Half of America in Poverty and It’s Getting Worse!

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Americans, assets, Congress, cuts, Debt, decline, food assistance, income inequality, IRS, middle class, Poor, Poverty, Sequestration, SNAP, U.S, U.S. Bureau of Labor Statistics, United States, United States Census Bureau, wages

The Census Bureau has reported that one out of six Americans lives in poverty. A shocking figure. But it’s actually much, much worse.

The Census Bureau has reported that 15% of Americans live in poverty. A shocking figure. But it’s actually much worse. Inequality is spreading like a shadowy disease through our country, infecting more and more households, and leaving a shrinking number of financially secure families to maintain the charade of prosperity.

1. Almost half of Americans had NO assets in 2009 

Analysis of  Economic Policy Institute data shows that Mitt Romney’s famous  47 percent, the alleged ‘takers,’ have taken nothing. Their debt exceeded their assets in 2009.

2. It’s Even Worse 3 Years Later 

Since the recession, the disparities have continued to grow. An  OECD report states that “inequality has increased by more over the past three years to the end of 2010 than in the previous twelve,” with the U.S. experiencing one of the widest gaps among OECD countries. The 30-year decline in wages has worsened since the recession, as low-wage jobs have replaced formerly secure middle-income positions.

3. Based on wage figures, half of Americans are in or near poverty. 

The IRS reports that the highest wage in the bottom half of earners is about $34,000. To be eligible for food assistance, a family can earn up to  130% of the federal  poverty line, or about $30,000 for a family of four.

Even the Census Bureau recognizes that its own figures under-represent the number of people in poverty. Its  Supplemental Poverty Measure increases, by 50%, the number of Americans who earn between one-half and two times the poverty threshold.

4. Based on household expense totals, poverty is creeping into the top half of America. 

A family in the top half, making $60,000 per year, will have their income reduced by a total tax bill of about $15,000 ($3,000 for  federal income tax and $12,000 for  payroll, state, and local taxes. The  Bureau of Labor Statistics and the Census Bureau agree that food, housing, and transportation expenses will deduct another $30,000, and that total household expenditures will be about $50,000. That leaves nothing.

Nothing, that is, except debt. The median  debt level rose to $75,600 in 2009, while the median family  net worth, according to the Federal Reserve, dropped from $126,400 in 2007 to $77,300 in 2010.

5. Putting it in Perspective 

Inequality is at its ugliest for the hungriest people. While food support was being targeted for cuts, just  20 rich Americans made as much from their 2012 investments as the entire  2012 SNAP (food assistance) budget, which serves 47 million people.

And as Congress continues to cut life-sustaining programs, its members should note that their 400 friends on the Forbes list made more from their stock market gains last year than the total amount of the  food, housing, and education budgets combined.

Arguments about poverty won’t end. Neither should our efforts to uncover the awful truth.

Source:  http://www.alternet.org/economy/real-numbers-half-america-poverty-and-its-creeping-toward-75-0?akid=10488.212171.MlEXg5&rd=1&src=newsletter845974&t=6

 

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U.S. Economic Black Hole On Horizon!

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banks, corruption, cuts, Dangerous, Economic bubble, economic collapse, Economy, Federal Reserve, Food Stamps, foreclosures, fraud, GDP, global crisis, Greece, greed, Japan, media blackout, national debt, profits, Social Security, stock market, U.S, Unemployment, United States, Wall Street

What is going to happen when the greatest economic bubble in the history of the world pops?  The mainstream media never talks about that.  They are much too busy covering the latest dogfights in Washington and what Justin Bieber has been up to.  And most Americans seem to think that if the Dow keeps setting new all-time highs that everything must be okay.  Sadly, that is not the case at all.  Right now, the U.S. economy is exhibiting all of the classic symptoms of a bubble economy.  You can see this when you step back and take a longer-term view of things.  Over the past decade, we have added more than 10 trillion dollars to the national debt.  But most Americans have shown very little concern as the balance on our national credit card has soared from 6 trillion dollars to nearly 17 trillion dollars.  Meanwhile, Wall Street has been transformed into the biggest casino on the planet, and much of the new money that the Federal Reserve has been recklessly printing up has gone into stocks.  But the Dow does not keep setting new records because the underlying economic fundamentals are good.  Rather, the reckless euphoria that we are seeing in the financial markets right now reminds me very much of 1929.  Margin debt is absolutely soaring, and every time that happens a crash rapidly follows.  But this time when a crash happens it could very well be unlike anything that we have ever seen before.  The top 25 U.S. banks have more than 212 trillion dollars of exposure to derivatives combined, and when that house of cards comes crashing down there is no way that anyone will be able to prop it back up.  After all, U.S. GDP for an entire year is only a bit more than 15 trillion dollars.

