A Bird's-Eye View Of How The US Economy Is Falling Apart (In 4 Simple Charts)

Tyler Durden's picture

Submitted by Tony Sagami via MauldinEconomics.com,

My college-aged kids love him. I’m not talking about Stephen Curry or Justin Bieber (although they love them too); I’m talking about Bernie Sanders.

Whether you support him or not, my guess is that most Americans my age are very surprised about his popularity. However, it shouldn’t be a surprise given the economic stress many Americans face.

The four charts below capture the essence of what I’m talking about…

A shrinking middle class and a growing lower class

These_4_Charts_Give_a_Bird’s-Eye_View_of_How_the_US_Economy_Is_Falling_Apart

Sadly, roughly 50 million Americans live below the poverty line—the largest number in our nation’s history—and the poorest 40% of all Americans now spend more than 50% of their incomes just on food and housing.

Consumer sentiment is plummeting

No wonder that consumer sentiment has been sinking fast, which is a very troubling sign for our consumer-driven economy.

These_4_Charts_Give_a_Bird’s-Eye_View_of_How_the_US_Economy_Is_Falling_Apart

Spending is slowing

That consumer angst translates into a drop in spending. The Commerce Department reported that retail sales dropped by 0.3% in March, well below the +0.1% gain Wall Street was expecting.

These_4_Charts_Give_a_Bird’s-Eye_View_of_How_the_US_Economy_Is_Falling_Apart

The biggest drop was in auto spending, which was down 2.1%.  One of the weakest sectors, however, was restaurants.

These_4_Charts_Give_a_Bird’s-Eye_View_of_How_the_US_Economy_Is_Falling_Apart

Wages are shrinking

I suspect the root of the issue is wages… or lack thereof. The reality is that inflation-adjusted wages—despite the recent minimum wage increase in several states—have been shrinking.

A recent report concluded, “In real terms, the average wage peaked more than 40 years ago.”

These_4_Charts_Give_a_Bird’s-Eye_View_of_How_the_US_Economy_Is_Falling_Apart

Check out these discouraging numbers:
•    39% of American workers make less than $20,000 a year.
•    52% of American workers make less than $30,000 a year.
•    63% of American workers make less than $40,000 a year.
•    72% of American workers make less than $50,000 a year.

Debt is piling up

And it doesn’t help that Americans continue to rack up debt. 

Example: Outstanding auto loans have hit more than a trillion dollars. With an average balance of $12,000 per person, that consumes nearly 8% of the average borrower’s disposable income!

No wonder that an estimated 62% of Americans are living paycheck to paycheck.

And all of us—low, medium, and high income combined—are working longer than ever to pay a growing tax bill. Tax freedom day (the day when the nation as a whole has earned enough to pay the state and federal tax bill for the year) arrived on April 24, according to the nonpartisan Tax Foundation.

That means all the money we made in the first 114 days of 2016 went to taxes.

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Shadow1275's picture

So far we have social scecurity, centrally planned economics through central banking I.E. the FED, a minimum wage, welfare, and a progressive income tax.

 

Hooray for Democratic Socialism???

BeaverCream's picture

And we have a presidential candidate with a ton of support running on a platform that we don't have enough government intervention into our lives....if Trump doesn't win this shit is over for real. 

 

silverer's picture

What country are you considering emigrating to? I've got three candidates picked out so far.

froze25's picture

Iceland is my #1 but is a pain in the ass to get residency. (they still have their heads on straight).

HopefulCynical's picture

Some pluses with Iceland, but IMO, fish guts is not a food group. I'll pass.

LasVegasDave's picture

Chile works;

any country that disappears communists by dropping them out of helicopters is ok in my book

HopefulCynical's picture

Agreed!

And I've always had a thing for Hispanic girls, >ROWR<. Although Icelandic girls are pretty hot, too...decisions, decisions...

skinwalker's picture

My first choice would be Madagscar. Yes, I've been there and could see myself living there. Talking the wife into it is a different story though. 

ZD1's picture

 

 

Madagscar?

The island nation is one of the poorest in the world and also suffers from one of the highest corruption rates, coming 127th out of 177 nations on Transparency International's annual graft ranking.

 

https://www.yahoo.com/news/40-percent-madagascar-budget-lost-corruption-...

Krungle's picture

Any list of corrupt countries that does not feature the US as #1 is completely full of shit. 

SuperRay's picture

Is this guy serious? Load up on dividend paying stocks? You need EARNINGS to pay dividends, and when reality hits the value of your stock will plummet. And no mention of PMs? A brainwashed wall st minion?

