Meet The Tens Of Millions Of Forgotten Americans That The U.S. Economy Has Left Behind

Tyler Durden's picture

Authjored by Michael Snyder via The Economic Collapse blog,

The evidence that the middle class in America is dying continues to mount.  As you will see below, nearly half the country would be unable “to cover an unexpected $400 expense”, and about two-thirds of the population lives paycheck to paycheck at least part of the time.  Of course the economy has not been doing that well overall in recent years.  Barack Obama was the only president in all of U.S. history not to have a single year when the economy grew by at least 3 percent, and U.S. GDP growth during the first quarter of 2017 was an anemic 0.7 percent.  During the Obama era, it is true that wealthy enclaves in New York, northern California and Washington D.C. did thrive, but meanwhile most of the rest of the country has been left behind.

Today, there are approximately 205 million working age Americans, and close to half of them have no financial cushion whatsoever.  In fact, a new survey conducted by the Federal Reserve has found that 44 percent of Americans do not even have enough money “to cover an unexpected $400 expense”

Nearly eight years into an economic recovery, nearly half of Americans didn’t have enough cash available to cover a $400 emergency. Specifically, the survey found that, in line with what the Fed had disclosed in previous years, 44% of respondents said they wouldn’t be able to cover an unexpected $400 expense like a car repair or medical bill, or would have to borrow money or sell something to meet it.

Not only that, the same survey discovered that 23 percent of U.S. adults will not be able to pay their bills this month

Just as concerning were other findings from the study: just under one-fourth of adults, or 23%, are not able to pay all of their current month’s bills in full while 25% reported skipping medical treatments due to cost in the prior year. Additionally, 28% of adults who haven’t retired yet reported to being grossly unprepared, indicating they had no retirement savings or pension whatsoever.

But just because you can pay your bills does not mean that you are doing well.  Tens of millions of Americans barely scrape by from paycheck to paycheck each and every month.

In fact, a survey by CareerBuilder discovered that 75 percent of all Americans live paycheck to paycheck at least some of the time…

Three-quarters of Americans (75 percent) are living paycheck-to-paycheck to make ends meet, according to a survey from CareerBuilder. Thirty-eight percent of employees said they sometimes live paycheck-to-paycheck, 15 percent said they usually do and 23 percent said they always do. While making ends meet is a struggle for many post-recession, those with minimum wage jobs continue to be hit the hardest. Of workers who currently have a minimum wage job or have held one in the past, 66 percent said they couldn’t make ends meet and 50 percent said they had to work more than one job to make it work.

So please don’t be fooled into thinking that the U.S. economy is doing well because the stock market has been hitting new record highs.

The stock market was soaring just before the financial crisis of 2008 too, and we remember how that turned out.

The truth is that the long-term trends that have been eating away at the foundations of the U.S. economy continue to accelerate, and the real economy is in substantially worse shape this year than it was last year.

Just about everywhere you look, businesses are struggling and stores are shutting down.  Yes, there are a few wealthy enclaves where everything seems wonderful for the moment, but for most of the country it seems like the last recession never ended.

In a desperate attempt to stay afloat, a lot of families have been turning to debt to make ends meet.  U.S. household debt has just hit a brand new all-time record high of 12.7 trillion dollars, but we are starting to see an alarming rise in auto loan defaults and consumer bankruptcies.  This is precisely what we would expect to see if the U.S. economy was moving into another major recession.

In fact, we are seeing all sorts of signs that point to a major economic slowdown right now.  Just check out the following from Wolf Richter’s latest article

Over the past five decades, each time commercial and industrial loan balances at US banks shrank or stalled as companies cut back or as banks tightened their lending standards in reaction to the economy they found themselves in, a recession was either already in progress or would start soon. There has been no exception since the 1960s. Last time this happened was during the Financial Crisis.

 

Now it’s happening again – with a 1990/91 recession twist.