But most Americans are only focused on the short-term because the mainstream media is only focused on the short-term.  Things are good this week and things were good last week, so there is nothing to worry about, right?

Unfortunately, economic reality is not going to change even if all of us try to ignore it.  Those that are willing to take an honest look at what is coming down the road are very troubled.  For example, Bill Gross of PIMCO says that his firm sees “bubbles everywhere”…

We see bubbles everywhere, and that is not to be dramatic and not to suggest they will pop immediately. I just suggested in the bond market with a bubble in treasuries and bubble in narrow credit spreads and high-yield prices, that perhaps there is a significant distortion there. Having said that, it suggests that as long as the FED and Bank of Japan and other Central Banks keep writing checks and do not withdraw, then the bubble can be supported as in blowing bubbles. They are blowing bubbles. When that stops there will be repercussions.

And unfortunately, it is not just the United States that has a bubble economy.  In fact, the gigantic financial bubble over in Japan may burst before our own financial bubble does.  The following is from a recent article by Graham Summers…

First and foremost, Japan is the second largest bond market in the world. If Japan’s sovereign bonds continue to fall, pushing rates higher, then there has been a tectonic shift in the global financial system. Remember the impact that Greece had on asset prices? Greece’s bond market is less than 3% of Japan’s in size.

For multiple decades, Japanese bonds have been considered “risk free.” As a result of this, investors have been willing to lend money to Japan at extremely low rates. This has allowed Japan’s economy, the second largest in the world, to putter along marginally.

So if Japanese bonds begin to implode, this means that:

1)   The second largest bond market in the world is entering a bear market (along with commensurate liquidations and redemptions by institutional investors around the globe).

2)   The second largest economy in the world will collapse (along with the impact on global exports).

Both of these are truly epic problems for the financial system.

And of course the entire global financial system is a giant bundle of debt, risk and leverage at this point.  We have never seen anything like this in world history.  When you step back and take a good, hard look at the numbers, they truly are staggering.  The following statistics are from one of my previous articles entitled “Why Is The World Economy Doomed? The Global Financial Pyramid Scheme By The Numbers“…

–$70,000,000,000,000 – The approximate size of total world GDP.

–$190,000,000,000,000 – The approximate size of the total amount of debt in the entire world.  It has nearly doubled in size over the past decade.

–$212,525,587,000,000 – According to the U.S. government, this is the notional value of the derivatives that are being held by the top 25 banks in the United States.  But those banks only have total assets of about 8.9 trillion dollars combined.  In other words, the exposure of our largest banks to derivatives outweighs their total assets by a ratio of about 24 to 1.

–$600,000,000,000,000 to $1,500,000,000,000,000 – The estimates of the total notional value of all global derivatives generally fall within this range.  At the high end of the range, the ratio of derivatives to global GDP is more than 21 to 1.

The financial meltdown that happened back in 2008 should have been a wake up call for the nations of the world.  They should have corrected the mistakes that happened so that nothing like that would ever happen again.  Unfortunately, nothing was fixed.  Instead, our politicians and the central bankers became obsessed with reinflating the system.  They piled up even more debt, recklessly printed tons of money and kicked the can down the road for a few years.  In the process, they made our long-term problems even worse.  The following is a recent quote from John Williams of shadowstats.com…

The economic and systemic solvency crises of the last eight years continue. There never was an actual recovery following the economic downturn that began in 2006 and collapsed into 2008 and 2009. What followed was a protracted period of business stagnation that began to turn down anew in second- and third-quarter 2012. The official recovery seen in GDP has been a statistical illusion generated by the use of understated inflation in calculating key economic series (see Public Comment on Inflation). Nonetheless, given the nature of official reporting, the renewed downturn likely will gain recognition as the second-dip in a double- or multiple-dip recession.

What continues to unfold in the systemic and economic crises is just an ongoing part of the 2008 turmoil. All the extraordinary actions and interventions bought a little time, but they did not resolve the various crises. That the crises continue can be seen in deteriorating economic activity and in the panicked actions by the Federal Reserve, where it proactively is monetizing U.S. Treasury debt at a pace suggestive of a Treasury that is unable to borrow otherwise.

