaurants
5)    Splurges on heating & A/C bills
6)    Has any medical expenses aside from monthly premiums…

… he is running into the red EVERY month.

I also wish to note that my analysis didn’t include real estate taxes and numerous other expenses that most folks have to pay. So even if you are extremely frugal and careful with your money, it is impossible to “get by” in the US without using credit cards, home equity lines of credit or burning through savings. The cost of living is simply TOO high relative to incomes.

This is why there simply cannot be a sustainable recovery in the US economy. Because we outsourced our jobs, incomes fell. Because incomes fell and savers were punished (thanks to abysmal returns on savings rates) we pulled future demand forward by splurging on credit. Because we splurged on credit, prices in every asset under the sun rose in value. Because prices rose while incomes fell, we had to use more credit to cover our costs, which in turn meant taking on more debt (a net drag on incomes).

And on and on.

Does this mean the market is about to tank? Not necessarily, stocks have been disconnected from reality since November if not July. Bubbles (and we ARE in a bubble) take time to pop and this time around will be no different.

Best Regards,

Graham Summers

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Almost Solvent's picture

BINGO! And most folks are earning less than 50k per year as a married couple.

And don't forget daycare expenses and the health insurance premiums out of your pay!

pbmatthews's picture

The problem with this analysis is that it does not include property tax calculations.  So tack on another $3000 to $6000 in expenses for Joe Six Pack.



Ripped Chunk's picture

$6,000???? Check out NJ.  $6k is a 900 sf. one bedroom.

Pure Evil's picture

When I worked in NJ I knew a guy that was kevetching about having to pay $14K a year with the norm between $6K - $10K a year.

tmosley's picture

I'm in Lubbock County, TX, and I only pay $250.  PER YEAR.

And I do not live in a shit hole.  I have 2 acres, an orchard, and a nice garden.

Rusty Shorts's picture

 - my bad, Lubbock County, Texas... Luckenbach, Texas...well, enjoy anyway.

george22's picture

Thanks for taking the time to discuss this, I feel strongly about it and love learning more on this topic. If possible, as you gain expertise, would you mind updating your blog with more information? It is extremely helpful for me. GoSeeq act tests

SWRichmond's picture

I am insanely jealous.  No, really.  A mature, producing orchard?  Damn.

Ripped Chunk's picture

NJ is not a shit hole if you don't mind paying a couple of million for a nice home with some property. Then pay another $30k in property taxes every year.

Never been to Lubbock County, TX. What is the weather like there?


Cursive's picture

I also didn't see anything about payroll taxes.  Add another 7.65% is Joe is employed, another 15.3% if self employed.

Voluntary Exchange's picture

I would ask you all to focus on the big picture. Here is the short version. You are all slaves. Every one of you that supports the so called “government” by even one penny is partially responsible for the murder of millions upon this planet, as well as theft, fraud, and other crimes that are done in it's name.

Taxation is theft. Any entity that would presume to provide any service to anyone must pass the test of voluntary exchange. Almost all tax does not pass this test. It is not voluntary as you must pay some one or group even if you do not want any of their “services”. If you do not they will initiate force against you to take what they want and then some. Elections are are a tool of deception. They produce no contract and encourage people to view the world in a deceived way. You must never pay anyone for something you do not want to buy voluntarily. It is false that the things that need to get done will not get done unless some people are “forced” to pay them. That is a lie. Think it through clearly in your mind if you can. If you can't, ask for help from those who can explain it to you.

We make choices in life. The liars and cheats and murderers who call themselves “government” are very strong now as they have not been challenged in their crimes. Their organized looting has been going on so thoroughly and so long that things are about to collapse under the unsustainable weight of so many crimes in so many places. Criminals become more and more bold and more and more pervasive until they are stopped by the non-criminals or the natural laws of nature step in to cause their final destruction. If not challenged, ultimately everyone becomes a criminal and unending war among criminals ensues. Then everyone who has made their “deal with the devil” relearns a few basic moral lessons. Crime does not (ultimately) pay. You shalt not steal. You shalt not lie. Choose life that you may live.