 

Commercial and industrial loans outstanding fell to $2.095 trillion on May 10, according to the Fed’s Board of Governors weekly report on Friday. That’s down 4.5% from the peak on November 16, 2016. It’s below the level of outstanding C&I loans on October 19. And it marks the 30th week in a row of no growth in C&I loans.

Perhaps we will be very fortunate and break this pattern that has held up all the way back to the 1960s.

But I wouldn’t count on it.  Here is what Zero Hedge has to say about this alarming contraction in commercial and industrial loans…

Here’s the bottom line: unless there is a sharp rebound in loan growth in the next 3-6 months – whether due to greater demand or easier supply – this most accurate of leading economic indicators guarantees that a recession is now inevitable.

We are way overdue for a recession, the hard economic numbers are screaming that one is coming, and the financial markets are absolutely primed for a major crash.

As Americans, we tend to have such short memories.  Every time a new financial bubble starts forming, a lot of people out there start behaving as if it can last indefinitely.

But of course no financial bubble is going to last forever.  They all burst eventually, and now the biggest one in U.S. history is about to end in spectacular fashion.

Trump will get a lot of the blame since he is the current occupant of the White House, but the truth is that the conditions for the next crisis have been building up for many years, and the horrors that the U.S. economy is heading for were entirely predictable.

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saudade's picture

A human body is worth thousands in the black market

Number 9's picture

And the rabbi works on the corner of 5th and Maple.

*ratzazz*

NoDecaf's picture

well it's a good thing that we are going to war with the Norks to save all those starving people from their despotic leader.

 

or so the logic goes...

Creepy_Azz_Crackaah's picture

Nobody "forgot" them or "left them behind." The gubmint is strangling businesses with taxes and regulations, forcing businesses to send jobs overseas in order to survive, for a reason. More people dependent on... wait for it... GUBMINT!

More voters for FREE $HIT from gubmint. More power for gubmint. More control for gubmint. Fewer jobs.

HoyeruNew's picture

BS. Buisnesses are sending jobs overseas becuase they do't want to pay 50 dollars per hour while they can pay 5 dollars a day overseas. Try speakign the truth for once, instead of trolling. If you can.

Creepy_Azz_Crackaah's picture

BS. Businesses are sending jobs overseas becasue CHEAP A$$HOLES like you aren't willing to pay $200 for a toaster made by good 'ole USA Bubba with his union job when you can get it for $20 made buy slave labor overseas. Costs are multiple things which include COST OF REGULATION COMPLIANCE and wages.

Try reading up on economics and try running a business, instead of trolling. If you can't get it, have someone read business 101 to you.

CheapBastard's picture

A fresh [dead] human body not diseased is worth several hundred thousand---eyes, liver, kidneys, heart---there's someone waiting for all those from your body.

Young trauma victims make the best donors.

Katos's picture

SO people in Venezuela ARE starving, BECAUSE of socialist ideals from the government? AMERICANS ARE starving because we are capitalists and we believe in predatory capitalism WHERE a few WEALTHY ASSHOLES hold the entire population enslaved to piss poor jobs with piss poor pay! America is sliding into the proverbial SHIT hole, yet we hold ourselves up AS enlightened and wealthy?hahahah?

Muddy1's picture

As soon as I read the tite I knew it was from bleeding heart Michael Snyder.

Ghost of PartysOver's picture

I am not well versed in history but didn't the French throw a little party for these same reason.  I think it was called the French Revolution.  And Marie Antoinette lost her head.

Stuck on Zero's picture

All those poor people. Sad. Give another few trillion to the billionaires and see if a little bit more doesn't trickle down to them.

swmnguy's picture

Why yes, as I recall.  The French Snowflake Gibsmedats rioted against the Job Providers.  George Soros paid for it all. 

saudade's picture

It reminds when I went to Israel and couldn't sleep that night due to the sound of shekels clinking echoing throughout the city.

E-Knight's picture

I used to like that micheal synder guy...about 5 years ago. Its the same stuff out of him day in day out 'collapse collapse collapse'.