And there are already lots of signs that the next economic downturn is rapidly approaching.

For example, corporate revenues are falling at Wal-Mart, Proctor and Gamble, Starbucks, AT&T, Safeway, American Express and IBM.

Would revenues at Wal-Mart be falling if the economy was getting better?

U.S. jobless claims hit a six week high last week.  We aren’t in the danger zone yet, but once they hit 400,000 that will be a major red flag.

And even though we are still in the “good times” relatively speaking, the federal government is already talking about tightening welfare programs.  In fact, there are proposals in Congress right now to make significant cuts to the food stamp program.

If food stamps and other welfare programs get cut, that is going to make a lot of people very, very angry.  And that anger and frustration will get even worse when the next economic downturn strikes and millions of people start losing their jobs and their homes.

What we are witnessing right now is the calm before the storm.  Let us hope that it lasts for as long as possible so that we can have more time to prepare.

Unfortunately, this bubble of false hope will not last forever.  At some point it will end, and then the pain will begin.

Source:  http://theeconomiccollapseblog.com/archives/americas-bubble-economy-is-going-to-become-an-economic-black-hole

 

READER ALERT: “Fix the Debt” Scams U.S. Taxpayers!

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austerity, Caesars Entertainment, CEOs, corporations, corruption, cuts, David Zaslav, deception, Discovery Communications, Fix the Debt, fraud, Gary Loveman, Goldman Sachs, greed, Institute for Policy Studies, lobbyists, loopholes, millionaires, money, scams, Social Security, tax havens, taxes, taxpayer-funded, taxpayers, theft, U.S. citizens, United States, UnitedHealth Group

 new report by IPS and Campaign for America’s Future shows that America’s top CEOs are pocketing massive taxpayer subsidies at the same time they’re pushing austerity cutbacks in government programs that benefit ordinary citizens.

REPORT KEY FINDINGS

Thanks to a “performance pay” tax loophole, large corporations in the United States today are routinely deducting enormous executive payouts from their income taxes. In effect, these companies are exploiting the U.S. tax code to send taxpayers the bill for the huge rewards they’re doling out to their top executives.

• During the three-year period 2009-2011, the 90 publicly held corporate members of the austerity-focused “Fix the Debt” lobby group shoveled out $6.3 billion in pay to their CEOs and next three highest-paid executives.[i]

• These 90 Fix the Debt member firms raked in at least $953 million – and as much as $1.6 billion – from the “performance pay” loophole between 2009-2011. The exact full value of corporate windfalls from this loophole will remain impossible to compute until we have more complete mandated disclosure for executive compensation.

• Top executives at these same Fix the Debt companies are aggressively advocating cuts to government programs that benefit the ordinary American taxpayers subsidizing their compensation. Many of these executives have also added to America’s debt and deficit by using tax havens and other accounting tricks to have their corporations avoid paying their fair tax share.[ii]

• Health insurance giant UnitedHealth Group enjoyed the biggest taxpayer subsidy for its CEO pay largesse. The nation’s largest HMO paid CEO Stephen Hemsley $199 million in total compensation between 2009 and 2011. Of this, at least $194 million went for fully deductible “performance pay.”[iii] That works out to a $68 million taxpayer subsidy to UnitedHealth Group – just for one individual CEO’s pay. A just-released proxy reveals that Hemsley pocketed another $28 million in “performance pay” in 2012, which computes into a tax break for UnitedHealth of nearly $10 million.

• Discovery Communications stood next in line for a government handout. Between 2009 and 2011, CEO David Zaslav pocketed $114 million, $105 million of this in exercised stock options and other fully deductible “performance pay.” That translates into a $37 million taxpayer subsidy for Discovery and its lavish executive pay policies. In 2012, Zaslav hauled in enough additional “performance pay” to generate a tax break worth $9 million.

Even big losers win with the “performance pay” loophole. Gambling titan Caesars Entertainment has hemorrhaged money in recent years, driving CEO Gary Loveman‘s stock options underwater. Loveman managed, even so, to take home $9.6 million in cash bonuses between 2009-2011, a windfall that’s generating taxpayer subsidies the firm can cash in to lower its taxes over years to come.