You must stop using fiat money. It is the mother lie and deception that is the foundation of all organized crime that calls itself “government” on this planet. You must learn how to provide for yourself and others what you need to survive and do it through honorable voluntary exchanges; use gold or silver as money or something of value your neighbor will agree to. Anyone or group (government usually) that initiates force or deception is your ENEMY and the enemy of every decent person on this planet who is willing to live by voluntary exchange. Some parasites have the capacity to become productive and live by voluntary exchange. When you choose to feed the parasites you become partially responsible for their crimes. Friends, the bullies have multiplied. You must organize to defend yourselves. Surviving the storm by yourself is almost impossible. People of good will must organize to sustain each other. When you try to do this some of you will be attacked. Organize carefully. Get to know your actual neighbors again. YOU MUST! Perhaps you could introduce yourself and first find out if they are basically trying to survive honorably or by “government”. If things look promising perhaps you could show them a message like this one and ask them what they think of it? You must act and you must act fast. Time is short. Be encouraged. Ultimately there will be peace on Earth among men of good will.


Voluntary Exchange's picture

I am encouraged that someone was riled enough to vote this post as junk. You might have some emotional energy at your disposal and future change is a possibility under those circumstances. I would be even more encouraged if you offered to explain why you feel it is junk. Maybe we could benefit from the exchange? Maybe you could convince others that what I write is “junk”. Could you explain your vote please?


SWRichmond's picture

I find absolutely nothing to disagree with in your post.  The path for me has included Locke; we are all equal here on Earth, there is no subordination.  Since there is no subordination, any exchanges between us that are not voluntary are criminal.  Simple. 

Voluntary Exchange's picture

Just so that others are not confused, I like to explain what I mean by "equal". We are equal with respect of rights, in that they come from the same origin that man came from and are (unalienable) enate within him. The colonist were close to the solution but the "Hamiltons" snuck in.

There is nothing special about a group with guns that calls itself "government". It is a creation of people, a tool that some intented to preserve life, liberty and property but it inevitably attracts those who would use it as a different tool.  That is why there should not be a monopoly of secruity or adjudication services in a region (usually refered to as "government"). It is not "governement" that creates man and thus it is non-sequiter to think that rights come from such an invention. SWR I would feel more secure having you as a neighbor.

Buck Johnson's picture

Right on, that 50k is a pipe dream to alot of people.  Most make less than that as you said even married.  Single they would be making 10 11 12 bucks an hour.  Our pay hasn't gone up with the REAL INFLATION (you know the one that doesn't take out that pesky food and fuel consumption, the two things that people can do without ;)), and now the corporate and govt. is trying to not let things deflate to their true prices.  Much of the prices we see today was due to speculation, monopoly and inflation.  

Cursive's picture

Bankruptcies always peak as the economy starts to recover.

Who says they've peaked?

TCA's picture

No kidding.  They increased 19% YOY and 35% MOM.  I don't see anything to indicate this number is headed down.

B9K9's picture

I swear I cannot determine whether you are really a clueless comic relief dunce or a paid dis-information troll.

There isn't going to be any economic "recovery" of the FIRE model - it's mathematically impossible. There can only be an economic miracle; this is what pretend & extend is all about.

Something, anything, needs to be developed to increase what Travis refers to as economicalness aka ROI. It can come in the form of huge new energy reserves priced at a comparable oil $USD/BTU ratio, tremendous breakthroughs in GM crop yields, and/or unimagined productive efficiencies in new, high-value goods & services.

To help explain these concepts, here's a brief economic history of California:

As most everyone knows, the discovery of gold set off an unprecedented gold rush. But what many people don't know is that gold was only the beginning of a major, resource extractive economic base.

The water & rail infrastructure requirements for oil, timber & agriculture laid the groundwork for the human immigration to follow. Employment was provided by the big 3 industries: first entertainment, followed by aerospace, then high tech computers & communications.

Each stage required successive layers of investment that were handsomely rewarded by fabulous output gains and productivity increases which dramatically increased the overall level of wealth.

Now, compare those previous cycles with the FIRE economic model that was based on nothing more than new (credit) money chasing older (credit) money. All those realtors, all those loan officers, all those transaction/legal workers, all that construction activity, all those home consumer items (kitchens, baths, etc) ad infinitum, was based on nothing new, nothing productive, nothing useful.

IOW, it was all based on nothing. Now, how is this supposed to 'recover'? It isn't supposed to recover! The bailouts and gross illegal activities are being undertaken in the name of national security simply because if something doesn't come up out of the blue, we are truly hosed.


The Disappointed's picture

The bailouts and gross illegal activities are being undertaken in the name of national security simply because if something doesn't come up out of the blue, we are truly hosed.

