Thursday, October 20, 2016

Food For Thought...the state of family debt in this country

Ralph and I read a lot. We keep abreast of the news as best we can. I have to admit it is discouraging sometimes but we beleive we have to know as much as we can.

We found this blog and enjoy it for the facts and honest, well researched and documented articles. I felt I had to repost this article and Ralph agreed. So here is a repost from The Economic Collapse Blog.

During The Coming Economic Crisis Two-Thirds Of The Country Will Be Out Of Cash Almost Immediately

By Michael Snyder, on October 10th, 2016

Did you know that almost 70 percent of the U.S. population is essentially living paycheck to paycheck?  As you will see below, a brand new survey has found that 69 percent of all Americans have less than $1,000 in savings.  Of course one of the primary reasons for this is that most of us are absolutely drowning in debt.  In fact, the total amount of household debt in the United States now exceeds 12 trillion dollars.  So many Americans are so busy just trying to pay off their existing debts that they can’t even think about saving anything for the future.  If economic conditions remain relatively stable, the fact that so many of us are living on the edge probably won’t kill us.  But the moment the economy plunges into another 2008-style crisis (or worse), we could be facing a situation where two-thirds of the country is in imminent danger of running out of cash.
If you are living paycheck to paycheck, you live under the constant threat of your life being totally turned upside down if that paycheck ever goes away.  During the last crisis, millions of Americans lost their jobs very rapidly, and because so many of them were living paycheck to paycheck all of a sudden large numbers of people couldn’t pay their mortgages.  As a result, multitudes of American families went through the extremely painful process of foreclosure.
 Unfortunately, it appears that we have not learned anything from the last go around.  According to the brand new survey that I mentioned above, 69 percent of all Americans have less than $1,000 in savings…

""Last year, GoBankingRates surveyed more than 5,000 Americans only to uncover that 62% of them had less than $1,000 in savings. Last month GoBankingRates again posed the question to Americans of how much they had in their savings account, only this time it asked 7,052 people. The result? Nearly seven in 10 Americans (69%) had less than $1,000 in their savings account.
Breaking the survey data down a bit further, we find that 34% of Americans don’t have a dime in their savings account, while another 35% have less than $1,000. Of the remaining survey-takers, 11% have between $1,000 and $4,999, 4% have between $5,000 and $9,999, and 15% have more than $10,000.""

Perhaps the most alarming fact from this survey is that 62 percent of all Americans had less than $1,000 in savings last year.  So that means that this number has gotten 7 percent worse over the last 12 months.
How did that happen?  I thought the mainstream media was telling us that the economy was getting better…
Look, if you don’t have an emergency fund you are in danger of losing everything.  This is a point that I have been making over and over again for years, and in an article about this new survey USA Today made this point very strongly as well…

 ""This data is particularly worrisome since the recommendation is for Americans to have six months in expenses saved in case of an emergency, such as a large medical expense, car repair bill, or losing your job. Without this emergency fund to fall back on, millions of Americans could be risking financial disaster.""

As the publisher of The Economic Collapse Blog, people are constantly asking me what they should do to get prepared for what is coming.
The number one thing that I always suggest is to build up an emergency fund.
In a chaotic situation it is always hard to anticipate accurately what is going to happen, but without a doubt we are all going to need to continue to pay our bills and to buy things for our families during the next crisis.
Yes, someday the U.S. dollar will become rather worthless, but until that happens you are going to need to continue to put a roof over the heads of your family and to put food on the table.
And you are going to need money to do those things.
Some time ago, the Federal Reserve also found that a large percentage of Americans are living on the edge of financial disaster.  They discovered that 47 percent of all Americans could not even come up with $400 to pay for an unexpected emergency room visit without borrowing the money or selling something that they own.
If you can’t even come up with $400 you are really hurting, but that is the status of about half the country these days.
We are continually being told that the economy is strong, but that is simply not the truth.
In fact, it turns out that the period from 2005 to 2015 was the worst period for per capita real GDP growth in modern American history.  The following comes from Zero Hedge