INTRODUCTION

Fix the Debt is a corporate-backed lobby group committed to slashing Social Security and other earned benefits and social insurance programs – all under the veil of “deficit reduction.” But, as this report documents, the very taxpayers who pay into and depend on these programs and benefits are subsidizing excessive compensation for the top executives of Fix the Debt member corporations and other large firms.

These pages calculate how much the corporations Fix the Debt CEOs manage have benefited from a federal tax code loophole that lets major firms deduct unlimited amounts off their income taxes for the expense of executive stock options and other so-called “performance-based” pay. These CEOs are raking in huge taxpayer-funded bonuses at the same exact time they’re insisting on deep cuts in the government programs that benefit ordinary Americans.

A loophole history

In 1993, amid widespread public revulsion at executive pay excess, Congress passed legislation that capped the tax deductibility of executive pay at $1 million. The ostensible message this legislation sent: No rational society can view annual executive compensation over $1 million as a reasonable business expense worthy of a tax deduction. Without putting a ceiling on executive pay, this reform aimed to prevent taxpayers from subsidizing amounts over $1 million per executive. But the law left a huge loophole. Corporations could exempt “performance-based” pay from the $1 million limit. This loophole quickly led to an explosion of “performance-based” compensation, particularly in the form of stock options.

Corporate boards of directors touted this new surge in stock options as a means to align the interests of executives and shareholders. In practice, options align only greed and the tax code. If a firm’s shares decline in value over time, shareholders lose wealth. But executives with stock options lose nothing. In fact, during stock slumps, executives often receive boatloads of new options with lower exercise prices. In 2007, for instance, Goldman Sachs gave executives options to purchase 3.5 million shares. In December 2008, after the crash had driven Goldman shares to record lows, the bank’s top executives received nearly 36 million stock options, ten times the previous year’s total. This new grant positioned Goldman executives for massive new windfalls even if the bank’s shares never regained their 2007 price level.

On the upside, stock options gains have no limit, a reality that encourages reckless, short-sighted executive behaviors designed to jack up share prices by whatever means necessary. What sort of reckless behaviors? Over the past two decades, the Institute for Policy Studies has documented the connections between massive CEO options payouts and corporate tax-dodging, excessively risky financial gambles, and accounting fraud.

Stock options also provide huge personal tax advantages for executives. If executives hold onto their shares for more than two years after the grant date and more than a year after the exercise date – the point at which the stock is transferred to the executive – they pay only the long-term capital gains tax rate on this income. This rate will rise from 15 to 20 percent as a result of the “fiscal cliff” deal, a rate still far lower than the new 2013 top marginal rate of 39.6 percent on ordinary income.

The performance pay loophole, in short, serves as a critical subsidy for excessive compensation. The larger the executive payout, the less the corporation pays in taxes. And average taxpayers wind up footing the bill.

Source:  http://readersupportednews.org/news-section2/320-80/17238-qfix-the-debtq-ceos-enjoy-taxpayer-subsidized-pay

 

House GOP Plans Even Deeper Food Stamp Cuts

Tags

Americans, cuts, dirty politics, farm bill, Food Stamps, GOP, greed, Poor, Republicans, SNAP, U.S, U.S. House of Representatives, U.S. Senate, United States, USDA

Volunteers fill bags for a school lunch program at the Cleveland Foodbank. (AP Photo/Amy Sancetta.)

Lost in the shuffle of last year’s big fiscal cliff deal was the deal that didn’t happen on a new farm bill.

One of the major points of contention was funding for food stamps through the Supplemental Nutritional Assistance Program, run by the US Department of Agriculture. Republicans in the House proposed steep cuts: $16.5 billion over the next decade, which would eliminate food assistance to as many as 3 million low-income Americans. The Senate countered with a farm bill cutting $4.5 billion from SNAP over the same time period.

There was simply no deal to be had on the farm bill, and so Congress passed a simple extension until September 30. Now Congress has to start over—all prior versions of the farm are dead, since there’s a new Congress.

And this time around Republicans are only going to increase, not moderate, their demands for steep food stamp cuts. Representative Frank Lucas, the chair of the House Agriculture Committee, told the Capital Press this weekend that the new House farm bill will mandate $20 billion in SNAP cuts over the next ten years.

Read more here:  http://www.thenation.com/blog/174094/house-gop-plans-even-deeper-food-stamp-cuts?goback=%2Egde_4071589_member_236706206

 

How Bad Is The U.S. Economy Getting? Worse Than You Think!