There's always cold fusion. Got Palladium?

Seer's picture

Well, I was a fan of "simple" hot fusion (much more do-able) until I realized that abundantly cheap energy presents problems- it is, after all, how we've come to over-power the environment: energy is applied to "natural" resources, more energy means more pressure on the world's natural resources.  The trajectory isn't a good one...

SWRichmond's picture

That's just not true.  Abundant clean energy makes it possible to economically recycle things.  Recycling is incredibly energy-intensive.

Seer's picture

I'm confused, which is it, economical or not economical ("incredibly energy-intensive")?

I'm ALL for recycling, but recycling isn't going to save our butts as we continue to dig up more and more fresh resources.

SWRichmond's picture

There are of course limited resources, but there are observable self-limiting influences on human population.  Mature educated societies can barely maintain a positive birth rate, and many can't (Japan, for example).  Abundant clean energy affects the recycling economics equation in a manner that makes recycling more attractive, helping to lessen demand for "new" materials, and makes new resources economically recoverable that might not have been otherwise. 

Seer's picture

Those "mature" societies that you mention are the greatest consumers of materials (which are predominately new/fresh).

It all sounds good until you dig into the facts...

Look up Jevons Paradox.

Thanks for playing!

ThreeTrees's picture


Credit expansion can temporarily increase people's/business' ability to consume, thereby influencing production upwards, but real economic growth (ie: gains in efficiency, new technologies, more efficient allocation of capital) is needed to sustain an increased level of output in the long run.  

akak's picture

Anyone who would be naive, clueless or disingenuous enough to call our currency economy in "recovery" would also logically have to call the convulsion of a cardiac patient's body after having the electric paddles applied as an indication that he was "back to health".

sgt_doom's picture

"There isn't going to be any economic "recovery" of the FIRE model - it's mathematically impossible."

Thank the gods, B9K9, someone who understands arithmetical relationships and how variables correlate (ain't too many of us left, evidently)!!!!

But as long as the various propaganda networks reframe every fact to their fiction***, few will comprehend that if the top five banks make up 63 percent of the GDP, and they are technically insolvent in the traditional assets versus liabilities model -- but only sustain themselves and their obscene bonuses by the aid of trillions in dollars of free Fed/Treasury monies plus TARP bailout funds (and further hidden bailouts, high freq. trading, constant and consistent ultra-multiples of wash sales) -- then, not even considering the remaining percentage of the fantasy finance sector (bringing their portion of our fantasy finance GDP to over 83 percent) -- this is the most back-ass-wards socialist plutocracy around!!!

Thanks, B9K9, always glad for any and all company in the realm of human thinking machines.

***latest Great Reframing: a soon-to-be media report showing that the OTS was either ignorant or not concerned with all the fraud-related predatory lending.

Completely ignoring all the documented stories of how the Bush administration, via the Office of the Comptroller of the Currency, and with the criminal collusion of the rating agencies, especially S & P and Moody's, did conspire to halt the individual state governments and consumer-protection agencies from intervening against said predatory, and illegal, lending practices --- by threatening to lower the state's bond ratings.

B9K9's picture

It goes way further back than Bush - more like 2,500 years & longer. I posted this reply to Mako on another thread which appears to be going stale. Same appeal for comments & suggestions applies:


Mako and others, I've been working on a short & succinct manifesto that has two-fold aims:

  • Address the defensive concerns Cognitive Dissonance has raised; and
  • Provide some sort of road map for the future.

I'm trying to tighten it up so that it provides a quick & easy read for any & everyone - informed and uninformed alike. Comments, criticisms & helpful suggestions would be greatly appreciated.


Don't allow yourself to be placed in a position of defending that which is obvious & self evident. It is the odious task of economic holocaust deniers to take the morally repugnant position of defending crimes committed against humanity.

The historical record of usury is quite clear, with specific admonishments dating back over 2,500 years:

(Exodus 22:25-27)
25If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury.

 26If thou at all take thy neighbour's raiment to pledge, thou shalt deliver it unto him by that the sun goeth down:

 27For that is his covering only, it is his raiment for his skin: wherein shall he sleep? and it shall come to pass, when he crieth unto me, that I will hear; for I am gracious.

The exponential math is irrefutable; compounding principal+interest always outruns loan serviceability. Thus, the end result is preordained: usurers take possession of forfeited real property and productive assets pledged as collateral while borrowers are reduced to a state of debt peonage.