  1. Growth was unusually strong in the 1960s and early 1970s. In every year from 1966 through 1973, per-capita income was up between 30 percent and 40 percent from a decade earlier. Thus, it’s not surprising that many Americans recall this as a great period for the nation’s economy.
  2. In every year from 1984 to 2007 — a period that economists call the Great Moderation, because of the way both growth and interest rates stabilized — per-person income was up between 20 percent and 30 percent from a decade earlier. That’s ample reason for Americans to view this as a good period for the economy.
  3. Cumulative per-person growth from 2005 to 2015 was lower than in any prior decade in the sample. That certainly helps explain why many Americans are unhappy with the nation’s recent economic performance.
 And as I repeat over and over, Barack Obama is on track to be the one and only president in all of American history to never have a single year when the economy grew by at least 3 percent, and he has had eight years to try to accomplish that feat.
Why doesn’t Donald Trump ever bring up that amazing fact?  I would think that he could get a lot of mileage out of that number.
At this point, nobody can deny that the middle class is shrinking.  61 percent of all Americans lived in middle class households in 1971, but now the middle class makes up a minority of the population for the very first time in our history.
Back in 1970, the middle class brought home approximately 62 percent of all income, but today that figure has plummeted to just 43 percent.
Those that are still doing well often dismiss those that are struggling by barking out such phrases as “get a job”, but the truth is that getting a good job is not so easy these days.
The most recent statistics show that there are 7.9 million Americans that are considered to be officially unemployed.  When you add that number to the 94.1 million working age Americans that are considered to be “not in the labor force”, you get a grand total of 102 million working age Americans that do not have a job right now.
And just because you do have a job does not mean that everything is okay.  As I have discussed previously, 51 percent of all U.S. workers make less than $30,000 a year according to the Social Security Administration.
Everywhere you look things seem to be getting worse and not better.  Not too long ago I documented the explosion of tent cities all over the country as poverty continues to rise, and I discussed how one study found that some young women in our impoverished inner cities are so desperate that they are actually trading sex for food.
Sadly, it isn’t just a few hard cases that we are talking about.  Even in areas of the country that are supposed to be “doing well” we are seeing record-setting poverty numbers.  For example, it was recently reported that the number of New Yorkers sleeping in homeless shelters just set a brand new all-time high, and the number of New York families permanently living in homeless shelters is up 60 percent over the past five years.
If things are this bad during an “economic recovery”, what are they going to look like once the economy really starts imploding?
 And considering the fact that almost 70 percent of the population has virtually no savings, could our nation handle an extended economic downturn that may be even worse than what we experienced in 2008 and 2009?
As a nation we truly are living on the edge, and it isn’t going to take very much at all to push us into oblivion.
 I hope you enjoyed this article. This blog is worth a look and I am sure a lot of you know about it. Saving money is difficult when people are heavily in debt and since we live beside a  highway near lakes and rec areas we see an amazing amount of debt drive by in the shape of fancy ATV's, Boats, Horse trailers, brand new Vehicles, and high end motorcycles. Then we also see Garage sale after garage sale with people selling things to get extra cash. There are also liquidation places that sell pallets of goods that people sell in flea markets to make extra money. In fact we find several neighbors have had a job loss in the family and the are trying to  make ends meet and to fill the job loss income by flea marketing or selling baking and the like.

After the Presidential debate last night Ralph and I talked long into the night. We evaluated all that we have done and are doing to be prepared. We live on a fixed income. We are in a fairly good position. We have no land payment, we have food and the ability to raise and grow more. We have a seed bank reserve. We are healthy and active and we have a plan.

God Bless you all and be safe.



  1. First of all, I would never answer a survey about how much I had in savings....but if I did, I would not tell the truth. I do agree with the rest of the article, though. Obama is taking this country down to get ready for the new world order.

    1. The Amish community here look after themselves with their own home insurance and health insurance, they work hard and save money. They do not have tons of 'stuff'. I think we could all learn from them. The election scares me.

  2. hi, fiona,
    there is no way to save.
    only began to pay off debt when daughter got medicaid and we got soc sec on top of husband's salary.
    he is 71, has cancer , and is still working.
    only God can help us.
    every time i walk in the grocery store the prices have gone up.
    had to give up hamburger for the most part. releases so much water when i cook it that it becomes very shrunken, so not worth it even at the sale price.
    buy chicken when less than 2$ per pound.
    eat beans--price has doubled on dry beans, too.
    miracle whip was 89c per jar for years at 32 oz. now 4$ for 30 oz.
    pork is cheapest but i cannot digest it.
    medical expenses are draining. thanks to God we are both on medicare now.
    daughter gets some food stamps--[lyme disease] or we would not make it.
    trying to pay off credit debt incurred before medicare, soc sec, and medicaid kicked in.
    accumulates fast, pays off slowly. paying more than minimum on all of them.
    had 500$ car repair. takes 3 months to make it up but car needs more work and winter is coming.
    never made much money so never saved as money always adequate only for expenses over the decades.
    most are in the same boat, everyone working beyond retirement age with a few exceptions.
    look at all the retirees standing on concrete floors all shift at walmart.
    the noose is tightening.
    i believe it is because people have rejected God and embraced evil.
    the children stand no chance as their parents and grandparents have sown the wind, so we shall all be subjected to the whirlwind.
    i keep asking God to help us but the whole country, or at least a majority, must ask Him and seek Him.
    i pray mostly for my daughter's safety and shelter under the angels' wings.
    what else can we do?
    i keep writing to our senators--apparently to no avail. they are going to go ahead with the tpp, another nafta type destroyer.
    just praying for husband's healing and for time and money to pay off debt entirely.
    who knows, the days of being sold into slavery because of indebtedness may make a return?

    at ferfal's website, 'surviving argentina', there is a letter from a scots lady about how britain is also seemingly circling the drain. she fears for her children's future. read it when you have time.

    had a friend, one of nine kids. her dad was a farmer. i asked how he afforded to raise nine. she said money was not plentiful but food was!
    best way to live if health allows it.

    love your website. thanks for doing it.

    1. We were just talking about food costs and how things are going up. Dairy farms have been dumping milk because their prices are so low...the consumers are still paying high milk prices????
      You are in our prayers.

    2. many thanks.
      remember when elizabeth warren and her daughter studied bankruptcies--before she was sucked into politics?
      they discovered that, unlike commonly held belief, debt was usually linked to medical needs.
      she was surprised because bankruptcy was said to be caused by 'consumer spending'.
      in other words, caused by people indulging themselves.
      for most, it is not true.
      here in n e ohio there are jobs of a menial kind and none are full time.
      one company told its employees that they were losing their decent health care because the change to obamacare would be too great a burden. the company was better able to afford the fines from the feds than to sign on to obamacare.
      they were sorry, but finances left no choice.
      i read one writer say the 'elite', [read 'scum'!] do not know what they are headed for.
      of course, they know. they are destroying the nation on purpose. what their purpose is i do not know.
      it is baffling, to say the least.