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alstry (< 20)

How Many Americans Facing Serious Crisis?



July 19, 2008 – Comments (8)

We know a few years ago, many Americans were living paycheck to paycheck.  These were people on Social Security, government assistance, lower paying jobs, and highly leveraged.  Some estimates ran higher than 50% of the population.

Think about the following:

In the past three years, many of the above incomes remained stagnant.  However, much of what they purchased.... food, fuel, medicine, insurance ect.....has skyrocketed.  If they were living paycheck to paycheck a few years ago.....mathematically they can't make ends meet today.

If the above thesis were correct, we would be seeing higher foreclosure rates, more people visiting food banks, and elderly selling their homes simply to generate extra cash to live.  Whoops.

At this point, I estimate that at least half of the American population is facing a very serious financial crisis.  If fuel costs remain high going into the winter....the consequences could be material.

Remember , if half the country needs help, the other half needs to help em.... regardless whether its McCain or Obama....get ready to watch your taxes skyrocket...this year will be the highest budget deficit in US history under a Republican we know, the airlines, autos, banks, builders, and developers are going to be getting HUGE tax rebates this I guess we are just going to have to dig a LOT LOT little deeper into our checkbooks this year to make up the difference.

8 Comments – Post Your Own

#1) On July 19, 2008 at 6:37 AM, DemonDoug (31.17) wrote:

you are seeing the the inflation light, aren't you al?  government has incentive to keep official inflation below actual inflation as a stealth tax - so that the poor and the old retain less wealth and the rich get richer.

you are right about higher taxes unfortunately (although it won't help most HB's and airlines i'm afraid).

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#2) On July 19, 2008 at 8:01 AM, abitare (30.20) wrote:

Bush vs Clinton 

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#3) On July 19, 2008 at 10:09 AM, alstry (< 20) wrote:


The rich are not getting richer.  The rich are getting poorer.  MUCH POORER.

The rich own stocks, bonds, businesses and real estate.  Collectively, these asset classes are falling in value.  In some cases dramatically.

You are going to see a number of business fail in upcoming months.  The vacancy rate will likey skyrocket as a result.  Bond values will likely plummet as questions arise whether they can perform.  Stock values should fall as earnings evaporate.

If Google's revenues are getting can bet so is the vast majority of other business.  Right now, those selling overseas and dealing with commodities and energy are doing OK on a reported basis.....but that could change going forward as foreign economies slow as well.

The rich are finally beginning to realize this....they are cutting back.  Articles a just beginning to be written about the subject.

Once the rich really start to feel the squeeze, expect things to unravel.

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#4) On July 19, 2008 at 11:21 AM, wolfhounds (40.02) wrote:

alstry, your thesis is right. As demonstrated by NYC statistics which show that in the last 3 years there has been a 55% in the number of people getting food at food banks. This means people still above the new "poverty level" of $26,000 arn't making ends meet.

Would like to see  some references in your posts even though the anectodal evidence backs your thesis.

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#5) On July 19, 2008 at 11:26 AM, alstry (< 20) wrote:


For declines in Stock values...just look at the financial page.

For declines in commercial real estate values...just talk to any commercial real estate agent you know.

For declines in bond values....take a look at bloomberg.

Regarding business failing or scaling way back....just read your local newspaper.

As far as percentage of Americans living paycheck to paycheck...just google it and thousands of articles have been written on the subject.

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#6) On July 19, 2008 at 1:20 PM, LordZ wrote:

Its all a matter of perception.

You say potatoe and I say potato.

When I stand up next to a mountain

doesn't my perspective change when i'm 2 feet away or 20,000 feet away from it.

Omg fewer middle class rich people < key word >





its all just a matter of perspective and perception.

maybe instead of an expensive aged fine cut of meat, you substitute a fat porterhouse steak, its still meat.

maybe instead of killing ourselves, we start to learn to love ourselves ~ not like yesterday.

do we really need all these expensive toys ~ millions of years ago, we survived on nothing but our wits and fortitude, we scratched a living out of picking fruits and nuts and scavenging among dead animals.


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#7) On July 19, 2008 at 6:04 PM, hansthered0 (< 20) wrote:

Another thing about hard economic times is that people will actually contract their spending habits.

An example I recently heard made me think.

Right now the CPI uses the price of a certian group of products to test report the increase or decrease of prices.

So lets say that oranges have doubled in price but apples have trippled. In this situation many people might just buy more oranges. The CPI cannot adjust for this shift. This could lessen the burden of the CPI in reality.

It is estimated that the CPI actually overstates inflation by 1% each year....but of course 1% isnt a big deal.

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#8) On July 19, 2008 at 7:47 PM, alstry (< 20) wrote:


The CPI actually does adjust for this behavior.  It is called hedonics.  You may want to Google it and see how the assumptions can actually cause the CPI to understate inflation.

You really think inflation is running around 2%?

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