Deniers are merely earning their respective thirty pieces of silver as paid apologists for their banking masters. Let deniers make ridiculous spectacles of themselves attempting to explain the unexpected hoocoodanode.


More to the point - it doesn't matter if the money-lenders' collateral is seized and re-distributed to the People. They still have their bullion reserves safely stored in Zurich & Tel Aviv, along with the ability to restart the money-credit game. Yet it doesn't really matter either if these countries are invaded and the respective gold holdings seized & re-distributed to national entities, because the money-credit game can still be re-instituted via pure fiat.

No, the real game changer, the one thing that would spell their ultimate doom, would be the permanent destruction of the money-credit system via some impersonal, scientific means of creating & maintaining a medium of exchange, unit of account, and store of value.

Nathan has the right idea with Freedom's Vision, but he is hopelessly naive in intent. It's about as rationale as arguing with Heinrich Himmler that it would really be a much better idea not to try & exterminate certain peoples.

The bankster's will never willingly give up their advantage. It will have to be taken from them and denied in perpetuity by permanent controls.

fUny1's picture

Amen to that. There is a reason why usury is an abomination.

The reality is most, if not all, humanity is prone to bouts of laziness.

The compounding interest of usury spurs that laziness. Everybody cannot pass the buck. Some people may be able to pass the buck but someone has to pay for it and in an ever expanding bucket of thin air printed bucks, you need an ever expanding list of those that service the buck passing .

This planet is incorrectly governed. It cannot be sustained. It is said that there are three things which provide zero value(aka solutions):Politics,Religion, and money.

If we destroy the Earth's ecosystem beyond repair, it would take almost twice the GDP of the entire world to pay for doing the work that nature was programmed to do.

For a long time, we have been busy failing at the game of GOD while destroying the one creation that gave rise to our species and the ability to interface with this reality.

Either we are insane, or we do not want to interface with this reality and believe that a better one awaits.

If it's the former, we'll end up testing the latter.

If it's the latter, we better hope there is no usury in that reality and we do not fall prey to the "bored to death" syndrome that will tempt us to want to return to this type of reality.

This reality is unsustainable in my varied ways.

As Woody Allen said: Eternity is very long, especially towards the end.


merehuman's picture

keep it simple. common sense and a map of the USD in decline, with a few websites tossed in for verification. Better yet to have some utube video and a one page flier. Many that i know will print and deliver across the usa. I will certainly help distribute as long as its not for demducks or the repugnants.

Seer's picture

Finally!  I've been fairly lonely out here talking about exponential growth!

Is there, between either one of you, any recognition that ecomies hinge on not number theory, but physical resources, and exponential growth as applied to the consumption of physical resources is the real underlying issue?

wake the roach's picture


Finally!  I've been fairly lonely out here talking about exponential growth!



Is there, between either one of you, any recognition that ecomies hinge on not number theory, but physical resources, and exponential growth as applied to the consumption of physical resources is the real underlying issue?


I cannot speak for others but in my opinion, yes...

Net ENERGY gains produced from the increased (exponential) rate of extraction and consumption of finite energy resources... All finite resources being mathematically impossible to consume sustainably but just as importantly, the rate of extraction cannot be increased all the way to the point of physical resource depletion (bell curve)... The exponential growth of credit required to sustain the ponzi has hit the brickwall of physical reality... Global rates of net energy production and consumption are falling (in developed nations anyway, for now). And as all goods and services we consume require energy to produce, transport etc. Each monetary units energy value is also decreasing (inflation/deflation, same thing).... Game over, bummer... 


Seer's picture

Oh, yes!  There IS intelligent life on earth after all!

I've gotten so tired of people believing that there can be sustained (read "indefinite") economic growth; it's like they completely ignore the physical world.

Sam Clemons's picture

Also, keep in mind that most jobs that are actually here and actually get raises, those raises are pegged to the CPI which has been understated for years.  Originally intended, I hope, to simply hide inflation to sedate the masses and enable skimping on entitlement program payouts, it has inadvertently destroyed the ability to consume in this country as our "leaders" would like us to. Whoops.  I don't see any way out of this vicious cycle until public employees are fired, federal spending is slowed and private taxes reduced.

Seer's picture

And what exactly is it that you would be expecting when the vicious cycle is broken?