Yes the 'fundamentals of the economy' are NOT strong, but I got tired of chicken little act a long time ago.

Number 9's picture

I hear ya.. I am about done with the internet entirely..on my fourth account from being banned from a once free Zerohedge and everywhere I go I run into censorship and insane control freak monitors.. fvkit,,

time to go Galt

 

NidStyles's picture

I call bullshit, I've talked way more shit than any of you and I have never been banned.

 

You're a fake.

Number 9's picture

 

shows what you know..Zero hedge is still banning people.. start bashing blacks and jews with non pc titles and see what happens..

The username flaminratzazz has not been activated or is blocked. Go ahead, put in my old username and any pword you want and see for your self.. we all know it sure as hell was activated.

so kindly fvkoff.. idiot

JethroBodien's picture

Its called being anti semitic you imbecile.  You have to be an imbecile to hate someone for skin color or ethnicity.  Think about it for a second.. you actually judge people by skin color.  It would be laughable if it wasn't so sad.

tion's picture

'Anti-semitic' is an Orwellian Alinskyist term because in truth, they are not even actual semites.  Rabbinist Pharisees pretending to be God's chosen people, how laughable. I have no problem with the vast majority of plebian Jews, most don't. It's the elitist Bolshevik Jews, you know like the ones that helped finance Hitler, and the Molech/Ba'al worshipping Kaballah Satanists hiding behind their make believe heritage to commit evils that I hate. Anyone who thinks it's wrong to judge someone based on their actions and values just might be retarded, though somehow doing so has been lumped into the catch all term 'racist'.

JethroBodien's picture

The people you describe don't have a monoply on evil.  Do you actually believe what you type?  I waisted two minutes of my life reading your hate drivel.

 

Note I said why would anyone judge someone on their ethnicity or skin color.  Big difference from someones actions.

JethroBodien's picture

The people you describe don't have a monoply on evil.  Do you actually believe what you type?  I waisted two minutes of my life reading your hate drivel.

 

Note I said why would anyone judge someone on their ethnicity or skin color.  Big difference from someones actions.

Moe Hamhead's picture

For ye have the poor with you always

NoDebt's picture

That's exactly how the Washington/Wall St. axis thinks about them, too.

 

Buck Johnson's picture

Exactly, they look at the regularl american and/or ones that aren't them as useless eaters to be used.  When this game implodes, it's going to hurt big time.

 

NoDebt's picture

"Today, there are approximately 205 million working age Americans, and close to half of them have no financial cushion whatsoever."

Which makes sense because only 130MM of them have jobs.

 

swmnguy's picture

But if they take the assistance we offer to prevent the exploited from getting too desperate and noticing how many they are and how powerful they could be, they're lazy "Gibsmedats."  And when they eat the cheap food they can afford and get fat and sick, that's their fault too.  And if they voice their frustrations, they're "Snowflakes."  And what we really want to do is watch uniformed troopers brutalize them using State Violence to make the rest of us feel superior.

I guess there are no possible solutions and it's really all hopeless.  It's all a matter of how we define things.  If we define all the solutions to be impossible, then yes, all we have left is Authoritarianism and the violence of the powerful against the powerless.

I wonder what's on TV?

Number 9's picture

It is always easy to get one half of any population to kill the other half.

Canary Paint's picture

Yeah, I am kind of on board with what you are saying here.

Coming up to the election and just afterwards, I was telling people to try to have a more complex view of Trump voters. It is too reductionist, too convenient to chalk up the Trump phenomenon to racism and xenophobia. Now, it seems like the folks I was ready to defend are just as hysterical in their own way. If I were to ask the question "Does racism or sexism exist?" then I am some kind of snowflake and someone is jumping down my throat.

I think hystericism is the sentiment of our times.