Tags

Americans, Barack Obama, Bureau of Labor Statistics, Congress, corruption, cuts, Economy, Federal Government, fraud, Health, Jobs, Medicare, Obama, Obama Administration, Social Security, STOCK Act, U.S, U.S. Economy, Unemployment, United States

The economic news in the last two weeks points to bad news for the economy and a reason for people to mobilize and demand change. We want to emphasize that as bad as the situation looks, there are solutions and ways to protect ourselves. The time to act is now.

Before we get to the impact of the Obama budget, let’s explode a critical myth: there is no recovery (at least for the 99%). Last month’s unemployment numbers revealed the fraud of the unemployment rate.  Even though the country produced less than 90,000 new jobs, when over 120,000 are needed to keep up with growth, the unemployment rate declined. Why? Because hundreds of thousands are giving up on work each month and they don’t get counted.

At present, over 100 million working age Americans do not have a job that is 41.5%.  And, for some groups, African Americans and youth in particular, this is a persistent jobs crisis that ensures low incomes and little wealth for the future. And, workers who do have jobs are paid way too little, about half of the value of what they actually produce. There will be no recovery until these fundamentals change.

Read more important information here:  http://www.nationofchange.org/collapse-call-action-1366295531

 

U.S. House Passes Dept. of Defense Spending (Not Cuts) During Sequestration!

Tags

Barack Obama, Biotech Rider, Budget, Congress, cuts, deceptive, Defense Department, Department of Defense, distraction, DOD, economic collapse, filibuster, H.R. 933, Kentucky, Monsanto, Occupy Monsanto, Plant Protection Act, President, Rand Paul, Representative Harold Rogers, Republican, secret, Senator Rand Paul, Sequestration, spending, taxpayers, U.S, U.S. Defense budget, U.S. Government, U.S. House of Representatives, U.S. Senate, United States, United States Congress, United States Department of Defense, United States House of Representatives, US House of Representatives

IMPORTANT UPDATE:  

“Look what I found regarding my findings below!

Page 80 is of great concern, since it’s Monsanto’s

Biotech Rider in disguise!  Our govt. is hiding all

sorts of destructive secrets:

Secretive U.S. Amendment Would Weaken Biotech Oversight

http://www.nationofchange.org/secretive-us-amendment-would-weaken-biotech-oversight-1363706738

On Page 80 is the ‘Plant Protection Act’:  http://www.appropriations.senate.gov/news.cfm?method=news.view&id=4aaebbb9-924d-4e96-8221-240813428a13

This is a Senate version of H.R. 933 that passed in the House of Representatives on March 6, 2013 allocating money for the Dept. of Defense to spend during Sequestration.”

 

On March 6, 2013 the U.S. House of Representatives passed almost $1 trillion in new spending for the Department of Defense (DoD).  The U.S. is in Sequestration due to the inability of Congress to pass a balanced budget.  Massive cuts to the DoD were supposed to kick in, but our elected legislators in the House opted to increase defense spending at taxpayer expense!  Here is the bill called H.R. 933:   http://beta.congress.gov/bill/113th-congress/house-bill/933/text

Here is a line chart of what the United States has spent on defense in billions of dollars:

Defense spending is out of control!

On March 6th, during the Senator Rand Paul filibuster distraction, The US House of Representatives approved H.R. 933 for Fiscal Year ending September 30, 2013.  It distributes $982 billion mostly to the Department of Defense, but it also reserves money for Military Construction, the Department of Veterans Affairs (VA) and Planned Parenthood.

Why is the U.S. government spending more than half of the world combined in defense at a time of fiscal crisis?  Why is the House of Representatives trying to rush H.R. 933 through the U.S. Senate en route to President Obama’s desk for signature into law when Sequestration calls for deep cuts in defense spending?  The ones who suffer the most, as always, are the U.S. taxpayers!  The vast majority of citizens who will shoulder the burden of an over-bloated Department of Defense budget are the same ones who are going to suffer under the remaining Sequestration cuts from education to Social Security and more.  This secrecy reeks of a government who has grown too big for its britches, and one that is in desperate need of down-sizing instead of super-sizing for a change!

Let your representatives know that you do not appreciate their financially irresponsible actions while our economy teeters on the brink of collapse:  http://www.house.gov/representatives/find/

By John Loeffler – Fountain City, Wisconsin