In the 1970s and early 1980s we had a rapid rise in two-wage earner families; my family included, under something less than perhaps idea conditions, but nonetheless, with two wages my family (and millions of others) were able to take on more debt than we had earlier. This additional debt could be serviced, so it wasn't such a big deal.
About that same time my step dad had me open up a money market account (which I still have today) where he'd match dollar for dollar, so that by the time I got to college it was around $4k, but importantly, was earning somewhere around 8-13%. This was the era of high borrowing costs, too, and since the mid-80s we've seen this steady decline in borrowing costs, allowing families to take on much more debt. This additional debt could be serviced, so it wasn't such a big deal.
Then along came our twin booms of rising stock valuations and rising housal unit valuations where everyone $aw dollar signs and held a belief (a wish, really) that rising asset prices would by themselves contribute to early and comfortable retirements. Cash-out re-fi's and second mortgages and a half dozen $22,000 credit cards -- this allowed families to take on much more debt. This additional debt could be serviced, so it wasn't such a big deal...
That is, until it became clear that four decades of incremental borrowing had left a massive chasm between what was being earned and what was being paid back.
Now the credit boom has gone bust, and it's payback time.
With roughly 40,236,544 Americans currently on SNAP we're masking the true nature of our
With roughly 14,567,821 Americans out of work, with 4,398,556 receiving benefits and another 4,793,227 receiving extended benefits, we're masking the true nature of our economy. Easy for me to pay extra for non-pasteurized juice, eh, while there are over eight million being paid while not working (I don't mean this facetiously).
Then you've got my cousin and a houseful of loafers in a rental in South Sacramento all of whom aren't even counted in all this because they've long since fallen off the turnip truck, never again to be counted as unemployed as they aren't looking or are marginally employed. This masks the true nature of our economy. He's alongside another 8,329,979 part-time workers and 2,565,002 marginally attached workers. Easy for me to pay extra for non-pasteurized juice, eh?
Again with my cousin -- he's got a beat up Honda Civic that he's long since stopped making payments on, while the financial servicing company continues to demand payment yet won't come pick up the car (that's long since stopped running), and I have to wonder about how many hundred thousands of others there are out there who are driving cars they've stopped making payment on, or living in houses that they've long since been foreclosed on but are still continuing to use. This masks the true nature of our economy, when people free from mortgages are living as if they weren't.
Only now, months after the end of our little recession are we seeing teacher and firefighter and police and public servants under the guillotine. Hard to understand why, if we're out of recession.
Only now, months after the end of our little recession are we seeing the worst month over month fall in housal unit sales in our nation's history. Hard to understand why, if we're out of recession.
What this is all gonna do, in my little opinion, is set us up for a better nation once all this works itself through, and the more mired in muck we get into while fording that chasm the better we'll become at the receiving end. Perhaps we'll become a nation of savers. Of non-barcode people. Of non-consumers. Of regional caretakers.
Or perhaps not. Perhaps William & Martha, both working in 2017, will be forced to enter little Billy into the workforce, to become a family of three-wage earners to support even more levels of personal debt.
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