John Kich's picture

Trump Got It Right Again. This Is the Undeniable Proof... However the mainstream media isn't saying a word about it! What are they really trying to cover up? https://www.youtube.com/watch?v=VKBfjdM3AKg

CheapBastard's picture

Obamacare disaster will be Obama’s enduring domestic legacy

The president promised “if you like your doctor, you can keep your doctor.” But commercial insurers who stay in Obamacare are responding to massive losses by narrowing provider networks, with fewer doctors and hospitals to choose from. And those that quit are being replaced by Medicaid HMOs with even less doctor choice.

 

With Obamacare, Obama wanted to restore America’s faith in big government. Instead, the opposite has happened. Today, 69 percent of Americans say big government is “the biggest threat to the country in the future” (ahead of big business or big labor).

 

That, in the end, will be Obama’s enduring domestic legacy.

 

https://www.washingtonpost.com/opinions/obamacare-disaster-will-be-obamas-enduring-domestic-legacy/2016/04/25/a8c09b38-0ae4-11e6-8ab8-9ad050f76d7d_story.html

 

 

This article is [shockingly] from WaPo. How did they let this guy in?!

 

 

 

The Saint's picture
The Saint (not verified) CheapBastard Apr 25, 2016 6:57 PM

But Tony, your chart shows the Upper Class grew by 50%.

While the Lower Class only grew by 16%.

How does that jive with your assumptions?

zeronetwork's picture

Real situation is much worse than these charts show.

John Kich's picture

This is Donald Trump's most shocking statement yet,

However the mainstream media isn't saying a word about it!

What are they really trying to cover up?

www.legitorscamreview.com/the-final-bubble

All Risk No Reward's picture

Big Debt-Money Monopoly is the #1 threat to America's future (and the world's future) because they finance big government, big business, and big labor...

Think about it... the borrower is SERVANT to the lender MASTER.

PS - Obama doesn't care what ordinary people think... he despises them. Do care what a goldfish thinks? That's his attitude towards ordinary people, except he knows our attention span is greater than a goldfish... oh... wait...

ZD1's picture

 

 

Chile?

Chile's president is a leftist hag named Michelle Bachelet who is a Hillary clone and is just as corrupt.

 

http://www.ibtimes.com/chiles-president-michelle-bachelet-approval-sinks...

http://www.nytimes.com/2016/01/30/world/americas/daughter-in-law-of-chil...

crazzziecanuck's picture

"is just as corrupt."

I'm not sure that's even remotely possible

zeronetwork's picture

At this moment, whole world is under crooks. Let the dust ( ropes $ lamp posts) get settled than decide where to move.

animalogic's picture

A "Hillary clone"?? I KNEW there was a reason the neoconservatives love her so much ! Hilary's just SO "left".  

What fun it all is -- viz  "Alice" (in wonderland), words mean whatever we say they mean....

Yuubokumin's picture

thank you, but no thank you? ZHers can be fuck-dumb, specially when complaining and speculating. 

https://i.gyazo.com/7405816435c3f587da299d362acdb56b.png

https://i.gyazo.com/ad263a5be7c70c507f1f875777f2597c.png

the red circles are obviously seismic activity.

hope you guys don't take this the wrong way? 

Tom Servo's picture

This author is peddling some GD fiction...

 

the late idi armin's picture

just don't meddle in politics there as mr com found out. its not bad but kind of pricey and wages are not so high. little bit  iowa-ish - with mountains. 

just in case anyone thinks the NZ is any less rapacious than others
 http://www.nzherald.co.nz/home-truths/news/article.cfm?c_id=1500914&obje...

 

Lurk Skywatcher's picture

five eyes, banker prime minister, first to implement bail ins (2013), industrialized dairy farming destroying the water (70%+ waterways are unswimmable) , the highest rate of melanoma in the world (no ozone layer) , agent orange testing area, straddling the faultline with the biggest discovered movement record (750 metres), fat ugly women, asbestos riddled houses built with substandard materials at ridiculous prices, and the rothschilds sold up and left last year which should tell you what sort of paradise NZ is planned to become...

Tom_Pain's picture

Naaa.  I didn't even kiss her.

knukles's picture

And if you get tired of Jamacia, Queens is just next door. 
(Tah dah!)

Proofreder's picture

Queens ?

Drag Queens

(Ta da boom)

Reichstag Fire Dept.'s picture

Fuck Sanders & Trump! We're stuck with that communist, Justin Trudeau here in Canada! Therefore, I'm half moved to Nicaragua now!