A basic stereotype of American business is our creativity and relentless practicality. These traits do not lend themselves to long-term planning. I think we are simply at a turning point where the problems are too big for the creative, American "Let's get her done!" solution. We have big questions to ask about our healthcare system, our civil infrastructure, and our Too-Big-To-Fail institutions, and so many irons in the fire at the international scale, that we are having a hard time focusing on those internal issues. Furthermore, these problems are complex enough that a handful of smart people still aren't smart enough to solve them.

Despite reading ZH regularly, I have not lost hope ;-p There are 2 aspects that make me doubt sometimes: 1) the near impossibility of dislodging the invisible and entrenched foreign policy structure 2) our so-called left and right that IMO are both faces of an ultimately intolerant and destructive authoritarianism

 

swmnguy's picture

The problem, as "Mine Is Bigger" suggests just below, is the system itself.  This has been laid out so many times by so many brighter than myself I feel like a bore doing it again, but it goes like this:

Our system of using debt at interest as "money" requires infinite inputs of money, materials, energy and markets.  We live on a finite world, so the only one of those things that can be infinite is money, and that only by making it abstract.  If we run into shortfalls of any of those inputs, we have to increase the others.  Our system demands growth in economic activity at a rate higher than the prevailing rate of interest.  If growth falls below that rate, we can't create enough new money to pay off the old interest accrued.

There are all kinds of ways to game this system, and we see an awful lot of them at work today.  The people who have profited up to now from this system favor all the extend/pretend options to anything that might correct the problem, because they would have to give up their accumulated advantages along the way and who wants to do that.

So the system has to collapse before we can come up with a better system.  Unfortunately, when a system is collapsing, those trying to preserve their advantage have to rely on the power they can bring to bear by leveraging their advantages.  That's where State Violence comes in.

I think we all see that, even if it was most completely laid out by Karl Marx (Boo!  Hiss!).  He was an utterly horseshit political philosopher, mostly because he suffered from the typical affliction of intellectuals, in neglecting the less-rational aspects of human nature.

And therein lies the solution.  We're not going to get anywhere until we use cold, blunt unemotional logic.  Naturally, we are discouraged and distracted from doing this, and our own natures prefer not to.

We can't blame the victims when it makes us feel better, but then pretend to be their champion when that feels better.  It's the same "fat, stupid lazy" people in the story about SNAP benefits as they are in the story about all the decent jobs having gone and been replaced by low-paid "service sector" jobs.  It's the same "Snowflakes" with $100,000 student loan debt loads who can't pay them back, as they are when they can't pay their bills and student loan debts on a $25,000/yr. full time job (that costs their employer another $20,000 to pay taxes and provide health insurance); so they don't buy houses, or even move out of their parent's houses, much less start families at the traditional time of life.

We need to get clear with ourselves on what our principles really are, and then apply them equally to all, across the board.  We can't have Elites who are above the law, because they claim to be "Job Providers."  Business isn't charity.  The only time anyone hires anyone else is when by doing so, they can make more money.  In the absence of demand, in the self-fulfilling spiral we've gotten into by refusing to address the fundamentals of our broken system, no good jobs are going to spring out of the blue, no matter what we do about taxes.

Human nature being what it is, I don't expect us to suddenly drop all our cultural mythologies, even when we can all see they no longer match up to what we see around us.  But we need to start with ourselves, making sure we're being honest about ourselves, and then applying our principles to ourselves as well as those around us.  If we do that, we won't run to the illusory safety of Authoritarianism.  Because that has been tried throughout human history, and it has failed every single time.

Canary Paint's picture

Wow... Thank you for a quick and thought provoking reply. Two statements especially stood out to me:

1) "Our system demands growth in economic activity at a rate higher than the prevailing rate of interest.  If growth falls below that rate, we can't create enough new money to pay off the old interest accrued."

It is embarassing, but I can get caught up in my own ideology about trying to avoid ideologies and forget this very basic fact.

2) "We need to get clear with ourselves on what our principles really are, and then apply them equally to all, across the board."