Sam Clemons's picture

Only a slightly-better version of the current unsustainable version.  Either way, there are finite limits to the game of fiat attached to interest and finite limits of natural resources.

Seer's picture

Only a slightly-better version of the current unsustainable version

But... this contradicts your statement that there's a "way out."  I mean, suggesting that we all fire eveyone in govt, though it will slow the bleeding, it won't SOLVE anything.  The slinky analogy!

Tethys's picture was only the beginning of a major, resource extractive economic base.

The water & rail infrastructure requirements for oil, timber & agriculture laid the groundwork for the human immigration to follow. Employment was provided by the big 3 industries: first entertainment, followed by aerospace, then high tech computers & communications.


Now don't get me wrong, I'm as disgusted with the hopelessness of the current clusterphuck as many who post here.  But it is good to test one's beliefs from time to time (one reason I like to read the comments of Leo and other contrarians here).

There is one thing to consider in the list you provide above.  Each development or industry was followed by a new and profitable endeavor as the previous one ran its course and wound down.  In such a string of successes, it is to be expected that occasional failures such as FIRE occur.

And just as it was impossible for the early entertainers to foresee the transition to computer and communications industry, it is difficult for us now to imagine what may come next. And it is precisely times of turmoil which breed the conditions that push people from comfort to innovation.

Not saying it's likely, or, given the impending supernova-scale phuckedness approaching, that it would be enough to reverse the slide if some new innovation such as zero-point energy generators or transmogrifiers or warp drive or those little gizmos in the cafeteria of the Starship Enterprise which make food out of nothing were to come about.  Just saying that whenever I become as certain of anything as I am of our impending doom, it is usually time to step back and pan out, because nature and life are full of surprises.

Assuming that there exist any powers-that-be who are not corrupt (outside of the land of skittle-shitting, rainbow pissing unicorns), it is likely that they are trying to extend-and-pretend us towards just such an event.  In my more optimistic moments such as this (rare and elusive as they may be), I hope they succeed.  Because if they don't, its down to three day old leftover coyote for dinner and corn cobs for TP.



Grappa's picture

Well said. Sure would like to have some hope in this.

Also regards to Leo and other contrarians for pointing out things that might be otherwise left out.

Dirtt's picture

"You don't like this arrangement? Tough luck. Go protest and they'll haul your ass in jail."

Funny Leo.  This fits neatly with the anecdotal data of the pathetic Greek nymphs and playboys in the streets pissing away German productivity.  I think the last time the "tough luck" or "let them eat cake" attitude became this pervasive was in the late 1700's.

We ain't talking protest in the US Leo. That is so French. One thing that must be remembered when comparing everyone else in the world to the USA....Americans are armed to the teeth.

"Let them eat cake?" NO. How about La Guillotine shall claim her bloody prize.  And those holding US debt will have to kiss their ass-ets goodbye.

Mr Lennon Hendrix's picture

Leo, are you sarcastic....half of the time, without insinuating it?

Leo, how is it that you do such brilliant work on pensions?  Your solar picks tell me you are aware of peak can you ever insuniate we are in a recovery?  Let alone that we will ever recover from the absolute pillaging of all things considered? 

"Go protest and they'll haul your ass in jail."  Thats our point!  It appears you would welcome the NWO, but at the same time, tell us of the impending doom and gloom, and that it will be best to accept our given fate.  To paraphrase your overall tense, "The shit is hitting the fan!  But if you accept it, they will give you a cookie.  The cookie is laced with mercury, but it tastes good.  Enjoy!" 

Man, what gives?

sgt_doom's picture

Great post, BTW!!!

Leo, you keep reporting on this and it keeps getting by you.

North America, most definitely the USA and Mexico, have reached critical mass (starting around July 1999) as far as the offshoring of jobs is concerned.

Now, Prez Obama sent everyone his message loud and clear when he appointed the NON-ECONOMIST, Diana Farrell, the number one jobs offshoring specialist (BPO Specialist) to his economics council post.

This is what happens when the cannibals have dismantled one's national tax base, destroyed income for too many, and are feasting on the final cannibalization of the remains.

Seer's picture

The US reached critical mass when its oil production peaked in 1970/1971.  Mexico reached critical mass a few years ago when its oil production (Cantarell - third largest oil field in the world) peaked.

Mr Lennon Hendrix's picture

...and the world reached critical mass when its oil production peaked in '08.