Spent last winter down there already. I actually had trouble spending Cdn$35.oo/day and prostitution is totally legal.

Outside of all of that, the business climate is pretty good! I've got a Private Label cigar brand started in Esteli, looks like local taxes are reasonably low. Don't like cigars? It looks like the government will allow you to start any kind of busness you want there as long as you employ Nicaraguan locals...which may be tougher than it sounds, unemployment there is extremely low at 2% in Managua, 1% in Esteli...these are the #1 & #3 cities in terms of population.

Weather is great. Cervezas are US$1.20 each. There are residency programs available for Business, Extended stay or Retirment.

Moreover, there is Tourism Law #306 to promote Tourism Based Businesses. Hard to say no!! Good bye, Canada! I shall miss your cold and snow but honour it by putting ice in my every drink!

Reginald Blome's picture

@silverer - which 3 and why? My project for this week actually is checking out the Caribbean economic citizenship programs firsthand so I'm definitely on your same wavelength. 

Perhaps we can exchange views and resources...

GRDguy's picture

No matter who wins, the lyin' and stealin' (and killin') by TPTB will continue to be rewarded handsomely.

That's why they're spending billions on the elections; to have more say in how the trillions will be distributed.

HopefulCynical's picture

And by distributed, you mean concentrated.

Rancho Texican's picture

I actually expected the lower class to increase by much more, considering all the illegal alien trash we've imported the last 8 years.

Buckaroo Banzai's picture

My understanding is, the rapidly increasing income and wealth inequality that you see in the US over the last 20 years is, statistically speaking, entirely attributable to the massive amount of illegal immigration during that time frame.

animalogic's picture

You need more understanding: of course illegal/immigration has affects on supply/demand for labour, and therefore the price of labour. But, it's only one factor: ie, government's  (strict)policing of decent minimum wage rates might also have a positive affect....

AGuy's picture

"I actually expected the lower class to increase by much more, considering all the illegal alien trash we've imported the last 8 years."

Its coming. As $15 Min Wage, outsourcing, downsizing and corp. bankruptcies start coming either later this year, or in 2017.

 

malek's picture

 if Trump doesn't win this shit is over for real

Excuse me, what?
This shit will be over soon anyway, we can only choose which way it ends depending on the next prez

Memedada's picture

"if Trump doesn't win this shit is over for real" - sounds like a great argument for not voting Trump.

Vlad the Inhaler's picture

All these things serve a higher purpose my friend, they allow corporations to reap the benefits of dirt cheap labor.  

AGuy's picture

"So far we have social scecurity, centrally planned economics through central banking I.E. the FED, a minimum wage, welfare, and a progressive income tax."

Hey, What about the ACA & Dreamers?!?

Geez, some people just like to forget about all the good thinks the DNC has brought us. /sarc

 

demi urge's picture

Where are you seeing Democratic Socialism?  I see an Oligarchy.  I see a Corporacracy. I see a Plutocracy.

 

...but I see no evidence of democratic socialism since about the 50's.

Memedada's picture

In US “lala-land” everything to do with the “state” is equated with “socialism”. It’s almost synonymous. You’re up against decades (centuries soon) of corporate propaganda. US is so dumbed down they’ll welcome the total and soon to be outspoken fascistic take-over of US Inc. (look at the Trump-phenomenon).

Umh's picture

Pretty lousy theater when I think about how much money is being spent on it.

Infield_Fly's picture
Infield_Fly (not verified) Apr 25, 2016 8:23 AM

don't believe any of this bullshit

 

these macros are a balance of the most positive to maintain some form of credibility

 

the reality is that these macros are far worse - not many talking about food stamp membership - number is too high

 

ATH marketsino's - thanks yellen you fucking cunt.

Theonewhoknows's picture
Theonewhoknows (not verified) Infield_Fly Apr 25, 2016 9:59 AM

The important part here is still while knowing how everything is manipulated to make sure you are on the upside. That you with your knowledge make money to be independent and say whatever you want to say while they take savings from the middle-class and make everyone poorer. I think this guy made a good point when he compared different markets according to CAPE and others. On top of that, he pointed to the cycle of capital transfers between developed markets and emerging ones. Worth watching. Especially second half. http://independenttrader.org/trader21-lecture-presented-at-fx-cuffs.html

HenryHall's picture

Linky no worky;

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Proofreder's picture

Nah, link works great - good info

disinfo bad

Thanks, buzz