I agree that this is lacking and that it is a profound deficiency. One must have such an understanding, and also a reasonably easy to state goal in order to to formulate a strategy. Without a strategy, one is creating reactionary tactics. What strategy will those tactics cohere into? Will it be the desire that we seek?

I think our situation, the American situation, is quite particular. Many ZHers have a Russia hard-on, I have a bit of a stiffie for them myself, but their highly centralized planning is partially possible because of the foreign threat that we present. Putin's strategy has been immaculately implemented. But what are its principles? In a theoretical world where no other state is literally trying to collapse Russia, will their priciples stand?

Then, there is us. Right now, we are essentially unassailable in an existential way. While we have the liberty to do so, what are the principles we uphold in good times or bad? I am talking about the principles that still exist if we are number one in the world or competing with 1 to 3 other countries. Russia and China can have an enormous amount of centralized planning BECAUSE of external threats.

What about us? We are sitting pretty with a horde of armements that garantee no invasion for the next 50 years at least. Probably more because of the engineers and scientists that we have...

Where I am living for the moment in France, despite ZH publicity, regions and cities are responsible for creating strategies for their area and even have risk management responsibilities. Public services even have yearly process improvement initiatives.

We are bigger than them, but even at their scale, they are trying to explore what autonomy is needed by a region or a city in order to flourish, and it is being done with the "grace" of the state.

This subject touches on what my true hopelessness is. We will need to have a profound evaluation of what the powers in an American region are with respect to the federal state because centralized power is not the best option for a country without external threats.

I think there is no possible way that we will go through this introspective process.

Mine Is Bigger's picture

Let's not shift the blame to the "economy."

The blame should be squarely placed on the Fed.

swmnguy's picture

That's still blaming the effect while ignoring the cause.  Who owns the Fed?  Now you're getting closer.

Mine Is Bigger's picture

If we look deeper, the problem is the system itself. The fractional reserve banking system is a fraud.

Rakksan's picture

The real problem is" People are without Honor".

7thGenMO's picture

If we look deeper still - the problem is largely the globalist oligarch owners of The Fed - a private corporation.  They prefer to be nameless.  Hmmm... wonder why?

hangemhigh77's picture

Oh my goodness!!! This is just TERRIBLE!!! WHAT CAN WE DO??!!! My oh my WHAT CAN WE DO TO FIX THIS??!! I think I know. Yes I think I have THE SOLUTION!!! And what is it you might ask? HANG EVERY MOTHERFUCKING POLITICIAN!! HANG EVERY PIECE OF SHIT THAT TOOK AN OATH TO THE CONSTITUTION INCLUDING EVERY TREASONOUS COP!!! THEN HANG EVERY FUCKING BANKSTER BURN DOWN EVERY FUCKING BANK AND BLOW UP THE FEDERAL RESERVE. THEN HANG EVEFY CORPORATE HEAD FOR TREASON. That may not fix the problem now, but it is what NEEDS TO BE DONE. NOW!!!

Number 9's picture

ok, good idea..you go first

lasvegaspersona's picture

Politicians, bad as they can be, get fired if they are not doing the will of the voters. It is we the people who clamor for 'more currency, more spending'. Read White's Inflation in France...it is free on web.

hangemhigh77's picture

Yes very true we want the money but the scum politicians are there to sail the ship away from the rocks irregardless if they get re elected. Plus now they're not just skimming off the top they're stealing everything and destroying our lives and the lives of our children. They're waaaaaay over the line. Kill them all.

JethroBodien's picture

Be careful someone might be listening.  I understand your rage but talk like that doesn't help.

Number 9's picture

and nation after nation are looking away from the American *system* to do business with as they don't want to be enslaved by the western bankers.

ToSoft4Truth's picture

Cut their foodies. 

hangemhigh77's picture

Or, maybe eating a donut would help!!! LET THEM EAT DONUTS!!!

Osmium's picture

Should work fine as long as they are CAKE Donuts.